UK Chancellor Rachel Reeves has backed a third runway at London Heathrow airport, reviving one of the longest-running and controversial issues in transport history.
Speaking to an audience of business chiefs at Siemens in North Oxfordshire this morning, the Chancellor set out the government’s latest set of reforms to kickstart economic growth.
This included the announcement that the government supports, and is inviting proposals for, a third runway at Heathrow.
The Chancellor confirmed that the government will move “at speed” to review the Airports National Policy Statement (ANPS). This provides the basis for decision making on granting development consent for a new runway, but for that to happen, major environmental and planning obstacles will have to be overcome. Next year will be 80 years since the idea of a third runway was first put forward.
One topic missing from previous debates is the rise of sustainable aviation fuel (SAF), which will be a key element in any successful bid.
SAF is made from sustainable sources, such as household waste or used cooking oil, and produces an average of 70% less carbon emissions than traditional fossil-based aviation fuel.
The government is supporting UK producers by investing £63m in 2025-26 into the Advanced Fuels Fund and setting out details of a Revenue Certainty Mechanism, which will support investment and green jobs in plants across the UK – with previous winners of the Fund ranging from across the north of England to South Wales.
“Taken together, our commitments to SAF will support thousands of jobs in places like Teesside and Humberside, bring down our transport emissions, and help make the UK a clean energy superpower as part of our Plan for Change,” said Reeves.
A new SAF mandate came into force this year. By law, this type of fuel must now make up at least 2% of all jet fuel in flights taking off from the UK this year, growing year-on-year to 10% by 2030 and 22% by 2040.
Flights taking off from the UK totalled 1.93m in 2023, according to ONS data; 2% would represent 38,620 flights – or around 3,218 monthly.
To date only four airports – Heathrow, Gatwick, Manchester and Stansted – have demonstrated the capability to handle SAF, although between them the busy quartet do account for 178 million of the total 292 million passengers travelling through UK airports.
Capacity remains the main hurdle. In 2024, SAF production capacity didn’t exceed 1.5 million metric tonnes (Mt), barely 0.5% of total jet fuel needs, according to International Air Transport Association estimates. On the bright side, it was projected to triple to 1.875 billion litres in 2024, but that still represents only about 6% of renewable fuel capacity.
A third runway, should it be approved, is unlikely to be ready until the mid-2030s, by which time SAF will be more readily available, enabling the modest targets to be met – but even then it would probably power less than a fifth of all flights. That will not appease the environmental lobby.
More SAF is becoming available as policy advances. A bill will be introduced to support SAF production, King Charles III said in his speech to mark the opening of the new parliament and legislative programme last July (click here).
Converting aviation to a SAF age is going to take years, if not decades. The average commercial aircraft’s age is 11.6 years, with many airlines operating aircraft over 20 years old.
Aircraft purchased with today’s technology will still operate in the 2040s – and most likely with kerosene in their wings. SAF is compatible with conventional jet engines and can be blended with standard fuel up to 50% but that still leaves a lot of emissions-pouting fuel.
Scaling SAF production is key, but that will mean further work to expand eligible feedstocks, incentives to help cut costs and, critically, ensuring the design of the revenue certainty mechanism enables the UK to increase production of advanced fuels this decade whilst keeping costs as low as possible, which are critical for achieving mandate compliance and avoiding supplier buy-out.
Expanding production beyond the use of waste oils will require scaling up new and immature technologies, while relatively high interest rates and risk premiums could discourage investment, especially in immature technologies such as synthetic fuels, notes McKinsey.
Since 2022, announced production capacity expected to be operational by 2030 has increased significantly, while capacity that was expected to become operational in the near future has been delayed.
Heathrow CEO Thomas Woldbye said a third runway would unlock “billions of pounds” of private money to stimulate the UK supply chain during construction and drive trade, tourism and inward investment to every part of the country.
“With strict environmental safeguards, it would demonstrate that by growing our economy responsibly we can ensure our commitments to future generations are delivered,” he said.
