Referral of the proposed Low Carbon Fuels Fund subsidy scheme by the Department for Transport
The Subsidy Advice Unit (SAU) has accepted a request for a report providing advice to the Department for Transport (DfT) concerning its proposed Low Carbon Fuels Fund subsidy scheme.
Administrative timetable
| Date | Action |
|---|---|
| 15 July 2026 | SAU’s report to be published |
| 16 June 2026 | Deadline for receipt of any third-party submissions |
| 3 June 2026 | Beginning of reporting period |
Request from DfT
3 June 2026: The SAU has accepted a request for a report from DfT concerning the proposed Low Carbon Fuels Fund subsidy scheme. This request relates to a Subsidy Scheme of Particular Interest.
The SAU will prepare a report, which will provide an evaluation of DfT’s assessment of whether the subsidy scheme complies with the subsidy control requirements (Assessment of Compliance). The SAU will complete its report within 30 working days.
Information about the scheme provided by DfT
DfT proposes to create a new government subsidy scheme, the Low Carbon Fuels Fund, targeted at sustainable aviation fuel (SAF) producers to support increased SAF supply in the UK market. SAF is an alternative to fossil-based jet fuel which is technologically compatible with existing fleets and infrastructure. With this new scheme, DfT intends to progress the UK’s advanced fuels sector, by supporting projects ranging from early development phases to those near to a final investment decision (FID). This will support first-of-a-kind low-carbon fuels projects to commercialise and increase the pipeline of domestic SAF projects.
This scheme will help to support SAF producers and industry by providing capital funding for development costs, encouraging private investment and progressing SAF projects toward FID.
The Low Carbon Fuels Fund will award subsidies through competition for grant funding. There will be £219m of grant funding available between 2026 to 2027 and 2029 to 2030, as secured by the 2025 Spending Review. A breakdown of funding availability by year will be announced in due course. Industry will be invited to bid for a share of capital grant funding in the form of a funding competition, which will be open to SAF producers to fund certain eligible project costs across both early and more advanced project lifecycle phases up to construction. The grant will benefit SAF producers in the UK and the wider SAF industry such as feedstock and technology providers, and fuel offtakers.
Applications will be welcomed from enterprises such as private sector commercial organisations, academic institutions, and small-medium enterprises (SMEs). Project partners can comprise a variety of the above enterprises and applications can be made by a single organisation or via a consortium/partnership. The lead applicant organisation would need to be registered in the UK, and the project itself must be located in the UK.
Project funding will be available for work completed during the “Funding Period”. This period will begin following completion of the assessment process, decisions on successful projects, due diligence checks, and after the finalisation of project specific grant conditions and all relevant grant agreement paperwork.
Information for third parties
If you wish to comment on matters relevant to the SAU’s evaluation of the Assessment of Compliance concerning the proposed Low Carbon Fuels Fund subsidy scheme, please send your comments on the date stipulated in the timetable above. For guidance on representations relevant to the Assessment of Compliance, see the section on reporting period and transparency in the Operation of the subsidy control functions of the Subsidy Advice Unit.
Please send your submissions to us at sau-lowcarbonfuels2026@cma.gov.uk, copying the public authority: lowcarbonfuelsfund@dft.gov.uk.
Please also provide a contact address and explain in what capacity you are making the submission (for example, as an individual or a representative of a business or organisation).
Notes to third parties wishing to make a submission
The SAU will only take your submission into account if it can be shared with DfT. The SAU will send a copy of your submission to DfT together with its report. This is to allow the public authority to take account of the submission in its decision as to whether to grant or modify the subsidy scheme or its assessment. We therefore ask that you provide express consent for your full and unredacted submission to be shared. We also encourage you to share your submission directly with DfT using the email address provided above.
The SAU may use the information you provide in its published report. Therefore, you should indicate in your submission whether any specified parts of it are commercially confidential. If the SAU wishes to refer in its published report to material identified as confidential, it will contact you in advance.
For further details on confidentiality of third party submissions, see identifying confidential information in the Operation of the subsidy control functions of the Subsidy Advice Unit.
Contacts
- SAU project team: sau-lowcarbonfuels2026@cma.gov.uk
- CMA press team: 020 3738 6460 or press@cma.gov.uk