Heathrow Expands SAF Incentive Scheme With £86 Million

London's Heathrow Airport has launched the biggest expansion of its Sustainable Aviation Fuel (SAF) incentive programme, committing £86 million-approximately USD $104 million-to support its airline customers in bridging the price gap between SAF and conventional jet fuel. This is an extension of the overall thrust towards increasing SAF use at Heathrow Airport to 3% by 2025 as part of broader efforts to meet the UK's climate targets and the aviation industry's drive toward decarbonization.

SAF is a cleaner alternative to fossil-based jet fuel, derived from sustainable resources like waste oils and agricultural residues. Industry estimates claim that SAF could reduce lifecycle greenhouse gas emissions by as much as 85% compared to traditional jet fuel. However, there are two big challenges facing the widespread adoption of SAF: low supply and high production costs. Currently, the SAF accounts for less than 0.1 percent of global jet fuel consumption, which justifies the prompt need for tailored initiatives such as Heathrow's incentive scheme.

The Heathrow SAF incentive program launched in 2022 has earned recognition for its novel approach to aviation emissions reduction. The scheme makes use of aeronautical fees at the airport, NOx charges, and pools the rebates from them. Airlines bid for rebates from this pool, effectively reducing the price difference between SAF and conventional fuels by half. It makes SAF a more financially feasible option for airlines, thereby motivating them to buy more of it.

The influence of the programme has been reflected in its rising targets. In 2023, Heathrow targeted 70,000 tonnes of SAF usage. That target increased to 155,000 tonnes in 2024 and is set to increase to 187,000 tonnes by 2025. These steps are expected to reduce lifecycle carbon emissions by 500,000 tonnes, based on SAF delivering a 70% reduction in emissions compared to traditional fuels.

Heathrow's commitment goes beyond the fulfillment of mere regulatory requirements. In 2025, the UK will implement its SAF mandate, requiring that 2% of jet fuel used in the country's aviation sector is derived from sustainable sources, which will increase to 10% by 2030 and 22% by 2040. Heathrow's targets exceed these mandates, with the airport setting a target of 3% SAF usage by 2025 and 11% by 2030, thus establishing itself as a leader in sustainable aviation.

As director of carbon strategy at Heathrow, Matt Gorman stressed on SAF as a tried and tested panacea for air emissions. Sustainable Aviation Fuel "is no longer a future promise—it's now a proven solution that is powering flights worldwide", Gorman insisted. He quoted the success Heathrow's programme on SAF and its "Connecting People and Planet" sustainability approach. Gorman emphasized government action, especially on implementing a SAF revenue certainty mechanism to support the development of a domestic SAF industry. Such a mechanism would bestow the financial stability needed to scale SAF production and contribute to both economic growth and decarbonization.

The announcement of the expanded incentive scheme comes at a crucial time for the aviation industry, which is increasingly under pressure to address its massive carbon footprint. Fuel accounts for the majority of emissions from aviation, making cleaner alternatives like SAF a vital component of the sector's sustainability efforts. Despite the challenges of limited supply and high costs, Heathrow's initiative demonstrates how strategic investments and policy alignment can accelerate progress.

This has the direct effect of encouraging airlines to switch to the usage of SAF, which is beyond the regulatory target. In this way, Heathrow sets a mark for other airports and stakeholders in the aviation sector. The program supports environmental goals while placing the UK at the forefront of global sustainable efforts in aviation. As the SAF market keeps advancing, Heathrow's long-term vision will be the key feature in shaping the industry into a low-carbon future.