The Sustainable Aviation Fuel (Revenue Support Mechanism) Bill was among proposed legislation revealed in the state opening of parliament.

The bill said SAF production would be supported by “revenue certainty” determined by the government, but no further details have been provided.

It added: “Bringing in a revenue certainty mechanism will help to reduce risk, giving investors the confidence they need to invest in UK SAF plants.”

The government estimates SAF production will add more than £1.8 billion to the economy and support 10,000 jobs.

“The government will mandate the supply of SAF in the UK by obliging suppliers to have at least 10% SAF in their fuel mix supplied to airlines,” the bill added, but also gave no timescale.

The previous Conservative administration, in the UK’s Jet Zero Strategy, committed to having five SAF plants under construction by 2025.

Mark Tanzer, chief executive of Abta, hailed the King’s Speech the first "real insight" into the new government’s priorities. "There are some welcome announcements for our industry," he said.

“We are very pleased to see the inclusion of the Sustainable Aviation Fuels Bill. As we set out in our manifesto for travel and tourism, building a domestic industry in sustainable aviation fuels (SAF) is essential if the aviation industry is to meet its net zero targets.

"Industry and investors have been clear a price mechanism will be vital in stimulating investment in the development of a UK SAF industry, so it is very welcome to see this is a priority within the first parliament."

Tanzer continued: “Elsewhere, the Skills England Bill will establish a new body with responsibility for skills development and also make changes to the apprenticeship levy, which the industry has long been calling for. Abta will be engaging with this process, both directly and through the Tourism Industry Skills Working Group to make the views of members heard.

“There are a number of other bills announced today [Wednesday] that we will monitor to assess their implications for the travel industry, including the Terrorism Bill and the Arbitration Bill.

“It’s also important for the industry to remember that the King’s Speech just sets out the new legislative agenda.

"There are many other matters for the industry to liaise with government on which are either existing legalisation or are not a legislative issues, such as Package Travel Regulations and Atol reforms, and the implementation of the EU Entry-Exit Scheme.

"Abta is already working with government on these matters, making sure that the views of our members are represented and understood.”

‘Positive step forward’ for SAF production

Clive Wratten, chief executive of the Business Travel Association, said: “A bill to support the production of sustainable aviation fuel is to be celebrated,” adding: “We urge the government to include provision for Air Passenger Duty to be ring-fenced for sustainable initiatives."

Karen Dee, chief executive of AirportsUK (formerly the Airport Operators Association), said the backing for SAF production through a mandate and revenue support mechanism would "help grow a new industry for the UK".

"This will enable aviation to reduce its carbon emissions, grow sustainably and support economic growth in every region of the UK through new jobs, new investment and new connectivity to global markets," said Dee.

Tim Alderslade, chief executive of Airlines UK, said the commitment to a revenue support mechanism incentivising SAF production was "a positive step forward".

"Airlines are clear that a guaranteed strike price mechanism... would represent exactly the kind of strategic partnership with business that will unlock billions of pounds of private sector investment in a brand new UK SAF industry," Alderslade added.

Matt Gorman, chair of Sustainable Aviation, said the proposed legislation represented "a significant milestone" in UK aviation’s journey to net-zero, which could "turbo-change" private investment in the country’s SAF industry and ensure the cost of flying "remains competitive" while creating thousands of new green jobs.

"We look forward to working with the government towards a government-backed and funded scheme as soon as possible so UK-produced SAF – currently, on average, 70% less carbon intensive than fossil jet fuel – can play its full part in our important journey to net-zero aviation this decade and beyond."

The speech made no mention of APD or the wider travel industry in general.

Rail reform

It did, though, contain a bill that will see Britain’s railways brought back into public ownership under Great British Railways (GBR).

The government said: “GBR will reform the ticketing system to make it simpler for passengers, replace the current ticket types and maximise passenger growth.

"GBR will also ensure ticketing innovations like automatic compensation, digital pay as you go and digital season ticketing are rolled out across the whole network.”