Advanced Liquid Fuels
Aviation and heavy transport cannot electrify on the available timetable. We follow the mandates, the feedstock competition and the plants that are actually being financed.
Demand created by obligation, supply constrained by feedstock.
Sustainable aviation fuel, renewable diesel and synthetic e-fuels exist because certain sectors have no near-term electrification route and have been given a blending obligation instead. That obligation is the demand curve.
Supply is a different problem. Waste-based feedstocks are finite and already contested; synthetic routes need cheap hydrogen and captured carbon. The gap between mandated demand and deliverable supply is the single most important number in this area.
- Blending mandates and the buy-out mechanisms behind them
- Feedstock availability, contracting and competition
- Plant pipelines from consent to commissioning
- Certification, chain of custody and book-and-claim
The instruments that create the demand.
Read the mechanism, not the headline percentage. How an obligation can be discharged matters more than its headline level.
Aviation fuel mandates
Rising blending obligations on fuel suppliers, with sub-targets that steer which production routes qualify.
Road transport obligations
Renewable fuel obligations and certificate markets that set the value of each qualifying litre.
Feedstock rules
Caps and eligibility criteria on waste-derived feedstocks that quietly decide which plants can be built.
Buy-out pricing
The price an obligated supplier pays instead of buying fuel — the effective ceiling on the whole market.
Three things we keep returning to.
The real constraint on supply
Plant capacity is buildable; qualifying feedstock is not.
The ceiling every business case runs into
If it is cheaper to pay the penalty, the fuel does not get bought.
Where the value concentrates
Route-specific sub-targets create the scarcity that pricing follows.
The four stages, and where they stall.
Feedstock contracts
Secure qualifying feedstock on terms long enough to finance a plant against.
Consent & finance
Planning, permitting and a capital stack that survives mandate-dependent revenue.
Certification
Qualification under the relevant scheme, without which the output earns no compliance value.
Offtake & delivery
Supply agreements with obligated parties, and the logistics to deliver into the right fuel system.
A mandate is not a purchase order.
Obligations create demand on paper. Whether that becomes a signed contract depends on the buy-out price, on whether the fuel qualifies, and on whether an obligated supplier would rather pay a penalty than commit to a decade of volumes.
We read the mechanism in detail for exactly that reason: the difference between a headline percentage and a bankable revenue line is where most of the disappointment in this sector has been concentrated.
Recent notes touching this area.
Grid connection queues are now the binding constraint
Capital is no longer the scarce input in UK clean power. Access to the network is.
Reading a mandate properly before pricing it
How an obligation can be discharged matters more than its headline level.
Announced capacity versus financial close
The conversion rate between the two is the most useful number in any build-out.
Questions about this area.
If something here is not covered, email the desk directly.
Do you cover e-fuels as well as biofuels?
Yes. Synthetic routes are covered alongside waste-derived ones, including their dependence on low-carbon hydrogen and captured carbon.
Is this relevant if I only look at aviation?
Aviation is the largest single driver here, but feedstock competition with road and marine fuel determines what aviation can actually buy.
Do you model fuel prices?
We explain the mechanisms that set price formation and point to the public reference data. We do not publish price forecasts.
How often is this area updated?
Continuously, with written notes when a mandate, sub-target or major plant decision changes the picture.
Start a conversation with the desk.
Tell us which sector you are looking at and what you are trying to establish. If we cover it, we will say what we know and what we do not.