Sustainable Aviation Fuel Bill

Sarah Olney Excerpts

Report stage
Wednesday 15th October 2025 Commons Chamber

[Brian Leishman (Alloa and Grangemouth) (Ind)]

This year, Petroineos—that is, Jim Ratcliffe’s Ineos and PetroChina from the Chinese state—closed the Grangemouth oil refinery. Closure was not about some passionate quest for net zero. Closure happened because private capital and a foreign Government owned vital energy infrastructure, and because corporate profits are more important than community good to the billionaire Jim Ratcliffes of this world. There were 435 jobs lost at the refinery, and hundreds more lost in the shared services that are housed on site; 2,822 jobs were lost in the wider supply chain. That is mass de-industrialisation.

But closure is not just about job losses. The exodus of talented, skilled workers is awful, but closure also means that the site is no longer a positive destination for many local young people leaving school. We have seen an end to a generational employer in my community. The economic consequences are also absolutely enormous for local Grangemouth businesses, which relied on the custom of refinery workers and their families. Once again, I want to give credit to all the small local businesses that have kept town centres going in recent years. The pressure of running a small business when austerity and the cost of living crisis have hammered people’s disposable incomes can be all-consuming and incredibly stressful. I should know; I tried it for some years.

The economic turmoil of stopping refining is also a national issue, because the refinery was worth more than £400 million per annum to the Scottish economy. Politicians often talk about black holes. Well, that is a sizeable, industrial-shaped black hole to fill. I do not doubt that the Government understand the magnitude of how important it is to re-industrialise communities like mine in Grangemouth. The other day, I read my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane), who has done so much work to bring this Bill to the House, describing in Hansard the situation that he grew up in on the east side of Manchester, which lost its chemical and mining industries. He said:

“We are still getting over that in my great city.”––[Official Report, Sustainable Aviation Fuel Public Bill Committee, 17 July 2025; c. 108.]

He undoubtedly understands the social consequences of industry finishing up. No community can afford this continued spiral of industrial decline.

To go back to my original point, we have for decades been an economy controlled by private capital, multinational corporations and foreign Governments whose policy has been to make things elsewhere, and to sell here. Have the last four decades not shown that the country’s complete reliance on private capital means profits over people? We must adopt a new industrial strategy that meets the needs of working people and their communities by securing at least some form of public ownership of the new industries that we will need—that is a mainstream political view.

The Government must learn lessons to stop history repeating itself, and to prevent workers and communities having every last ounce of work extracted from them before they are discarded on a corporate whim. For the Government to create and benefit economically from the necessary green industrial revolution, which we need for our economy and for the planet, some form of Government ownership of future industries is necessary. Surely, that view should be at the heart of any Labour Government.

If the Government want to put their faith in private capital to mould Britain’s new industrial future, I urge them to think again. They need to be more active in the process of creating Grangemouth’s industrial future. They need to seize the initiative and invest in workers, communities industry and Scottish manufacturing. Producing sustainable aviation fuel is an enormous objective—one that we have committed to—and sites like Grangemouth are ideally placed for it. The infrastructure needs some degree of conversion and upgrade, of course, but it is there. The workforce and expertise are there. My local community needs to be re-industrialised. The Labour Government have ambitious SAF targets to meet, but, more importantly, they also have obligations to communities in our forgotten industrial heartlands.

[Sarah Olney (Richmond Park) (LD)]

New clause 2, tabled by my hon. Friend the Member for Didcot and Wantage (Olly Glover), would require the Government to publish a report within six months of securing the supply of bioethanol for sustainable aviation fuel production. The Government have repeatedly cited the increased use of SAF as the answer to questions about how the UK will meet our net zero targets while expanding multiple airports in London. It was wishful thinking nine months ago, but that argument has now dissolved almost into impossibility. Not only did the summer proposal submitted by Heathrow Airport Holdings for a third runway include a request to add nearly 300,000 flights to our airspace each year, but the concerns regarding the production of SAF have become more prominent. That concern has grown following China’s implementation of its own SAF mandate, which will result in it using more of its production domestically. That will undoubtedly cause a challenge for the UK given that over 90% of our current SAF is imported from China.

The challenges to the UK’s ability to produce and import SAF were underscored by the Climate Change Committee’s recent report, which estimated that only 17% of the UK’s aviation industry will be using SAF by 2040. That is 5% lower than the Government’s own mandated targets, and 8% below the EU’s target. The estimate does not even take into account the additional flights that would come in and out of the UK as a result of the proposed airport expansions. In fact, in 2024 only 10% of bioethanol certified as renewable and consumed in the UK was produced domestically. That was down from 17% in 2023 and 15% in 2022—a concerning trend and one that the Government must report back on.

In addition, the UK-US trade deal presents a threat to the UK’s domestic bioethanol production, as the agreement removed tariffs on US ethanol and replaced it with a zero-tariff quota of 1.4 billion litres. The US bioethanol industry is heavily subsidised and its companies will be able to undercut UK bioethanol industries. Vivergo Fuels’ plant in Hull, which had the largest capacity of any UK bioethanol producer, has already closed, with the managing director citing the US-UK trade deal as a significant factor that contributed to the site’s closure.