Sustainable Aviation Fuel Bill

Lord Mackinlay of Richborough Excerpts

Report stage
Tuesday 10th February 2026 Lords Chamber

In sum, while each of these amendments is well intentioned, taken together, they would substitute flexibility with arbitrary constraint, either banning specific technologies or mandating others in a way that would freeze the policy framework in time. We need a revenue certainty mechanism that can back the best projects as they emerge—one that adapts with the market, and not one constrained by today’s assumptions about which technologies or feedstocks will win out. Picking winners or losers in the Bill is a fool’s game and would slow investment, cause dispute and risk leaving the UK behind in a fast-moving international market.

[Lord Mackinlay of Richborough (Con)]

My Lords, I am the director of the Global Warming Policy Foundation, so the House might believe that I am immediately against all this sort of thing, but that would not actually be true. I am certainly in favour of proper CO₂ accounting, hence my support for Amendments 14 and 15.

We cannot do another Drax, dare I say, where we end up with a situation that sounds very renewable and sustainable, but when we peel the surface away, we are actually generating more CO₂ in creating the final outcome than by doing nothing. My concern if we allow crops, particularly if they are imported sustainable fuels that are derived from crops, is we do not have the CO₂ accounting arising in the UK, and we pat ourselves on the back and say how marvellous and virtuous we are, but the reality is that we have increased global CO₂ on an undertaking that is anything but sustainable.

I would like an assurance from the Minister that, as we progress the sustainable aviation fuel future, there is proper mindfulness about the CO₂ effects of what we are doing. One of my grave concerns about the power-to-fuel ambitions is that they require such a huge amount of energy in the creation of the fuel that, by the end of the process, we will have actually created a lot more CO₂. I hope that we have learned something about CO₂ accounting, particularly on the back of the Drax experience, which allows virgin forests from North America to be cut down, presumably powered by petrol. It then goes to drying mills run by gas, is put on a diesel-powered train to a shipping port, comes across the Atlantic by a diesel-powered ship and is then burnt in a power station in the UK, and, hey presto, we say that it is zero-carbon. We have to do better than that as we progress a net-zero future. I do not want to see us conned and just kidding ourselves and the public that we are doing something for the right reasons when actually we are creating more CO₂. I would like that type of assurance from the Minister.

[Lord Hendy of Richmond Hill (Lab)]

My Lords, I thank all noble Lords who have taken part in this debate.

Amendment 3, tabled by the noble Lord, Lord Moylan, seeks to prevent the revenue certainty mechanism supporting power-to-liquid sustainable aviation fuel projects. However, as the noble Earl, Lord Russell, noted, Amendment 7 from the noble Lord, Lord Ravensdale, produces the reverse, in that it would require the Secretary of State to enter into at least one revenue certainty contract with a SAF producer that is using power-to-liquid technology.

We believe that there is value in potentially supporting power-to-liquid fuels because they have a high greenhouse gas emissions reduction potential, lower competition for their feedstocks and lower risk of wider environmental issues such as land use change. Adopting either of these amendments would limit the Government’s negotiation flexibility by setting criteria in advance, which could ultimately reduce overall value for money in the contracts agreed.

The Government will establish a fair and transparent contract allocation process to assess each project’s costs, benefits and risks. It is important that government retains the flexibility to support a range of technologies if they can deliver cost-effective greenhouse emissions reductions and support the SAF mandate obligations—and, to address the point made by the noble Lord, Lord Moylan, whenever they are able to do so. He cannot predict the future any more than I can, and in any event, there is a sunset clause to the Bill which means that it can be extended in five-yearly increments. We are currently developing our approach to allocation, and we will publish an allocation strategy which outlines our approach to different SAF technologies and how the revenue certainty mechanism will support mandate targets.

On Amendments 14, 15 and 16, our intention is for HEFA technology and feedstocks to be excluded from RCM contracts because HEFA SAF—I am sorry about all these acronyms—has already overcome many of the barriers to investment that the revenue certainty mechanism seeks to address. However, the SAF market is at an early stage and uncertain, so the legislation needs to remain flexible to allow for potential future changes in the market to which the revenue certainty mechanism may need to respond.