Q&A: UK must accelerate on domestic SAF: Nova Pangaea

The UK must accelerate support for sustainable aviation fuel (SAF) producers to unlock investment, meet its mandates, and boost energy security, according to Nova Pangaea chief commercial officer Jonathan Wood. The firm is developing a UK project to convert biomass residues into second-generation ethanol. That will fuel SAF production by LanzaJet, to supply International Airlines Group (IAG). Like many UK SAF proposals, Project Speedbird is behind its original timeline, not helped by policy delays. Argus spoke to Wood about energy security, policy asks, and carbon negative fuel. Edited highlights follow:

Does recent jet fuel volatility strengthen the case for domestic SAF production?

Jet fuel disruption and price spikes reinforce the case for diversifying energy supply. SAF is one way to achieve that, including domestic production. We should be realistic that some regions have more feedstock than others, but the UK can certainly increase production. But obviously, policies and investments made over the next 1-2 years will only bear fruit towards the end of the decade. I am not advocating for a domestic quota. It is about pace, so we should not complicate or change but rather focus on implementing already announced well set policy plans.

Is your planned supply chain fully domestic?

We have supply agreements for domestic woody biomass residue, so there is a strong domestic element. Biomass power generation is plateauing and may decline as support schemes fall away, creating feedstock headroom for SAF. We recognise the UK is not one of the largest biomass suppliers. We must also look at agricultural residues and nearby regions with ample biomass, like the Nordic region.

Are current policies sufficient to support SAF?

Policy must support both demand and supply. No single mechanism will create the tipping point. The UK is moving in the right direction. We have the SAF mandate, now the key is to move at pace on supply-side mechanisms such as the revenue certainty mechanism (RCM) to unlock final investment decisions (FIDs). Feedstocks for hydrotreated esters and fatty acids (HEFA) are limited, so we must ready production platforms to tap into other feedstocks as soon as possible.

How many of the 10-15 UK SAF projects are actually near FID?

Projects need to have completed front-end engineering and design to accurately understand capital costs and project economics, to have offtake agreements, and have the feedstock origination, and financing in place. These pieces are interlinked. You cannot sign offtake without clarity on costs and feedstock, and vice versa. Aligning that is challenging. Probably only a handful of projects could achieve that in the next 12 months.

Is the delayed RCM slowing UK projects?

There is a risk it could slow the projects that are most well progressed and closest to FID. The government talks about RCM legislation by the end of 2026, so the mechanism becomes available in early 2027. But then follows the selection process and contracting. It's unclear how long that will take but it won't be done by the first quarter of 2027. Given typical timelines of 2-3 years from FID to operation, we are now looking at FID in 2027–28 and operation around 2030.

Given delays, how will the UK get advanced SAF in time for its 2027-HEFA cap?

There's advanced SAF coming out of other regions, notably the US, and potentially China. There's nothing wrong with imports, but we also need local production for a diversified and resilient portfolio.

Why has Nova Pangaea called this a critical moment for the SAF industry?

If we do not move forward, doubts will grow around mandate delivery. That will increase pressure to dilute the mandates, which would destabilise the investment case. We should leverage this difficult jet fuel situation to get some FIDs over the next 12 months. We shouldn't waste a good crisis.

HEFA has been led by traditional oil companies. But advanced SAF and e-fuels projects are typically developed by companies without the same balance sheets and therefore rely more on third-party finance to get through development and reach FID. There's billions of tonnes of biomass residue globally, creating an opportunity to boost SAF and income streams for rural and agricultural communities. But if we can't get FIDs over the next year, we'll risk not getting into that virtuous cycle that we need, of getting costs down as we scale up.

What differentiates Nova Pangaea's technology?

A key aspect is the biochar co-product when we make the ethanol. That is permanent carbon capture and enables carbon negative SAF — roughly twice the greenhouse gas (GHG) savings compared with 70-80pc typical for HEFA. The biochar will initially go into soil enhancement, compost, concrete, or asphalt. In coming years, it could also be used to aid water filtration or to make strong and lightweight materials, for example in aircraft.

What is the longer-term opportunity for the technology?

The UK project is our reference plant to show the technology works at commercial scale. The bigger opportunity is to deploy in regions with large volumes of biomass or agricultural residues, like North and South America, Asia, and parts of the global south.

By Aidan Lea