Innovative companies from across the UK are invited to bid for a share of £93m over the next two years to develop low carbon fuel, with applications opening in mid-July. The fund will focus support on the most promising projects meaning those closest to the actual production stage.

The announcement builds on £198m already invested through the advanced fuels fund since 2022 to scale up cleaner aviation technologies. Low carbon fuel production could add up to £5bn to the economy by 2050 and position the UK as a global hub for sustainable aviation fuel (SAF) production.

SAF is an alternative to fossil jet fuel which reduces greenhouse gas emissions on average by 70% on a lifecycle basis, making it a key technology that will allow UK aviation to grow capacity while meeting its net zero commitments.

Alongside the new fund, the government has launched a Call for Evidence on the SAF Mandate which requires an increasing proportion of jet fuel supplied in the UK to be sustainable, starting at 2% in 2025, rising to 10% by 2030 and 22% by 2040. The Call for Evidence will explore what current global supply projections for different types of sustainable fuel mean for meeting the SAF Mandate’s targets in the coming years.

This is part of an ongoing and collaborative approach with industry to ensure the scheme remains responsive to an evolving market. Overall mandate targets are not under consideration for reduction, with proposals focusing on strengthening the scheme for the future.