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IAG chief fires off warning to Rishi Sunak over green fuel subsidies

Published 13/02/2023, 09:10
© Reuters.  IAG chief fires off warning to Rishi Sunak over green fuel subsidies
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Proactive Investors - The chief executive of International Consolidated Airlines Group (LON:ICAG), Luis Gallego, has expressed concern that the UK is falling behind the United States in the production of green aviation fuels, due to the government's inaction on the matter.

He is calling for Prime Minister Rishi Sunak to implement a "contracts for differences" scheme, similar to that used for incentivising investment in UK wind farms, to kickstart SAF production in the UK.

In an op-ed for the Telegraph, Gallego, whose company owns British Airways, argues that the UK risks missing out on the opportunity to become a leader in this sector, as the US has established a lead with the help of billions of dollars in White House subsidies.

The UK's "Jet Zero" commitment, one of 10 made under Prime Minister Boris Johnson's £12bn "green industrial revolution" programme in 2020, aims to reach net zero aviation by 2050.

However, the industry is increasingly worried by the lack of funding for sustainable aviation fuels (SAF) from Westminster.

These concerns are echoed by John Holland-Kaye, CEO of Heathrow airport, who says that Britain risks being left behind by the US and Europe in the race to scale up SAF production.

The aviation industry is the latest sector to raise concerns about the direction of government policy and the long-term growth prospects for the UK.

Gallego is calling for Prime Minister Rishi Sunak to implement a "contracts for differences" scheme, similar to that used for incentivizing investment in UK wind farms, to kickstart SAF production in the UK.

Read more on Proactive Investors UK

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