Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what estimate she has made of the revenues generated from the ending of free allowances under the UK Emissions Trading Scheme for aviation; and whether she plans to allocate those revenues to support the production of Sustainable Aviation Fuel.

The UK ETS Authority announced in July 2023 that free allocation would end for the Aviation sector in 2026, after considering stakeholder feedback which largely supported the finding that removing aviation free allocation did not pose a significant risk to carbon leakage.

The independent Office for Budget Responsibility is responsible for forecasting receipts from the UK Emissions Trading Scheme (ETS), and has published its methodology for forecasting ETS receipts on its website.

Receipts from the UK ETS accrue to the consolidated fund, and go to funding government priorities, which includes decarbonisation support for the aviation sector.

The UK Government is supporting the Sustainable Aviation Fuel (SAF) industry by building demand through the SAF Mandate, supporting first-of-a-kind SAF production plants through the Advanced Fuels Fund, and derisking SAF projects by introducing legislation for the Revenue Certainty Mechanism. In 2025, the government announced £400,000 to get new fuels to market quicker, delivering on the UK’s clean energy ambitions and powering up economic growth as part of the Plan for Change.