Yesterday, the government tabled an amendment to the Energy Bill on SAF, which places a statutory duty to publish a consultation on the options for designing and implementing a revenue certainty scheme within 6 months of royal assent of the Energy Bill.
A revenue certainty mechanism is a policy, program, or system put in place to provide assurance and stability in terms of revenue or income for a particular industry. It is typically used to encourage investment, growth, and long-term planning in industries that may face financial volatility or uncertainty.
In an accompanying plan yesterday, the Department for Transport said it would launch a consultation on the plan by Q2 2024, ahead of delivery by 2026.
In partnership with British Airways, Velocys is developing its ‘Altato’ facility in Immingham, North East Lincolnshire, that could convert up to 500,000 tonnes of municipal solid waste into fuel for planes and cars each year (see letsrecycle.com story).
‘Positive’
Henrik Wareborn, chief executive of Velocys, said: “Yesterday’s announcement is very positive for the UK SAF industry and especially for the Altalto project.
“This commitment from the government is a major step towards unlocking the capital required to further fund SAF projects in the UK. As noted by the Department for Transport, this revenue certainty will provide SAF producers greater assurance over the earnings from the SAF produced in projects such as Altalto, enabling projects to attract the necessary finance.
“We look forward to engaging further with the DfT and seeing more detail on the mechanism and the timescale in order for the government target of five plants in construction by 2025 to be met.”
Velocys share price has risen by 6% today after the news.
Targets
SAF is a replacement for fossil jet fuel, derived from a variety of feedstocks, including waste.
The government committed to having five SAF plants under construction by 2025 in its ‘jet zero strategy’, which involved a £165 million ‘advanced fuel fund’.
It also said that by 2030, 10% of all aviation fuel should be SAF.
Projects
There are many SAF projects planned in the UK.
This includes the Fulcrum Bioenergy facility in Cheshire, planned to produce 100 million litres of SAF annually from 600,000 metric tonnes of waste. And, LanzaTech’s planned facility in South Wales is set to produce SAF using ethanol feedstock made from steel mill waste gases and other wastes.
Other proposed projects are Phillips 66, which has plans for SAF production from used cooking oil, delivering its supply via existing infrastructure feeding directly into the UK airports. Additionally, Alfanar has committed to a £1 billion Teesside facility that is set to produce 120 million litres of SAF from waste each year.
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