UK parliament approves SAF mandate from 2025

Market: Biofuels, E-fuels, Electricity, Hydrogen, Oil products
06/11/24

The UK parliament has approved the proposed sustainable aviation fuel (SAF) mandate that will come into effect on 1 January, 2025.

Obligated suppliers will have to deliver a 2pc share of SAF in 2025, increasing to 10pc in 2030, 15pc in 2035 and 22pc in 2040. The obligation will remain at 22pc from 2040 "until there is greater certainty regarding SAF supply".

The obligation arises at the point at which a supplier's jet fuel can be supplied only to UK aviation.

Hydrotreated esters and fatty acids (HEFA) SAF can be used to meet 100pc of SAF demand in 2025 and 2026, but will be capped at 71pc in 2030 and 35pc in 2040. An obligation for Power-to-Liquid (PtL) SAF will be introduced from 2028 at 0.2pc of total jet fuel demand, rising to 0.5pc in 2030 and 3.5pc in 2040.

Buy-out mechanisms will be set at the equivalent of £4.70/l ($6.10/l) and £5.00/l ($6.50/l) for the main and PtL obligations, respectively.

"It is projected that, between 2025 and 2040, the SAF mandate could deliver up to 25mn t of SAF, securing a saving of up to 54mn t of carbon dioxide", said transport minister John Hendy.

The UK confirmed on 17 July it will introduce the Sustainable Aviation Fuel (Revenue Support Mechanism) bill to support SAF production. The government previously said it aims to introduce the mechanism, which will be industry funded, by the end of 2026.

"Together with the SAF mandate, [the mechanism] will give the investment community confidence to invest in these novel and innovative technologies", Hendy said.

By Evelina Lungu

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News

23/06/25

Subsidised bio-LNG deemed eligible under FuelEU

London, 23 June (Argus) — Subsidised bio-LNG and other types of alternative fuels are deemed eligible under FuelEU Maritime Regulation, according to sources with knowledge of the matter. FuelEU allows emissions reductions supported under other legal frameworks, such as the support schemes under RED, in order to encourage greater investment in less carbon-intensive marine fuels. Under Directive (EU) 2018/2001 (RED), the greenhouse gas (GHG) reductions are counted towards member states' targets, while under FuelEU the targets are set to shipping companies. Excluding subsidised marine fuels may otherwise lead to competitive disadvantages for smaller sectors, such as European biomethane. The European Commission has not yet issued an official statement. Demand for bio-LNG has risen sharply this year with the start of FuelEU Maritime in January, requiring ship-owners to reduce their GHG emissions by 2pc in 2025, with targets steadily rising to 80pc in 2050. Subsidised, bunker dob bio-LNG in Northwest Europe was last assessed at €78.09/MWh ($89.55/MWh) on Thursday, while its unsubsidised counterpart was assessed at €93.59/MWh. By Madeleine Jenkins Bio-LNG vs Gas Bio-LNG vs Gas Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Find out more

News

US refiners boost jet production despite clouds

23/06/25

News

23/06/25

US refiners boost jet production despite clouds

Houston, 23 June (Argus) — Some US refiners are boosting jet fuel production despite tariff-related economic uncertainties that could affect travel demand. Marathon Petroleum, one of the largest US independent refiners, is spending millions to increase jet fuel capacity at its 253,000 b/d Robinson refinery in Illinois. The project will increase the refinery's flexibility to optimise jet output to meet growing demand, chief executive Maryann Mannen says. The company plans to spend $150mn on the project this year and another $50mn in 2026. Marathon would not disclose the planned jet capacity at the refinery but says the project will be ready by the end of 2026. Another independent refiner, CVR Energy, is increasing jet capacity at its Coffeyville, Kansas, refinery. The company is installing piping and revamping storage tanks at the 132,000 b/d facility to enable 9,000 b/d of jet output by the end of the third quarter, chief executive David Lamp says. Jet production is not subject to a Renewable Volume Obligation, which means that CVR would not need to blend biofuels into it or purchase renewable identification number (RIN) credits as it would if producing diesel. Shifting production from diesel to jet will reduce CVR's annual RINs requirements, Lamp says. At the same time, the opportunity to sell products to markets further west, where two major refineries are set to close, will continue to grow over the next few years, with jet being an important part of the mix, he says. Phillips 66 plans to shut its 139,000 b/d Los Angeles refinery by October, while independent Valero aims to close or repurpose its 145,000 b/d Benicia, California, refinery by April 2026. CVR has the capability to move products from the midcontinent to California but would need to weigh the potential benefits against the political, regulatory and cost environment in the state and, as a result, may favour other locations, it tells Argus . CVR at present produces jet at its 74,500 b/d Wynnewood, Oklahoma, refinery, shipping it primarily by truck or pipeline to midcontinent locations, but it can also move jet by rail. Another independent, Delek, has upgraded its 83,000 b/d El Dorado, Arkansas, refinery to produce jet as part of a plan to boost profitability. The company did not disclose how much jet the refinery can produce. The investments come after US refineries produced a record share of jet in 2024, reflecting higher demand relative to other transport fuels, according to the EIA. The EIA in its most recent Short-Term Energy Outlook forecasts that US jet demand will average 1.71mn b/d in 2025 and 1.73mn b/d in 2026, up from 1.7mn b/d last year. But US airlines are signalling an uncertain outlook for jet demand, with most withdrawing full-year 2025 financial guidance when reporting first-quarter earnings, as President Donald Trump's evolving tariff plans have made it difficult to predict how travel activity will develop. SAF conduct Refiners nevertheless appear bullish on aviation fuels, including renewables. Specialty refiner Calumet will expand sustainable aviation fuel (SAF) output at its Montana plant sooner than expected — reaching 120mn-150mn USG/yr by the second quarter of 2026, with plans to boost capacity to 300mn USG/yr by 2028. SAF margins have remained "stable and attractive", as the introduction of national mandates around the world compliment an already growing base of voluntary demand, chief executive Todd Borgmann says. US independent Par Pacific's planned $90mn renewable fuels facility at its 94,000 b/d Kapolei, Hawaii, refinery, is near completion. The project will produce SAF and other products, and is expected to start up in the second half of 2025. By Eunice Bridges US jet fuel demand Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Russia condemns US strikes, offers Iran support

23/06/25

News

23/06/25

Russia condemns US strikes, offers Iran support

London, 23 June (Argus) — Russia has condemned US airstrikes on Iranian nuclear facilities but said they will not affect Moscow's dialogue with Washington. "This is an absolutely unprovoked aggression against Iran. It has no basis or justification," state news agency Tass quoted President Vladimir Putin as saying during a meeting in Moscow with Iranian foreign minister Abbas Araqchi. Earlier today, Kremlin spokesperson Dmitry Peskov also criticised the strikes and expressed "deep regret" over the escalating conflict in the Middle East. "There has been an increase in the number of participants in this conflict, a new round of escalation of tensions in the region. And of course, we condemn this and express deep regret in this regard," Peskov said, according to Tass. Despite the tensions, Peskov said the US strikes would not affect Russia's bilateral dialogue with Washington, describing the two processes as "independent". He also raised concerns about potential radiation risks from the attacks. "We need to find out what happened to these nuclear facilities and whether there is a radiation hazard," he said, while noting that the UN nuclear watchdog, the IAEA, had reported no signs of contamination so far. Peskov said Russia is ready to support Iran, depending on Tehran's needs. "We have offered our mediation efforts. This is specific," he said. "Everything depends on what Iran needs." Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Iran vows payback after US strike on nuclear facilities

23/06/25

News

23/06/25

Iran vows payback after US strike on nuclear facilities

Dubai, 23 June (Argus) — Iran said today that US airstrikes on its nuclear facilities have expanded the range of legitimate military targets for its armed forces, intensifying concerns over supply disruptions in a region that underpins global oil trade. Powerful and targeted operations with "serious consequences" await the US in response to its direct involvement in strikes on Iranian soil, according to Ebrahim Zolfaqari, spokesperson for Iran's Khatam al-Anbiya central military headquarters. "Mr. Trump, the gambler, you may start this war, but we will be the ones to end it," Zolfaqari said. The US strikes on three heavily fortified nuclear facilities in Iran early on 22 June local time marked a clear shift, with Washington now openly joining Israel's military campaign against Tehran's nuclear programme, which Israel views as an existential threat. Israel and Iran have been trading airstrikes and missiles since 13 June. The US has thousands of troops stationed across the Middle East, including in Bahrain, Qatar, the UAE, Kuwait, Saudi Arabia and Iraq. While Iran has threatened retaliation, it has so far held back from steps often floated by its leadership, such as striking US bases in the region or closing the strait of Hormuz — a vital waterway through which about a quarter of global seaborne oil trade flows. The US bombing and Iran's threats of retaliation caused crude futures to rise sharply in early trading on 23 June , with front-month Ice Brent climbing above $80/bl for the first time in five months, as the US bombing raised fears of wider escalation. But markets later pared gains. The August Ice Brent contract was trading at $76.56/bl as of 08:25 GMT, down by 45¢/bl from its 20 June settlement. Trump warned Iran against retaliating for the strikes and signalled he is open to regime change in Tehran. "If the current Iranian Regime is unable to MAKE IRAN GREAT AGAIN, why wouldn't there be a Regime change??? MIGA!!!" he said on Sunday, as Tehran continued to show defiance. He followed up by claiming the strikes had caused "monumental" damage to Iran's nuclear sites, adding that the "biggest damage took place far below ground level. Bullseye!!!" The full extent of the damage remains unverified. But "even if nuclear sites are destroyed, game isn't over, enriched materials, indigenous knowledge, political will remain", said top Iranian military and nuclear adviser, Ali Shamkhani. The UN's nuclear watchdog, the IAEA, said on 22 June that no increases in off-site radiation levels had been reported following the US strikes. Director general Rafael Grossi, in an address to the UN Security Council, confirmed that Fordow — Iran's main facility for enriching uranium to 60pc — was hit. He also said the Esfahan nuclear site and the Natanz enrichment facility were struck again. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Iran raises Hormuz closure threat after US strikes

23/06/25

News

23/06/25

Iran raises Hormuz closure threat after US strikes

Dubai, 23 June (Argus) — A senior Iranian lawmaker says parliament has concluded that the strait of Hormuz "should be closed" in response to US airstrikes on three nuclear sites early Sunday — a move that would severely disrupt global oil flows. Esmaeil Kowsari — a member of the national security and foreign policy commission, and a former high-ranking commander in the Islamic Revolutionary Guard Corps (IRGC) — told state-owned Press TV that lawmakers had reached a consensus that closure would be the appropriate response. Argus understands that while members of parliament were all in agreement, the issue was not formally put to a vote. Kowsari said the final decision lies with the Supreme National Security Council, Iran's top security body. His comments have drawn global attention as markets await Iran's response to the strikes, which US president Donald Trump ordered against nuclear facilities at Fordow, Natanz and Isfahan. The Fordow site is heavily fortified and located underground. The Natanz facility had already been targeted by Israeli strikes, prompting a series of retaliatory missile and drone exchanges between Iran and Israel. Iranian officials, including supreme leader Ayatollah Ali Khamenei, had repeatedly warned Washington that any direct military action would trigger a response causing "irreparable" harm to the US. . Variety of options The strait of Hormuz is the world's most critical oil transit route, with around 17mn b/d of crude and refined products — roughly a quarter of global seaborne oil trade — passing through it. Iran has repeatedly threatened to close the strait in past confrontations but has never followed through. It has, however, previously targeted or seized vessels transiting the waterway, prompting some shipowners to consider alternative routes. Closure of the strait is one of several retaliatory options regularly floated by Iranian political and military leaders. Others include military strikes on US bases across the Mideast Gulf. The US maintains installations in Bahrain, Qatar, the UAE, Kuwait, Saudi Arabia and Iraq. Asked whether closing the strait was under consideration, Iranian foreign minister Abbas Araqchi declined to confirm, saying only that "there are a variety of options available to us". Araqchi travelled to Moscow late on Sunday and is expected to meet Russian president Vladimir Putin on Monday. Moscow has condemned the US strikes. Ali Akbar Velayati, a long-time adviser to Khamenei, also issued a veiled threat to Washington, saying: "West Asia is not Greenland, and the strait of Hormuz is fundamentally different from the Panama Canal." The comment referenced earlier threats by Trump to assert US control over Greenland and the Panama Canal during the early days of his second term. US secretary of state Marco Rubio warned that any attempt by Iran to close the strait would be "a terrible mistake." "It's economic suicide for them if they do it, and we retain options to deal with that," he said. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more