Sustainable Aviation Fuel Bill

Nusrat Ghani Excerpts

2nd reading
Wednesday 11th June 2025 Commons Chamber

[Heidi Alexander]

Supply is constrained at the moment; the UK has one commercial production facility, in Immingham. We need to build investor confidence to commercialise some of the sustainable aviation fuel demonstration projects around the country. More supply and lower prices are good for the aviation sector and, ultimately, good for those who wish to fly.

I think it is worth taking a moment to reiterate what is at stake. When UK production of low-carbon fuels is up and running, it could support up to 15,000 green jobs, contribute £5 billion a year to our economy, and deliver clean and secure energy. What is more, fulfilling the SAF mandate could save up to 2.7 megatonnes of carbon dioxide equivalent a year by 2030. Seizing those opportunities will ensure that we deliver on our bold plan for change and that the UK and our world-class aviation sector are leading the way in the race towards sustainable flight.

This country cannot be open for business, open to investment and open to growth yet have a closed mind when it comes to international connectivity. The Bill is a clear signal that we will not accept false trade-offs that pit aviation’s growth against our commitments to net zero. We can and must do both. We have the opportunity of a lifetime and, I believe, a moral mission to future-proof aviation. When the sector succeeds, it is not only a source of growth, through trade, business and tourism, but a source of joy, aspiration and opportunity. It is as vital today as it will be for future generations. Their need to fly, explore the world and do business requires us to act now. That is what the Bill does, and I commend it to the House.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Secretary of State.

[Gareth Bacon (Orpington) (Con)]

Let me begin by setting out an unambiguous truth: aviation is vital to the British economy. It is a cornerstone of our national infrastructure, our competitiveness and our connectivity.

When it comes to the impact of aviation on our economy, the figures speak for themselves. Aviation contributes £52 billion to UK GDP, supporting over 960,000 jobs across the country. That includes 341,000 people working directly in aviation—from air traffic controllers to aerospace engineers—350,000 jobs in the supply chain, and another 269,000 supported through consumer spending. Aviation also delivers nearly £8.7 billion in tax revenues, and aerospace manufacturing adds a further £9 billion directly to GDP, plus over £10 billion more when including its supply chains. Some 197 million passengers and 2 million tonnes of freight move through our airports each year. The economic case is therefore unanswerable. In short, we must all support this thriving industry with clear benefits to the country.

The Conservative party has always recognised the strategic importance of aviation, but, unlike the current Government, we understand the damage that can be done with poor policy choices—I regret to say that we have seen plenty of that from the Labour Government over the past year. Alongside their national insurance jobs tax, which is putting pressure on businesses and threatens to leave working people £3,500 a year worse off, Labour’s decision to hike air passenger duty threatens the vitality of this thriving industry. The Office for Budget Responsibility confirms that rises planned by the Chancellor of the Exchequer will raise an extra £555 million in taxes over five years, pushing up the costs for businesses and passengers alike.

In a speech that will have a lot of common ground with the Secretary of State’s speech, I regret to say that Labour’s handling of its professed desire to expand aviation raises more questions than answers. The decision to approve a second terminal at Luton airport, which we support, will be judicially reviewed. The proposal for a second runway at Gatwick has been kicked down the road for surprising reasons, to say the least, and the supposed support for a third runway at Heathrow is no more credible. The Chancellor has promised that the latter proposal will be operational by 2035, with spades in the ground in this Parliament, but that ambition looks very far-fetched, and there are substantial logistical and financial barriers to its construction. So far, the Government have provided no solutions on those points, so we will watch developments in the next few weeks with considerable interest.

It is against that backdrop that we come to the Bill before us. When we entered opposition, we made it clear that we would not oppose the Government just for the sake of it. We made it clear that where the Government’s choices would benefit the country or the economy, we would welcome them. That is why we will not seek to divide the House on this legislation on Second Reading. This Bill is a logical follow-on from the statutory instrument passed in September last year that established the SAF mandate, the first stage of which came into effect in January. Having mandated that airlines will be required to use a specified percentage of SAF—2% this year, rising to 10% in 2030 and 22% in 2040—it is logical to take steps to ensure adequate levels of locally produced fuel.

While the mandate requires the consumption of SAF, it is a new technology, and its production carries a high risk for investors. Encouraging the development of the plants required to produce this fuel is the purpose of this Bill and, to a very large degree, it is a continuation of the policy of the previous Government. In 2023, it was the last Government who committed to an industry-funded revenue certainty mechanism to support UK-based SAF production. In early 2024 we published the detail, with plans for a guaranteed strike price model to give price certainty to SAF producers. I hear the Minister say, “You didn’t do it!” He is completely correct, because unfortunately there was something called a general election that followed shortly after.

As the Secretary of State has outlined, under this model, producers will be topped up when the market price falls below a guaranteed strike price; when the market price rises above, they will pay it back. The system mirrors the successful contracts for difference model in offshore wind, and the economic benefits could be considerable. A cost-benefit analysis produced by the Department for Transport before the general election suggested that the SAF industry could add more than £1.8 billion to the economy and create more than 10,000 jobs in the country, but, more fundamentally, SAF is a product of what we know to work. As the Secretary of State said in her speech, it can be blended with conventional Jet A-1, used in existing aircraft and refuelled at existing airports. The capability exists. The challenge is not scientific; it is economic. That is why the concept of a revenue certainty mechanism was one of the six pillars in the previous Government’s jet zero strategy, and, as the Secretary of State outlined, the introduction of a revenue certainty mechanism has wide support in the aviation industry.

Let me be clear: while we will not oppose the legislation this evening, we will carefully scrutinise it as it progresses through the House. In that spirit, I will put some questions to the Minister, which I hope he will address in his summing up. The first is about passengers. In the press release announcing the Bill, the Government said that the revenue certainty mechanism would keep ticket price changes minimal:

“Keeping fluctuations to £1.50 a year on average.”

The Secretary of State said the same in her speech. Perhaps in his speech the Minister could outline what this figure is based on. Do the Government stand by it? Is it a commitment, or a rough estimate?

The second question is about what type of SAF the Government favour and how it will be produced. While the SAF mandate permits the production and use of hydroprocessed esters and fatty acids SAF in the early years of the mandate, and also contains a small but increasing requirement for power-to-liquid SAF in later years, the bulk of the SAF to be developed and used under the terms of the mandate is second generation SAF, which is to be made from municipal waste, non-edible crops and woody biomass. The UK is a small island, with insufficient spare land to enjoy self-sufficient food security or to grow new forests at scale. Does the Minister think we will be self-sufficient? If not, what proportion of the ingredients necessary for making second generation SAF does the Minister think we will need to import?

Relatedly, the HEFA cap comes into force incrementally from 2027, despite there currently being no domestic production of second generation SAF in the UK and low levels of second generation SAF produced globally, removing the opportunity to source mandated volumes through imports. This risks making the costs of hitting SAF mandate targets very high indeed, because suppliers will soon be forced to buy out of their mandate obligations—a significant cost that will be passed on to the airlines and, ultimately, to passengers without delivering any decarbonisation benefit at all. Will the Government consider revising the timelines for phasing out HEFA SAF to bring them more in line with the timescales for domestic second generation SAF production, in order to minimise the costs for passengers?

The next area of interest is planning. The plants in which the Government are seeking to encourage investment will be large, and—as the Minister no doubt knows—large developments tend to attract a lot of local opposition, often leading to planning inquiries, judicial reviews, vast expense and years of delay before any construction work begins. If this does not change, the revenue certainty mechanism may not be sufficient to attract investors, so what will the Government do to minimise delays in the planning process?

I turn now to timescales. When will the first contracts be awarded under the RCM? Will there be a timetable for reaching full mandate compliance? As my right hon. Friend the Member for Goole and Pocklington (David Davis)—who is no longer in his place—touched on, the issue of the strike price is critical to the success of the proposal. What criteria will be used to set the strike price? Will the methodology be published, and will there be regular reviews? Finally, will the Government commit to regular reporting to Parliament on industry take-up, production capacity and cost trajectory, to ensure that they remain accountable for the Bill over time?

The importance of this Bill is clear. Backing UK production of sustainable aviation fuel is necessary if we are to meet our net zero goals without undermining the competitiveness of the aviation sector. However, let me be clear: as the Bill moves through the House, we will continue to look closely at the detail and press for changes where necessary, where improvements can be made to ensure that the scheme delivers on its promise.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Chair of the Transport Committee.

--- Later in debate ---

[Luke Taylor (Sutton and Cheam) (LD)]

As chair of the all-party parliamentary group for the future of aviation, travel and aerospace, I very much welcome this step to push the aviation industry into a sustainable future. I encourage Members to join the APPG and come along to our meetings if they want to find out more about sustainability and the future of aviation. I worked in the aviation industry for 16 years before being elected to this place, and I studied aeronautical engineering for four years before that, so it would have been remiss of me not to come to the Chamber today to share with hon. Members my expertise on the subject, but I will try not bore them.

I welcome the support for future technology and the investment previously announced by the Government. We have massive and historical expertise in aviation here in Great Britain and Northern Ireland and we really must grasp the opportunity to develop those skills and that technology further. It is an incredible opportunity for UK plc and we need to grasp it. I want to pick up on a comment by the Secretary of State in her opening speech about airspace modernisation, because it is relevant to the discussion. We must grasp the opportunities of airspace modernisation, which have the potential, as she mentioned, to deliver shorter, more direct and more efficient flight routes. But as MPs, we must engage with the process. We must understand and learn about how that is happening around us. It is inevitable, but we must get the best for our communities. We must understand and engage with that process as it goes along. It is an incredible opportunity.

Over the past few months, the APPG has been hearing about the technologies that we have today. Of particular interest is ZeroAvia, which is already flying a hydrogen-electric, zero-emission aircraft in the UK—it has a hydrogen fuel cell with electrical propulsion, which offers completely zero-emission flight. As my hon. Friend the Member for Wimbledon (Mr Kohler) mentioned, this is only a stepping stone to the truly zero-emission flight that we really need to capture.

If hon. Members will forgive me for boring them slightly, the Breguet range equations that I learnt about for my degree are the reason why an Airbus A380 will take off from London at 580 tonnes and land in Sydney at around 340 tonnes. The burning of fuel throughout the journey means that it is able to maintain the range and maintain the flight levels that the burning of the fuel and the reduction in the weight require. That is one reason why liquid fuel will almost always be required for very long-haul flights, no matter how far we progress with hydrogen and electrical power plants for short and medium-haul flights.

That amplifies the need not just for the current second-generation SAF production, but for looking at alternative fuel sources such as algae-derived SAF. Others have correctly made the point about the reduction in residual waste, which is the current fuel source for a lot of biodiesel for the development of SAF. As those sources decrease and the cost potentially increases, we need to look at truly zero-carbon sources of SAF.

I will not bore hon. Members more. In closing, I will just echo the words of my hon. Friend the Member for Wimbledon and of my party and encourage the Minister to go further and faster to achieve truly zero-carbon and lower-noise aviation technology so that we can continue to enjoy the incredible freedoms and opportunities in both economic activity—jobs, skills and trade—and the broadened horizons that aviation has offered us for more than a century. Long may it continue.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. I will now announce the result of today’s deferred Division on the draft Contracts for Difference (Miscellaneous Amendments) (No. 2) Regulations 2025. The Ayes were 350 and the Noes were 176, so the Ayes have it.

[The Division list is published at the end of today’s debates.]

--- Later in debate ---

[Amanda Hack (North West Leicestershire) (Lab)]

It has been said by the Secretary of State and echoed across the Chamber that the UK has a world-class aviation sector that is key to growth in our economy. I welcome the introduction of the Bill as it will provide certainty for producers of sustainable aviation fuel, allowing the sector to grow and invest.

We all know the benefits that airports have for our communities, which is why my hon. Friends the Members for Doncaster Central (Sally Jameson) and for Doncaster East and the Isle of Axholme (Lee Pitcher) will welcome the Chancellor’s investment in Doncaster Sheffield. When we think about airports, we may automatically think about Heathrow, Gatwick, Luton, Birmingham and Manchester. However, as East Midlands airport is in my constituency of North West Leicestershire, it will be no surprise to anyone here that that is the airport I automatically think about.

The airport provides huge benefits to my local economy, as well as making an important contribution to the wider UK economy. As the second largest air freight terminal in the UK, East Midlands serves as the hub for DHL, UPS, FedEx and Royal Mail. This growth is backed by investment in the nearby east midlands rail hub, which transports our goods from port to port. In addition, the airport serves as a base for RVL, a specialist airline that provides support to the Environment Agency and the Maritime and Coastguard Agency. The transition to sustainable aviation fuel is going to be key if those organisations are to grasp the nettle on net zero.

My airport also serves millions of passengers every year, with the likes of Jet2, easyJet and Tui operating out of it, supporting my constituents and those from those across the midlands to take a well-deserved holiday. Having met representatives of Jet2 recently, I know that there is huge support for the introduction of the revenue certainty mechanism, and it will be interesting to hear more about the transitional arrangements to ensure that airlines such as Jet2 have the fuel they need to decarbonise and meet the mandated mix over the short term, as well as to see the SAF industry develop for the future.

As East Midlands airport’s thriving cargo facility extends to meet the demands of exporters from across the UK, cutting greenhouse gas emissions via sustainable aviation fuel will not only have significant benefits for net zero, but will put an estimated £5 billion a year back into our economy by 2050. It will also create additional jobs, securing a long-term sustainable future for the industry. It also puts forward a clear commitment to jobs at the airport, which will benefit my constituents and those of neighbouring MPs in the east midlands. I would welcome assurances from the Minister that North West Leicestershire will see the full strength of these training and work opportunities when they come about, because we have a lot to offer.

I know that the measures in this Bill, alongside the work announced to modernise airspace, will be welcomed by the sector. May I take this opportunity to invite the Minister to the 60th birthday party of East Midlands airport on 21 July?

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I notice that that was an exclusive invitation just to the Minister.

--- Later in debate ---

[Luke Taylor]

I would challenge the hon. Member’s commitment to aviation spotting if, during university, he did not take a date to the final approach at Heathrow airport and have her observing the flights coming in for a good two hours. He may be a geek, but he is not quite there yet.

[Madam Deputy Speaker]

It would rather depend on whether the date ended up marrying him, wouldn’t it?

--- Later in debate ---

[Luke Myer (Middlesbrough South and East Cleveland) (Lab)]

I welcome the Bill, particularly the introduction of the revenue certainty mechanism, which is not only a sensible intervention but a timely one. It gives investors clarity, it gives producers confidence and it gives communities such as mine a sense that this transition will bring jobs rather than take them away. I thank Ministers for listening not only to the sector but to those of us who represent Teesside.

In our region, we have a number of producers with an interest in scaling up SAF production—principally Alfanar, which has already invested £2.5 billion in our region and wants to go much further by building a brand-new plant that will create 2,300 construction jobs and 300 permanent jobs. Alfanar is not alone, however; we also have Iogen, Willis, Nova Pangaea, Abundia, Arcadia and many active producers or others looking to scale up—serious players with serious plans. I spoke to one earlier this week; it said that the Bill is exactly what the industry is looking for.

May I put just a couple of questions to the Minister? What those producers need now is confidence that enabling work for final investment decisions can begin, ideally before the Bill completes its full legislative journey. Of course, there is a precedent for that in the Energy Act 2023. What engagement will the Minister have with the Department for Energy Security and Net Zero on the carbon capture track project. I know that a number of the producers are keen to benefit from track 1 expansion, so producing those two things in train seems like a sensible thing to do, and I hope that there is cross-departmental engagement.

Ultimately, I thank the Government and urge them to move at pace to deliver the jobs that we want for the industry in our region. I want to ensure that young people watching from working-class communities across Teesside know that these are not abstract opportunities that are distant from them, but opportunities for them that they can get into—like our expansion in skills training. This sector can be transformative for the Tees valley region—not only for Middlesbrough but for Redcar and Cleveland, Stockton, Darlington and Hartlepool. Our area suffered industrial decline for many decades, but now we are seeing new life and new industry. Finally, Teesside is taking off.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call Chris McDonald for the final Back-Bench contribution.

--- Later in debate ---

[Chris McDonald]

I agree. Whether it is in Sunderland or, as I mentioned, the north-west and down in south Wales, we will see jobs in the supply chain throughout all this work. It will also benefit Heathrow and our other major airport hubs.

I thought it might be useful to make a few comments about why I believe SAF is the solution. The hon. Member for Sutton and Cheam (Luke Taylor) gave a great description of why the flight range equations essentially drive us in the direction of sustainable aviation fuel. Electrification certainly would be possible for short-haul flights, but the hydrogen simply does not have the density. As I think the hon. Gentleman also said, infrastructure is important—we heard that from the Secretary of State in her opening statement—because planes take off from one place, but they land somewhere else, and they need to be able to refuel there too.

Sustainable aviation fuel is certainly the right approach, but a couple of Members raised concerns in the debate about the raw materials for feedstock—my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) raised that issue. The hon. Member for Mid Bedfordshire (Blake Stephenson) said that he had learned about second-generation sustainable aviation fuels; it is probably just as well that he is not in his place, because I might blow his mind when I talk about third-generation and fourth-generation sustainable aviation fuels.

Essentially, there are concerns about the raw materials and municipal waste. Although the amount of waste per person will decline, a lot of it is put into energy from waste plants, and the new investments are really about future generations of SAF. We have heard about biomass. If that biomass is not from a feedstock, perhaps that verges into the second generation, but it is third-generation and fourth-generation sustainable aviation fuel that will enable us to scale up this industry. That will open it up to the direct combination of carbon dioxide and hydrogen using green electricity, which will enable us to scale it up. An abundant supply of those raw materials is needed, which is why I am so confident that we will see the industry spread around the whole of the UK.

Why do I say Billingham will become the UK and European centre for this work? There is a justification. Teesside already produces 50% of the UK’s hydrogen, and the chemicals cluster there is well-known for producing pharmaceuticals for fertilisers and various other chemicals. We produced synthetic petrol in Billingham in the 1930s, and we produced synthetic jet fuel there in the 1940s for the Royal Air Force during the second world war. I say that not to imply in some way that we still have the skillset—many of those people are quite rightly enjoying their retirement, or have perhaps moved on from that—but to demonstrate to the House that there is not a big technological risk associated with this technology. Third-generation SAF will rely on the Fischer-Tropsch process, which has been around for 100 years.

In fact, when I talk to investors in the industry and ask them what the big risks are, they highlight economic risks—with which the Government are getting to grips right now through this legislation—and political risk, which is about the consistency of Government policy. As I mentioned earlier, the biggest threat to these jobs and to this industry is the ideology of the Reform party. As we see the jobs and investment, I am confident that people in my local community will vote for jobs and investment in the future as well.

As such, I warmly welcome this legislation. I very much look forward to the day when I can welcome right hon. and hon. Members to Teesside international airport, and enjoy a drink with them in the bar before we jet off to Alicante for our holidays.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Minister.

Sustainable Aviation Fuel Bill

Nusrat Ghani Excerpts

Consideration of Lords amendments
Tuesday 3rd March 2026 Commons Chamber

Consideration of Lords amendments

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I inform the House that nothing in the Lords amendments engages Commons financial privilege.

Clause 1

Direction to offer revenue certainty contract

[The Parliamentary Under-Secretary of State for Transport (Keir Mather)]

I beg to move, That this House agrees with Lords amendment 1.

[Madam Deputy Speaker]

With this it will be convenient to discuss Lords amendments 2 to 6.

[Keir Mather]

I am pleased that the Sustainable Aviation Fuel Bill has returned to this House with only a small number of Government amendments. I am grateful to Members of both Houses for their engagement and constructive approach throughout the Bill’s passage. I wish to thank my predecessor, my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane), for his skilful steering of this Bill through its initial stages. I also thank Lord Hendy of Richmond Hill for his valuable support, and for leading the Bill so effectively through the other place. The Government brought forward six amendments, which were agreed to, and we are considering them today.

Lords amendments 1 to 3 ensure that the Secretary of State can enter into revenue certainty contracts only when the supported SAF is produced at a facility in the United Kingdom. Throughout the passage of the Bill in the Lords, peers provided thoughtful and collaborative suggestions on this topic, and I am grateful to them. The amendments to clause 1 provide that sustainable aviation fuel is to be regarded as “UK-produced” where any part of the process for converting feedstocks into fuel occurs within the UK. These amendments give the industry a clear and confident signal of support, and align with our intended objective for this Bill: the objective of supporting the UK’s sustainable aviation fuel industry.

Lords amendments 4 to 6 require the Secretary of State to consult the devolved Governments before making regulations under the powers in clauses 1, 3, 10 or 11. This ensures that devolved Governments are fully engaged on matters in their areas of competence.

[Keir Mather]

To meet the provisions of the SAF mandate, we believe it will be necessary to have a mixture of sustainable aviation fuel produced in the United Kingdom and SAF imported from overseas. However, the Bill creates a revenue certainty mechanism—the first of its kind—to drive this nascent market to increase SAF production. We believe that the mechanism will demonstrably increase the amount of UK-produced SAF in the system, and will have an impact on the production of the good, skilled jobs in our energy industry that we all care about so much. I hope that reassures my hon. Friend that we believe that the Bill is the right process to go through to stimulate this industry, and to give investors the certainty that they need that the UK Government stand four-square behind the creation of sustainable aviation fuel in this country.

Clause 1(8) allows the Secretary of State to make regulations extending the period in which they can direct the counterparty to enter into contracts by up to five years at a time. Clause 3(1) gives the Secretary of State the power to make regulations requiring the counterparty to maintain a register of information on revenue certainty contracts, and to publish details about the contracts. Clause 10(1) gives the Secretary of State the power to make regulations that require the counterparty to pay a surplus to levy payers, and require levy payers to pass on the benefits of that surplus to their customers. Clause 11(4) gives the Secretary of State the power to make regulations amending financial penalties to reflect inflation, and to specify the basis on which a company’s turnover is to be determined for the purpose of those penalties. The amendments do not affect the delivery of the Bill or its underlying policy intent, and final decisions in relation to the regulation-making powers in the Bill will continue to rest with the Secretary of State for Transport.

The Government’s objective is to implement the revenue certainty mechanism for the SAF industry effectively across the whole of the United Kingdom and to work collaboratively with the devolved Governments to do so. I am grateful for the engagement on the Bill from across the devolved Governments and pleased to confirm that we have obtained legislative consent from all three devolved Governments. I therefore commend all six amendments to the House and urge Members to support them.

[Madam Deputy Speaker]

I call the shadow Minister, Greg Smith. I believe it is your birthday. [Hon. Members: “Aw!”] Happy birthday!

[Greg Smith (Mid Buckinghamshire) (Con)]

Thank you, Madam Deputy Speaker. I could not have asked for a better birthday treat than to debate this issue with the Minister and with everyone else who has shown such a huge interest in the Bill this afternoon.

When the Bill first came before the House, the Conservatives were clear that we support the innovation that underpins sustainable aviation fuel. Aviation matters enormously to this country: for families, for trade, for connectivity and for our standing as a global hub. The challenge has never been whether to decarbonise aviation, but how we do so without damaging competitiveness or pricing ordinary passengers out of flying.

From the very beginning, we set a clear test. If the British public are underwriting a revenue certainty mechanism, whether directly or through levies that will inevitably feed into ticket prices, the economic benefit must remain here in the United Kingdom. That was not an afterthought. It was not something we discovered halfway through the Bill’s passage; it was one of the central arguments we advanced from day one. Throughout Committee and on Report, I pressed Ministers on how the contracts would work in practice. How would domestic production be prioritised? How would we prevent a scenario where fuel was largely produced overseas, given minimal processing here and then rebadged as British simply to qualify for support? Without clarity, that risk was real.

My noble Friend Lord Grayling brought that concern into sharp focus in the other place. His amendment made the principle explicit: if sustainable aviation fuel is to receive support under a revenue certainty contract, it must genuinely be British. He made the point clearly: we cannot design a system that can be gamed. We cannot allow mostly complete fuel to be shipped here, polished up a bit, and then presented as a domestic product. That would not be an industrial strategy; it would be box-ticking with a Union Jack on it.

What has happened since? The Government tabled Lords amendments 1, 2 and 4, restricting revenue certainty contracts to UK-produced sustainable aviation fuel. That principle was not explicit in the Bill, as introduced. It is explicit now and I genuinely welcome that. That change, however, did not appear out of thin air. It followed sustained pressure from those of us on the Conservative Benches here and in the other place. It was Conservatives who identified the gap, made the case and tabled the original amendments. I am grateful that the Government have now listened and moved.

Of course, the detail matters. The definition of “UK-produced” refers to any part of the process of converting feedstock into fuel taking place in the United Kingdom. That must not become a loophole wide enough to taxi an A380 through. The intention is clear: real production, real value added and real jobs here. We will ensure that the practical application reflects that intention.

There is also a broader point to the amendments, which speaks to capability. The United Kingdom has genuine strengths in synthetic fuel and e-SAF. We have companies demonstrating 100% synthetic flight, developed right here in the United Kingdom. We have world-class engineers and researchers. We have the technical expertise to lead. What we should not have are British passengers ultimately bearing the costs while overseas producers capture the opportunity.

Now is not the time to relitigate the plus or minus £1.50 on fares argument we had in previous stages, but for the record I say that the Opposition are watching closely. Will the Minister confirm that the Government are assured that the non-HEFA—non-hydroprocessed esters and fatty acids—requirements contained in the mandate will be met by industry at no more than the same cost to the passenger?

[Greg Smith]

I am grateful to the hon. Gentleman, not least for his kind birthday wishes. We do support the SAF mandate. We do support the decarbonisation of air travel, as well as other means of travel, but it has to be done in a way that is economically viable not just to the industry but to all of us who ultimately pay to fly—or to go on a train or a ship, or whatever it might be—through the fares we pay. That is why the Opposition have been so laser-focused on the direct impacts on fare payers, as well as on the wider industry.

The wider point, to return to the Lords amendments we are debating, is to ensure that the economic value of decarbonisation, which the British state is mandating through the legislation we pass in this Parliament, actually benefits British producers, British researchers, British engineers, and the incredible array of innovators and talent we have here in this country.

With these amendments, the Bill is closer to meeting the test we established at the beginning of the first debate: that the sustainable aviation fuel policy the Government are pushing should reduce emissions while reinforcing the UK’s industrial base, safeguarding competitiveness and supporting high-skilled employment across the country. Indeed, our position remains clear: environmental responsibility, along with economic realism. That will be what protects competitiveness. We will continue to scrutinise the framework carefully as it develops, but on the fundamental point that British passengers’ money should back British production, the Government have adopted the Conservative position. Perhaps if they listen to us a little more often, they might find the turbulence a great deal lighter.

[Madam Deputy Speaker]

Follow that, Lee Pitcher.

[Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)]

Thank you, Madam Deputy Speaker. I wish the hon. Member for Mid Buckinghamshire (Greg Smith) a very happy birthday. I am sure the rest of the Conservative Members are waiting for him at the party—I know they like those. How was that, Madam Deputy Speaker?

Current events in the middle east have once again demonstrated the volatility and vulnerability of global fuel supplies. A cleaner aviation sector should also be a more resilient one. Producing sustainable aviation fuel at home reduces exposure to geopolitical shocks, while giving airlines and passengers greater long-term certainty. It is for that reason that I believe the Lords amendments are vital. This is about our home and our circular economy.

Before Parliament, I worked in the water industry for 30 years. One of the projects I led was working with farmers on practical measures to prevent flooding, including planting winter cover crops in between pea harvests to protect soil and reduce run-off. Those same winter cover crops, or similar ones, can also play a role as a feedstock for sustainable aviation fuel. That is why I see a real opportunity here to line up environmental improvement and the economic benefits that come from SAF. Better soil structure and less erosion mean better outcomes for our local waterways and a healthier local environment, while farmers and rural communities can gain an additional income stream from doing the right thing for their land.

Since coming to Parliament, one of my biggest goals has been the reopening of Doncaster Sheffield airport, which is essential to local jobs, growth and prosperity. But I want to go further still: I want Doncaster Sheffield airport to become a beacon of cleaner, greener aviation, and sustainable aviation fuel is a huge part of that transition.

[Lee Pitcher]

I certainly do agree. In the business case for Doncaster Sheffield airport, the South Yorkshire mayoral combined authority says that around 5,000 jobs will be created directly, with the creation of many more jobs indirectly. When I visit schools, as my hon. Friend does, I see our future pilots, engineers, manufacturers and aircrew. You know what, Madam Deputy Speaker? I want people to live in Doncaster, work in Doncaster, have their careers in Doncaster, spend their leisure time in Doncaster and basically have the passion for the place that I do. I know that my hon. Friend does, too.

DSA is ideally placed to lead on how we become a cleaner, greener aviation economy locally. It is surrounded by agricultural land and is close to the Humber, the UK’s leading hub for green energy and fuel. A domestic SAF industry means more UK manufacturing, more skilled work and more investment in the kind of modern facilities that can power regional growth. We know how important that is right now.

Taken together, the benefits are absolutely clear: for our countryside, we can improve soil and water outcomes, support more resilient farming and restore nature; for our rural communities, we can open up new opportunities, diversify incomes and improve productivity; for industry, we can build manufacturing capability and secure supply chains here at home; and for aviation, we can reduce dependence on volatile foreign oil and give the sector a credible route by which to decarbonise. Globally, we can reduce the carbon impact of air travel, which is exactly what we need to do if we are to meet our climate goals in a way that supports jobs and prosperity and secures the planet for our children and future generations. This is the right approach for an industrial strategy that is serious about delivery and an environmental strategy that is serious about our future.

If we are asking the public to help to de-risk and scale up a strategic fuel, the jobs, investment, apprenticeships and manufacturing capacity should be created right here, right now in the UK. These amendments keep the value chain onshore, strengthen British supply chains and ensure that decarbonisation supports growth in our communities, not just demand somewhere else.

[Madam Deputy Speaker]

I call the Liberal Democrat spokesperson.

[Olly Glover (Didcot and Wantage) (LD)]

Even taking into account the Lords amendments, we continue to welcome steps to decarbonise our aviation industry, including investment in sustainable aviation fuels. I repeat the Liberal Democrat point from Second Reading that SAF is just one step in that direction; in the longer term, it needs to complement rather than detract from investment in zero-carbon flight technology.

I thank the Government for their engagement in the other place and for bringing forward these amendments, and I thank the noble Baroness Pidgeon for her work and advocacy to strengthen the Bill. To that end, the Liberal Democrats support all the amendments. We support Lords amendments 1, 2 and 3, which will help to provide revenue certainty that can relate only to UK-produced aviation fuel, and Lords amendments 4 and 5, which will simplify industry consultation requirements, while noting the way in which Lords amendment 6 will bring in an overarching consultation requirement. We support the duty placed on the Secretary of State through Lords amendment 6 to consult before making regulations under the Act, including its focus on consultation and engagement with the devolved Administrations, which, of course, is always important.

With that, Madam Deputy Speaker, I conclude my remarks. I only regret that I lack the skill of the shadow Minister in making aviation puns.

--- Later in debate ---

[Mr Perkins]

The hon. Gentleman makes an interesting point—it is definitely something worth considering.

The Government have given an important commitment to meet their climate change and environmental targets at the same time as expanding airports and growing the economy, and I welcome that commitment. It is a hugely important promise, but it is also a huge challenge. Sustainable aviation fuel can deliver emissions savings compared with traditional kerosene fuel. Increasing its use is a vital piece of the puzzle in decarbonising aviation.

The revenue certainty mechanism introduced in the Bill will provide the minimum price guarantee for producers of SAF in the UK, so whoever was responsible for it, I welcome these amendments. The price certainty will encourage investor confidence in bringing commercial-scale SAF plans to the UK and bringing SAF production and jobs. Alongside that revenue certainty mechanism, the Government have introduced a SAF mandate: a legal obligation on fuel suppliers to the UK to provide an increasing proportion of SAF to airlines. That policy is also essential to driving the uptake of SAF.

What assessment has the Minister made of when these SAF mandates will be achieved? Does he think that they will be achieved in the next year? If not, at what point does he expect those mandates to be met? The Government do not believe that we need to follow the advice of the Climate Change Committee and see demand management alongside a suite of other measures as one of the approaches. Instead, they believe that we can get greater amounts of sustainable aviation fuel. Will my hon. Friend tell me how important it is to see the industry achieving these early mandates if we want to give confidence that they will be achieved in much greater numbers in the future?

Despite these welcome policies, the Environmental Audit Committee heard evidence—I think the Minister confirmed that today—that the UK would not be able to provide sufficient SAF to service the level that the Government expect the industry to use. We know that imported SAF is not currently recognised in UK carbon budgets as being a genuine reduction in emissions. Although I understand the Government have plans to include international aviation emissions within their carbon calculations, the UK has yet to formally legislate to include those emissions within the carbon budgets, despite both this and the previous Government agreeing to do so. Will the Minister confirm that the Government will prioritise parliamentary time to introduce the necessary legislation to formally include international aviation emissions within the UK carbon budgets?

The Environmental Audit Committee also heard evidence from the Whittle Laboratory at Cambridge University that, while moving to 25% of fuel usage to SAF would offer substantial emissions reductions, the reductions become much less certain beyond that point, because moving towards SAF could push up its price when compared with other sectors. That could lead to the potential of reduced availability of feedstocks for other sectors and a move beyond utilising waste products towards having to grow and cut down crops purely to serve the aviation sector. Therefore, if we go beyond 25% and start aiming for 50%, 60% and 70%, the certainty of this being an environmental and carbon reduction becomes much less certain. I wonder what assessment my hon. Friend has made of that research and whether he has visited the Whittle Laboratory. I also had the opportunity to listen to its modelling on this, so I wonder what he made of it.

Finally, will the Minister reassure me that he will not allow SAF production from feedstocks, potentially undermining the environmental sustainability and the emissions savings of SAF? Has he had any discussions with the Secretary of State for Energy, Security and Net Zero around the likely needs for the very same stock as part of our energy production in the future, particularly given the potential growth of data centres? Does the Government have a collective approach on the need for both sustainable aviation fuel and biofuels servicing our energy sector? With that, Madam Deputy Speaker, I will bring my comments to a close.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Marvellous. I call Chris Vince.

[Chris Vince (Harlow) (Lab/Co-op)]

Thank you, Madam Deputy Speaker. You have taken me by surprise by not picking me last.

I thank the Minister for opening this debate. I also thank the shadow Minister for his comments and wish him a very happy birthday. Without wanting to get into any party political back and forth, I would like to say that we had a really productive Bill Committee, in which Members from all parts of the House came together collaboratively because we all wanted this to be a success. My hon. Friend the Member for Wythenshawe and Sale East (Mike Kane), who saw the Bill through Committee, was a huge driving force in ensuring that it will get on the statute book and that we will see the benefit of it.

I am being a little bit naughty, Madam Deputy Speaker, which is rare for me, but I particularly wanted to speak in this debate today because I was a member of the Bill Committee—one of my first in this place—and I saw the legislation through all its stages, from First Reading to Committee, only to miss Third Reading due to being on paternity leave. I think that on this occasion, Madam Deputy Speaker, you will agree that I did get my priorities right.

However, as the Bill returns to this Chamber for the consideration of Lords amendments, I want to say how genuinely excited I have been to be part of this process. I believe that the Bill will make a difference not only to the aviation industry, which is hugely important to my constituency of Harlow, but also to Harlow itself. As I have mentioned previously in this place, my constituency starts at the end of Stansted airport’s runway. If my hon. Friend the Member for Wythenshawe and Sale East was in his place today, he would point out that Stansted airport is part of the Manchester Airports Group, so I am doing him a service by mentioning that.

This Bill will make a huge difference to people in my constituency. Hundreds of people are employed at Stansted airport, but Stansted airport college also has huge links with Harlow college. An earlier speaker mentioned how, when he goes into schools, he sees the younger people as the cabin crew, the pilot and the ground staff of the future. I have had the pleasure of visiting Stansted college—I did let the Leader of the Opposition know that I was visiting her constituency—to see the huge difference that that made to young people. We are not just talking about jobs; we are talking about careers and high-level occupations. I am really pleased that we will see 4,100 more jobs at Stansted airport because of its expansion. I am not expecting all of those 4,000 people to come from Harlow—although I have put in a request to the Manchester Airports Group—but that would be nice to see. We also know the difference that this Bill will make to the environment.

Naysayers will say that the increase of SAF production is not the answer, and that we need to decrease the number of people who fly, but we must be realistic about that. As I have said before, the expansion of Stansted airport will mean an additional 4,000 jobs for my area of the country. Aviation supports business travel and freight for millions, but SAF will also help to deliver on the green, clean energy and growth that has been so important to this Government. We know that, over its lifetime of usage, the use of SAF will reduce greenhouse gases by 70%, which is something that we can all get behind.

I know that I am expected to speak about the amendments, so I will briefly touch on Lords amendment 6. I am confident that the Secretary of State and the Minister will continue to consult those they consider appropriate ahead of any legislation. I am very reassured to hear the Minister say that he has already engaged with and got support from the devolved nations on this matter, but will he reflect on the comments by my hon. Friend the Member for Chesterfield (Mr Perkins) about how SAF production could be part of the Government’s wider aims and the conversations he has with Energy Ministers about getting to net zero? Decreasing our carbon usage and green energy are so important to that. When I go into schools and meet the pilots, cabin crew and ground staff of the future, the No. 1 thing they bring up are their concerns about climate change.

Finally, it has been a pleasure to be part of this process and see this Bill through Parliament. The Bill is a clear sign that this Labour Government recognise the importance of our aviation sector for the future of young people and for business and international trade. It is also clear that the Government recognise the importance of green energy solutions to ensure that this country and the world have a positive future. Although I missed Third Reading—this is the joke coming—I am glad to be here for the Bill’s final descent towards Royal Assent.