Sustainable Aviation Fuel: An Overview of the Current Regulatory Landscape in the UK, EU And USA

Introduction

We have set out below an overview of the current regulatory frameworks governing Sustainable Aviation Fuel (SAF) in the key jurisdictions of the UK, EU and USA.

SAF has emerged as a critical component in the global drive to decarbonise the aviation sector, a significant contributor to greenhouse gas emissions. Unlike conventional jet fuels, SAF offers substantial reductions in lifecycle carbon emissions by incorporating renewable feedstocks and innovative production technologies.

Recognising its potential to drive sustainable growth, policymakers across the UK, EU, and USA are actively shaping regulatory frameworks to accelerate its deployment and adoption.

Note that this is an evolving regulatory landscape that is subject to change – however, this overview sets out the current regulations and initiatives of each of the UK, EU and USA – and strongly indicates the direction of travel of each of these jurisdictions.

We conclude with a comparison of these jurisdictions and analyse their strengths and limitations in fostering market growth. We also examine potential pathways for future development, including harmonisation of international standards, technological advancements, and policy synergies.

By presenting such analysis and exploring projected trends, this overview offers insights into the role of regulation in shaping the trajectory of SAF as an essential enabler of sustainable aviation.

United Kingdom

The UK SAF landscape

Current Status and Future Developments

The UK’s SAF industry is progressing rapidly, driven by a number of policy measures that integrate SAF into the UK’s broader decarbonisation goals. With increasing regulatory and financial support, the UK aims to position itself as a global leader in SAF development, production, commercialisation and use.

A key component of this strategy is the SAF Mandate, alongside other legislative and market-based incentives designed to accelerate SAF adoption. Under these principles, SAF is defined based on achieving a minimum level of greenhouse gas emission reductions and specific sustainability criteria.

The key features include the introduction of compulsory, incrementally increasing SAF supply requirements, a buy-out mechanism to enforce compliance, and funding incentives to support industry growth.

The Jet Zero Taskforce (JZT) (building on the previous Government’s Jet Zero Council) was announced by the UK Government in November 2024 to advance sustainable aviation. Members include UK Government ministers, industry leaders and academics. Established to accelerate the transition to net zero aviation by 2050, the JZT aims to streamline aviation decarbonization priorities and support the development, production, commercialisation and use of SAF in the UK and globally.

Legislation

The UK is at the forefront of SAF development as the one of the first countries in the world to legislate for mandatory SAF requirements. The UK’s key policy to decarbonize aviation and secure demand for SAF is the SAF Mandate.

Key terms (2025 onwards):

HEFA Caps (2027 onwards):

Power to Liquid (PtL) Obligations (2028-2040):

Buy-out Mechanism (2025 onwards):

The Sustainable Aviation Fuel (Revenue Support Mechanism) Bill (2024) was announced in the King’s speech on 17 July 2024, proposing a revenue certainty mechanism for SAF producers investing in UK-based facilities. A number of funding options were proposed and, in January 2025, the UK Government confirmed that the Guaranteed Strike Price mechanism was the preferred option.

Further SAF Incentives

To further promote UK SAF development, the UK Government has implemented various financial incentives:

Projections and Insight

It is estimated that, by 2050, the global aviation industry will need approximately 400 million tonnes of SAF annually to meet international decarbonization goal and, whilst the SAF market is still in a nascent stage of its development, the UK is positioned to play a significant role in the global effort to decarbonize aviation. The development of SAF production facilities in the UK are key for the successful implementation of the UK Government’s SAF goals.

The SAF Mandate has only just come into force and the revenue certainty mechanism for SAF producers has yet to be finalized and take effect. As such it remains to be seen whether these mechanisms will be sufficient to meet international decarbonization goals and position the UK as a leader in SAF development, production, commercialisation and use:

For further clarity on the information above, we set out below (at Figure 1) a timeline of key projected regulatory developments in the UK SAF market.

UK SAF Timeline

Figure 1: UK SAF Timeline

European Union

The EU SAF Landscape

Current Status and Future Developments

Despite efforts to curb its growth, commercial flights in the EU could rise by up to 42% by 2040 compared to 2017. Recognizing the pressing need to address the climate impact of the aviation sector, the EU has prioritized the development of a SAF market. By leveraging the collective action potential of its member states, the EU is uniquely positioned to lead in SAF implementation.

SAF is defined by the EU as a “drop-in” aviation fuel, including advanced biofuels or biofuels produced from sustainable feedstocks, recycled carbon fuels, or synthetic fuels.

With mandates introduced in 2023 and effective as from January 2025, the European Union is meticulously crafting a policy framework to stabilize the SAF market, foster innovation, and create a level playing field, driving progress toward its Fit-to-55 climate goals.

Legislation

The European regulatory framework for sustainable aviation fuel (SAF) has been shaped by two key legislative milestones: the Renewable Energy Directives (RED) and the ReFuelEU Aviation Regulation.

The RED have progressively established binding renewable energy targets across the EU, including for the transport sector, and have increasingly integrated SAF into the broader energy transition strategy. From RED I (2009), which set initial renewable energy targets, to RED II (2018), which introduced incentives for SAF, and finally RED III (2023), which reinforced sector-specific mandates, these directives have paved the way for SAF regulation.

Complementing this framework, the ReFuelEU Aviation Regulation, adopted in 2023, marks a decisive shift in SAF development by imposing direct obligations on fuel suppliers at EU airports. Unlike the RED directives, this regulation is immediately applicable across the EU and imposes a progressive incorporation of SAF into jet fuel, with binding quotas extending to 2050. Together, these two instruments define the roadmap for SAF deployment, balancing long-term policy incentives with immediate regulatory requirements.

RED served as the cornerstone for establishing the EU’s shift toward greener fuels.

Adopted on April 23, 2009, the RED I Directive introduced ambitious renewable energy targets across EU Member States:

Entering into force on December 11, 2018, the RED II Directive strengthened the EU’s renewable energy framework in response to increased climate ambitions:

Adopted on October 18, 2023, the RED III Directive was a decisive step towards integrating SAF into the EU’s energy framework, by:

Directives are legal acts that generally need be transposed into national law by EU member states, meaning that each country must adopt its own legislation to achieve the directive’s objectives. Therefore, the RED directives’ provisions need to be transposed into national law. There is generally an 18-month deadline for member states to do so, with an occasionally shorter deadline for some provisions.

Member States successfully met the RED I targets, despite varying national goals, demonstrating the EU’s commitment to renewable energy. This progress laid the foundation for the more ambitious targets in RED II and RED III, and Member States are on track to achieve these goals. In particular, the push for SAF under these directives is progressing well, with ongoing efforts to scale production and expand infrastructure. While challenges remain, Member States are well- positioned to meet the targets for both renewable energy and SAF by 2030, especially with the introduction of the ReFuelEU Aviation Regulation.

Regulation (EU) 2023/2405 of October 18, 2023 through ensuring a level playing field for sustainable air transport (ReFuelEU Aviation) represents a cornerstone of the EU’s strategy to decarbonize aviation in line with the Green Deal objectives and the Fit-for-55 package. This regulation establishes a comprehensive legal framework to accelerate the adoption of SAF across the EU.

Finalized in 2023, most of its provisions entered into force on 1 January 2024, with Articles 4, 5, 6, 8, and 10 becoming applicable from January 1, 2025. As an EU regulation, ReFuelEU Aviation is directly applicable in all Member States without requiring transposition into national law.

The regulation imposes binding SAF blending obligations on aviation fuel suppliers, requiring them to progressively integrate SAF into the aviation fuel supplied at EU airports. The mandated SAF share begins at 2% in 2025 and will increase incrementally to 70% by 2050, of which a dedicated sub-target for synthetic aviation fuels starts at 0.7% in 2030, reaching 35% by 2050 (see Figure 2). For instance, the goal for 2040 is to achieve a 42% share of SAF in the aviation fuel supplied to EU airports, with 15% of that being synthetic.

To be eligible, SAF must comply with the sustainability and emissions reduction criteria set out in RED I. Acceptable SAF sources include advanced biofuels, synthetic fuels derived from renewable hydrogen, and recycled carbon aviation fuels. Fuel suppliers may also utilize hydrogen for direct aircraft propulsion or synthetic low-carbon fuels.

Within this regulatory framework, synthetic fuels—particularly e-kerosene—are set to play an increasingly prominent role, with a specific mandate ensuring their integration into the fuel mix.

EU airport operators are required to facilitate access to SAF, while aviation fuel suppliers, airports, and aircraft operators must systematically collect and report data to the European Union Aviation Safety Agency (EASA) and national competent authorities to ensure regulatory compliance.

The regulation further establishes enforcement mechanisms, designating national competent authorities responsible for supervision. Fuel suppliers failing to meet their SAF blending obligations will face financial penalties and must compensate for any shortfall by supplying the missing volume the following year.

By setting clear, long-term SAF quotas through 2050, the ReFuelEU Aviation regulation creates a stable and predictable market framework, reinforcing the EU’s ambition to achieve a more sustainable aviation sector.

Figure 2: SAF Mandate Levels in the ReFuelEU Directive

Incentives for SAF Production and Innovation

The EU Emissions Trading System (EU ETS) and Financial Incentives for SAF

In addition to the ReFuelEU Aviation regulation, the EU’s climate strategy for the aviation sector is reinforced by the EU Emissions Trading System (EU ETS), established under Directive 2003/87/EC. As a “cap-and-trade” mechanism, the EU ETS aims to progressively reduce greenhouse gas emissions by setting a cap on total emissions while allowing market- based trading of emission allowances. Initially, free allowances were allocated to aircraft operators based on the average emission of the sector and their historical performance. In 2023, approximately 22.5 million aviation allowances were allocated for free, while about 5.7 million were auctioned.

To accelerate decarbonization, the EU has initiated a phased reduction of free emission allowances for aircraft operators:

This transition is designed to incentivize the adoption of SAF, as airlines can lower their compliance costs by integrating SAF into their fuel mix. To support this shift, the EU has introduced targeted financial incentives within the EU ETS framework:

Beyond emissions trading, the EU has also introduced monitoring, reporting, and verification (MRV) measures for non-CO₂ aviation effects, with additional policy proposals expected by 2028.

Financial Support Mechanisms for SAF Development

Recognizing the financial and technological challenges associated with SAF production, the EU has established several funding instruments to support research, innovation, and large-scale deployment:

Projections and Insight

While the ReFuelEU Aviation regulation establishes a robust framework and clear mandates for SAF adoption, several policy areas will require further clarification and potential amendments. The regulation’s overall timeline is generally aligned with industry expectations, but additional interventions may be necessary to ensure a smooth and effective implementation:

Beyond regulatory refinements, the political landscape in the EU is evolving, with recent electoral shifts favoring parties historically opposed to Green Deal policies. As EU policymakers shift their focus toward an Industrial Deal, maintaining strong momentum for SAF adoption will be critical. Ensuring a stable regulatory environment and continued financial support will be essential to securing the long-term success of SAF integration within the aviation sector.

The effectiveness of SAF regulations in the EU stems from the fact that they are binding, compelling operators to take immediate action and enhance their performance.

Despite its relatively high cost, airlines and operators are eager to contribute and even exceed their obligated SAF targets as early as possible. They understand that this is the only way to assert themselves in the market and to ensure the long- term sustainability and viability of the industry, which must adapt to greener practices to secure its future.

United States of America

The U.S. SAF Landscape

Current Status and Future Developments

Aviation represents roughly 3.3% of total U.S. greenhouse gas emissions and jet fuel consumption is forecasted to increase by 2-3% annually through to 2050. This obviously presents significant opportunities for SAF investment, and the market has responded: projects have been announced in recent years that are projected to meet over 10% of U.S. jet fuel demand. Nonetheless, the biggest challenge SAF faces in the U.S. is that it is not cost-competitive with fossil jet fuel. According to the U.S. Department of Energy, SAF currently costs two to ten times more than fossil jet fuel. Consequently, the federal and state incentives discussed in this section are playing and will continue to play a critical role in the growth of SAF in the U.S.

Federal Support for SAF

The U.S. government supports SAF development in several ways: annual renewable fuel regulatory mandates; tax policy; and grants. Several of these incentives are in flux, however, given the shift in the balance of political power in the U.S. Congress and the White House.

State Incentives for SAF Production and Innovation

In other states – Illinois, Minnesota, and Nebraska – per-gallon SAF production tax credits promote SAF alignment with national objectives.

Projections and Insight

By 2030, domestic SAF production is expected to reach 3 billion gallons annually – a 130-fold increase from 2030 consumption. By 2050, production could rise to 35 billion gallons per year, reflecting a 12-fold increase from the 2030 target.

The shift towards SAF represents a long-term transition in the aviation industry. Given the international nature of air travel, SAF is a clean fuel whose market drivers are largely insulated from the political swings of the US; and American airlines and airports will need to access this fuel to comply with global emissions standards. Driven by discretionary grants from the FAA, significant investments in airport infrastructure for SAF distribution and storage are anticipated. This could lead to an improved supply chain and logistics, facilitating broader SAF availability at major airports by 2025. Increased funding through grants and tax credits may accelerate research and development of new SAF feedstocks and production technologies, enhancing efficiency and reducing costs. This could also lead to advancements in alternative feedstocks, potentially doubling production efficiency by 2030. As government initiatives and incentives ramp up, it is likely that the market share of SAF in total jet fuel consumption will increase significantly from the current less than 0.1%. Projections estimate reaching 5 -10% market share by 2030, depending on regulatory support and industry adoption.

The incentives enacted under the IRA constitute a good beginning in establishing the support necessary for overcoming barriers to SAF adoption. With investors comparing the short three-year timeline of the IRA’s section 45Z clean fuel production credit to ten-year timelines for other clean energy technologies, producers and airlines are making a long-term legislative extension of the credit a top priority for 2025. State level initiatives, like the California LCFS program, look to play a critical role in driving SAF adoption. Other states may follow suit, creating a patchwork of supportive policies that could incentivize producers while also fostering competition among states for SAF leadership.

Conclusion: Comparative Analysis of SAF

Regulatory Frameworks in the UK, EU, and US

The regulatory approaches adopted by the UK, EU, and US to promote SAF reflect distinct policy priorities, economic

structures, and aviation market dynamics. Whilst all three jurisdictions recognize the need to scale SAF production to achieve net-zero aviation emissions, their methods for incentivization, mandate enforcement, and industry engagement exhibit some notable divergences.

Key Similarities

Despite differences in policy mechanisms, several overarching themes emerge across all three jurisdictions:

Key Differences

Despite these similarities, the jurisdictions differ in several key respects:

Comparative Insights and Future Implications

Each jurisdiction’s SAF strategy reflects its unique regulatory philosophy and economic priorities. The EU’s highly structured, mandate-driven approach aims to achieve rapid SAF integration but places cost burdens on fuel suppliers and buyers. The UK’s hybrid model, combining mandates with revenue support mechanisms, seeks to balance regulatory certainty with investment incentives. Meanwhile, the US favors a market-driven, incentive-based model, fostering innovation but opening up potential regulatory uncertainty due to shifting political landscapes.

This evolving landscape reflects a multi-faceted approach, balancing stringent emissions reduction targets with mechanisms that incentivise investment and production. The UK has introduced ambitious mandates within its Jet Zero strategy, while the EU’s Fit-to-55 package integrates SAF quotas through the ReFuelEU Aviation initiative.

Meanwhile, the USA leverages tax credits and grant programs under initiatives like the Inflation Reduction Act to stimulate domestic SAF production. These diverse regulatory tools aim to address the significant challenges of scaling SAF, including high production costs, limited feedstock availability, and infrastructure constraints.

Looking ahead, international policy harmonization will be critical to ensuring the global scalability of SAF. The International Civil Aviation Organization and industry stakeholders may push for greater alignment between EU- style mandates and US-style incentives, potentially influencing future SAF policies. Additionally, ongoing bilateral agreements between the UK, EU, and US on carbon accounting, emissions reporting, and SAF certification will play a crucial role in fostering a globally integrated SAF market.

Despite their differences, the UK, EU, and US share the common goal of scaling SAF production to enable a net zero aviation future. While their paths to achieving this differ, their collective efforts will be instrumental in driving the technological and economic transformation needed for sustainable aviation. As regulatory frameworks evolve, continued cross-border collaboration and policy adjustments will be essential to maximizing SAF’s impact on global decarbonization goals.

Additional Authors: Parker A. Lee, Brittany M. Pemberton, and Timothy J. Urban.

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