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Jet2 invests in sustainable fuel plant as airlines seek to meet 2030 targets

A Jet2 Boeing 737 airplane takes off from the airport in Palma de Mallorca

LONDON (Reuters) - Britain's Jet2 said it has invested in a Sustainable Aviation Fuel (SAF) production plant in northern England, as airlines jostle to secure supplies of the green fuel ahead of 2030 targets.

The low-cost carrier said on Thursday that it was making a "major investment" in the Fulcrum NorthPoint facility, being developed by Fulcrum BioEnergy, but declined to give figures. Production is expected to start in 2027, the company added.

Airlines across the world are pinning their hopes on SAF, which uses waste such as cooking oils to reduce emissions by up to 80% compared to fossil fuels, to decarbonise flying before new electric and hydrogen-powered options expected in 2035.

The EU announced binding SAF targets for European airlines on Wednesday, while Britain has said it will introduce a SAF mandate in 2025 requiring at least 10% of jet fuel to be sustainable by 2030.

Britain's Department for Transport has offered support in the form of 165 million pounds ($205.46 million) in grants to help companies constructing SAF plants.

"We continue to engage extensively with industry leaders regarding any barriers to investment in sustainable aviation fuels," it told Reuters.

But airlines and SAF producers want the government to do more and faster.

"The big message is we just need to do this more quickly," said Jonathon Counsell, group head of sustainability at IAG, the owner of British Airways.

British Airways sources SAF from Phillips 66, a plant in central England.

This week, Hungary's Wizz Air said it was investing 5 million pounds in biofuel company Firefly in a deal that will provide it with SAF for UK flights from 2028.

SAF accounts for less than 1% of jet fuel used currently. It costs three times as much as regular jet fuel when made from waste oils, but other versions made from green hydrogen can cost more.

($1 = 0.8015 pounds)

($1 = 0.8031 pounds)

(Reporting by Sarah Young and Joanna Plucinska; Editing by Sharon Singleton)