The announcement was made during the Farnborough International Airshow on 19 July.
Under the new phase, the RAF and Zero Petroleum will carry out research to provide data to validate the efficiency and scalability of the synthetic fuel technology.
This phase will also see the production of additional fuel for certification and testing.
The fuel certifications and design blueprints will further contribute to the construction of squadron-scale fuel manufacturing capability as part of the next phase.
UK Defence Procurement Minister Jeremy Quin said: “With the potential to improve operational resilience and take an important step in meeting government climate change commitments, this exciting next phase could change the landscape of military aviation.”
In the first phase, the RAF and Zero Petroleum successfully completed the first 100% synthetic flight in November last year.
During the first flight test, the Ikarus C42 microlight aircraft completed a short UK flight, which was powered by 15l of whole-blend synthetic gasoline.
The syntenic fuel manufactured by Zero Petroleum uses energy generated from renewable sources to extract hydrogen from water and carbon from atmospheric carbon dioxide.
This technology has the potential to serve as an alternative to reduce the reliance on fossil fuels, without the land-use and scaling limitations of bio-based and waste-based systems.
Zero Petroleum’s sustainable aviation fuel also supports the country’s Net Zero by 2050 target, with the RAF planning to introduce their first Net Zero airbase by 2025.