The head of British Airways’ parent International Airlines Group (IAG) has questioned the value of the UK’s sustainable aviation fuel (SAF) Mandate and planned SAF revenue certainty mechanism.
IAG chief executive Luis Gallego told a recent Airlines UK event in London: “We can’t think because we have a mandate, we will have SAF. We can’t import it all from the US. That doesn’t make sense.”
He noted the government has “proposed a pricing mechanism to de-risk SAF projects in the UK”, but said: “How will it be funded? Who pays for it?”
Gallego insisted: “We’ll pay for SAF, but we don’t want to pay twice – first by buying SAF and second by funding a price scheme.”
Gallego told aviation leaders: “We were the first airline group to commit to net zero emissions by 2050, the first in Europe to set a sustainable fuel goal, and the first group to extend net zero to our whole supply chain.
“The good news is we’re on track for 2050. We’ve made progress on SAF. Last year we announced our biggest SAF deal to date with US producer Twelve, a plan to buy completely synthetic jet fuel.”
But he said: “There is also bad news. In Europe, we’re very far behind the US on sustainable fuel. At some point we’re going to have to debate what we want. We can kill aviation in Europe, but we’re still not going to save the planet.” Gallego insisted: “We need a European SAF industry as soon as possible.”
The UK SAF Mandate, which requires a minimum 2% SAF use across all departing flights this year, came into force on January 1. But there is only one SAF plant operating in the UK.
The mandate requires increased SAF uptake each year to hit 10% in 2030, and aviation minister Mike Kane insisted he is “reasonably confident” the target will be hit. But Kane acknowledged there is insufficient SAF in the UK, saying: “SAF will have to be sourced from overseas.” He confirmed a revenue certainty mechanism would be introduced by next year.
The 2030 target will require about 1.2 million tonnes of SAF be supplied each year. Low carbon fuels consultant Dr Chris Malins warned this month of a “likely compliance shortfall in a number of years” without “rapid investment in SAF production and billions in capital expenditure”.