Britain’s airlines face £400m bill to hit green fuel targets
Britain’s airlines face £400m bill to hit green fuel targets
Christopher JasperMon, June 22, 2026 at 5:45 AM UTC
0
UK airlines face a bill of more than £400m to meet a government mandate requiring them to use a green aviation fuel barely available anywhere in the world.
Rules requiring carriers to use a synthetic fuel made using renewable energy will cost carriers £434m a year by 2030, the International Air Transport Association (IATA) estimates.
That is despite the substance – known as electro-sustainable aviation fuel (e-SAF) – being virtually unobtainable, with just one refinery out of 600 worldwide currently producing it.
Under the UK requirement, airlines must begin using the synthetic fuel alongside regular SAF derived from waste cooking oil from 2028. They must then incorporate at least a 0.5pc mix into their total fuel uptake by 2030.
The cost of hitting this 0.5pc target will inevitably hit airlines' bottom line, said IATA, either through the cost of purchasing the fuel or complying with relevant penalties.
Overall, airlines must use at least 10pc SAF by the same year – the toughest requirement anywhere in the world.
Preeti Jain, IATA's head of net zero, described the e-SAF requirements as absurd.
"This is a classic example of what happens when you impose policies through a mandate without establishing the technology and the supply chain," she said.
Marie Owens Thomsen, IATA's chief economist, said Britain's 2030 targets "are beyond unrealistic – they are utterly detached from reality".
Advertisement
'A huge task'
Together with a similar mandate in the EU, Britain's e-SAF rules indicate production of 600,000 tons of the fuel a year from around 20 dedicated sites, IATA estimates.
Yet just 20,000 tons are made annually today, with just a single commercial-scale production site, the Era One factory in Frankfurt.
Ms Jain said that reaching the targeted volumes will be "a huge task" and that the "window to produce e-SAF has largely been closed".
Yet under the UK mandate – which was initially proposed by the Conservatives before being implemented by Labour last year – failure to use sufficient quantities will attract penalties equivalent to the cost of the fuel.
The drive to compel airlines to use e-SAF is part of a plan to reduce reliance on waste cooking oils mostly sourced from restaurants in East Asia.
The supply of such oils is viewed as insufficient to meet the needs of the aviation industry, while studies show that some shipments sent to Europe have come from virgin palm forests, and hence do nothing to curb emissions.
By contrast, e-SAF is produced by combining so-called "green hydrogen" released from water via electrolysis powered by renewable electricity with carbon dioxide captured from the atmosphere, so that the resulting fuel has close to net zero emissions.
Under the UK mandate, the proportion of recovered oils used to make SAF must be cut to 75pc of the total. IATA said that was impossible and that the figure would remain at around 95pc.
Only 2.4 million tons of SAF of all kinds are likely to be produced this year, according to the trade group, representing just 0.8pc of the industry's needs.
Ms Owens Thomsen said current volumes were "puny and uneconomic," adding: "It's erroneous to even call it a market. It's a bunch of local, private deals behind closed doors."
Source: “AOL Money”
