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The government says: ‘The revenue certainty mechanism is intended to provide first-of-a- kind UK SAF projects with a guaranteed price for their SAF over a defined period’
SAF scheme to be funded by levy on fuel suppliers
Government confirms basis for revenue certainty mechanism. Ian Taylor reports The consultation drew 76
A levy on aviation fuel suppliers will fund the UK sustainable aviation fuel (SAF) revenue certainty mechanism for fuel producers and be passed on to airlines and passengers. The government confirmed the
basis for funding the mechanism last week, rejecting calls for revenue from Air Passenger Duty (APD) or from the UK emissions trading scheme (ETS) to be used. The decision, following a four-week
consultation in March, was not unexpected. The government confirmed in its response: “Industry will fund the costs through a variable levy on aviation fuel suppliers [with]
48 22 MAY 2025
individual contributions determined by market share.” This would “allow costs to be
widely spread across the supply chain including airlines, freight companies and passengers”. The government noted: “The
aviation industry and its passengers, rather than the general taxpayer, will benefit most from increased SAF production. Therefore, industry should fund the revenue certainty mechanism.” Full details, including the size of
the levy, “will be subject to further engagement”, with the government insisting it is “committed to working closely with industry” on the details.
responses from airlines, airports, fuel and feedstock suppliers, energy firms, SAF producers, industry associations, academics and consultancies. The government dismissed calls to
redirect existing revenues “such as from the UK ETS or APD”, arguing: “We generally do not hypothecate taxes to particular spending programmes as it can reduce flexibility in spending decisions and lead to a misallocation of resources with reduced value for money for taxpayers.”
Continued on page 46
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