Government consults on a fuel supplier levy to support SAF roll-out

12th January, 2026

In early 2025 the government introduced a Sustainable Aviation Fuels (SAF) blending mandate. In order to scale up production of novel alternative fuels, producers had asked the government for a price certainty mechanism to support investment. The Department for Transport has recently consulted on principles for designing a levy on fuel suppliers, ensuring that the costs of the scheme are borne by industry.

AEF submitted a response to the consultation. The main points are:

• Full and transparent data should be submitted to the SAF mandate reporting mechanism – it’s fundamental that the levy is built on good information and transparency; in particular, to ensure that there are no double claiming risks through the chain of custody. We would be in favour of as much non-commercially sensitive information to be in the public domain as possible. We would like to see an alignment with the data supplied to the Department for Transport under the SAF mandate, so that easy comparisons can be made, and so that information about which feedstocks are being used can be analysed against the sustainability criteria. At a minimum we would ask for country of origin, feedstock type, volume and carbon intensity data.

• Data should be submitted in a timely manner at regular intervals – We suggested that either monthly or quarterly would be the best option for assessment and data collection frequency. Any less than that, and the RCM would not be agile enough to react to significant changes in global availability of feedstocks, but in order to avoid an unnecessarily high administrative burden on regulators it would seem preferable to avoid daily assessments. Daily assessments may present too many opportunities for buyers of fuel to disagree with the prices being charged by suppliers, which could lead to administrative headaches and blockages in the regulation process. Using a monthly or quarterly assessment period would align with the data already being collected by DfT under the SAF mandate. We would like to see as much transparency as possible, including publishing information about suppliers that are late in paying the levy, or those that fail to pay the levy.

• The correct guaranteed strike price should avoid the risk that the government bears more of the overall costs of the levy, or that the levy on suppliers is too low and therefore doesn’t stimulate the necessary investment. The levy and strike price should not be higher than the SAF mandate buyout price, as the buyout price should be the last resort as it does not deliver any climate benefit. Care should be taken to initially limit the scale and number of contracts awarded, and ensure the terms of the contract are transparent. This should ensure that the demands on the public purse are limited, and that there is no unnecessary administrative burden. Design should be transparent and fair to minimise risk of suppliers refusing to pay. We would also welcome further study into the question of understanding to what extent fuel suppliers really do pass the costs onto the airlines.

The government will be consulting on further aspects of the Revenue Certainty Mechanism (RCM) throughout 2026.