UK Moves to Align SAF Carbon Accounting with Mandate

On March 23, the UK government launched a consultation to clarify how Sustainable Aviation Fuel (SAF) should be treated under the UK Emissions Trading Scheme (UK ETS), aiming to align carbon policy with its SAF blending mandate. The key issue is how airlines should account for emissions when using SAF.

Regulators are considering three options: maintaining the current zero-emissions treatment for SAF; applying emissions factors based on actual lifecycle reductions; or treating SAF the same as fossil jet fuel with no preferential treatment.

The decision reflects a trade-off between environmental integrity and market incentives. A zero-rating approach minimizes compliance costs but risks overstating reductions. A proportional method improves accuracy but adds complexity. Removing incentives could weaken SAF adoption.

In parallel, the UK SAF mandate, effective from 2025, requires a 2% blend, rising to 10% by 2030 and 22% by 2040. Supported by tradable certificates with monetary value, the policy is expected to cut up to 6.3 million tonnes of CO₂ annually by 2040.

Overall, the consultation seeks to align the “mandate + carbon market” framework and clarify ownership of SAF-related carbon reduction benefits, with significant implications for airline costs, SAF certificate pricing, and investment signals. Public consultation closes on June 15.