The UK Emissions Trading System (UK ETS) authority has launched a consultation to gather stakeholders’ views on the future treatment of SAF within the UK ETS framework, particularly in light of the introduction of the UK SAF mandate. The consultation examines potential changes to the eligibility criteria for SAF, sustainability requirements, greenhouse gas savings thresholds, and accounting methodologies, with the aim of strengthening policy alignment and supporting the decarbonization of the aviation sector.
Under the UK Emissions Trading System (UK ETS), aircraft operators can currently claim emission reductions through the use of eligible SAF, thereby reducing the number of emission allowances that must be surrendered under the system. Eligible SAF is currently treated as “emission-free,” meaning that this fuel is considered to produce no emissions.
| Criteria | Requirement |
|---|---|
| Eligible fuel types | Biofuels only |
| Sustainability criteria | RTFO Sustainability Criteria |
| Greenhouse gas reduction threshold | 65% (55% for older production facilities) |
| Comparison with fossil fuels | 94 g CO₂e/MJ |
| How SAF Is Recognized | Tax-exempt |
The UK ETS authority is conducting a consultation on potential changes to the future treatment of eligible SAF to better align with the UK SAF mandate and strengthen efforts to decarbonize aviation. The consultation also presents illustrative policy packages that combine various SAF policy options to demonstrate how future UK ETS approaches might work in practice.
| Counterfactual scenario (no measures) | Policy Package 1 | Policy Package 2 | |
|---|---|---|---|
| Eligible fuel types | Biofuels only | Expansion beyond biofuels (recycled carbon fuels and Power-to-Liquid) | Expansion beyond biofuels (recycled carbon fuels and Power-to-Liquid) |
| Sustainability criteria | RTFO sustainability criteria | Sustainability criteria of the UK SAF mandate | Sustainability criteria of the UK SAF mandate |
| Greenhouse gas reduction threshold | 65% | 40% | 40% |
| Comparison with fossil fuels | 94 gCO₂e/MJ | 89 gCO₂e/MJ | 89 gCO₂e/MJ |
| How SAF is recognized | Zero-rate | Zero tax rate | Life Cycle Assessment |
The consultation is also intended to gather opinions on various operational issues related to SAF.
The consultation also proposes to clarify the legal requirements regarding the purchase and delivery of SAF for emission reduction claims under the UK ETS. The UK ETS Authority proposes that eligible SAF must be purchased within, or up to three months prior to, the relevant regulatory year and delivered by March 31 of the following year. Operators would also be required to provide evidence of the purchase and delivery of SAF to prevent double counting and strengthen verification controls.
The consultation proposes clarifying the legal limits on emission reduction claims based on SAF under the UK ETS. The UK ETS Authority states that claims may not exceed an operator’s total fuel consumption related to aviation activities under the UK ETS within a given regulatory year. Furthermore, claim limits for emission reductions from eligible SAF may not be carried forward to subsequent regulatory years, so that surrender obligations reflect emissions within the relevant reporting period.
The consultation proposes extending the SAF-related monitoring plan requirements to all aircraft operators, including small emitters. The UK ETS Authority is considering amending the UK ETS Regulation to ensure that all operators eligible to claim emission reductions from SAF are subject to consistent monitoring and reporting requirements.
The consultation emphasizes that the UK ETS currently imposes no geographic restrictions on where eligible SAF may be purchased or supplied for emission reduction claims. This differs from the EU ETS, which requires that SAF be physically linked to eligible flights departing from specific airports. The authority is therefore asking stakeholders to share their views on the potential benefits and challenges associated with maintaining the UK ETS’s current approach.
The consultation on the UK ETS represents an important step toward refining the regulations governing eligible SAF within the UK aviation sector. By seeking better alignment with the UK SAF mandate, the UK ETS Authority aims to create a more consistent framework for SAF eligibility, emissions accounting, and life-cycle analysis. Key considerations, such as new types of SAF, revised greenhouse gas emission thresholds, updated fossil fuel comparators, and alternative approaches to SAF recognition, could have a significant impact on future compliance obligations under the UK ETS. The consultation also includes proposals for additional clarifications regarding deadlines for the purchase and delivery of SAF, limitations on claims, monitoring requirements for small emitters, and geographic restrictions. Together, these proposals aim to strengthen verification controls, improve regulatory consistency, and support long-term efforts to decarbonize aviation in the United Kingdom.
References
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