Sustainable Aviation Fuel Bill

Iqbal Mohamed Excerpts

Report stage
Wednesday 15th October 2025 Commons Chamber

[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.

--- Later in debate ---

[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.

--- Later in debate ---

[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.

--- Later in debate ---

First, I will turn to some of the points raised in the debate. The hon. Member for Didcot and Wantage (Olly Glover) asked what plans we had in place to achieve our decarb aims. Through the mechanism in the Bill, UK SAF production could account for 6.3 megatonnes of carbon savings by 2040. That provides an attractive business case for businesses to scale up their existing SAF efforts in the UK—but it goes far broader than that. The Government’s other priorities around airspace modernisation, low and zero emission aircraft, meeting our UK emissions trading scheme and carbon offsetting and reduction scheme for international aviation—CORSIA—obligations and addressing the non-CO₂ impacts of aviation will also be instrumental in this work.

[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.