Government creates fund to support UK production of green aviation fuel

The government aims to boost homegrown sustainable aviation fuel (SAF) production with the creation of a multi-million pound Low Carbon Fuels Fund.

Companies from across the UK will be able to bid for a share of £93 million over the first two years to develop low carbon fuel, with applications opening in mid-July.

The fund will focus support on the most promising projects, meaning those closest to the actual production stage, according to the Department for Transport.

A total of £219 million will be available over four years up to 2030, succeeding an Advanced Fuels Fund, which has seen government invest £198 million since 2022 to support UK SAF development. 

The latest initiative follows a mandate which came into force in January 2025, requiring 2% of all jet fuel in UK departing flights to be SAF.

The government now wants to see an increasing proportion of jet fuel supplied in the UK to be sustainable, rising to 10% by 2030 and 22% by 2040. 

The alternative to fossil jet fuel is claimed to cut greenhouse gas emissions on average by 70% on a lifecycle basis, making it a key technology that will allow UK aviation to grow capacity while meeting its net zero commitments, according to the DfT.

“Growing a thriving domestic SAF industry will give investors the confidence they need to back new production plants in the UK, creating well-paid, skilled jobs in communities the length and breadth of the country,” the transport department noted.

“Investment in low carbon fuels is investment in the future of aviation. For young people looking to build a career, the UK’s growing SAF industry offers some of the most innovative and exciting opportunities anywhere in the economy, from engineering and science to construction and manufacturing.” 

Aviation, maritime and decarbonisation minister Keir Mather said: “This £219 million is the next chapter in Britain’s green aviation revolution. 

“We’re backing brilliant British innovation, creating thousands of high-skilled jobs and making sure the UK leads the world in the fuels that will power the future of flight. 

"This kind of investment is exactly how we kick-start economic growth, open up exciting new opportunities for young people and make our holidays greener and cleaner."