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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.


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17/02/25

Singapore bunker demand softens in January

Singapore bunker demand softens in January

Singapore, 17 February (Argus) — Bunker fuel demand at the key port of Singapore was tepid in January. Total bunker sales declined by 9.1pc on the year to 4.46mn t, which was 6.9pc down from a month earlier, according to preliminary data from the Maritime and Port Authority of Singapore. Demand for alternative marine fuels was stable at 206,500t, with total bio-blends consumption at 107,900t. Consumption of B24 HSFO-based fuel rose by 33pc on the month to 15,970t, and for B24 VLSFO-based there was a 2pc decline to 92,000t. A sharp drop of 86pc was seen for LNG bunkering, to 6,600t. Conventional bunker sales were lacklustre ahead of the lunar new year holiday at the end of January. Most buyers held a cautious procurement stance against an uncertain backdrop within the crude complex, after the US tightened sanctions on Russian energy exports . Trading was subdued for very-low sulphur fuel oil (VLSFO) bunkers and January sales fell by 15pc on the year to 2.43mn t. This was steady on the month despite limited spot enquiries. The seasonal slowdown coupled with a gradual rebound in Red Sea shipping traffic that resulted in shorter transit routes, contracting global tonne mile fuel demand. In contrast, HSFO bunker sales, while steady year on year, saw a 11pc drop from December. Rising premiums for HSFO, coupled with an expected slowdown in global tonne-mile fuel demand, should see HSFO demand retreating from its highs of 2024. The imposition of US tariffs threatens to further slow regional exports, particularly from China. This will probably have a knock-on effect on bunker demand, as trade activity declines. By Cassia Teo, Mahua Chakravarty and Asill Bardh Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Frustration over delays to UK CCS and H2 programmes


17/02/25
News
17/02/25

Frustration over delays to UK CCS and H2 programmes

London, 17 February (Argus) — Companies are growing increasingly frustrated with the UK government over unclear timelines and inadequate funding for carbon capture and storage (CCS) and clean hydrogen projects. The government has drawn strong praise for the design of its contracts-for-difference style production subsidies for electrolytic hydrogen and CCS systems to underpin low-carbon hydrogen from fossil fuels. But too few projects have been able to access the schemes and developers are losing confidence that the UK will match their ambition with sufficient and timely funding. "It's like building a great motorway with five lanes but very few, or no junctions," industry body OEUK's head of energy policy Enrique Cornejo said. "We have a great policy framework, but we don't have access, apart from a very small number of projects," he told the UK CCUS and Hydrogen Decarbonisation Summit in Leeds, northern England this month. Cornejo welcomed a recent final investment decision (FID) for the Teesside CCS system and progress made on northwest England's HyNet cluster, which is expected to reach FID this year, but he urged the government to set out funding and timelines for the Scottish "Acorn" and Humberside "Viking" CCS projects that are supposed to be next in line. "It's been a really long wait for these projects and the risk is very clear that if we don't hear some positive news from the government" there could be "lost investment", he said. It is a view shared by Norway's Equinor, which owns 45pc of the Teesside CCS project and a portfolio of Humberside hydrogen proposals that are in limbo having been overlooked in initial government selections. "Keeping projects on life support costs a lot of money," said the company's director of UK low-carbon solutions hydrogen, Dan Sadler. Equinor has spent "hundreds of millions" on its proposals for CCS-based hydrogen production, electrolytic hydrogen production, transport and storage infrastructure, he said. Sadler made the same appeal 12 months ago but has still received no update on the timing for the so-called "track 1 expansion process" which would allow its CCS-hydrogen project to move ahead. Optimism over the "fantastic" Teesside FID and contracts signed with three electrolytic projects must be balanced against concerns that HyNet has not reached FID nor have any of the UK's CCS-based hydrogen plants , Sadler said. On electrolytic hydrogen, the UK missed its deadline to shortlist winners of second round projects in 2024. Multiple electrolysis-focused developers at the Leeds conference talked of "standstill" in the sector, while financiers echoed the importance of the UK's second hydrogen allocation round (HAR2) shortlist. "We're waiting with bated breath for HAR2 so we know which projects we can look to finance," UK-based National Wealth Fund's managing director of banking and investments, Emily Sidhu, said. Opening applications for the UK's subsidy scheme for hydrogen pipeline and storage infrastructure has slipped to the fourth quarter of this year, which means it could be many months into 2026 before winners are selected and years until the projects get built. UK pipeline operators envy the government support that peers in continental Europe have received and have been trying to alert London about what companies perceive to be unduly arduous permitting processes, one pipeline firm told Argus . Emperor's new clothes The funding appeals come at a difficult time. The Labour government, which was elected last year, is reviewing spending across all departments, creating extra doubt. The total cost of the UK's ambitions for hydrogen and CCS would surpass several times over the £21.7bn ($27.3bn) for CCS and £2bn for electrolytic hydrogen that the government has confirmed for the first rounds. While raising funds from the government, the Emissions Trading System (ETS) or the so-called gas shipper obligation are possibilities, it is not sufficiently clear to give confidence to investors, Equinor's Sadler said. Moreover, the Labour administration has not said if it will stick to the former Conservative government's targets, Sadler noted. "It's rhetoric. Government policy for hydrogen and CCS? There isn't any. People quote 10GW [hydrogen production] and four [CCS] clusters by 2030 and 30mn t/yr [CO2 sequestration] by 2030. That's the Tory [Conservative] policy, the Labour government hasn't got a policy at the moment," Sadler said. The industry's belief in the UK as an investment proposition cannot be sustained forever, he said. The UK's Department for Energy Security and Net Zero has not responded to questions about the Labour government's hydrogen targets. By Aidan Lea Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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German heating oil sales in February higher on the year


17/02/25
News
17/02/25

German heating oil sales in February higher on the year

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Philippines to review shutdown of 232MW coal plant


17/02/25
News
17/02/25

Philippines to review shutdown of 232MW coal plant

Manila, 17 February (Argus) — The Philippines will review plans to retire the 232MW Mindanao coal-fired power plant in Misamis Oriental province because the rehabilitation of a major regional power complex could cause an electricity supply shortage. The country could put on hold plans to accelerate the retirement of the Mindanao coal plant to 2026 from 2031, the Department of Energy (DoE) said. The plant, majority owned by private-sector Aboitiz Power, started operations in 2006 under a build-operate-transfer (BOT) agreement with the National Power and Power Sector Assets and Liabilities Management. The plant was originally scheduled to be retired in 2031 once the BOT agreement had run its course and plant ownership transferred to the national government, but authorities later decided to shut it down by 2026. The plant consumes over 1mn t/yr of coal. Authorities might review the retirement plans to offset the loss of power supply from the 1,000MW Agus-Pulangi hydropower complex, which will be rehabilitated next year. The complex comprises seven hydropower plants and serves as a key source of baseload power in the Mindanao grid. It is currently capable of producing only 600-700MW of power because of siltation and ageing infrastructure. Parts of the power complex are over 50 years old and its oldest dam, Agus 6, started commercial operations in April 1971. The rehabilitation involves repairing, replacing and upgrading the components of an existing hydroelectric power plant to restore its functionality, improve efficiency and extend its lifespan. The complex will run at a derated capacity during rehabilitation works, which could take several years. This comes as power demand in the Mindanao grid continued to increase last year. Demand averaged 2.248GW in 2024, a 10.2pc increase from 2.040GW a year earlier. The Mindanao plant could supply enough power to keep the grid stable at its full capacity, by covering for the loss in generating capacity and meeting the increase in power demand, DoE added. By Antonio Delos Reyes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Japan’s economy grows in 2024


17/02/25
News
17/02/25

Japan’s economy grows in 2024

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