Delivering on sustainable fuels and zero emission technologies

628.  Harder to electrify transport modes will rely on a mix of technologies and fuels, offering new opportunities for UK innovation, production, and skills. Respondents to the Review generally welcomed existing ambitions as set out in the Transport Decarbonisation Plan and sector-specific plans such as the Jet Zero Strategy and Clean Maritime Plan but stressed that delivery of these ambitious plans would be key. They saw specific advantages based on the UK's expertise in R&D, aviation and maritime as well as the UK's leading role on waste-derived fuels and sustainability criteria.

629.  The UK is well set up to support innovation but commercialisation of new technologies still faces barriers. Stakeholders pointed out the important role that for example the Aerospace Technology Institute (ATI) programme plays in supporting R&D in the aerospace sector in the UK, with interest exceeding funding available. However, more would be needed to bring new technologies and fuels to the market. Stakeholders highlighted, for example, that to meet the Government's ambition to have five sustainable aviation fuel (SAF) plants under construction by 2025 and 10% of all UK jet fuel to be sustainable by 2025, government needs to take further action, most notably "a mandate for fuel producers and the right incentives to close the price gap with kerosene".448

630.  To continue to support innovation, the Review recommends that government should provide long-term funding beyond the current spending review period to support UK manufacturing and supply chains (including as part of the Aerospace Technology Institute for demonstration) as well as for testing and certification of new fuels and technologies (as part of Zero Emission Road Freight (ZERFT) demonstration programme, UK Shipping Office for Reducing Emissions (UK SHORE), SAF demonstration competitions and clearing house).

631.  In addition, an enabling regulatory framework is needed to support investments. At the roundtables, the Review heard about the value stakeholders assign to existing support mechanisms such as the Renewable Transport Fuels Obligation (RTFO) as well as the planned mandate for SAF and Low Carbon Fuels Strategy, which respondents asked to be delivered as soon as possible. Some also argued for higher RTFO targets and fiscal incentives for fuels with a higher biocontent. They noted that there would be encouraging signs for other technologies such as direct air capture and the development of business models for greenhouse gas removals. However, changes in fuels and technologies will necessitate wider changes. For example, the use of hydrogen and electrical propulsion in aviation will require new regulations to authorise such aircraft. Maritime UK pointed out that "although government and industry have both made a substantive start towards decarbonisation, there is a need to increase the scale and pace of this joint effort".449 Several respondents highlighted that more clarity is still needed on the next steps in the maritime sector, including the respective roles of industry and government, with a refresh of the Clean Maritime Plan expected for 2023.

632.  Some stakeholders also highlighted the need to drive operational efficiencies. Taking aviation as an example, Airlines UK highlighted delays linked to infrastructure and airport capacity that force aircrafts to "stack, bunch and circle airports waiting for arrival slots".450 The British Airline Pilots Association flagged that 'economic tankering', i.e. the carriage of extra fuel to avoid paying higher fuel costs elsewhere, means "typically 3-5% of the extra fuel is wasted per hour".451 Alongside technological changes, government and industry should continue to increase operational efficiencies. As part of this, government should for example identify voluntary and mandatory options to put an end to 'economic tankering' by airlines by 2023.

633.  Continued dialogue between government and industry as well across sectors will be important to deliver on ambitions. Such dialogue will be needed to address potential skills and supply chain constraints as well as identify required infrastructure investments that enable new technologies and operational changes. Many stakeholders stressed the need for more integrated, system-wide thinking, for example on how to link fuel production with CCUS or interactions with impacts other than CO2.

634.  Many respondents also highlighted the international character of the aviation and maritime sector, and the need for joint action and collaboration across borders. Building on the UK's leading role in International Civil Aviation Organization (ICAO) and International Maritime Organization (IMO), the Government should drive ambitious policies to decarbonise transport at international level, working with partner countries to effect change.