Sustainable Aviation Fuel Bill
(1 day, 8 hours ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
17:30 - The House divided: - Ayes: 78 / Noes: 316 - Question accordingly negatived.
17:45 - The House divided: - Ayes: 151 / Noes: 319 - Question accordingly negatived.
17:59 - The House divided: - Ayes: 160 / Noes: 324 - Question accordingly negatived.
Olly Glover (Didcot and Wantage) (LD)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Judith Cummins)
With this it will be convenient to discuss the following:
New clause 2—Review of the supply of bioethanol for use in sustainable aviation fuel production—
“(1) The Secretary of State must, within six months of the passing of this Act, publish and lay before Parliament a report reviewing measures to encourage the supply of materials for sustainable aviation fuel.
(2) The report under subsection (1) must include—
(a) an assessment of the impact of the closure of bioethanol plants on the ability to encourage overall increases in sustainable aviation fuel production;
(b) options for mitigating any adverse impacts on the availability of supply of sustainable aviation fuel by the closure of bioethanol plants;
(c) recommendations for any necessary Government action to promote a stable supply of bioethanol for sustainable aviation fuel.”
This new clause would require the Secretary of State to lay before Parliament a report outlining measures to encourage the supply of materials for SAFs, including considering the impact of bioethanol plant closures on encouragement to increase supply.
New clause 3—Increasing greenhouse gas saving potential of sustainable aviation fuel—
“(1) The Secretary of State must, within six months of the day on which this Act is passed, publish and lay before Parliament a report which sets out a strategy for increasing the greenhouse gas emission saving resulting from the promotion of sustainable aviation fuel production in the United Kingdom.
(2) The report required under subsection (1) must include, but not be limited to—
(a) proposals for incentivising the research and development of sustainable aviation fuels that maximise greenhouse gas emission savings;
(b) an assessment of, and recommendations for increases to, the minimum required greenhouse gas emission reduction in order for a sustainable aviation fuel to be issued a SAF certificate;
(c) an assessment of, and recommendations for increases to, minimum ratios for renewable content in blended sustainable aviation fuels, for the purpose of more quickly reducing greenhouse gas emissions.
(3) Twelve months after the publication of the report required under subsection (1) and within every twelve months thereafter, the Secretary of State must publish a further report which—
(a) sets out progress against the strategy; and
(b) makes any necessary adjustments to the strategy as a result of developments in the sustainable aviation fuel industry.
(4) In this section, “SAF certificate” has the meaning given in article 2 of the Renewable Transport Fuel Obligations (Sustainable Aviation Fuel) Order 2024.”
New clause 4—Reporting of Sustainable Aviation Fuel targets—
“(1) The Renewable Transport Fuel Obligations (Sustainable Aviation Fuel) Order 2024 is amended as set out in this section.
(2) In paragraph (3), after sub-paragraph (5) insert—
“(5A) The Secretary of State may vary the table in paragraph (7) in order to increase the obligation in any given year.”
(3) In sub-paragraph 33(2)(c) leave out “, and”
(4) After sub-paragraph 33(2)(d), insert “and
(e) consider whether the SAF obligation set out in the table in sub-paragraph 3(7) of this Order should be increased for any given year, and if so, set out steps the Secretary of State will take to effect such an increase.”
(5) After paragraph 33(2) insert—
“(2A) A copy of a report published under this article must—
(a) be laid before Parliament; and
(b) be sent to the relevant select committee of each House of Parliament.
(2B) In sub-paragraph 33(2A)(b), “the relevant select committee” is—
(a) in the House of Commons, the Transport Committee, provided that—
(i) if the name of that Committee is changed, reference is instead taken to mean the new name, and
(ii) if the functions of that Committee with respect to Sustainable Aviation Fuel become functions of a different committee of the House of Commons, reference is instead taken to the committee by whom the functions are then exercisable;
(b) in the House of Lords, any such Committee as the Chairman of Committees may appoint.””
New clause 5—Air travel providers’ use of sustainable aviation fuel: reporting requirements—
“(1) Within six months of the passing of this Act, the Secretary of State must, by regulations, establish a requirement for air travel providers to report annually on their use of sustainable aviation fuel.
(2) Regulations made under subsection (1) must specify—
(a) that the annual reports include figures for sustainable aviation fuel usage which can be easily understood, including expressed as—
(i) an absolute volume, and
(ii) proportion of all aviation fuel used; and
(b) that the annual reports are accessible to members of the public including by being made available on their websites.
(3) Any regulations made under subsection (1) must be made under the negative procedure.”
New clause 6—Economic Impact of the Act—
“(1) The Secretary of State must lay before Parliament a report on the economic impact of the Act.
(2) This report must include, but shall not be limited to—
(a) the impact on the UK’s aviation fuel industry;
(b) the impact on the UK’s sustainable aviation fuel supply including the impact on all small, medium and large producers and potential importers of sustainable aviation fuel;
(c) the impact on international and domestic tourism in the UK; and
(d) the impact on passenger air fares.
(3) The report required by subsection (1) must be laid before Parliament within one year of this Act being passed.”
New clause 7—Targets for power-to-liquid aviation fuel usage—
“(1) The Secretary of State must, within 12 months of the passing of this Act, conduct a review of the power-to-liquid aviation fuel targets as set out in section (3) of the Renewable Transport Fuel Obligations (Sustainable Aviation Fuel) Order 2024.
(2) The review carried out under subsection (1) must only consider—
(a) the effectiveness of the existing power-to-liquid aviation fuel target and;
(b) whether the target should be increased.
(3) In carrying out the review under subsection (1) the Secretary of State must consult with—
(a) producers of power-to-liquid aviation fuel;
(b) airlines;
(c) experts in sustainable aviation fuel production; and
(d) any other persons the Secretary of State deems appropriate.
(4) A report setting out the findings of the review must be published and laid before both Houses of Parliament.”
Government amendment 1.
Amendment 10, in clause 1, page 2, line 4, at end insert—
“(4A) The terms under subsection (4)(c) must include a requirement for the producer to consider the longevity of supply and relative environmental impact when prioritising between organic and synthetic derived sustainable aviation fuel solutions.”
Government amendments 2 to 5.
Amendment 11, in clause 6, page 4, line 19, leave out from “pay” to end of line 22 and insert
“to the designated counterparty in each month a standardised levy on their relevant disposals of aviation fuel products in the preceding month that must be publicised on invoices expressed in pence per standard litre.”
This amendment requires the Secretary of State to set a standardised levy rate payable by all suppliers of aviation fuel, that must be publicised by suppliers of aviation fuel on invoices to their customers.
Government amendment 6.
Amendment 8, in clause 12, page 7, line 6, at end insert—
“(3) A direction given under subsection (1) must include a requirement for the designated counterparty to report on—
(a) the impact of any revenue certainty contract on the fluctuation of the average price to consumers of an airfare over the proceeding 12 month period;
(b) a projection of the expected impact of any revenue certainty contract on the fluctuation of the average price to consumers of an airfare over the following five year period.
(4) A report under paragraph (a) must be made within one year of the date of Royal Assent to this Act and annually thereafter.
(5) The Secretary of State must lay a report made under paragraph 3(a) before Parliament.”
This amendment would require the designated counterparty to report on the impact that the revenue certainty mechanism has on passenger air fares.
Amendment 9, page 7, line 6, at end insert—
“(3) A direction given under subsection (1) must include a requirement for the designated counterparty, where a venue certainty contract would result in a new production facility, to prioritise entering into any such contracts with producers that will use UK owned technologies in that facility.”
This amendment would require the designated counterparty to prioritise UK-based technology when entering contracts.
Amendment 12, page 7, line 6, at end insert—
“(3) Within twelve months of the passing of this Act, the Secretary of State must make a direction under subsection (1) which requires the designated counter party to prioritise entering at least one revenue certainty contract with a producer of Power to Liquid sustainable aviation fuel if doing so will allow for at least one plant to reach Final Investment Decision by 31 December 2026.”
Government amendment 7.
Olly Glover
Global demand for aviation continues to grow; it is projected to be two or three times bigger by 2050. In 2024, there was a record rate of increase in carbon emissions, according to the World Meteorological Organisation, and there was a new daily record for global aviation emissions in July 2025. Nearly half of all the carbon emissions to date from aviation have occurred since 2000.
Sustainable aviation fuel has been talked up for years as the solution, yet there has been a poor track record of unambitious targets not being matched by delivery. For example, in 2010, Boeing announced the target that 1% of aviation fuel globally should come from SAF by 2015, and in 2019, the International Air Transport Association set out hopes of reaching 2% by 2025, but today, globally, the figure is just 0.3%. The UK’s published figure this year of 1.29% is better, but it nevertheless shows how far we have to go.
The Conservative Government promised back in 2022 to have five commercial UK SAF plants operational by 2025, but there is still only one. It is therefore right of the Government to have introduced legislation to attempt to make sure that the latest set of SAF targets move from fantasy to realistic, credible and deliverable plans, although these will ultimately need to transition us towards the development of truly zero-carbon flight technology. I thank my hon. Friends the Members for Wimbledon (Mr Kohler), and for Sutton and Cheam (Luke Taylor), for their contribution to the Bill Committee, and I hope that Members from across the House will consider the Liberal Democrat amendments.
New clauses 1, 2 and 3 all increase the chances of the intention behind the Bill being realised. New clause 1 requires the Secretary of State to assess and report on the potential for disused oil refineries and similar industrial sites to be used for the production of sustainable aviation fuel. New clause 2 requires the Secretary of State to assess the measures being taken to encourage the supply of materials for production of sustainable aviation fuel, and has a focus on bioethanol plants. That is especially important in the context of the expected closure of the Vivergo bioethanol plant near Hull, following the Government’s decision not to provide it with financial support.
New clause 3 requires the Secretary of State to report to Parliament on the development of a strategy for analysing and maximising the potential of sustainable aviation fuels to contribute to reductions in greenhouse gas emissions.
I also speak in support of two new clauses tabled by my hon. Friend the Member for West Dorset (Edward Morello), both of which would improve the Bill by providing greater rigour and scrutiny of progress towards sustainable aviation fuel targets. New clause 4 would give the Secretary of State the power to increase SAF production obligations where necessary, and to ensure that reports on progress are laid before Parliament and relevant Select Committees. New clause 5 would introduce requirements for air travel providers to report on their use of sustainable aviation fuel, and to provide annual reports to the public via their websites. Collectively, new clauses 1 to 5 would strengthen the Bill and increase its credibility when it comes to SAF production and reporting on progress.
The Government’s SAF mandate requires just 22% of aviation fuel to be sustainable by 2040. That compares poorly with the European Union’s target of 32% by 2040. It is hard to square an objective of net zero aviation by 2050 with just 22% of fuel being sustainable a decade earlier, unless we put in place measures alongside SAF to cut emissions and make climate-friendly flight a reality. We urge the Government to clarify their plans for achieving their targets, particularly as hope for SAF progress is being used to state that Heathrow and Gatwick expansion are compatible with our greenhouse gas emissions reduction targets.
John Milne (Horsham) (LD)
As my hon. Friend says, sustainable aviation fuels are being used by the Government to justify major airport expansions. One such expansion would be at Gatwick, adjacent to my constituency. A target of 10% SAF by 2030 is optimistic in the extreme, as the Climate Change Committee said. If the Government’s own advisers do not believe in this target, why should we?
Olly Glover
My hon. Friend makes a good point about what the Climate Change Committee has said. That is why I hope the Government will consider these Liberal Democrat amendments, which are intended to strengthen the Bill, so that its provisions become reality this time, and contrast with the many missed targets in the past on sustainable aviation fuel.
Making aviation genuinely sustainable will require the Government to go beyond securing investment in SAF, and to ensure that in the longer term, the SAF measures complement, rather than detract from, investment in zero-carbon flight technology. I hope that the House will support our amendments, so that our country makes a bigger and more rapid contribution to decarbonising aviation.
Brian Leishman (Alloa and Grangemouth) (Ind)
This year, Petroineos—that is, Jim Ratcliffe’s Ineos and PetroChina from the Chinese state—closed the Grangemouth oil refinery. Closure was not about some passionate quest for net zero. Closure happened because private capital and a foreign Government owned vital energy infrastructure, and because corporate profits are more important than community good to the billionaire Jim Ratcliffes of this world. There were 435 jobs lost at the refinery, and hundreds more lost in the shared services that are housed on site; 2,822 jobs were lost in the wider supply chain. That is mass de-industrialisation.
But closure is not just about job losses. The exodus of talented, skilled workers is awful, but closure also means that the site is no longer a positive destination for many local young people leaving school. We have seen an end to a generational employer in my community. The economic consequences are also absolutely enormous for local Grangemouth businesses, which relied on the custom of refinery workers and their families. Once again, I want to give credit to all the small local businesses that have kept town centres going in recent years. The pressure of running a small business when austerity and the cost of living crisis have hammered people’s disposable incomes can be all-consuming and incredibly stressful. I should know; I tried it for some years.
The economic turmoil of stopping refining is also a national issue, because the refinery was worth more than £400 million per annum to the Scottish economy. Politicians often talk about black holes. Well, that is a sizeable, industrial-shaped black hole to fill. I do not doubt that the Government understand the magnitude of how important it is to re-industrialise communities like mine in Grangemouth. The other day, I read my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane), who has done so much work to bring this Bill to the House, describing in Hansard the situation that he grew up in on the east side of Manchester, which lost its chemical and mining industries. He said:
“We are still getting over that in my great city.”––[Official Report, Sustainable Aviation Fuel Public Bill Committee, 17 July 2025; c. 108.]
He undoubtedly understands the social consequences of industry finishing up. No community can afford this continued spiral of industrial decline.
To go back to my original point, we have for decades been an economy controlled by private capital, multinational corporations and foreign Governments whose policy has been to make things elsewhere, and to sell here. Have the last four decades not shown that the country’s complete reliance on private capital means profits over people? We must adopt a new industrial strategy that meets the needs of working people and their communities by securing at least some form of public ownership of the new industries that we will need—that is a mainstream political view.
The Government must learn lessons to stop history repeating itself, and to prevent workers and communities having every last ounce of work extracted from them before they are discarded on a corporate whim. For the Government to create and benefit economically from the necessary green industrial revolution, which we need for our economy and for the planet, some form of Government ownership of future industries is necessary. Surely, that view should be at the heart of any Labour Government.
If the Government want to put their faith in private capital to mould Britain’s new industrial future, I urge them to think again. They need to be more active in the process of creating Grangemouth’s industrial future. They need to seize the initiative and invest in workers, communities industry and Scottish manufacturing. Producing sustainable aviation fuel is an enormous objective—one that we have committed to—and sites like Grangemouth are ideally placed for it. The infrastructure needs some degree of conversion and upgrade, of course, but it is there. The workforce and expertise are there. My local community needs to be re-industrialised. The Labour Government have ambitious SAF targets to meet, but, more importantly, they also have obligations to communities in our forgotten industrial heartlands.
Sarah Olney (Richmond Park) (LD)
New clause 2, tabled by my hon. Friend the Member for Didcot and Wantage (Olly Glover), would require the Government to publish a report within six months of securing the supply of bioethanol for sustainable aviation fuel production. The Government have repeatedly cited the increased use of SAF as the answer to questions about how the UK will meet our net zero targets while expanding multiple airports in London. It was wishful thinking nine months ago, but that argument has now dissolved almost into impossibility. Not only did the summer proposal submitted by Heathrow Airport Holdings for a third runway include a request to add nearly 300,000 flights to our airspace each year, but the concerns regarding the production of SAF have become more prominent. That concern has grown following China’s implementation of its own SAF mandate, which will result in it using more of its production domestically. That will undoubtedly cause a challenge for the UK given that over 90% of our current SAF is imported from China.
The challenges to the UK’s ability to produce and import SAF were underscored by the Climate Change Committee’s recent report, which estimated that only 17% of the UK’s aviation industry will be using SAF by 2040. That is 5% lower than the Government’s own mandated targets, and 8% below the EU’s target. The estimate does not even take into account the additional flights that would come in and out of the UK as a result of the proposed airport expansions. In fact, in 2024 only 10% of bioethanol certified as renewable and consumed in the UK was produced domestically. That was down from 17% in 2023 and 15% in 2022—a concerning trend and one that the Government must report back on.
In addition, the UK-US trade deal presents a threat to the UK’s domestic bioethanol production, as the agreement removed tariffs on US ethanol and replaced it with a zero-tariff quota of 1.4 billion litres. The US bioethanol industry is heavily subsidised and its companies will be able to undercut UK bioethanol industries. Vivergo Fuels’ plant in Hull, which had the largest capacity of any UK bioethanol producer, has already closed, with the managing director citing the US-UK trade deal as a significant factor that contributed to the site’s closure.
Tom Collins (Worcester) (Lab)
I will speak to new clause 1. Context is important, as this Bill is a first step on a long pathway to decarbonising aviation. At the moment, SAF components are blended with existing fossil fuels to create usable aircraft fuel, as I will go on to discuss, but I think it is helpful for us to be aware of the context: the various generations of sustainable aviation fuel that will form a road map as we move into the future.
First-generation aviation fuels use oils, often of biological origin, as feedstocks, and they produce a kerosene-type fuel that can be blended with our existing jet fuel. Second-generation SAF is derived from solid waste that goes through a digestion process, producing alcohols that can then be formulated into aviation fuel-type products. Third-generation fuels—I remind hon. Members that there are four generations—use wet mass as feedstock. Again, that wet mass might be biological, but it is incapable of competing with food crops for production, and the process produces an output that is much like a bio-crude oil.
As we move through the generations of sustainable aviation fuel production, it is important to remember that the outputs are different and are able to slip into different parts of the existing fuel production supply chain. The fourth generation is derived from gases, maybe even atmospheric gases, such as carbon dioxide drawn from the atmosphere. It is often referred to as a power-to-liquids process, and is an entirely non-biological process that requires a lot of new technology. It is a future solution, but an advantageous and attractive one as it can provide us with a purely synthetic fuel.
The point that I am illustrating is that the Bill is the first step in a long-term vision for aviation, in which sustainable aviation fuel is able to play a progressively larger role. In future, we may even move to different fuels all together. As chair of the all-party parliamentary group on hydrogen, I would like to give a shout-out to its role in the potential long-term future of power for aviation.
These generations of fuels also interact with the technology in our aircraft. Although current blends of sustainable aviation fuel can go into aircraft now, the aircraft will need to be upgraded as we move to higher fractions of sustainable components in that fuel, because some of the aromatic components in fossil fuels are not available in synthetic fuels. They are currently required by some of the seals in the engines, and the aircraft will need to move into future generations to accept high proportions of aviation fuel.
All of this is about having a strategic road map. The Bill is one step—one vastly enabling piece of legislation—and it follows a model that is well proven to help establish new technologies as part of a green and sustainable future. We have seen the similar progress in offshore wind, for example, where it has been utterly transformational beyond anybody’s expectations. This vehicle should be able to do similar things for the beginning of our journey on decarbonising aviation, but it needs a long-term plan. That is why there is a really important piece of work to be done in the secondary legislation enabled by the Bill. It is very important that that legislation takes account of all the factors being discussed through the various amendments that have been tabled.
I oppose new clause 1, because we must not oversimplify the journey before us. In fact, we must allow the Government the freedom to create a sophisticated, technically-led strategy to deploy these different types of sustainable aviation fuel, taking into account all factors, including our existing infrastructure, the production of biomass and the advancement of aviation technology. If we get this right, and if this game is played well, we have the opportunity to start successfully—and even lead—a journey that will be absolutely transformative, and to envisage a thriving, positive and sustainable future for aviation.
John Cooper (Dumfries and Galloway) (Con)
For many years, I commuted by aircraft from Scotland to Dublin—so many years, in fact, that I can still recall there are eight emergency exits on a Boeing 737-800. There are two at the front, two at the rear and four over-wing exits. What a great pity that this Bill does not have an amendment that is an escape slide.
While sustainable aviation fuel sounds wonderful, it is burdened with many inconvenient facts. The first is that there is no SAF production industry at the scale required. While new clause 1 is a bold attempt to jump-start production by repurposing old facilities, it is a jumbo jet of a task. The World Economic Forum estimates that by 2030, global demand for SAF is expected to reach 70 million tonnes per annum—around 4% to 5% of total jet fuel consumption.
Meeting likely demand in just five years requires an additional 5.8 million tonnes of capacity. What is the investment required to reach even that relatively modest goal? The WEF pitches it at somewhere between $19 billion and $45 billion globally. If that does not give our legislative autopilot the warning, “Terrain! Terrain! Pull up!”, then it should do. New clause 1 is unaffordable, whether backed by public or private finance, and I am afraid it is doomed to fail.
It is certain that the vast input costs will result in massively higher costs for passengers and air freight. I support the vital new clause 6, which would force an assessment of the economic impact of this Bill, which I fear will be nothing short of devastating. Some might piously accept fewer flights to the Costas or a little less airfreighted Kenyan mangetout on the dinner table, but making air travel ruinously expensive will have implications for thousands of jobs—millions globally—in not only aviation, but tourism. Many flights are not indulgences, but lifelines. We are an island nation, and many communities within the UK are entirely reliant on air links.
Will Britain—so long the pioneers of aviation, with a history stretching back to the first scheduled international passenger flight and the first jet airliner—be foremost in SAF? Probably not, for mandating SAF is easier than producing it, especially in a country with power prices as exorbitant as ours. Energy bills in Dumfries in my constituency are four times what they are in Dumfries in Virginia in the United States, and they are cheaper still in China.
We need a lot of power to make SAF. Many question its green credentials when so much carbon is generated in its production. Amendment 10 is a bid to explore the serious issues around SAF derived from either organic or synthetic sources. Much is made of an 80% reduction in greenhouse gases using SAF sourced from waste fat and oil feedstocks, but, as we have heard, those basic building blocks are in limited supply. That issue is also addressed in, though not solved by, new clause 2. Using crops as feedstock may not reduce greenhouse gases at all, and there are huge implications of turning prime agricultural land and billions of gallons of water over to producing crops for fuel, rather than food. Again, Britain is at a disadvantage. America’s vast corn belt might get involved, but the British bioethanol industry is a warning to us, for it was not able to survive on current targets for the content in road fuel.
Other amendments, including amendment 11, concern themselves with how a revenue certainty mechanism will operate. My concern is that we risk creating a self-licking ice cream—a self-perpetuating system with no purpose other than to sustain itself. This Bill could guarantee moneys that simply offset the costs of manufacturing SAF, which is itself made expensive by green levies. Would it not be better to put what money we have available into aviation excellence, driving up the efficiency of jet engines and airframes? Aviation is already playing its part in reducing its carbon footprint—according to some experts, engine efficiency is already up by as much as 83% from the early days of the de Havilland Comet jet liner. That progress can continue, although super-efficient jets need superalloys to handle the extremes of temperature in their engines, and those require the sorts of rare earths that China is hoovering up. Canada, by the way, has many of the same critical minerals; might we be better off investing in those than subsidising SAF?
If we want really big carbon savings, we ought to look to the sea. Much of what we trade—in and out—goes by sea, and cargo ships are heavily reliant on bunker oil, a tar-like substance with heavy emissions. If we want novel fuels, this island nation should look once more to Tennyson’s “boundless deep”, where the salt-caked smoke stacks belch still. Meanwhile, the wild blue yonder of the skies must not be made inaccessible simply by expensive green dogma.
Baggy Shanker (Derby South) (Lab/Co-op)
Aviation is central to our economy and our way of life, whether it is delivering well over 300,000 jobs here in the UK, contributing over £22 billion to our economy, driving inbound tourism, or connecting communities, businesses and families the world over. I am proud of our world-leading aviation sector in Derby and many other places across the UK, and while aviation is an integral part of our economy, it is also one of the most challenging to decarbonise. Despite the scale of the challenge, though, we must keep pushing forward, because—as I have said before, and as I will say again now—without net zero in aviation, there is no net zero, full stop.
To ensure that future generations are able to access the opportunities that air travel can provide, we need to make sure that flying is greener. This Bill does exactly that. It will unlock the potential of UK SAF by delivering the confidence and stability that SAF producers need to continue to turbocharge growth as they drive forward green innovation. I welcome the Bill as a clear statement of intent that this country is absolutely serious about decarbonising the future and future-proofing our world-leading aviation sector. It is the right thing to do, and we must do it.
Luke Taylor (Sutton and Cheam) (LD)
I chair the all-party parliamentary group for the future of aviation, travel and aerospace, and the debate on SAF has been a focus of many of our meetings. As a cover-all, I should declare my interests, having met with AirportsUK, Airlines UK, ADS Group, LanzaJet, Back British SAF, Valero, alfanar and others over the past six months. I also worked in the aviation industry for 16 years prior to being elected. I rise to speak in support of new clauses 1 to 5, tabled by my colleagues, and new clause 7. I also encourage the Government to support amendments 8 and 9, tabled by the Conservatives, which would strengthen and improve the Bill and give us the best chance to achieve its targets. I will tell the House why.
In 2023, aviation accounted for 2.5% of global energy-related CO2 emissions; however, when non-CO2 effects are included, its contribution to climate warming increases to approximately 4%. Although that is a small fraction of global emissions, it is not insignificant. However, in my experience, few sectors take their role in bringing down emissions and tackling climate change as seriously as aviation, primarily because fuel burnt and emissions released is money spent.
As other Members have already made clear, decarbonising aviation and achieving net zero carbon UK aviation will require a huge range of different measures. Measures such as Operation Blue Skies, a global contrail avoidance system, will reduce the density of the heat-trapping contrails produced by aircraft, which creates nearly half the overall climate-warming impacts. Continuing improvements in aircraft engine and airframe efficiency are also critical, and that too has been mentioned by others.
Sadik Al-Hassan (North Somerset) (Lab)
I greatly welcome the progress of this vital Bill, which will help ensure that the United Kingdom takes a genuine global lead in the development and use of sustainable aviation fuel. Sustainable aviation fuel is the key to solving many of the challenges we face today and those we will face in the decades to come. Aviation currently accounts for around 7% of the UK’s total emissions. As demand for travel continues to grow, that figure will only rise, unless we act now.
If we are to meet our net zero commitments while keeping flying affordable and accessible, sustainable aviation fuel must be at the heart of our strategy. It offers one of the most practical and immediate ways to decarbonise flight, reduce our reliance on fossil fuels and secure the economic future of one of Britain’s most successful industries. That is why this Bill is so essential for our environment, our economy, our technological leadership and the future of British aviation.
I would like to draw attention to the £4.5 million investment by Exolum in the existing Redcliffe Bay facility, in my constituency of North Somerset, which is already happening without the need for new clause 1. It will be the home of the UK’s first independent sustainable aviation fuel blending facility. When it becomes operational in 2026, it will underpin green fuel supplies for some 65,000 flights to major airports, including Heathrow, Gatwick, Cardiff and, of course, Bristol.
Andy McDonald (Middlesbrough and Thornaby East) (Lab)
My hon. Friend is making a very powerful point. Will he join me in thanking our hon. Friend the Member for Stockton North (Chris McDonald) and his predecessor, Alex Cunningham, for securing the Alfanar investment in that constituency, and our right hon. Friend the Member for Redcar (Anna Turley) for securing investment at the Wilton International Centre, which will lead to many hundreds of secure, permanent jobs?
Sadik Al-Hassan
My hon. Friend is, of course, right to highlight such advocacy in the sector. I welcome his contribution.
The Exolum project is not just a boost for our regional economy; it is a clear signal that the UK can combine its climate ambition with a sound industrial strategy. The production subsidies for SAF introduced by this Bill are therefore already very welcome and are the right step forward, but production plants are only as good as their ability to get their product to market. Without that capability, they cannot attract investment or access the very subsidies that this Bill rightly establishes.
Fortunately, the UK is blessed with an extensive aviation fuel pipeline and storage network—one of the most advanced in the world. Companies such as Exolum are already using that network to deliver cleaner fuels across the country. From my visits to Redcliffe Bay, I know that Exolum has additional storage capacity that it would like to bring back into use to help deliver even more SAF. Companies at the forefront of this shift, such as Exolum, must be supported to deliver further investment at Redcliffe Bay in my constituency—and at other sites—and across the national pipeline network to create a new SAF super-highway for the UK. Such a network would allow producers to get their fuel to market efficiently, and it would secure our long-term position as a global leader in green aviation.
Crucially, my constituency is also home to Bristol airport, which has demonstrated real leadership in this sector. In March, almost a year ahead of the Government’s mandate, Jet2 began operating flights from Bristol airport using SAF, cutting emissions by an impressive 70%. However, our ambitions for cleaner flights cannot stop at SAF. Bristol airport’s same leadership can and should be applied to hydrogen in aviation, ensuring that the south-west continues to lead the UK’s journey to greener skies.
Hydrogen is a key element of the future aviation landscape and the broader energy transition. As we stand at the crossroads and decide which industries and technologies to support, we must not overlook the infrastructure that will support hydrogen tomorrow, as well as its supply chain, its production and its distribution. Investment in hydrogen benefits both the industries of today and the industries of 2050. However, that investment requires certainty, which only Government direction and leadership can provide via a road map already laid out in this Bill.
I believe deeply in the potential of hydrogen, and I am proud that the south-west is uniquely positioned to take advantage of this opportunity. We have world-class research facilities such as those I have visited at the University of Bath, innovative small and medium-sized enterprises such as Hyflux in North Somerset, and a cluster of industries already looking to the hydrogen future. For my constituents in North Somerset, this Bill in its current form delivers both cleaner skies and a sustainable future for a vital industry. Looking ahead to hydrogen in aviation, the opportunities are particularly exciting for our region. The research, development, production and infrastructure required for hydrogen fuel are rightly taking root in the south-west, near Bristol, which is the home of AI in the UK, where the fantastic Mayor, Helen Godwin, is creating jobs, driving innovation and positioning us at the forefront of this emerging technology.
This Bill is not merely climate policy; it is economic strategy, industrial ambition and national leadership combined. Sustainable aviation fuels are essential to the survival of our aviation industry, but let us not allow our ambition to cease there. Hydrogen represents another key to unlocking our sustainable future in the UK, and this Bill provides us with the learnings we will need to make hydrogen in aviation a reality.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
I am pleased to rise to speak to my new clause 7 and amendment 12. I support the intentions of the Bill, and I want to strengthen it with my amendments, which I believe are essential to ensuring this legislation delivers a real, lasting impact for our climate, our economy and our position on the global stage.
The Bill rightly seeks to unlock private investment in UK sustainable aviation fuel through a revenue certainty mechanism. This is a welcome and necessary step that gives certainty to businesses looking to invest in this world-leading mechanism to decarbonise the aviation sector. However, if we are serious about climate leadership, preventing the worst effects of climate breakdown and long-term energy resilience, we must do more than build a framework; we must prioritise the right fuels.
That is why my new clause 7 focuses on power-to-liquid sustainable aviation fuel. Not all SAF is equal. Power-to-liquid SAF is the cleanest, most sustainable option we have, in my opinion. It is made from renewable electricity and captured carbon, and it does not rely on limited or environmentally questionable feedstocks such as used cooking oil or palm derivatives. It is future-proof, and it is essential if we are to hit our net zero targets without compromising environmental integrity. The Government themselves, in their SAF mandate guidance, recognise power-to-liquid fuels as having the greatest potential. The Committee on Climate Change has said that we need 13 TWh of synthetic fuel by 2040 to stay on a credible path to net zero. The potential is there, but it will remain untapped unless we take deliberate action to bring this industry to life.
Ayoub Khan (Birmingham Perry Barr) (Ind)
I thank my hon. Friend for giving way. He is making some very persuasive points. I support the intentions of the Bill and pushing for these fuels is absolutely the right thing to do, but does he agree that we must also keep a focus on the wider opportunities—for example, in hydrogen, battery electric systems and next generation e-fuels—if the UK is to be a leader in this technology?
Iqbal Mohamed
I thank my hon. Friend for his intervention and I wholeheartedly agree. We in the UK have the capabilities to be a leader in these technologies and we must take a collective approach on green energy for both environmental and economic gains. We need certainty for private capital to flow in and the delivery of long-term taxpayer returns.
Amendment 12 looks at the SAF mandate itself. It requires a review within 12 months of the sub-target for power-to-liquid fuel to assess whether it is ambitious enough and whether it reflects the urgency of the climate challenge and the pace of international competition. This is not about setting targets in haste; it is about ensuring our targets are based on evidence, consultation and real-world feasibility. The amendment explicitly requires engagements with power-to-liquid producers, airlines, experts and wider stakeholders, and it requires that a report be laid before Parliament.
Let me be clear: I do not stand alone in calling for this. More than 130 organisations, from airlines and clean energy firms to researchers and investors, have called on the Government to prioritise PTL through the Bill. They have called for urgent engagement, timely regulation and a clear pathway to a commercial-scale plant in the UK by 2026. We already know the EU is moving faster, alongside Canada and the United States, with more ambition on PTL. If we fall behind, we will become importers of clean fuel, not exporters of clean technology and we will miss the industrial opportunity staring us in the face. Time is of the essence, and we must all work together to get this right.
Sir Edward Leigh (Gainsborough) (Con)
I am listening very carefully to what the hon. Gentleman says and I completely support his good intentions. The problem with sustainable aviation fuel is that it is perhaps five times more expensive than what we are currently paying, and that stocks are very limited and—we have been talking about livestock feeds—even more difficult. I am completely with him on the ambition, but we must also protect consumer rights, the right to fly at a reasonable cost and the cost to the economy. As with all green energy policies, there must be a balance. I am sure he will agree with that.
Iqbal Mohamed
I thank the right hon. Gentleman for his intervention and I do understand his point. This is a transition. We are moving away from fuels that are killing our environment and our ability to survive on planet Earth. It is a responsible thing to do to find ways to reduce our reliance on carbon-generating fossil fuels through cleaner alternatives. This may not be the final solution for aviation—it might be a transition. Future technologies and innovations might allow us to stop the use of such fuels altogether.
More than 130 organisations from airlines and clean energy firms to researchers and investors have called on the Government to prioritise PTL through the Bill. They have called for urgent engagement, timely regulation and a clear pathway to a commercial-scale plant in the UK by 2026. As I have mentioned, the EU, Canada and the United States are moving faster. We must not miss this industrial opportunity to take a lead in progressing innovative SAF alternatives and licensing that technology around the world. We must act decisively, not incrementally.
I support the Sustainable Aviation Fuel Bill, but I believe we have a responsibility to make it stronger, bolder and more targeted towards the fuels that will truly deliver net zero. My amendments are practical, proportionate and widely supported. They add not cost, but clarity, confidence and a commitment to a sector that needs all three. If we want to lead the world in clean aviation, we must lead with action, not just ambition. I call on friends and colleagues across the House to support the amendments in my name, and in doing so to give PTL the foothold it needs to take off in the UK.
Edward Morello (West Dorset) (LD)
Sustainable aviation fuel offers us a route to decarbonise one of the most carbon-intensive industries and to secure the future of our aviation sector in a way that is compatible with our net zero goals. Climate change remains the greatest challenge of our time. It is an existential threat to us, our children and our grandchildren, and every decision made in this House must be measured against the scale and the urgency of the crisis.
Aviation, while connecting people and driving our economy, is a contributor to the problem. In 2022, it was responsible for almost 30 million tonnes of CO2, equivalent to about 7% of the UK’s total emissions. Even as emissions from other sectors decline, aviation’s share is projected to rise to 16% by 2035. That is not compatible with our net zero targets, nor with our moral obligation to keep global temperature rises below 1.5°.
Sustainable aviation fuel is not a silver bullet, but it is a step towards addressing the challenge. As someone who spent almost a decade working in renewable energy, I have seen how technology, innovation and the public trust must work hand in hand if we are to make lasting progress in addressing climate change. However, with innovation must come accountability, which is why I have tabled new clauses 4 and 5. These new clauses would strengthen this Bill and aim to make the transition to clean flight more accountable, more transparent and, yes, more ambitious. New clause 4 would support the Secretary of State to raise sustainable fuel targets in any given year and introduce a duty to consider annually whether the target should be increased. The Secretary of State would also be required to set out what steps the Government will take to make any increase possible. In short, to ensure that the Government cannot forget the targets, it would require them to revisit, review and, wherever possible, raise their ambitions for cleaner flight.
New clause 4 would strengthen the parliamentary scrutiny. It would require the Government to lay a copy of each annual report before Parliament and share it with the relevant Select Committees in both Houses, meaning proper oversight and public accountability. Progress must not just be made; it must be seen to be made if we are going to take the public with us.
New clause 5 would build on that principle of transparency and public engagement, requiring air travel providers to report annually on their sustainable aviation fuel in a way that passengers and the public can actually understand. Too often, data about emissions and fuel use is buried in complex technical reports that mean little to consumers. Under this proposal, airlines would publish both the total amount of SAF used and the proportion it represents of their overall fuel consumption.
Julia Buckley (Shrewsbury) (Lab)
The hon. Gentleman is giving a very detailed speech. Would he agree that we already have the annual carbon budget audit, which looks each year at exactly those emissions and was what drew to our attention the growth in this sector and why we need to focus exactly on driving down emissions from the aviation sector, which led us to the SAF mandate? Does he acknowledge that we already have a mechanism for this, which has helped us to get to where we are today with this excellent Bill?
Edward Morello
I thank the hon. Member for her intervention. She managed to make a detailed speech sound like a backhanded compliment. I do not disagree with her point that we have several reporting standards, and my only counter-argument would be that I do not believe there can be too much transparency. If that results in information being presented in a way that gives the public further clarity and puts greater pressure on any Government to speed up the transition, that can only be a good thing.
Those figures must be presented clearly in a format that is accessible and easy to find on websites and in public material. That matters, because whether it is demonstrating that solar and wind power lower bills, that carbon removal technology will provide jobs or that sustainable aviation fuel can cut emissions, we must be transparent to build public trust and belief in what we are doing. The powers in this Bill to fund the strike price mechanism to levy fines on fuel suppliers who fail to pay are all welcome, but they must be matched by equally strong accountability to this House and the general public. The amendments I have proposed would ensure that the Government are required to review progress every year, to explain how targets will be strengthened, and to make transparent the actual use of sustainable fuel across the aviation industry.
Tom Collins
I thank the hon. Member for giving way. I would like to speak to his comments and those of the Father of the House about the impact on consumers. In Committee, the Government made it clear that they are alive not only to the considerations of cost and the impact on consumers, but to the extreme complexity of how aircraft logistics and fuelling function across global markets, and how aircraft are operated on a day-to-day basis. That makes some of these reporting requirements extremely difficult for airlines to deliver. We do not want to create a burden of bureaucracy that drives airlines away from sustainable fuel and back towards unsustainable pure fossil sources. I support the Government’s position that we should stay where we are and build processes that provide accountability.
Edward Morello
I think I thank the hon. Gentleman for his intervention. I am afraid that I do not agree that increasing reporting burdens on industry is a bad thing. Every industry will argue that reporting is onerous. The liturgy starts with water companies. Companies will hide behind not having to report. On the need to move forward with technology, I am reminded that Henry Ford once said, “If I asked people what they want, they would say a faster horse.” The reality is that technology will be the route to our achieving our net zero goals, and this is one step on that pathway.
I will finish. New clauses 4 and 5 would strengthen this Bill, strengthen public confidence and demonstrate the UK’s global leadership, and I very much hope the Government will support them.
Madam Deputy Speaker (Caroline Nokes)
That brings us to the Front-Bench contributions. I call the Liberal Democrat spokesperson.
Olly Glover
This has been an informative debate on all the new clauses. From a procedural point of view, we are happy not to push new clause 1 to a Division.
Greg Smith (Mid Buckinghamshire) (Con)
To begin, I draw Members’ attention to my entry in the Register of Members’ Financial Interests with regard to the synthetic road fuel provided to me for a constituency surgery tour last year. That is not strictly relevant to sustainable aviation fuel, but I want to be entirely transparent about it, as I have been throughout this Bill’s passage.
May I also welcome the new Minister to his place? He has a big pair of shoes to fill, and I equally want to commend the hon. Member for Wythenshawe and Sale East (Mike Kane)—we did not always see entirely eye to eye—for the effort and attention he put in to getting this Bill through the House and to his other duties in the House.
I begin with new clause 6, which requires the Secretary of State to lay before Parliament a report on the economic impact of the Act once it is in force. This amendment goes to the nub of what is important. Does the Bill enable growth or stifle it? Does it support our world-class aviation industry or go against it? More importantly, does it enable our constituents to do what they have always done and fly, be that on holiday, on business or to visit family and friends overseas, or does it hinder them in doing that; and does it hinder our businesses in bringing goods in and out of the country by air?
New clause 6 forces the Secretary of State to confront the realities of the Bill on multiple fronts. It covers the impact on the UK’s aviation fuel industry and the UK’s sustainable aviation fuel supply, and the impact on small, medium and large producers and potential importers of sustainable aviation fuel.
Iqbal Mohamed
Could the hon. Member clarify over what period the Government would do the cost impact assessment, if they were to do one? Does he agree that the transition to any new technology requires significant initial upfront investment? All the trillion-dollar companies in the world were losing millions before they became profitable.
Greg Smith
I am grateful to the hon. Gentleman for his intervention. I will come on to some of the technological points he made earlier, which it may surprise him to hear that I was incredibly sympathetic towards. On the timescale he asks for, I think it reasonable that, when a new Act comes into force, the Government should review it on a yearly basis at least, if not more frequently, to check that it is working. The point he makes is valid, and I thank him for it.
Last on the list of impacts covered by new clause 6 is the impact on international and domestic tourism in the UK and passenger air fares. We in this House can pass all manner of laws and schemes, and we can mandate new things, but their impact, including on the wider economy, matters. Reviews like the one proposed by new clause 6 would ensure that Governments of all political persuasions monitored real-life outcomes and, if necessary, tweaked provisions—or completely changed course. I cannot for the life of me understand why any Government would run scared of such a clause; it would help them govern better in the long run.
Dr Scott Arthur (Edinburgh South West) (Lab)
The hon. Member will know that countries right across the world are moving towards SAF. Has he reviewed them to understand what is unique about the UK that means that we are vulnerable, while other countries are able to drive ahead? Are these countries undertaking the same bureaucratic reviews of their own legislation, and which country is he modelling his approach on?
Greg Smith
I think it is necessary for any Government to review the legislation they are passing to check that it actually works, does what it says on the tin, and does not negatively impact real people and businesses going about their day-to-day lives. If he has paid attention to the debates in previous stages of this Bill, he will know that I support a move to sustainable aviation fuel; I will come on to that shortly, when I speak about other amendments. I think, as the hon. Member for Dewsbury and Batley (Iqbal Mohamed) does, that some technologies are superior to others when it comes to power-to-liquid, but the move to those fuels is very important. We have to get it right. If we do not, and we do not make it affordable, it will not happen.
Sir Edward Leigh
I commend my hon. Friend on his speech. Does he agree that the Conservative way is to ensure practicality over mere ideology, and consumer rights over Government imposition of controls and regulations that can do serious damage to the economy and people’s livelihoods?
Greg Smith
I am grateful to my right hon. Friend the Father of the House; I could not have put it better myself. It is essential that whatever measures, on any matter, are brought forward by any Government—be it the current Government or any future Government—real people’s lives and the cost base be reviewed regularly, so that we are not making people poorer, or stopping people from being able to do what they want, be it go on holiday, travel for business or move goods around.
With that, I come to amendment 8 and the cost impact on passengers. The amendment would require the designated counterparty to report on the impact of the revenue certainty mechanism on passenger air fares. One of the most contentious areas surrounding the Bill, and indeed the Government’s whole approach to net zero, is: what does it actually cost real people? The amendment seeks to clarify that, and it gives the Government the opportunity—in theory, they should cheerfully embrace this—to lock in a claim that they profess to believe, namely that the Bill will have an impact of plus or minus £1.50 on air fares. The previous Minister repeated that statistic time and again on Second Reading and in Committee. The new Minister has the challenge today of either sticking with his predecessor’s assertion, backing the amendment and locking in protections for consumers, or admitting that this may well be more costly to air travellers.
It is worth noting that during the evidence stage of Bill Committee, none of the witnesses was willing to affirm the Government’s figure. In fact, some noted that the estimated price appeared low. For example, Jonathon Counsell from International Airlines Group stated:
“We think there are potentially some elements that have not been included in that calculation, but £1.50 per passenger feels quite low when you think the costs of the SAF itself will be nearer to £10.”––[Official Report, Sustainable Aviation Fuel Public Bill Committee, 15 July 2025; c. 17, Q12.]
Consumers need peace of mind that the Bill will not cost them dear, and will not act as a financial barrier to the family holiday or any other trip, so failure to back the amendment can only mean uncertainty.
I turn to amendment 11, which is focused on transparency. The amendment would require the Secretary of State to set a standardised levy rate, payable by all suppliers of aviation fuel, that must be publicised by suppliers of aviation fuel on invoices to their customers. Valero, for example—one of the world’s largest renewable fuels producers—has contacted the Opposition arguing for the amendment, saying that it would offer a workable solution; it would support the development of new SAF production without significantly impacting the industry as a whole. The amendment would apply the levy equally to all jet fuel suppliers, providing a fair and transparent mechanism for supporting the broader SAF industry.
Just this week, I have been contacted by Virgin Atlantic, which is arguing that transparency safeguards must be in place to keep costs low for consumers. As organisations including the International Air Transport Association have highlighted, since the mandate came into effect in January 2025, fuel suppliers have been adding compliance risk premiums to the cost of mandated SAF, contributing to the price of SAF and doubling it for some carriers. That is to cover the eventuality that they do not meet the 2% mandate target and must pay the buy-out price for any missed volume. Virgin Atlantic has argued that to prevent SAF prices increasing further, the revenue certainty mechanism must have sufficient safeguards in place to ensure transparency over cost pass-through. There must also be a transparent process for refunds in the event of over-collections, and all revenues generated under the RCM should be ringfenced, rather than going into the general taxation pot.
Amendment 9 looks at British technology and intellectual property. It would require the designated counterparty to prioritise UK-based technology when entering contracts. As I said from the Dispatch Box on Second Reading, there is a historical reality that we need to confront, and the amendment would stop history repeating itself. The historical error that I refer to is this: a great many projects supported by grants from the advanced fuels fund use foreign-owned technology. It cannot be right that the British state, while arguing for domestic fuel security, funds overseas technology when we have incredible innovators and manufacturers right here.
Domestic fuel security must mean domestic fuel IP, manufacture and supply. It is important both to develop a UK market for SAF, eSAF and local production, as is provided for by the Bill and the mandate, and to support and encourage the use of home-grown technology for the manufacture of those products. That not only retains revenue in the United Kingdom but leverages a huge amount of revenue for future exports through technology licensing. The amendment tackles that head-on, and a failure to back it would be a failure to back United Kingdom innovators.
Lastly, amendment 10 is on technological choices. It states:
“The terms under subsection (4)(c) must include a requirement for the producer to consider the longevity of supply and relative environmental impact when prioritising between organic and synthetic derived sustainable aviation fuel solutions.”
I feel incredibly strongly about this amendment. It is on a matter that I have championed in this House for many years—in the last Parliament, during my time on the Transport Committee and, since July, from this Dispatch Box. The amendment is in the name of the shadow Secretary of State, my right hon. Friend the Member for Basildon and Billericay (Mr Holden), and it is relevant to new clause 7 and amendment 12 in the name of the hon. Member for Dewsbury and Batley, both of which I have a great deal of sympathy for.
Governments of all political persuasions have professed to be technologically neutral. They seldom are. There is a natural tendency to pick winners and losers. We need to look through that lens, and ask ourselves what the Bill is promoting and using the levers of primary legislation to enable. The disappointing answer to that is the potential to bring alive SAF plants using technologies that have already been superseded—plants that would therefore be temporary at best. Stepping up something with no longevity, and with an estimated build cost of between £600 million and £2 billion, would be no small mistake.
Power-to-liquid solutions, otherwise known as eSAF or synthetic fuel—liquid hydrocarbons literally made out of air and water—are surely the better and sustainable future for aviation fuel. We had debates on Second Reading and in Committee about other solutions. I cannot imagine that anyone is ready to defend growing food to burn it, but equally, waste-derived fuels simply are not sustainable in the long term. Solid waste is not readily available; the primary source is local authorities, the majority of which are on contracts with energy-from-waste facilities and incinerators that have decades to run. Likewise, I am not sure there is enough chip oil in the country to meet our aviation fuel needs.
That leaves power-to-liquid solutions and eSAF. Many say that it is not ready; some say it is too expensive; but those of us on the Public Bill Committee heard loud and clear from Zero Petroleum that it is ready to scale right now. It just needs the green light from the regulators, and with scale will come affordability. Amendment 10 is in many ways a light-touch amendment to bring this debate to the fore. It does not close down other technological routes, but forces the Government to acknowledge the risk, both to the environment and in terms of cost, when choosing contracts under the RCM.
As other speakers have said, the Bill can still be improved. I urge the Minister to accept the amendments, which would improve the Bill, and to ensure a strong and affordable future for sustainable aviation fuel in our great United Kingdom.
The Parliamentary Under-Secretary of State for Transport (Keir Mather)
Before I turn to the amendments before us, I would like to thank the many hon. Members who have made considered and helpful contributions. This legislation has been long in the making, and few have been more central in bringing it to fruition than my predecessor, my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane), who I would like to thank personally for his efforts throughout the Second Reading and Committee stages.
Iqbal Mohamed
The Minister mentioned a reduction of 6.3 megatonnes, but what is that as a proportion of the current emissions?
Keir Mather
No piece of legislation can deal with all the emissions that we are facing through challenges in the aviation sector. That is why we have this comprehensive package of measures to make decarbonising aviation while allowing passengers to fly at an affordable rate a reality.
The hon. Member for Alloa and Grangemouth (Brian Leishman) spoke with his usual fervent passion in support of his constituents. The National Wealth Fund stands ready to encourage investors to join us in finding a long-term industrial future for Grangemouth, standing ready to invest £200 million once an investable proposition has been identified.
The hon. Member for Richmond Park (Sarah Olney) raised the unfortunate closure of Vivergo. The Government have been working with the plant to understand the financial challenges that it has faced over the last decade, but I would like to reassure her that we do not anticipate supply issues in bioethanol provision. I also thank my hon. Friend the Member for Worcester for his decided and confident support for the measures in the Bill.
The hon. Member for Dumfries and Galloway (John Cooper) said that the market was too nascent, but I encourage him to look at the detail of the Bill. He will see that that is exactly the problem we are seeking to solve through this legislation, by allowing SAF producers to scale at pace and pursue those innovative technologies. He also spoke about Britain as an aviation leader. The RCM is a first-of-its-kind global initiative to allow SAF producers to produce the fuels we so desperately need. He also encouraged me to sort out decarbonisation challenges in maritime. I draw his attention to the fact that the UK Government announced £448 million of funding to decarbonise the maritime sector only a fortnight ago.
My hon. Friend the Member for Derby South (Baggy Shanker) has Jaguar Land Rover within his constituency and is a passionate advocate for both the automotive and aviation sectors there. He spoke about the urgent need to encourage people to fly—to enable them to access the rest of the world, to see their families and to pursue business opportunities. That is something that we are passionate about championing through the Bill.
The hon. Member for Sutton and Cheam (Luke Taylor) was pleased to see that the Bill was supported across the House. I can only hope that he is correct in his prediction. We shall see. I note that there are no representatives from the Green party here today to focus on these important measures to decarbonise aviation. Hon. Members from across the House can take from that what they will. The hon. Gentleman was right to outline the broader work that is required to decarbonise aviation, including airspace modernisation, but also to talk up our fantastic UK aviation sector and the hard work that it is undertaking to pursue decarbonisation.
My hon. Friend the Member for North Somerset (Sadik Al-Hassan) pointed to the very important fact that we are endowed with key infrastructure, such as pipelines, pioneered by firms like Exolum, the research facilities in his constituency to which he pointed and the pioneering work of Bristol airport. We need to develop a market to facilitate that infrastructure further. The 70% cut in emissions through SAF is an exciting proposition indeed.
There are a number of Government amendments that I would like hon. Members to consider. Government amendment 6 allows for levy regulations to require the Secretary of State to assist the designated counterparty by collecting information and sharing it with the designated counterparty. It will also allow for the regulations to be used to impose requirements on a person to provide information to the Secretary of State. It is a technical amendment that will ensure that the information required to calculate individual levy contributions is provided at sufficient frequency, while not creating additional administrative burdens for industry.
Government amendment 1 allows the Secretary of State to direct a Government-owned company to provide assistance for the purpose of identifying to whom revenue certainty contracts should be allocated. The allocation process for RCM contracts will be fair and transparent to give confidence to any applicants. In other renewable schemes, contract allocation is often carried out through an auction process. The allocation process for contracts for difference for renewable electricity is carried out through the National Energy System Operator, or NESO, which is an operationally independent, publicly owned body.
That type of approach to allocation may also be suitable for RCM contracts, so the amendment will allow the Secretary of State to direct a body like NESO to support in the allocation process. The final decision on allocation, however, remains with the Secretary of State. Without the amendment, the same allocation process could be pursued, but that would need to be done on a contractual basis through a procurement process, which would add unnecessary cost and complexity to the process. The amendment avoids those unnecessary impacts. I therefore commend it and all other Government amendments to the House.
I would ask that new clauses 1 to 3, which were tabled by the Liberal Democrats, be withdrawn. They were introduced in identical form in Committee, and my remarks will closely reflect the points my predecessor made then. The amendments seek a review of the impact of the revenue certainty mechanism within the next 12 months. I am afraid that that is not reasonable, as the revenue certainty mechanism triggers only once SAF is being produced, and even at pace, that is some years off. It will take time to build SAF plants, initially starting with a contract allocation round with SAF producers. Therefore, we will not see sufficient developments in the next 12 months to warrant a review of the impact of the revenue certainty mechanism. I agree, however, that it is important to have parliamentary scrutiny to measure the impact of the Act and to propose actions if necessary. The SAF mandate already includes a review clause to assess the impact of the statutory instrument, with the first review scheduled within five years. That is in line with comparable schemes.
With regard to new clause 1, I can reassure the House that work is being carried out at pace across Government on the future of our refineries. Commissioning a separate report, as the new clause proposes, risks a delay to future decisions and any subsequent benefits that may be realised. Overall, we expect low-carbon fuel production to support up to 15,000 jobs across the country and to make a contribution to the economy of up to £5 billion by 2050.
Jim Shannon (Strangford) (DUP)
I commend the Minister, and wish him well in his new role and in all that he does. The legislation extends to Scotland, Wales and Northern Ireland, so what discussions have been taking place with the Northern Ireland Assembly to ensure that we can see its benefits—to both employment and the wider economy—in Northern Ireland?
Keir Mather
The hon. Member raises a very important point. We need to ensure that the benefits of the Act are felt across the length and breadth of our United Kingdom, and that includes engaging with our colleagues in the Northern Ireland Assembly.
I turn to new clause 2. We do not anticipate a substantial impact on SAF production in the event of a decline in UK bioethanol production. The bioethanol market is a global one, and we do not currently foresee any supply issues. Furthermore, the recommendations in new clause 2 are already under way and duplicate measures can already be found in the SAF mandate. In July, a total of £63 million was awarded to 17 projects via the advanced fuels fund. That includes projects that use bioethanol, municipal solid waste and green hydrogen as feedstocks, among other sources. The Chancellor also announced in the spending review 2025 that we will continue to support SAF production throughout the spending review period. The SAF mandate also includes a formal review mechanism embedded in its legislation, with the first review scheduled to take place within five years.
New clause 3 would also duplicate measures that already exist in the SAF mandate. The mandate awards more certificates per litre to SAF with higher greenhouse gas savings, which will encourage SAF developers to continuously improve on their greenhouse gas savings. This will be monitored through the formal review mechanism, with the possibility to update legislation as required.
I hope that this reassures the hon. Member for Didcot and Wantage that, in many respects, the concerns he outlines are allayed by existing measures in the Bill. I therefore urge him not to push his new clauses.
New clause 6, tabled by the right hon. Member for Basildon and Billericay (Mr Holden), would require the Secretary of State to lay before Parliament a report on the economic impact of the legislation within a year of it being passed. Such a report would not show the full economic impact of these measures. Contracts will need to be negotiated, signed, plants built and SAF produced and sold before economic impacts are released. Transparency on reporting in relation to the Act’s economic impact can be achieved through regular updates to the House. Therefore, I do not see the new clause as being effectual, if he wishes to evaluate the economic impact of the RCM. I therefore ask him not to move his new clause.
New clause 5, tabled by the hon. Member for West Dorset (Edward Morello), would require the Secretary of State to introduce a regulation requiring airlines to make an annual report on their use of SAF, both in absolute volumes and as a percentage of overall fuel used. I welcome transparency on carbon emissions to help consumers make informed choices. However, we will be providing data on the supply of SAF under the mandate, including what proportion of the total aviation fuel supply is SAF. Furthermore, many airlines already provide public information on their decarbonisation efforts, and I therefore do not believe this new clause is necessary and ask the hon. Member not to move it.
New clauses 4 and 7, tabled by the hon. Member for West Dorset and the hon. Member for Dewsbury and Batley (Iqbal Mohamed) respectively, relate to power-to-liquid obligations. On new clause 4, the Government have already committed to keep mandate targets under review. The existing legislation enables the Secretary of State to amend obligations under the SAF mandate, subject to consultation with those affected and scrutiny by Parliament. Allowing amendments to the obligations without consulting appropriate parties could be detrimental to our shared ambition of increasing the use of SAF. On new clause 7, the legislation that gave effect to the SAF mandate already makes provision for a review no later than 2030. Given that the mandate has been in place for less than 12 months and the PtL obligation does not come into effect until 2028, it would not be helpful to review earlier than planned. I therefore ask the hon. Members not to move their new clauses.
Amendment 8, tabled by the right hon. Member for Basildon and Billericay, would put a requirement on the counterparty to report on the effect of the introduction of the RCM on air travel prices. This was spoken to by the shadow Minister, the hon. Member for Mid Buckinghamshire (Greg Smith). The Government are committed to delivering value for money in the RCM scheme by controlling the scale and number of contracts entered into, and through the prices negotiated in each contract. The impact on air fares are likely to rise or fall by less than the cost of a cup of coffee. The costs of the scheme and the impact on ticket prices will be kept under continual review. Passengers should also benefit from the lower prices generated from the lower project risk and reduced cost of capital for SAF producers. Therefore, the Bill and the measures in it will not limit people’s ability to fly. Given that, I ask the right hon. Member not to move the amendment.
I turn to amendments 9 and 10, tabled by the right hon. Member for Basildon and Billericay, and to amendment 12, tabled by the hon. Member for Dewsbury and Batley. The decisions on the specifics of contract allocation will be made during the contract allocation process. There will be a fair and transparent allocation process that evaluates the key costs, benefits and risks of each project. That will be developed over the coming months and will be subject to consultation with stakeholders. These amendments would reduce the Government leverage in negotiations by setting criteria in advance and would likely reduce value for money in the contracts signed, which I am sure all of us would seek to avoid. I therefore ask that these amendments are not moved.
Finally, I turn to amendment 11, tabled by the right hon. Member for Basildon and Billericay. In May 2025, the Government published the response to the consultation on funding the SAF revenue certainty mechanism. It confirmed that a variable levy on aviation fuel suppliers would be introduced, and this was included in the contents of the Bill. The Government plan to consult imminently on the detailed design of the levy, but this amendment would pre-empt stakeholder responses, which will be considered in any design decisions. I therefore ask the right hon. Member not to press the amendment.
I hope that my responses have provided the explanations and reassurances that colleagues were seeking. The Bill is a crucial step towards establishing a SAF industry in the UK and driving investment, growth and jobs across our great country. Once again, I urge the House to give the Bill its full support.
Madam Deputy Speaker (Caroline Nokes)
Mr Glover, is it your pleasure that new clause 1 be withdrawn?
Olly Glover
I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
New Clause 5
Air travel providers’ use of sustainable aviation fuel: reporting requirements
(1) Within six months of the passing of this Act, the Secretary of State must, by regulations, establish a requirement for air travel providers to report annually on their use of sustainable aviation fuel.
(2) Regulations made under subsection (1) must specify—
(a) that the annual reports include figures for sustainable aviation fuel usage which can be easily understood, including expressed as—
(i) an absolute volume, and
(ii) proportion of all aviation fuel used; and
(b) that the annual reports are accessible to members of the public including by being made available on their websites.
(3) Any regulations made under subsection (1) must be made under the negative procedure.”—(Olly Glover.)
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
On a point of order, Madam Deputy Speaker. Earlier today, the Prime Minister promised that certain papers would be published as soon as they could be, but he did not give a time. Has there been any indication of when those papers will be published? We are still waiting for them.
Madam Deputy Speaker (Judith Cummins)
I thank the hon. Gentleman for his point of order. While that is not a matter for the Chair, I am sure that those on the Treasury Bench will have heard what he said.
Bill read the Third time and passed.