UK Sets Out Its First SAF Contract Allocation Strategy
The UK Department for Transport published its first contract allocation strategy for the Sustainable Aviation Fuel Revenue Certainty Mechanism on July 13, 2026.
The document sets out how the government intends to allocate contracts during the first SAF allocation round, including the strategic objectives of the programme, an indicative timeline, the proposed scale of the first round and the treatment of different technologies and feedstocks.
The Revenue Certainty Mechanism is intended to address one of the main barriers facing new SAF projects: uncertainty over future revenues.
By giving qualifying producers greater visibility over the price they may receive for eligible fuel, the government aims to improve project bankability and help developers move toward final investment decisions.
A Guaranteed Strike Price Is Central to the Model
The UK has chosen a guaranteed strike price model for the Revenue Certainty Mechanism.
Under the proposed structure, eligible SAF producers will enter into private-law contracts with a government-backed counterparty.
If the market reference price for eligible SAF falls below the agreed strike price, the counterparty would pay the producer the difference.
If the reference price rises above the strike price, the producer would instead pay the difference back to the counterparty.
The mechanism is designed to reduce revenue volatility and improve confidence for lenders and equity investors considering first-of-a-kind SAF production facilities.
The government has said the first allocation round will focus on supporting commercial deployment while seeking value for money and faster project delivery.
Policy Support Moves from Demand to Project Finance
The UK already operates a SAF Mandate that requires an increasing share of aviation fuel supplied in the country to come from sustainable aviation fuel.
The Revenue Certainty Mechanism is intended to complement that demand-side policy by addressing the investment risks faced by domestic producers.
Earlier government decisions confirmed that the first tranche of contracts would focus on UK projects using non-HEFA technologies and feedstocks, supporting alternative pathways beyond the dominant hydroprocessed fats and oils route.
The July 2026 allocation strategy provides developers with greater clarity on how those contracts are expected to be awarded and how the first round will be structured.
For the UK SAF market, the significance of the policy lies in moving support beyond general targets and mandates toward project-level revenue certainty.
If the mechanism succeeds in reducing financing risk, it could help more proposed facilities reach final investment decision and begin construction.
Sources
UK Department for Transport — Sustainable Aviation Fuel Revenue Certainty Mechanism: Contract Allocation Strategy, 13 July 2026
UK Department for Transport — SAF Revenue Certainty Mechanism: Indicative Heads of Terms and Contract Allocation
UK Department for Transport — Sustainable Aviation Fuels Revenue Certainty Mechanism: Government Response