VAT on sales of emissions certificates under Sustainable Aviation mandate

Our company is impacted by the upcoming UK sustainable aviation fuel (SAF) legislation, and we are trying to understand the VAT implications of selling the related certificates arising from this scheme. There is a lot of documentation from the Government consultation exercise and response, but there is no information on the VAT treatment of such certificate sales. The closest information I can find references VAT treatment of "Compliance Credits" (VATSC06581), but this relates just to UK ETS, with no mention of the SAF mandate. There is additional information regarding a Domestic Reverse Charge process for Emissions Allowances (Notice 735, 3.6), but again, this specifically references only UK ETS. I can find no other information on the correct VAT treatment of certificates sold through the SAF mandate process, which is something of a concern, considering this is live from 1st Jan 2025. Is there any guidance available on this treatment?

 

Hi. I can currently see no guidance available regardind the VAT implications of the UK sustainable aviation fuel (SAF) legislation. As the new guidance goes live from 1st January 2025 then I would expect  relevant guidance to be available on gov.uk very soon. Please keep looking for updates on our website and I would advising calling the Helpline on 03002003701 if you don't see any updates over the next couple of weeks. Thank you .