On Wednesday, Prime Minister Rishi Sunak announced his government’s proposed U-turn on Net-Zero Policy. Notably, this decision is on the heels of the European Parliament’s crackdown on unsustainable biofuels.
The U-Turn on Net-Zero Policy
In the press release, Mr Sunak explained that the U-turn removes “worrying proposals that would interfere in the way people live their lives.” Changes included a delay on the new petrol and diesel car sale ban, exemptions to the phase-out of fossil fuel boilers, and scrapping policies to force landlords to upgrade energy efficiency – rather, Mr Sunak emphasized households should be encouraged to do so.
The Prime Minister noted that the United Kingdom’s progress toward Net Zero has been faster than any other G7 country – in 2023, Britain’s carbon emissions were reduced by 48% compared to 1990 levels, dwarfing Germany’s 41% and France’s 23%. Despite this promising change, it remains uncertain whether the country will maintain this momentum following Sunak’s rollback.
Earlier this year, Mr Sunak attended the G7 Summit, where decarbonization of the energy industry was paramount. Following the summit, the Leaders’ Communiqué affirmed that they would be “making an effort for promoting and introducing sustainable aviation fuel (SAF).” The Communiqué announced plans to accelerate efforts to aid the aviation industry in reaching its goal of net zero by 2050.
On Wednesday, Mr Sunak announced that policies that directly interfered “in the way people live their lives” would be scrapped. The Prime Minister dismissed notions of car-share policies, measures to reduce animal product intake, and, most relevant here, the idea that passengers would “be taxed to discourage their flying.” The latter statement indicates that Mr Sunak is prepared to scrap the notion of a flight tax.
The United Kingdom and Sustainable Aviation
Mr Sunak has implied his government will scrap measures for flight taxes to encourage alternative methods of transport. However, whether the abolition of these measures will impede the SAF industry in the United Kingdom remains questionable.
The British Government has confirmed investment to encourage a sustainable aviation fuel industry in the United Kingdom. Additionally, the Department of Transport has announced that a blending mandate will be issued in 2025, but ratios have not yet been confirmed. The 2022 Jet Zero Strategy committed the UK to having at least 5 SAF plants under construction by 2025. Five SAF projects have been awarded funding as part of the Advance Fuels Fund.
The Climate Change Committee’s recent report, published in June, argued that insufficient policy has been implemented to address SAF’s domestic and global demand. The report also found a significant delay in the Department of Transport’s introduction of a SAF blending mandate. The UK’s per person emissions for international flights were also found to have been ranked 11 highest in the world.
The Committee argued that air travel prices should be higher than lower-emission modes to incentivize alternative transport modes. Further research on the efficacy of SAF was needed, the Committee discusses, for Britain to achieve its goal of SAF contributing to 10% of aviation fuel by 2030.
How will this U-Turn impact the SAF Industry?
Although the Department of Transport has announced plans to introduce a revenue certainty scheme using SAF by 2026, recent legislation suggests that investors may find other European countries more attractive. The Prime Minister’s decision to scrap ideas of flight taxes may potentially discourage airlines from producing and using SAF. By extension, investors may set their sights on the European Union, where demand for SAF is more certain.
Comparatively, the European Union passed its SAF Bill, which requires planes departing from airports in the EU to use a ratio of at least 2% SAF alongside conventional jet fuel. In 2030, airlines must use a minimum of 5% SAF. By 2050, a minimum of 63%. Although questions have been raised about the availability of SAF to meet these targets, clear legislation supporting the production and use of SAF in the EU may attract investors. The bill has been described by Transport & Environment as “the world’s largest green fuel mandate”, and the organization predicts this move will “kickstart Europe’s green aviation fuel market”.
Do you think the Prime Minister’s U-Turn will impede the UK’s SAF Industry? Let us know in the comments below!