Sustainable Aviation Fuel Bill

Lord Berkeley Excerpts

Committee stage
Wednesday 10th December 2025 Lords Chamber

[Lord Moylan (Con)]

My Lords, for the convenience of the Committee, I rise to move Amendment 7 in the name of my noble friend Lord Grayling. While I am on my feet, I congratulate the noble Earl, Lord Russell, on his demotion to a mere barony. I assure him that it will pass, and his family will be able to resume their Earl-like status, I hope for many generations to come.

I wish to speak to my Amendment 11 in this group. I will try to put this in language that I understand—that is, fairly simple language. The levy has to be allocated. If the contracting party has to make payments to the producers of SAF, it will fund this by a levy, and the levy will be applied high up the supply chain; it will be applied to the producers of fuel. The people who produce aviation fuel will be adding a certain amount of SAF to their kerosene—an increasing amount each year—before then selling it to the airlines. As I understand it, that is the mechanism.

The question is: among the competing producers of aviation fuel, how is the levy to be allocated from one period to the next? I will assume for the sake of simplicity that the allocation period is a year. There is no necessity that it should be a year—it could be done six-monthly or monthly—but the Minister can say whether the Government have a clear intention about that.

My understanding is that the Bill envisages that the allocation will be based on market share. Market share can be measured only in retrospect. You can know what a company’s market share was last year or in the last six months; you will not necessarily know what its market share will be for the year to come. But, of course, companies are selling aviation fuel in the year in which they are acquiring market share, so they will not know what their levy is until the end of the year, or period, in which the levy is allocated to them, according to their market share. It will be impossible for them to have a clear notion of what they should be adding to the price of the fuel to compensate themselves for the levy. It is envisaged that they should compensate themselves for the levy through adding to the price of the fuel and selling it on, which is how the airlines and ultimately the passengers pick up the cost.

This is presented by the industry—to me, at least, and maybe to other noble Lords —as a very serious practical difficulty. The tendency will be to overcompensate and add more to the price of fuel than is strictly necessary to cover a levy which companies can only vaguely guess at. I accept that their market share is unlikely to jump wildly from one year to another. That does not happen in mature businesses; I do appreciate that. But the levy is quite sensitive even to modest adjustments in market share from one year to another. To get an accurate price to pass on to the customer, relying on retrospective market share is simply not going to cut it and the result may well be that customers end up being overcharged.

It would be better if the counterparty were able to calculate the levy on a transparent pence-per-litre basis. Another point of capital importance is that this could then be added to invoices so that anyone buying aviation fuel—which would normally be airlines, of course—would see clearly on their invoice how much had been added in respect of the levy. There is a suspicion in the industry, which I am sure the Minister wants to dispel, that the Government would rather obscure the additional cost of the levy, and that a system whereby it was written plainly on the face of an invoice would be unwelcome to them.

It would be useful if the Minister were to dispel that view, but I will leave aside that issue. Even if it were not a consideration, there is the important practical consideration of how this will be calculated by companies which will not know what their levy is going to be. This is an extremely serious issue about the implementability of the Bill. It is bound to come back on Report, because the Bill will not work unless this is sorted out; at least, it will not work in the way that the Government intend.

With that, I recommend my Amendment 11. I will be interested to hear what the Minister has to say about it.

[Lord Berkeley (Lab)]

My Lords, I will speak mainly to my noble friend the Minister’s Amendment 20. This is perhaps an odd order in which to speak on these things, but it does enable my noble friend to respond to me after I have spoken rather than before; I am sure that he would welcome that.

I want to talk about the relationship between sustainable aviation fuel and the production of renewable liquid fuels that could be used in home heating. I raised this at Second Reading and highlighted what I thought was a key point. The production of sustainable aviation fuel, particularly through the HEFA process, generates hydro-treated vegetable oil—HVO—as a by-product. In fact, HVO accounts for around 30% of the output—a significant quantity, I believe.

In the consultation on alternative heating solutions published a couple of weeks ago, the Government rightly acknowledged the role that HVO could play in decarbonising off-grid homes. I declare that my home is off-grid and relies on oil. Indeed, the Government highlighted that it would be the most cost-effective option for consumers of all the options considered. However, the consultation still questioned the feedstock availability of the fuel. What really pleased me was that, in the last few days, a Written Answer has been given to a Member of Parliament in the other place. It states:

“As of the 1^st of January 2025, a market for low carbon fuels for use in aviation and road transport has been supported under two separate schemes”—


the SAF and the RTFO. It continues by saying that targets under both these mandates

“are set considering global availability of feedstocks and competing demands between transport modes and across sectors of the economy”.

It basically says that there is enough material for both aviation and home heating. I think that is a major step forward.

When my noble friend comes to discuss his Amendment 20, I hope he will include a consultation with me, a few colleagues and our noble friend Lord Whitehead, the Minister for Energy Security, to discuss the significant benefits of working together for these two uses given that we have this Bill and a DESNZ consultation. I hope that this is just the right time to have such a discussion because it is a sensible strategic step towards meeting our decarbonisation goals.

--- Later in debate ---

[Lord Berkeley (Lab)]

My Lords, following up on the question from the noble Lord, Lord Moylan, about the £1.50, I may be missing something, but if that is a cost to UK airlines for passengers leaving or arriving at UK airports, do we add that to a similar cost which might be applied by France, Germany or Timbuktu? They may have different costs in creating SAF, if they ever get round to doing it. The noble Lord mentioned cabbages. Well, if you are flying to Russia, you probably get lots of cheap cabbages there and you can turn those into SAF. I think we need to know what the total cost is going to be for this particular journey, whether it is £1.50 or £10 or whatever.

Sustainability is fine, but we had a Question today about the Drax power station and wood chips. If you look at some of the consultancy reports on how those wood chips are made, you will see that most of the trees seem to have many years of life left in them, but we do not worry about that, apparently. A bit more detail from my noble friend the Minister would certainly give me a bit of comfort.

[Baroness Pidgeon (LD)]

My Lords, I shall talk about Amendment 19 and the impact on airline tickets, which I think is really important. At Second Reading, a number of noble Lords raised the impact on passengers, and it goes to the whole theme of our discussion this evening, which has been about transparency at every level of the Bill.

We should talk, maybe outside the Chamber, about what sort of comprehensive report we could produce on the impact of this legislation, whether that is the direct impact on the passenger, through the price of their ticket, or in all these other areas we have been discussing today. There is a cost as we transition to the greater use of SAF through the revenue certainty mechanism, and it is really important that passengers and the whole industry understand the true cost of the Bill, so I will be interested in the Minister’s response to the points that have been raised.

Sustainable Aviation Fuel Bill

Lord Berkeley Excerpts

2nd reading
Thursday 20th November 2025 Lords Chamber

[Lord Berkeley (Lab)]

My Lords, I support the Bill. I am not often known to be supporting aviation, but this is the first time there has been a serious attempt to reduce its carbon emissions. At the same time, it can be used also to help the millions of households across Britain that actually do not have access to gas. I spoke about this in a debate on the energy Bill earlier this year and I declare an interest as the owner of a house that does not have gas, so we have to use oil.

There are 1.7 million homes in the UK, serving about 4 million people, that are off the gas grid and rely only on heating oil. They will be suffering at the present time, when it is really cold. They are mostly in rural community areas, where alternatives such as heat pumps work sometimes but not always.

It has come out of the recent debate that HVO, hydrotreated vegetable oil, is a renewable fuel that can cut emissions from home heating by up to 88% compared with kerosene, which is used at the moment. It works as a drop-in replacement—you just tip it in the tank. I do not know, because I have not tried it. The reason I bring it up again this morning is that HVO is a by-product. It is only about 30% of the output from SAF and, as SAF production goes up, we can increase the domestic supply of HVO.

Ministers have rightly said that HVO will play a vital role in our aviation decarbonisation journey, and I certainly agree with that. But it looks as if the SAF mandate will accelerate that growth from what I think is about 2% of jet fuel demand today, rising to 10% in 2030 and 22% in 2040. That is enough HVO to provide a 66% or so blend of heating oil, which will sort out the decarbonisation needs of most off-grid homes. Especially at this time of year when it is really cold, this is a benefit not only for the aviation industry but for people who live in the countryside or cannot connect to alternatives.

We need the right mechanism, as other noble Lords have spoken about. Section 159 of the Energy Act 2023 gives the Government power to create a renewable liquid heating fuel obligation, which mirrors what the Labour Government did with the transport fuel obligation last time. I was really pleased, therefore, to read an announcement from the Government on Tuesday this week about a consultation on this. The industry that provides SAF and other similar material, working with their off-grid customers, has built up a considerable bank of evidence and data to show that this policy will actually benefit both consumers and the environment. I hope now that the consultation will allow things to move forward at pace.

I was interested to read that the Irish Government recently confirmed their intention to implement a renewable heat obligation, confident that their feedstocks are available to supply their off-grid homes. That is terribly important, as the noble Lord, Lord Grayling, referred to. If there are enough feedstocks, the market will work.

This is an opportunity to deliver a win-win: cleaner skies and warmer homes. I hope that my noble friend the Minister will discuss this with his new ministerial colleague, the noble Lord, Lord Whitehead—who was introduced today and has a lot of experience—confirm the Irish Government’s conclusion and commit to implementing Section 159 swiftly following the consultation.

On that basis, I hope we can have a win-win solution for aviation and home heating.

Heathrow Airport: Third Runway

Lord Berkeley Excerpts

Thursday 30th October 2025 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

I had a feeling that fish and books would come up again because they came up on Monday. Of course, value and size are two different things. The point of an international hub airport—of which I should continue to say we have only one and we will have only one, which is Heathrow—is international connectivity around the globe. Expanding an international hub airport should mean more connectivity to more places, and that will enable more fish and books and salmon to be sent all around the globe.

[Lord Berkeley (Lab)]

My Lords, as part of the assessment of the two remaining bids for the third runway, will my noble friend take into account the additional carbon footprint of the additional planes, the concrete and steel that go into the construction and any other transport that is needed to service the passengers?

[Lord Hendy of Richmond Hill (Lab)]

My noble friend is right that the carbon footprint of building a third runway and operating the airport is significant. The Government have made it clear that any proposed scheme must meet four clear tests, of which aligning with our legal obligations on climate change, including net zero, is one. He is also aware, I think, that the construction industry is moving forward with more carbon-friendly methods of construction, and I think it reasonable that the Government and the country expect a successful scheme to be carbon friendly, if not carbon-neutral, in construction.

International Maritime Organization: Net-Zero Framework

Lord Berkeley Excerpts

Wednesday 22nd October 2025 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

The simple answer to the noble Lord is yes. Adopting the IMO net-zero framework is vital for climate action and giving industry the certainty it needs to make net-zero shipping a reality. The UK will, as he suggests, maximise our effort to maintain momentum so that the framework can be adopted next year. We are committed to working with others at the IMO, which we are honoured to host here in London, and industry generally, to progress the necessary intersessional work to shape the framework’s technicalities.

[Lord Berkeley (Lab)]

My Lords, while I welcome the IMO decision—as other noble Lords have said, it is a shame that it has been delayed—when it actually comes into effect, who is going to police the enforcement of lower emissions from ships on a worldwide basis? It sounds a pretty horrendous task.

[Lord Hendy of Richmond Hill (Lab)]

The purpose of the IMO, of course, is to have an international way of policing things, because shipping is necessarily carried out at sea, so policing in the sense of communities does not work. The way it works is that IMO resolves as a whole to have binding regulations and that is what is being discussed at the moment. We desperately need to give some certainty to people who invest large sums of money for the long term in this. This Government are determined to drive this forward in order to give that certainty, both for decarbonisation and for a healthy shipping market.

Great British Railways: Rolling Stock

Lord Berkeley Excerpts

Tuesday 21st October 2025 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

My Lords, EUROFIMA is a long-established, supranational financial institution, established as a joint stock company by an international treaty, the convention, signed by 25 European member states. It is dedicated to financing public passenger railway rolling stock and related infrastructure, as well as the modernisation and renewing of related equipment. As part of developing the rolling stock and infrastructure strategy, my department is exploring a range of financing structures to support investment in partnership with private finance. This includes active engagement with EUROFIMA to assess how its financing mechanisms could support future investment in the UK rolling stock market. If, following due diligence, EUROFIMA is considered an appropriate avenue to go down, then we would aim to accede by the end of 2026.

[Lord Berkeley (Lab)]

My Lords, now that the Government own South Western Railway, they have inherited about 4,000 trains that were manufactured four years ago and have not carried any passengers at all. Can my noble friend the Minister tell the House when these trains are likely to enter service?

[Lord Hendy of Richmond Hill (Lab)]

My noble friend is accurate: 90 trains were procured; some of them were delivered five years ago. At the time that the South Western Railway operation reverted to public ownership, six out of the 90 were in service; as of today, 23 are now in service. The new management is doing what the old one did not, which is to put the new trains in service and have the old ones taken out of service and scrapped. The rest of them will be introduced as fast as the drivers can be trained, which will take a little time because that had not been done either.

National Policy Statement for Ports

Lord Berkeley Excerpts

Tuesday 14th October 2025 Grand Committee

[Lord Berkeley (Lab)]

My Lords, I rise to speak briefly in the gap. Unlike many noble Lords, I very much welcome this document. The Government have done pretty well in getting this far, because it is incredibly complicated, but I have a few questions, which I hope my noble friend the Minister will be able to answer.

The first issue—it is pretty obvious, I suppose—is how far this policy applies to Scotland and Wales. My noble friend the Minister mentioned Scotland briefly but, as we all know, there are some very big ports in Scotland. Wales has a large number of ports as well; some of them are pretty large and some of them think that they will get even bigger when the new offshore wind farms are built somewhere in the Celtic Sea. It would be nice to know about the scope of this document in those two countries.

Along with that, I would be interested to know who will be in charge. This week, I was a bit surprised to see a press release saying that the lower Thames tideway tunnel is going to be built not by the Department for Transport, because it is not capable, but by the Government. I thought that the Department for Transport was government. It is a good department, but this is an odd way of saying who will be in charge of the budget, or who will be in charge when things do or do not go well.

On my other worry, most of the discussion in this debate has been about energy; the noble Lord, Lord Moynihan, started it. Energy is a terribly important element of input/output, et cetera. I am involved in a hydro scheme—or whatever it is—for passenger services between the Isles of Scilly and the mainland, which is entirely electric. It is charged at each end, and it has enough power to get across the 25 miles of rough sea in the middle. There are many other ones that could continue like this, and I hope that the Government will continue to encourage them.

My worry is that the document does not appear to include many energy projects; as I understand it, those have been left to the energy NPS. For ports, they cover everything, as noble Lords have said. However, it is difficult to get things through the so-called planning approval process for ports. You have all kinds of people saying, “You can’t do this because of that, and you cannot do that because of the other”. We had this off the coast of Penzance last year, when somebody said that you could not run a ferry over the sea because there was eel grass underneath it. It was 10 metres down—how serious can the grass get? Years ago, the Environment Agency told me that one could not run new services into the Isles of Scilly because they were entirely covered by a local environmental protection order. I asked, “Are people going to starve, then?” The agency said, “No, it’s just difficult”. I said, “Well, it works on the continent. It is in European legislation”. We really have to sort all this out.

My last point is on forecasts, because the Government say that they would like to take keep control of all the forecasts themselves, but that is wrong. The ports should be given a major role to play in telling everyone what their forecast is, and if the Government do not like it, there can be a debate. But it is important that that is done by the private sector, which is, after all, in charge of all the different cargoes that go in and out of ports. I wish this project well and congratulate the Government on producing it.

Rail Fares

Lord Berkeley Excerpts

Thursday 18th September 2025 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

The noble Lord was not an absolute failure in the job; he was brilliant, and he of course appointed a very competent chair of Network Rail in his time—for which I am grateful, but my wife is not. My noble friend Lord Livermore is sat next to me, and he deals with Treasury matters; for the moment, at least, I deal with transport and the railways. The truth is that the railways are in a very bad financial position. They are taking twice the subsidy that they did pre-Covid, and they do not run very well—the noble Lord is right about that. We have a huge amount of work to do. Matters such as the balance between fares and subsidy and the performance of the railway need to be addressed, which is why the Government are addressing them through the public ownership Act and the Railways Act. It will take time—the system has taken 200 years to create—but we are determined to make a real difference in the course of this Parliament.

[Lord Berkeley (Lab)]

My Lords, the present system of passenger compensation for when the train is late seems to work well, in my experience. Will that change with the new, wonderful structure that the Minister and the noble Lord, Lord McLoughlin, outlined? Who will pay the compensation to passengers?

[Lord Hendy of Richmond Hill (Lab)]

I thank my noble friend. It is right that there is compensation. The rates vary and the system of paying it is complex; for example, if you have bought your ticket from a third-party ticket retailer, it is sometimes not easy to get your money back through Delay Repay. We know that we need to address all those things. In the end, GBR will be operating the public sector railway, and therefore the system for people to make claims will inevitably be simplified.

Planning and Infrastructure Bill

Lord Berkeley Excerpts

Committee stage
Thursday 24th July 2025 Lords Chamber

[Lord Berkeley (Lab)]

My Lords, I am very pleased to support the amendment in the name of the noble Lord, Lord Lucas. My interest in animal welfare and good-quality meat comes from the south-west and talking over many years with the butchers who supply good meat. The two problems which noble Lords have identified are: the distance of travel, which is a very serious animal welfare issue; and the fact that over the last 20 or 30 years the supermarkets have put pressure on government to close as many small abattoirs as possible, so that they can get a greater share of the market. Also, as we have discussed in your Lordships’ House before, you must have a vet to witness the abattoir’s work, yet there is a shortage in the competitive supply of vets. One company appears to have a very large share of the market. I wonder whether Ministers should not go a little further and look at the whole question of competition in this field and, most importantly, the distance of travel.

I live on the Isles of Scilly. We have some very nice farmers there and some very nice cattle—which taste extremely good too—but they have to go to the mainland. On a small ship going up and down in the waves, these animals are pretty unhappy. For years, the farmers there have been lobbying to have an abattoir on the islands. Finally, after years, the new Duke of Cornwall has agreed to provide some land on St Mary’s where an abattoir can be built. It will therefore be a much shorter journey from the off islands to the abattoir. All the issues that the noble Lord, Lord Lucas, has mentioned are still there, but it is a much shorter distance. I hope that that the Government will look at all these things and make sure that we have a competitive market for this which is also very animal friendly.

[Baroness Bennett of Manor Castle (GP)]

My Lords, there are 100 million animals killed for meat in the UK every month, which is quite a statistic. There are 75,000 people who work in abattoirs and associated institutions. The amendment from the noble Lord, Lord, Lucas, raises an important issue. Whether this is the right way to address it I am not quite sure because, as other speakers have said, we are talking about a systemic issue here. I often speak about our broken food system. At the heart of that broken food system is factory farming and the giant chicken and pig institutions which are associated with giant abattoirs, logically enough. We are approaching a land use framework, to be coming from the Government. Many noble Lords think that this does not get mentioned enough. If we think about land use and abattoirs, this all needs to fit together in a systemic way, whatever model you think should apply. Obviously, I have views on that.

I want to cross-reference what I was doing in your Lordships’ House about 12 hours ago. I was talking about the climate emergency and the impact of rising temperatures. I note that in 2022, the Government produced guidance that animals should not be transported except in temperature-controlled environments when the temperature—or the perceived temperature, taking account of humidity—is higher than 30 degrees Celsius. That might not historically have been much of an issue in the UK, but it is only going to continue and become a larger issue if you are moving animals. The longer the distance, the more you are unable to do it in the cool hours of the day.

We need a much more localised food system, which means small independent farmers and small independent abattoirs. Five small abattoirs closed in 2024 alone, and the figure is down to 49 from 64 in 2019. There is a real issue here, but it must be looked at systemically in the round, not just as abattoirs on their own. We have a huge animal welfare issue here. We also need to think about workforce. I found some statistics suggesting that the average age of a slaughterer is 63.

Train Operators’ Revenue Protection Practices Review

Lord Berkeley Excerpts

Thursday 17th July 2025 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

The noble Baroness is right to describe it as a mess. We are not waiting for Great British Railways. LNER’s changes to long-distance fares, which have been introduced progressively, have resulted in considerably greater passenger satisfaction with the way in which the fares are arranged now compared with before. I am expecting to see similar arrangements on the west coast main line and on Great Western in due course. I think the noble Baroness knows that we are rolling out pay-as-you-go in urban areas, as well as in London and the south-east. It is a long and complex job, and it is not helped by the fact that, fundamentally, the fares system has not changed since the railways were privatised. We are on it, and we are working hard at it.

[Lord Berkeley (Lab)]

On the west coast main line and on other routes, when Great British Railways actually happens, will it have control over the fares issued by open-access operators, or will they still be able to charge what they like for their own services?

Road and Rail Projects

Lord Berkeley Excerpts

Monday 14th July 2025 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

I am sure the noble Baroness will know the answer to that. As I said at Questions, taxation is a matter for His Majesty’s Treasury. The Chancellor will determine taxation policy from time to time.

[Lord Berkeley (Lab)]

My Lords, I congratulate the Secretary of State and my noble friend on producing a comprehensive list of railway and road schemes they intend to go ahead with. This is the first time that we have seen such a list for years. In her introduction, the Secretary of State says that she is green-lighting over 50 rail and road projects. I am not sure whether green-lighting is all right, because occasionally greens go to orange and red, but I hope that is wrong. Within the text, there is quite a lot of uncertainty about which schemes are going ahead and which are what Ministers call “paused”. Pausing could happen for just a week or for a year. It would be useful, the next time Ministers do this, to spell out what pausing means.

One of the schemes paused is the Dawlish scheme mentioned by the noble Baroness, Lady Pidgeon. I have an interest as I live down the other end. I am not suggesting the work should start now but, as my noble friend said, monitoring should continue because, if the cliff does come down—it could happen quite quickly if it does—it will put the south-west in a very difficult position.

Could my noble friend, over the next week or two, publish a short paper giving the criteria used for going ahead with or pausing different schemes? It can apply to roads as well as to rail. We have had so much stop-start over the last few years, for reasons we need not go into. It would be nice to know what the reasons are. What are the criteria? Is it that there is a good business case, is it because the local MP knows the Minister very well, or is there some other good reason? I am sure there are good reasons for the decisions, but it would be helpful if Ministers could come up with that in the next few weeks. Otherwise, I congratulate the Minister on a good, comprehensive document.

[Lord Hendy of Richmond Hill (Lab)]

I am grateful to my noble friend for his compliments. Of course, the real significance of this list is that it is a funded list, rather than one that is not funded—a list of aspiration and hope. I am not too sure about the phrase “green-lighting”; I am not too that it is in the dictionary and, if it is, it is a shame. What it means is that these are funded schemes to go ahead. One or two still need development consent orders, which is a process that has to be taken to a conclusion. Therefore, the start dates will be different across the huge list, but many are ready and have been waiting for funding for quite a long time.

On the pausing at Dawlish that I referred to in the discussion with the noble Baroness, Lady Pidgeon, monitoring will take place. It is not that it “should” take place. The monitoring of those cliffs needs to continue. My understanding of the situation, which I have to say is from the last job I did rather than this one, is that monitoring those cliffs is essential. The work needed to remedy all this is, at least partially, about what we see in the monitoring process, so it is sensible to look now and do something when agreed.

Will we publish a paper on the criteria that have been used? There are two things here. One is that the Government have decided to do these schemes and have taken a view, from the wreckage they inherited, to prioritise things that need to be done that will contribute to a better local economy. We will get on with doing that first. In the longer term, there is an intention to have both a 10-year infrastructure strategy and a long-term railway plan. In conjunction with the revision of the Green Book that the Chancellor talked about in the spending review—to look at aspects that allow projects in parts of the country with lower rates of economic activity to benefit—I think there will be a case to publish a long-term railway plan and talk about the criteria used. For now, we will get on with what has been announced.