UK Export Finance backs sustainable fuel to drive growth, cut emissions

U.K. Export Finance announced a series of measures at the Farnborough International Airshow in late July to drive growth and decarbonization across the aerospace sector.

In a major step, UKEF will broaden its eligibility criteria so that it can consider a wider range of financing options for U.K.-based sustainable aviation fuel (SAF) projects, opening the door to greater investment in the sector.

The export-credit agency also signed agreements with international aerospace leader Turkish Aerospace and British air-taxi pioneer Vertical Aerospace to help U.K. innovation reach global markets.

“This government is laser-focused on bringing good growth to every corner of the country, and today we’re wasting no time in getting on with the job,” said Jonathan Reynolds, the U.K.’s secretary of state for business, innovation, science and trade. “Aerospace is one of Britain’s great industrial success stories, supporting skilled jobs and innovation right across the U.K., and this new support will harness the potential of not only our manufacturing base but our cutting-edge research and technology and deliver benefits for every postcode.”

UKEF CEO Tim Reid added, “From cleaner aviation technologies to next-generation aircraft and advanced air mobility, these partnerships show how UKEF is helping British aerospace innovation reach global markets and supporting the industries that will shape the future of flight. Backing SAF exports and strengthening our relationships with Turkish Aerospace and Vertical Aerospace, we are unlocking new opportunities for U.K. businesses across some of the world’s fastest-growing aerospace sectors, while strengthening innovation and jobs here at home.”

SAF is central to decarbonizing aviation, with some fuels capable of reducing lifecycle greenhouse-gas emissions by up to 80 percent.

U.K. low-carbon fuel production could support up to 15,000 jobs and add £5 billion (USD$6.65 billion) to the economy by 2050.  

The government said it is committed to making the U.K. a global leader in SAF production, including by helping businesses access the finance they need to develop and scale new projects.

Turkish Aerospace

UKEF signed a memorandum of understanding (MOU) with Turkish Aerospace, one of Turkey’s leading defense companies, to establish a framework for enhanced cooperation on defense export projects to third-country markets.  

Under this MOU, UKEF will consider support for Turkish Aerospace’s export deals by offering up to 100 percent of the contract value in return for at least 20 percent of content being allocated to U.K. suppliers.  

This agreement builds on the MOU signed in May between UKEF and Turk Eximbank at the SAHA defense and aerospace exhibition in Istanbul, which established a broader framework for U.K.-Turkey cooperation on financing defense and export projects to third countries.

“Our collaboration with the U.K. represents a strategic step in strengthening Turkish Aerospace’s international partnerships,” said Mehmet Demiroğlu, CEO of Turkish Aerospace. “We believe that the MOU signed with UKEF will expand financing opportunities for global projects and further enhance our export capabilities. Built on our strong engineering expertise and a foundation of mutual trust, we expect this cooperation to create long-term value for the aerospace and defense ecosystems of both countries.”

Vertical Aerospace

UKEF and Vertical Aerospace, a Bristol-based electric vertical take-off and landing aircraft company, formalized a framework for cooperation to support the company’s future export ambitions. 

It forms part of a wider government-support package for the U.K. aerospace industry and reflects UKEF’s commitment to supporting businesses that drive growth across all regions of the U.K.

“Vertical was founded in the U.K. and is building one of the country’s most exciting new aerospace platforms,” said Ben Story, the interim chair of Vertical Aerospace. “As the business scales toward production and export, this MOU with UKEF is an important step in creating the financing framework that can help British-designed and British-built aircraft compete in global markets.”

Earlier in the week, UKEF signed a brand-new financial framework with GE Aerospace for USD$1 billion (approximately £750 million) to support airline-engine maintenance at GE Aerospace’s regional sites in Wales and Scotland over the next five years.

The partnership aims to provide commercial airlines with faster and more predictable financing options for engine repairs while supporting local jobs and supply chains.