Common use of Background/purpose of the Grant Clause in Contracts

Background/purpose of the Grant. 1.1 The UK has challenging goals for reducing greenhouse gas (GHG) emissions. In transport, the electrification of vehicles will have a key role, but the aviation sector currently has few alternatives to using liquid fossil fuels. Biofuels derived from wastes and residues, fuels made from renewable or nuclear electricity and waste-based fossil fuels could deliver significant GHG savings. However, other than commercially mature hydrotreating routes using segregated waste oils and fats, these conversion routes are yet to be commercialised and face high upfront capital costs and investment barriers which are challenging to overcome without government intervention. In the UK, DfT have encouraged the deployment of waste/residue-derived biofuels and renewable fuels of non-biological origin through double counting under the Renewable Transport Fuel Obligation (RTFO), and inclusion of aviation fuels within the RTFO ‘development fuels’ sub-target. DfT have also provided previous grant funding to industry projects via the £25 million Advanced Biofuel Demonstration Competition (ABDC), the £20 million Future Fuels for Flight and Freight Competition (F4C), the £15 million Green Fuels, Green Skies (GFGS) Competition and the £165 million Advanced Fuels Fund. Whilst these demand-side and supply-side policy approaches have been successful at helping build innovative biofuel demonstration projects and designing a number of SAF projects, there is still an ongoing need to support the development of the emerging UK sustainable aviation fuel sector as it scales up to commercial production. In the Jet Zero Strategy, the government committed to establishing a UK Clearing House to enable fuel testing and qualification for SAF. The Clearing House is intended to help reduce uncertainty, cost, and time barriers to SAF development which in turn will broaden the scope of fuels eligible for the future UK SAF mandate without sacrificing safety. In March 2023, the University of Sheffield was appointed as the delivery partner for the Clearing House to help set up and run the Clearing House function, supported by Xxxxxxx. The Clearing House will act as a central hub to advise fuel producers, coordinate testing, liaise with key stakeholders and manage applications for grant support. DfT will offer SAF Testing Grants to allocate up to £5.35 million of grant funding towards the cost of testing for pre-screening, and testing to progress a fuel towards qualification against ASTM D7566. In support of this, the SAF Clearing house will offer tailored advice to support all potential applicants regarding the processes for funding, and regarding the ASTM qualification process. To ensure the SAF Testing Grants achieve the stated objectives, it is necessary to clearly define the scope of the fund and provide the criteria used to assess the eligibility of proposed projects.