Sustainable Aviation Fuel Bill

Debate between Nusrat Ghani and Keir Mather

Tuesday 3rd March 2026 Commons Chamber

[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!