Sustainable Aviation Fuel Bill

2nd reading
Wednesday 11th June 2025 Commons Chamber

Second Reading

15:44

[The Secretary of State for Transport (Heidi Alexander)]

I beg to move, That the Bill be now read a Second time.

On the day when the Chancellor has set out this Government’s determination to deliver a decade of national renewal, I am proud to stand before this House to make good on our promise to deliver a sustainable aviation sector. If we are once again to be an outward, confident trading nation that is connected to the world and leading the way on innovation, we must run as fast as we can towards a greener, cleaner future for flying. The Bill before us today will enable us to do precisely that. We do not have time to waste.

[Siân Berry (Brighton Pavilion) (Green)]

Does the Secretary of State agree that this Bill has a missing half, which could cut aviation emissions by demand management, and that at the very least, if there is to be public money spent setting up this system, it should be raised from the most frequent flyers and private jets?

[Heidi Alexander]

I think the hon. Lady and I fundamentally differ on the issue of demand management, because demand for air travel is only going one way, and it is therefore our moral responsibility, if we are going to have more people in the skies, to reduce the carbon emissions associated with that.

As I said, we have no time to waste. That is why, when it comes to aviation, this Government have rolled up their sleeves and got on with the job, putting an end to the dither and delay of the past. In less than a year, we have approved the expansion of Luton airport and invited plans for a new runway at Heathrow, and I will be making a final decision on Gatwick expansion as soon as possible. We have invested in the future of aviation, not just with the help we have given to reopen Doncaster Sheffield airport or the work we are doing to strengthen connectivity around Liverpool John Lennon, but also by putting £1 billion towards aerospace technology. We have introduced the sustainable aviation fuel mandate and provided £63 million to the advanced fuels fund, helping the industry prepare for a sustainable future. Just last week, we kick-started the largest redesign of UK airspace since the 1950s, paving the way for cleaner flights, fewer delays and more direct routes. This is what governing for growth looks like.

[Rachel Hopkins (Luton South and South Bedfordshire) (Lab)]

I really welcome the Bill and the creation of a mechanism to increase the supply of sustainable aviation fuel. Can I add that, as we look towards airspace modernisation, we will have not only cleaner and quicker but quieter flights?

[Heidi Alexander]

My hon. Friend is completely right to highlight the benefits of cracking on and delivering airspace modernisation. It could mean not only more direct flights and therefore less use of carbon, but noise benefits for communities close to airports.

We are determined to make rapid progress on this issue because we have an iron-clad belief that our success as an island nation rests on our international connectivity. The flow of trade, exporting British expertise and the movement of people for business and leisure all depend on aviation continuing to grow and thrive. We could put our head in the sand and pretend that people do not want to fly, that the sector does not support hundreds of thousands of jobs, that people do not look forward to foreign holidays or family reunions and that air freight is not a significant part of our trade by value, but we would be on the wrong side of both reality and public aspiration.

The truth is that demand for flight is only going in one direction. According to the Civil Aviation Authority, passenger levels were 7% higher in 2024 than in the previous year. If we do not respond and if we do not set aviation up for long-term success, we do not just make ourselves poorer today, we kiss goodbye to the growth and opportunity this country needs in the decades to come.

I want a future where more passengers can take to the skies, not fewer. But like the rest of our economy, that must mean emitting less carbon, not more. This Bill will help secure that future. It builds on the fantastic work across Government and industry, led by my hon. Friend the Aviation Minister, which saw the SAF mandate come into effect earlier this year. As we run towards a future of green flight, we know that sustainable aviation fuel is one of the biggest levers we can pull. It emits 70% less greenhouse gases on average than fossil fuels. It can be used in existing infrastructure and aircraft engines, and it is now backed by a mandate that is rightly ambitious: 10% SAF in the fuel mix by 2030 and 22% by 2040. I want as much as possible to be made in the UK.

[Monica Harding (Esher and Walton) (LD)]

The mandate, which we welcome, calls for only 22% sustainable jet fuel usage by 2040, while the Chancellor has said that she wants a third runway in use at Heathrow by 2035. That would mean more aviation-related health hazards to my constituents. Does the Minister agree that we should not pursue Heathrow expansion until we can turbocharge the SAF mandate and bring non-sustainable fuel usage down further?

[Heidi Alexander]

The Government have been clear that we will permit airport expansion only when it is consistent with our legally binding climate change targets. SAF is one way in which we can clean up aviation, but the work we are doing on the development of new aircraft technologies, alongside the work we are doing on airspace modernisation, is all connected to how we bring those emissions down. I point out to the hon. Lady that the expansion of Heathrow has already been modelled in relation to the sixth carbon budget.

We have been clear that the mandate alone is not enough. Creating the demand for SAF but not the supply does not get us where we want to be. We have heard the industry’s concerns around risk and uncertainty for investment, and that is why we are acting today. The Bill creates a revenue certainty mechanism that will boost SAF production by giving investors confidence to choose the UK.

[David Davis (Goole and Pocklington) (Con)]

I declare an interest as a pilot. In this context, I spoke to one of the would-be producers—I think it is called Zero—and its primary concern with respect to the strike price mechanism that the right hon. Lady talks about is how that will be set and what input producers will have. Will she address that when she talks through the mechanism?

[Heidi Alexander]

There is more detailed design work to do on all that, and we will work alongside industry to ensure that we have a workable proposition.

The mechanism boosts SAF production and gives investors confidence in the UK by addressing one of the biggest barriers to investment: the lack of a clear, predictable market price for SAF. That starts with a guaranteed strike price agreed between a Government-owned counterparty and the SAF producer. If SAF is sold for under that price, the counterparty will pay the difference to the producer. If SAF is sold for above that price, the producer will pay the difference to the counterparty.

The revenue certainty mechanism will be funded by industry, specifically through a levy on aviation fuel suppliers. That makes sense for two reasons. First, it is the industry that will benefit from more and cheaper SAF production, so it is only right that industry, and not the taxpayer, should fund it. Secondly, placing the levy higher up the supply chain spreads costs across the sector and is the least burdensome option. It is important to note that the revenue certainty mechanism will not be indefinite. It will be targeted and time-limited, helping to get first-of-a-kind UK projects off the ground. The Bill’s sunset clause means that we can offer contracts only for 10 years, unless it is extended via the affirmative procedure. We will have a firm grip on costs throughout. We will decide the number and duration of contracts, limit support to a predetermined volume of SAF and negotiate acceptable strike prices. There is no obligation on the Government to enter into a defined number of contracts or to agree contracts at any cost.

I know that some hon. Members may be concerned about the impact on passengers, so let me reassure them: none of this will limit people’s ability to fly. We expect minimal changes to fares, with an average ticket increasing or decreasing by up to £1.50 a year. I am pleased to say that this is a product of many months of consultation with the industry. Airlines are calling for it, airports are calling for it, SAF producers are calling for it, environmental organisations are calling for it, and the Government are therefore getting on with delivering it.

[Sir Julian Lewis (New Forest East) (Con)]

I am sure that we wish the Government well in what they are trying to do. I gather that the International Air Transport Association highlighted only last week that, at the moment, sustainable aviation fuels cost approximately five times as much as conventional jet fuel. Will she explain how the measures in the Bill will bridge that gap to make it economical?

[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.

15:58

[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.

16:07

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

I start by thanking the Secretary of State for Transport for her speech. I also thank her and the Aviation Minister, my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane), for coming to speak to the Transport Committee earlier this year about aviation and, of course, wider matters.

I welcome the introduction of the Bill, and I was pleased to hear the remarks of the shadow Secretary of State, the hon. Member for Orpington (Gareth Bacon). The Bill will play an important role in our work to decarbonise our aviation sector. Some 7% of domestic greenhouse gas emissions come from domestic and international flights, and it is estimated that this figure will increase to 11% by 2030 and 16% by 2035. We all know the huge challenges involved in decarbonising aviation, and this Bill is a much-needed step towards addressing them. I am glad that the Government are taking action, and I know that many in the industry want to ensure that the Bill is operational as soon as possible.

As I am sure the Transport Secretary will appreciate, I have a few questions about the Bill, which I am sure will also be raised at later stages of its progress. However, I start by saying that it is rare to find a Bill on which there is so much agreement; every major airline I have met has mentioned its support for SAF, and there is widespread agreement that we need a price certainty mechanism. That is a sign that the Government have been pragmatic, working with business and—in the case of SAF—working to ensure that we have domestic capacity here in the UK.

I am glad that the Bill will start to move us away from our dependency on imported fossil fuels, particularly for aviation. This House may forget that our reliance on foreign fossil fuels meant that in 2022, we had to spend more than £35 billion bailing out our energy market. That reliance leaves us reliant on the whims of autocratic regimes across the world. We need to move away from that costly model and, in turn, bring investment into our regions, growth to our economy and much-needed tax revenue to our Treasury.

I am glad that the UK Government are working to make sure that we continue to lead on decarbonisation and to reduce our carbon emissions in line with the Paris agreement. I want to touch on the nature of the SAF we will be using. First and second generation SAFs are made from waste—the first from used cooking oils predominantly, and the second from waste such as household black bin bag waste. Where do the Government see that waste coming from in the future? How does that tie in with our efforts to reduce our residual waste, particularly black bin bag waste, and wider efforts to reduce the non-recyclable waste that we produce? Is a large part of our household waste not already going to waste-to-energy plants, providing electricity that we depend on?

There is a lot of support for SAF in America and, as with ethanol, it offers a huge chance for large-scale agricultural businesses to profit from the sale of their waste and their oil. Ethanol is often produced in the same plants as SAF. In seeking to secure UK domestic production of SAF, what could the challenges of the US-UK trade agreement mean for our biofuel industry and its ability to transition to producing SAF? Has the Department modelled the economic and environmental impact of providing resources for second generation SAF? What is the timescale to bring on third generation SAF?

One issue that has been raised with me is whether companies looking at producing SAF will be able to enter negotiations with the Government before the Bill reaches the statute book. I understand that that has been the case for the mechanism for renewable energy projects, where negotiations began early to ensure that the investment is locked in.

We need to see changes in aviation to meet our ambitious climate goals. Now that aviation and shipping are included in our carbon budget, those changes are even more important, and I hope that the Government will also look beyond SAF when thinking about decarbonising aviation. SAF is not and will not be the silver bullet solution to the sector’s responsibility to this country’s decarbonisation strategy.

[Deirdre Costigan (Ealing Southall) (Lab)]

My hon. Friend, like me, represents a west London constituency. Brentford and Isleworth is very close to my constituency of Ealing Southall. She will know that while our constituents support the work towards a more sustainable air industry, they also want to see work to reduce the noise we hear in west London from the airline industry. Does she agree that the airline industry must also look at new, quieter planes and airspace modernisation for those communities?

[Ruth Cadbury]

My hon. Friend and neighbour is absolutely right, and I know that the plane and engine manufacturers are continuing to work—as they have done for decades, to be fair—on quieter and less polluting aircraft. Sometimes there is a tension between those two. Airspace modernisation will not make a lot of difference to my constituency in terms of landing aircraft, but overall airspace modernisation will play a part in reducing emissions and flight times for passengers.

As I have said, SAF is not and will not be the silver-bullet solution to the problem of aviation’s responsibility for decarbonisation. The Climate Change Committee warned Parliament in 2023 that relying on SAF alone was “high risk”. For example, Heathrow airport is already the single greatest source of carbon emissions in the UK, and the current plans for expansion would add an extra 8 to 9 megatonnes of carbon dioxide a year. If the Government do expand Heathrow, other airports across the UK will have to make cuts to ensure that aviation does not breach its carbon targets. Furthermore, continuing increases in aviation emissions will have to be offset against significant cuts in emissions in other sectors. I should like to hear from the Transport Secretary what the Government are doing to address that particular challenge.

When the Transport Committee considered SAF during the last Parliament, we found that it had “significant potential”, and I know that there is support throughout the House for us to reduce carbon and other greenhouse gas emissions from aviation. As Chair of the Committee, I also know how widespread support across the sector is for decarbonisation, and that many private companies are already way ahead in preparing for the future. This country needs to stay ahead of the game internationally, and I am glad that by introducing the Bill the Government are showing their commitment, investing in UK industry, and showing that the UK can be a leader on sustainability.

16:16

[Mr Paul Kohler (Wimbledon) (LD)]

I thank the Secretary of State for her speech, and congratulate the Aviation Minister on the Bill.

The challenge facing the aviation sector—as with our entire economy—is decarbonisation. Reaching net zero by 2050 is essential, and given the scale of the scientific and technical challenge, it is clear that decarbonising aviation will not be easy. Sustainable aviation fuels have an important role to play in this effort. We consequently welcome the establishment of a SAF revenue certainty mechanism, which has long been called for by many in the aviation industry and which, as we have heard, is vital to ensuring that the SAF mandate is both feasible and achievable for airlines. Providing SAF producers with a guaranteed level of revenue will be key to unlocking investment in the sector—which, I think, answers some of the questions posed by the shadow Minister, the hon. Member for Orpington (Gareth Bacon). It will help to stimulate private capital at this early stage, and will support the UK’s ambition to become a global leader in SAF development and production. The growth of the industry also has the potential to generate jobs and economic activity across the country.

However, while my party supports the Bill, there remain important questions, regarding in particular the scrutiny of the mechanism, international alignment, and the wider strategy for aviation decarbonisation. The Bill sets out the broad principles for the revenue mechanism, but leaves much of the detail to secondary legislation and ministerial discretion. That is, to a degree, understandable—the early stage of SAF technology and the uncertainty in market development mean that flexibility is crucial and necessary—but the Government must ensure that Parliament has an adequate opportunity to scrutinise the development of the mechanism, and the SAF sector more broadly. Given the importance of SAF to achieving net zero in aviation, it is vital that the House is updated regularly on progress in the industry, and on whether any adjustments to the mechanism are necessary. That is especially important in the light of previous Government promises to kick-start the domestic SAF industry—promises that have yet to materialise. In 2022 the Conservatives promised to have five commercial SAF plants up and running by 2025, but, as so often, they failed to deliver. I will therefore be pushing in Committee for the Bill to increase the level of ongoing scrutiny.

It is also crucial for the UK to work collaboratively with international partners on net-zero aviation technologies. Currently, the criteria for both what qualifies as SAF and what levels of different technologies should be used differ between the UK and the EU, with each jurisdiction prioritising different fuel types at different times. Given the inherently international nature of the aviation sector, closer regulatory alignment with the EU and other key partners is essential to fostering growth in the industry and ensuring that there are sufficient levels of SAF production internationally to support the transition. The Government must therefore work more closely with the EU and others to ensure that our frameworks dovetail.

Finally, while we welcome this Bill, it is important to acknowledge that SAF alone will not be enough to decarbonise aviation, as the Chair of the Transport Committee made clear. Although SAF can significantly reduce the carbon intensity of air travel, flights using SAF will not be carbon neutral, so many of the necessary emission reductions to reach net zero will need to come from other areas. By the Government’s own estimates, SAF could cut emissions by 6.3 million tonnes of CO₂ equivalent by 2040. That is not insignificant, but given the projected growth in passenger numbers, it would represent only a 0.8% reduction in overall aviation emissions compared with today.

While the Lib Dems support the Bill, we continue to urge the Government to take more ambitious action to decarbonise the aviation industry. With plans for airport expansion still on the table, the Government must clearly articulate how net zero aviation will be achieved by 2050.

16:20

[Sadik Al-Hassan (North Somerset) (Lab)]

I thank the Secretary of State and the Aviation Minister for their engagement while bringing forward this legislation. This Bill is vital not only to meet our national climate commitments, but to ensure strong regional economic growth, such as in my constituency of North Somerset, where Bristol airport, a beacon in the UK’s transition to sustainable aviation, is located.

Bristol airport has long demonstrated real leadership in this space. In March 2021, it became BP’s first UK customer to receive a supply of sustainable aviation fuel. In March 2024, nearly a year before the Government’s mandate, Jet2 began operating flights from Bristol airport using a blend of sustainable aviation fuel, reducing the emissions that these flights generated by an astounding 70%. In recognition of the airport’s leadership in this area, in December this Government made the very wise decision to appoint it to the jet zero taskforce, where it will be able to share its years of experience and expertise with the group.

The leadership and vision shown by institutions such as Bristol airport are not just laudable, but necessary, if we are to reach net zero by 2050. Aviation has been a domestic economic success story in recent decades. It now contributes £40 billion to the UK economy annually, including £20 billion in exports, and supports over half a million jobs across the country. With over 60% of the Members of this House having 500 or more constituents who work in aerospace, aviation or the wider supply chain, I will not be alone in recognising how vital it is for the economic future of our country to ensure that this industry remains a success. However, the ugly truth is that the sector accounts for around 7% of the UK’s total emissions, and if we are to decarbonise the aviation industry while ensuring that flying remains affordable and accessible, it is to innovations such as sustainable aviation fuels and hydrogen in aviation that we must turn.

As the sustainable aviation fuel mandate begins to ramp up demand in the years to come, domestic production will sadly continue to lag behind, so this Bill’s revenue certainty mechanism is essential. Learning from the success that contracts for difference have led to for renewables, the revenue certainty mechanism will unlock the UK’s production by providing certainty for investors, and could see up to 60,000 skilled and well-paid jobs created by 2050.

My constituents in North Somerset will welcome the news that the Government continue to balance the need to support regional economic growth with meeting our net zero commitments, and I look forward to seeing the local jobs and cleaner skies that this Bill will deliver in the years to come.

16:23

[Blake Stephenson (Mid Bedfordshire) (Con)]

The UK has a real opportunity to lead the world in the production of sustainable aviation fuels, and this Bill aims to provide the investment certainty needed to scale up domestic SAF production and achieve just that.

My constituency is located a stone’s throw from London Luton airport. It is a rapidly expanding regional airport, and that expansion will bring with it huge economic benefits, including jobs for thousands of my constituents and better connections for business and leisure. Indeed, airport expansion will help to bring millions of people to the Universal UK theme park—which I have to mention every time I stand up—and play a key role in driving local economic growth. But just as it is important to support the growth of airports such as Luton, it is important that expansion happens as sustainably as possible to ensure that we get as many of the benefits, and as few of the harms, as possible.

This is the subject of a current Environmental Audit Committee inquiry, which I was pleased to secure, investigating how the Government can deliver airport expansion while meeting their legally binding climate targets. Some, such as the Climate Change Committee, say that it is not possible, and the Government need to square that circle. With around 7% of greenhouse gases derived from aviation in the UK, we should not underestimate the challenge, but it is clear to me that sustainable aviation fuels are an important piece of the jigsaw.

In my constituency of Mid Bedfordshire, Cranfield University and local industry are already working at the cutting edge of developing new technologies in this area. I have heard from them and other experts about the potential of British-made sustainable aviation fuels. I have even learned about second-generation SAF—not something that I thought I would get into this time last year—which turns the waste we all put in our black bins every week into the fuel that powers us to adventures abroad. That is a remarkable thing, and I am glad to have learned about it since coming into the House. If we get sustainable aviation fuels right, we can create and support thousands of highly skilled jobs in places such as Cranfield.

Doing more to stimulate the development of sustainable aviation fuels is an obvious route to economic growth, so will the Minister reflect on our global market position, explain how the mechanism compares with other approaches, and give an assurance that the measures in the Bill will be enough to avoid the UK aviation industry needing to import SAF from abroad? It would be a huge missed opportunity to later find that this mechanism and related policies have not been ambitious enough, leaving foreign countries to benefit from domestic mandates.

One thing that strikes me immediately as worthy of more thought—the Minister may wish to comment—is black bin waste. Taking waste that was heading to landfill and instead using it to power us into the sky would seem to be a simple way forward, although whether there is enough of it is another matter. I declare my interest as a Central Bedfordshire councillor, but will the Minister consider the merits of including, in this Bill or elsewhere, a requirement for the Secretary of State to provide local authorities with guidance on how they can take advantage of this opportunity to help in the national effort to scale up production? Unless it is financially prohibitive for them to do so, would it not be sensible and pragmatic to let them use our household waste in this way, rather than let it head to landfill or local incinerators?

Finally, I have a few questions for the Minister on the costs of aviation travel. As we all know, times are tight for many of our constituents. UK air passenger duty is the world’s highest tax levied on airline passengers, and following the autumn Budget, the OBR forecasts that it will increase 9% a year on average to a whopping £6.5 billion in 2029-30. On top of that, it is estimated that the impact of the Bill through the levy and administration costs will raise the cost of a ticket to travel. I know Ministers say that it is a modest increase, but that is why some may prefer the Government to use an alternative funding mechanism, such as the industry’s contribution to the UK emissions trading scheme. I am not saying that the Government should take that approach, but it would be worthwhile for them to explain why they have taken the approach they have. Reflecting on the fact that the costs of the Bill come on top of the increase to air passenger duty in the autumn Budget, will the Minister provide an assurance that the Bill will not clobber our hard-working constituents with yet higher prices when they jet off on their family holiday?

16:28

[Baggy Shanker (Derby South) (Lab/Co-op)]

I refer the House to my business interests in the Register of Members’ Financial Interests.

As a proud advocate of UK aviation, I am pleased to speak in support of the Sustainable Aviation Fuel Bill, and I add my thanks to the Aviation Minister for his determination in support of UK aviation and to the Secretary of State for her leadership. By backing industry with a revenue certainty mechanism, the Bill will turbocharge the production of UK SAF, reducing reliance on imports and generating jobs up and down the country. As one of the most carbon-intensive and hardest-to-decarbonise forms of transport, aviation is vital to get right. Alternative and sustainable aviation fuels will help us to safeguard the future of our planet, because without a decarbonised aviation sector, there will be no net zero.

Decarbonising will ensure that future generations can enjoy the opportunities that air travel brings without compromising the health of our planet. It will ensure that our regional economies continue to benefit from the growth that the aviation sector can offer, such as the whopping 6,000 jobs that East Midlands airport supports. In Derby, we are already making bold strides towards our net zero future. I am proud that Rolls-Royce moved quickly to confirm the compatibility of its long-haul aircraft engines, in both the wide body and business jet sector, with 100% SAF usage. The Derby factories will continue to play a significant role in shaping the future of aviation decarbonisation for years to come.

We recognise that decarbonisation will not be without its challenges. Sustainable aviation fuels offer a practical and innovative solution to those challenges, with SAF made from waste emitting a staggering 89% less carbon than burning conventional jet fuel. This is what the SAF Bill recognises. It is a bold and necessary step forwards to secure a sustainable net zero future for aviation. I am proud to support it.

15:34

[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.]

16:35

[Sally Jameson (Doncaster Central) (Lab/Co-op)]

Since entering this place almost a year ago, I have been proud to be a part of the campaign led by my hon. Friend the Member for Doncaster East and the Isle of Axholme (Lee Pitcher) to reopen Doncaster Sheffield airport and unleash the economic potential of the surrounding land as a hub for sustainable aviation. Our airport is a source of pride for all of us in Doncaster and South Yorkshire. We all eagerly anticipate the first flight for holidaymakers, but also—perhaps more importantly—we are looking forward to the high-skill, high-wage jobs that the airport will bring, and not just for people in Doncaster and South Yorkshire today, but for young people for generations to come.

That is why my right hon. Friends the Members for Doncaster North (Ed Miliband) and for Rawmarsh and Conisbrough (John Healey), my hon. Friend the Member for Doncaster East and the Isle of Axholme (Lee Pitcher) and I, along with Mayor Ros Jones and Mayor Oliver Coppard, and indeed the whole of South Yorkshire, were delighted that this Labour Government backed £30 million of devolved funding into our airport. I thank the Secretary of State for Transport and the Minister with responsibility for aviation for their support in our airport, our area and our potential.

A Government who prioritise growth must ensure that it is place based and felt in every corner of the country.

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

I thank my hon. Friend and neighbour for giving way and for what she has said today. Does she agree that there is real potential for farmers to contribute by supporting feed stock from winter crops, creating a circular environmental economy that helps the local economy to grow further with new kinds of jobs, including for people who live in rural areas?

[Sally Jameson]

I absolutely agree. The Bill is not just about the small, narrow element of sustainable aviation; it is about what every industry across the country can do in the shared endeavour to make our aviation sustainable.

If this Government’s growth agenda is to be a success, it must be felt in every corner of the country, including Doncaster and South Yorkshire, and I am pleased that with our airport investment and the backing from the Prime Minister—reiterated just today by the Chancellor—this Government have proved that they will do just that.

As the Secretary of State said, low-carbon fuels could support up to 15,000 jobs and contribute £5 billion to the economy by 2050. The Sustainable Aviation Fuel Bill is a promising boost to our ambition in Doncaster to create a sustainable aviation hub linked to our airport, proving, despite what some on the Opposition Benches may say, that the green agenda and the sustainability agenda are firmly woven into—and are, in fact, essential to—the regeneration of areas that have often been forgotten, such as mine, and to the industries of the future, good jobs for young people and the security of the nation.

The Bill’s revenue certainty mechanism will widen opportunities for innovators, entrepreneurs and producers of fuels, propelling our aviation industry to world-class levels and helping us to become world leaders in an emerging market that will benefit our economy, our industry and our climate.

Perhaps most importantly, this critical infrastructure is sorely needed in Doncaster, and indeed across the country, to bring about the high-skill, high-wage jobs for my constituents and for young people across South Yorkshire. I know that our airport will champion the Government’s aviation fuel ambitions, as will I.

16:39

[Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)]

The SNP welcomes the Bill, which will support the expanding use of sustainable aviation fuel. We view that as an important action among the range of actions that are needed to meet our legal and—most importantly —moral obligations to reduce carbon and support global efforts to tackle climate change.

My constituency has already played an important role in the use of SAF, with RAF Lossiemouth being the first Air Force base to use a SAF fuel blend for routine operations, for both the Poseidon submarine hunters and the Typhoon squadrons operating with a SAF mix. The RAF has also conducted demonstrator flights with 100% SAF-fuelled aircraft, and refuelled jets in the air with SAF. Indeed, Group Captain Sarah Brewin, the station commander at RAF Lossiemouth, has stated:

“The use of sustainable aviation fuel represents a significant milestone in the RAF’s journey towards helping mitigate against climate change. By integrating sustainable practices into our operations, we are not only enhancing our ability to protect the nation and deliver excellence on operations, but also contributing to a more sustainable future for generations to come.”

I welcome the fact that the RAF has some ambitious targets to reduce its aviation carbon emissions.

Inverness airport, publicly owned by Highlands and Islands Airports Ltd and responsible to the Scottish Government, has offered SAF to operators since 2023—a vital piece of work towards the Scottish Government’s deliberately ambitious goal of creating the world’s first net zero aviation region by 2040.

Offshore supply flights are one of the most promising parts of our aviation sector for SAF potential. With Scotland having the lion’s share of these flights from Aberdeen airport, it is vital that we see investment in SAF production in Scotland. Aberdeen airport, operated by AGS Airports, has supplied SAF since 2022, helping offshore industries to reduce their emissions. In 2021, one of the first fully-SAF helicopter flights in the UK took off from Aberdeen airport. BP is working with Bristow Helicopters to ensure that flights to BP platforms have used a SAF blend for more than two and a half years.

Scotland has an immense SAF production potential. The Bill alone is insufficient to see us reach that potential, but it is an important part of that. Scotland’s SAF progress has been held back by the inaction of successive UK Governments on funding the Scottish carbon capture, usage and storage cluster. The CCUS cluster is, in turn, integral to the investment in SAF production at Grangemouth.

Industry body Sustainable Aviation found that a UK SAF industry could deliver £2.9 billion annually to the UK economy, and create more than 20,000 jobs. It is vital that, with long-overdue funding finally confirmed today—something that the SNP has campaigned on for over a decade—the full detail is rapidly made clear and that pace is further injected into the process if that overdue cash is to be converted to construction and processing.

My SNP colleague and Transport Secretary in the Scottish Government has put in place an expert working group on sustainable aviation fuel to exploit the potential for the Scottish economy.

I have covered our broad welcome for the Bill, but there is one area that the Government must address, which is ensuring that feedstocks are coming from sustainable sources. We welcome the Secretary of State’s comments on further design work in the process and we will see that come through in the passage of the Bill. However, the Government must set out how they plan to manage the sourcing of sustainable aviation fuel feedstocks, so that the waste hierarchy is adhered to, and that existing businesses are not damaged by the introduction of the revenue certainty mechanism.

The most obvious illustration of this is the potential use of high-quality wood as one potential feedstock for SAF production. Some Members, but I suspect not all, will be aware that current demand for wood will outstrip supply by 2035. It will be obvious to everyone that it takes more than 10 years to grow a forest, so there is a real and well-articulated concern from organisations such as the Wood Panel Industry Federation and the many sawmill operators throughout the UK.

The UK wood panel industry currently supplies 65% of the UK’s demand for wood panel products, utilising 25% of the annual roundwood harvest basket and 25% of the annual waste wood basket. Fully 10% of the UK economy utilises wood panel products and, again, it will not be lost on the Government that, in order to achieve a 1.5 million new homes target—something the SNP welcomes, given our own substantial success in social and affordable housing build in Scotland—protecting and growing wood supply will be absolutely vital.

The eligibility criteria for the SAF mandate stipulates that feedstock materials must be waste that cannot be prevented, reused or recycled in accordance with the waste hierarchy. While the mandate acknowledges the waste hierarchy, which in principle would prioritise the use of waste wood for recycling before energy recovery, it is not clear how it will be monitored and enforced, leaving supplies of waste wood vulnerable to being used in SAF, against the eligibility criteria. There is a risk that the introduction of a revenue certainty mechanism will incentivise producers wishing to use this essential raw material for SAF production.

There will be time during the passage of the Bill for Ministers to mitigate this risk and address this issue across the Departments involved, of which there are several. I particularly hope that the Deputy Prime Minister’s responsibility for housing will help to focus ministerial and wider departmental minds on ensuring that the final iteration of the Bill supports sustainable SAF feedstocks. There are many good ways to manufacture SAF, and there are some bad ones. Let us get the mix right in this Bill.

16:45

[Euan Stainbank (Falkirk) (Lab)]

I welcome this tremendous legislation, which comes not a minute too soon after the previous Government self-admittedly sat on their hands. The Bill will enable the essential move to the production of British sustainable aviation fuel, and I put on the record my thanks to the ministerial team and officials for bringing the Bill forward and for their answers to my extensive written questions.

Unless it is the will of the House to cry for the end of aviation as a practice, it is imperative that we back the sustainable use of biofuels, municipal waste, cover crops, ethanol, and even carbon dioxide straight out of the atmosphere, for aviation fuel. The mandate provides a modest progression for the aviation industry towards incorporating this fuel into its mix. We have genuinely world-leading research and development on Teesside, such as through Project Speedbird and Lighthouse Green Fuels. The green shoots of industry there must be supported by Government to enable their outcomes.

Both airlines and airports recognise the environmental and economic imperative of building a domestic SAF market. They understand that relying on imports to meet the mandate increases costs and introduces risk to our energy security, aviation resilience and national competitiveness, and there is the geopolitical risk of exposing ourselves to a cheap Chinese market. We shamefully saw the previous Government be willing to do that, as exposed by the hundreds of jobs now on the line at Alexander Dennis in my constituency due to aggressive state-subsidised Chinese industrial practices capturing an incrementally increasing share of the British bus manufacturing market. It is also in no small part thanks to the SNP Government recently buying four times as many Chinese buses as buses from Scotland, but I digress.

There is credible investment interest from traditional jet fuel producers and aviation operators, which have shown their willingness to put capital behind UK SAF projects. That investment is waiting for the RCM to be put in place, for private law contracts with manufacturers to be agreed, and for the industry to have complete certainty in investing in what is a nascent and uncertain technology.

The Bill must pass through the House as quickly as possible. One of the places that cannot afford to wait for investment is Grangemouth. The closure of the Grangemouth refinery has marked the end of over a century of oil refining on Falkirk’s doorstep, and jobs in the wider supply chain are at risk daily due to the loss of the economic anchor that the refinery provided the community. Petroineos’ conversion of the refinery into an import terminal compounds the concerns within the community that we will be reliant on cheap Chinese imports instead of growing our own SAF.

Grangemouth has the infrastructure, skills, logistics and the will to be a cornerstone of our domestic SAF industry and strategy in Scotland and across the United Kingdom, and it already has a commitment from the Government of £200 million from the national wealth fund. Organisations such as Scottish Enterprise and the team around Project Willow are already assessing investable proposals centred on SAF in Grangemouth. However, the dates for commencement of operations suggested in the report are still far too remote from the practical reality of workers who need to feed their kids and pay their mortgage.

With strategic support and the wise and expedient deployment of the £200 million dedicated by this UK Labour Government to Grangemouth, I firmly believe that we can rapidly transition Grangemouth from aviation fuel to SAF, serving as a model of industrial renewal. There are implications for fuel security in Scotland, for jobs in my constituency and the cost of heating and industrial fuel across the country. We cannot allow this to become another missed opportunity. For Grangemouth to have a chance of succeeding, we need acceleration.

With that in mind, I would like the Minister to answer the following questions. Considering that industry is raising concerns that we may have to wait up to nine months between the commencement of this legislation in quarter 4 of 2026 and the first private law contract being confirmed, what work can be done prior to the introduction of this legislation to bring the first of the contracts into effect as soon as humanly possible? How does the Bill intersect with Project Willow proposals for SAF at Grangemouth? Does the Minister understand the need to back and deliver that at pace? Would he like to touch on how the Project Willow report recommends delaying the HEFA cap? Does he consider the use of waste feedstocks for sustainable aviation fuel to be dirtier, cleaner or the same as waste incineration? What conversations has he had with colleagues at the Department for Environment, Food and Rural Affairs regarding the waste hierarchy implications?

In summary, we need the RCM rapidly, and we need to develop the industry at scale, and affordably. I hope that we can genuinely back British SAF, safeguard fuel security, protect skilled jobs and anchor the energy transition in communities such as Grangemouth, Teesside and all across the United Kingdom.

16:50

[Lillian Jones (Kilmarnock and Loudoun) (Lab)]

I rise to speak in this important debate as we address the challenge of modernising fuel sources and reducing our dependency on fossil fuels. I declare my interest as chair of the all-party parliamentary group for the wood panel industry. The transition to net zero in aviation is not just a climate imperative but an industrial opportunity. I commend the Government for bringing forward the Bill, which aims to provide long-term certainty for investors in the UK’s growing sustainable aviation fuel sector. However, in our efforts to decarbonise aviation, we must be careful not inadvertently to harm other strategically important industries that also contribute to our economic growth and environmental goals.

The UK wood panel industry is one such sector. It generates more than £1.1 billion in gross value added and supports more than 10,000 jobs across the UK, many in high-skilled manufacturing roles in Wales, the north of England and Scotland, including my home of Ayrshire and beyond. Those are well-paid, productive and future-facing jobs.

The sector is one of the UK’s largest industrial recyclers of post-consumer waste wood. It takes what would otherwise be discarded and turns it into essential materials for furniture, interior design and—crucially—the homes we are building, yet there is genuine concern that the SAF revenue certainty mechanism could distort markets by incentivising the diversion of recyclable wood and forestry products to fuel production. We have seen that before with the renewable heat incentive, where subsidies inflated virgin wood prices and squeezed out established manufacturers. We cannot afford to repeat that mistake. I am pleased to hear that Ministers have met industry representatives, listened to their concerns and responded positively. I would like to invite my hon. Friend the aviation Minister to come and speak to the APPG so that he can hear from the industry at first hand.

The SAF mandate rightly references the waste hierarchy, prioritising reuse and recycling before energy recovery. However, the enforcement mechanisms remain unclear. If high-quality waste wood is drawn into SAF production, prices will rise, availability will fall and our domestic supply chain will suffer.

Let me be clear that I support the ambition of SAF. I also support the Government’s ambition to build 1.5 million new homes, but that will not be possible without affordable, sustainable construction materials, including wood panels. I urge Ministers to maintain the current safeguards in the SAF mandate, uphold the exclusion of virgin and recyclable wood from eligibility, ensure robust enforcement of the waste hierarchy so that only truly non-recyclable wood can be used, and put in place transparency mechanisms so that we can track what feedstocks are being used. If we get the balance right, we can deliver cleaner skies and affordable homes, and we can decarbonise aviation without decimating domestic manufacturing. Let us make SAF sustainable in every sense: environmentally, economically and industrially.

16:53

[Alice Macdonald (Norwich North) (Lab/Co-op)]

I thank the Minister for all his engagement on the subject. I am definitely not an expert on sustainable aviation fuel—it is nice to be in a debate where we can learn so much—but I will focus on what it could mean for my area of Norfolk and the east of England.

As we have heard, the Bill has the power to support a sustainable aviation industry that will reduce carbon emissions, protect highly skilled jobs and drive green growth. Norwich airport in my constituency has been a user of sustainable aviation fuel since 2023. SaxonAir, a local flight operator, reported that it used nearly 3,000 litres of sustainable aviation fuel for a single aircraft alone in 2024. That usage shows us what a substantial reduction in carbon emissions can be made compared with regular jet fuels, but much more needs to be done.

Recently, Norwich airport, Suffolk and Norfolk county councils and SaxonAir launched Aviation East: a vision to make East Anglia an innovation hub for sustainable aviation. Sustainable aviation fuel was referenced as one of the vital building blocks for that mission, but that and what we are discussing today is part of a much broader landscape of innovation and decarbonisation in aviation. The east of England is already seeing amazing work to revolutionise the way we travel, resulting in faster, cleaner transport solutions such as electric aircraft and drone taxis. In fact, as the Minister said recently, we could have flying taxis in the Norfolk sky by 2028—the Jetsons are coming to Norwich, and the Minister will be coming too, to go in an electric plane.

Alongside this important Bill, I welcome action that the Government are taking to decarbonise aviation through airspace modernisation, low and zero-emission aircraft, and carbon pricing. I welcome the £1 billion of funding for the Aerospace Technology Institute, and the work that the Civil Aviation Authority is doing in the regulatory environment for zero emission aircraft.

The potential in our region, the east of England, is huge, including for our local economy and—importantly—our young people. Young people growing up in Norfolk and Norwich, as I did, want lots of different opportunities, but too often those opportunities are not there, and especially not on their own doorsteps. I know we can deliver many more jobs and apprenticeships, including at the International Aviation Academy in Norwich, which counts KLM as one of its partners. I am also on a mission to work with local stakeholders, so that that academy is working at full capacity, opening up opportunities to local people both now and for future generations.

Delivering the vision of Aviation East, and the measures in the Bill, feeds clearly into the Government’s growth missions, by delivering highly skilled, sustainable, world-leading engineering jobs. However, all fledgling innovations need protection, and sustainable aviation fuel is no different if it is to grow into an industry that could transform air travel for the better. I welcome the sustainable aviation fuel mandate that came into force this year and requires the blending of SAF into the UK-wide aviation fuel mix. I support that goal, but I recognise that it is achievable only when suppliers are protected and supported, by ensuring that a price is guaranteed, regardless of market forces. I recently met members of the East Anglian air ambulance, and I pay tribute to the amazing work they do, based out of Norwich airport. They told me that they use a mix of SAF, but that it is expensive and perhaps they could use a bit more if the price came down.

If the Government want to encourage innovation and drive growth in regions such as the east of England, providing a backstop price is the signal that shows investors we are serious about good green growth. With the Bill supporting sustainable aviation fuel producers, regional innovation hubs such as Norwich airport will only benefit, helping to increase their contribution to the UK’s sustainable aviation industry, reducing carbon emissions, tackling climate change, and driving green growth. I fully back the Bill.

16:57

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

My contribution comes from a slightly different angle compared with that of other hon. Members, but from the outset let me be clear: I welcome the Government’s plan for sustainable aviation fuel, and I thank my hon. Friend the Minister for his generous time discussing the matter. We can, however, hold different feelings at the same time, and while I approve of the plans, I feel a lot of anger and frustration at what has happened to my constituency. A joint venture of private capital through Sir Jim Ratcliffe’s INEOS and the Chinese state, called Petroineos, has closed the Grangemouth refinery. Hundreds of workers on site, and thousands in the wider supply chain, are to lose their jobs. Scotland no longer refines our oil and fuel, and national security has been weakened as a result.

Everyone is aware that the previous Conservative Government did not want to know about that issue, and the current SNP Government tried their very best to conceal their knowledge of the closure years ago. So while my Government have committed £200 million from the national wealth fund for new industries to come at some point down the line, that frankly is not enough. At Grangemouth we have seen another unjust transition. Four decades ago, it was the miners who were cast aside; now it is refinery workers. I understand why oil and gas workers in the north-east of Scotland are anxious, and they have every right to be.

The last four decades of privatisation have also highlighted the danger of private capital and foreign Government ownership of our vital industry. At Grangemouth, conversion from a traditional oil refinery to a plant that would create sustainable aviation fuel was a viable alternative to closure and would have meant a truly just transition for workers and my local community. It would also have helped the Government meet our ambitious SAF mandates and supported the UK aviation industry. Yet conversion was not deemed profitable enough for Petroineos, and the Scottish and UK Governments both meekly accepted the company calling the shots, with minimal pushback, in an example of working-class communities being let down by the collective political class.

Only yesterday, in questions to the Department for Energy Security and Net Zero, I asked what ownership stake the Government would take in future industries at Grangemouth. I am still waiting on a coherent answer. Let me be clear: if there is no Government ownership stake taken and we surrender all the new, greener industries, such as SAF, to private capital, the Government will have learned no lessons at all from the past four decades and we will never free ourselves from being at the mercy of those who put corporate profit ahead of our country’s needs.

Earlier today, the Chancellor said that she and the Secretary of State for Business and Trade were not ready to let a working-class community in Scunthorpe go to the wall. That is why they intervened to save steel there and that was absolutely the correct decision. However, the Chancellor and the Secretary of State should have treated the refinery workers of Grangemouth in the same way as they did the steelworkers of Scunthorpe. I urge the Government to take responsibility and to take ownership of vital industry in our national interest.

17:01

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

I take this opportunity to wish everybody across the House a happy Carers Week.

It is a pleasure to speak on Second Reading of the Sustainable Aviation Fuel Bill. I know that many Members think that I make my speeches up as I go along, but I want them to know that I wrote this in advance and I did not wing it. Members will also be happy to know that that was my last joke in this speech. I will just say quickly to the hon. Member for Sutton and Cheam (Luke Taylor) that he should never apologise for using an equation in a speech.

As Members across the House will be aware, although I do not have an airport in my constituency, Harlow starts at the very end of the runway at Stansted airport, and thousands of its residents work at the airport in a variety of roles. I briefly pay tribute to the work of Stansted airport college in investing in training the local workforce.

As the Minister is aware, Stansted is part of Manchester Airports Group, which is focused on the development of SAF. Like this Government, the group recognises that SAF is the future. I will also briefly give a plug for the Harlow Group, which is involved in machining vital aircraft components, and so is in line with the airport on that.

As Members will recognise, the UK has a world-class aviation sector and a proud history in the field, from R. J. Mitchell to Morien Morgan. I am proud that this Labour Government are promoting growth, as well as decarbonisation, in the sector. SAF will help us deliver our clean energy mission and our growth mission, allowing the UK to be a world leader in the field once more.

Compared with fossil jet fuel, SAF will reduce gas emissions by around 70%, and we can all welcome that. The Bill will introduce a revenue certainty mechanism to provide a price guarantee for SAF producers. The Government believe that that will increase investor confidence in SAF production, and having spoken in depth about the issue with Stansted airport, it is clear that that is the stumbling block for greater SAF production and use.

In conclusion, I welcome the Bill and the Government’s ongoing commitment to decarbonisation and tackling climate change. I also welcome their commitment to being a world leader in the field.

[Mrs Sureena Brackenridge (Wolverhampton North East) (Lab)]

I thank my hon. Friend for giving way right at the end. Just like him, I welcome the announcement. As we hear from across the aviation sector, there is much to be championed in the transition to sustainable aviation fuel that will be enabled by the Bill. Although Collins Aerospace in my constituency does not produce SAF, it does develop the components and systems that mean that 100% SAF flight is a reality. Does my hon. Friend agree that that backs both the green transition and the industrial future for places such as our regions and Wolverhampton and Willenhall?

[Chris Vince]

I thank my hon. Friend for her contribution. She managed to get in just before my last words, so I shall have to make up a new conclusion. I absolutely agree with her point. The point I was going to make in my conclusion is that this Bill is really important for climate change and meeting our decarbonisation targets. We all know about the impact of climate change on the planet that we live on, and we only have one planet so we have to get this right. She is right to say that there is also a massive economic advantage to this.

I was really proud to mention two aviation pioneers from the United Kingdom earlier, and I think this country should be ambitious. We should once again be at the front of the queue when it comes to aviation technology and aviation pioneers. SAF is a huge part of that. This is not just about climate change; it is also about jobs and opportunities, and I am really excited that this will mean more jobs and opportunities for my constituency of Harlow as well as for Wolverhampton. I am delighted to support the Bill today, and I look forward to hearing many more contributions. I also look forward to this Government continuing with their flying start.

17:06

[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.

17:09

[Graeme Downie (Dunfermline and Dollar) (Lab)]

Like my hon. Friend the Member for Harlow (Chris Vince) said, the hon. Member for Sutton and Cheam (Luke Taylor) should never be ashamed of being a geek of any kind. I definitely do not have his knowledge of formulas or anything like that, but I certainly am a self-professed aviation geek who has spent probably far too long sitting at the end of runways watching planes land for hours on end. When I was in high school, I used to cycle with one of my friends who lived close to the end of Edinburgh airport runway to just sit and watch aircraft come in—to the point that one time, the police came along and asked why these two 14-year-olds were sitting at the end of the runway watching aircraft land. I can assure everyone that nothing untoward or illegal was happening—we were just being that sad and geeky. I think that was the problem the police had; they did not believe that that was what two 14-year-olds were intending to do.

[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?

[Graeme Downie]

I thank the hon. Member for that intervention. I will not ask for a second intervention on how that relationship progressed.

Aviation is a critical part of our national story and our economy, as others have said. As an island nation, we rely on the maritime and aviation sectors to get goods and people in and out of our country, so it is clear that aviation must continue to play a role in our future. In Scotland and in my constituency, that includes the movement of products like salmon and whisky, as well as tourists, to and from Dunfermline and the rest of Scotland. However, with aviation expected to become the largest transport sector emitter of carbon by 2040, it is clear that a range of transformational, long-term changes are needed in the sector to make it sustainable.

I recently had the privilege of hosting a sustainable aviation technology showcase in Parliament with companies such as Airbus, Boeing, easyJet, International Airlines Group and others, including some of the ones that have been mentioned. There I saw technological solutions ranging from radical changes to aircraft design to hydrogen-powered aircraft, as well as a number of SAF producers. I have also heard from Edinburgh airport, one of the largest employers in my constituency, of the importance of airspace reorganisation and regulatory changes, all of which will have a role in modernising aviation and reducing the environmental impact. I know that the Minister has been relentless in pursuing all these avenues to improve aviation in the UK, and we should thank him, his officials and the ministerial team for that work and commitment.

For all those people from different parts of the aviation ecosystem, the issue of SAF has been prime. On taking office, this Government took action much faster than many expected with the introduction of the SAF mandate. It obligates companies supplying fuel to airlines operating out of the UK to either incrementally increase the amount of SAF in use or pay a buy-out fee. That mandate started at 2% and will rise to 10% in 2030 and to 22% in 2040. That is the kind of direction and steer that the industry needed, but it will mean nothing if we do not produce SAF in the UK and invest now in the much longer-term plans for third generation SAF to make that a reality here and to make the UK a world leader in this technology, as well as playing a part in the future of our fledgling hydrogen sector.

Developing a strong SAF industry is a major industrial opportunity for the UK, as others have said. The UK can lead the SAF industry with job creation and innovation. At the event I mentioned, Airbus told me that it is committed to enabling 100% SAF capability across its aircraft production by 2030. According to the Back British SAF campaign, there is potential for over 10,000 jobs in the UK by 2030 and 60,000 jobs by 2050, a number of which would be in Scotland and in my constituency, as well as in the constituencies of other Members across the country. In due course, I hope that some of that might include investment in different parts of the SAF infrastructure in Fife, with proximity to Edinburgh airport and excellent sea, road and rail links.

For these and other reasons, I am delighted to see the Bill come forward. It clearly sets out the revenue certainty mechanism and the framework for setting a strike price that will support businesses and investment cases to make SAF a reality in the UK. It also establishes the route for funding via a levy on suppliers, along with enforcement and oversight.

I hope the Minister might respond in his summing up to a few specific points, some of which have been mentioned by colleagues. Under clause 1, what process does he intend to use to shape precise price points for producers and to calculate the market reference price? Clause 11, on financial penalties, contains provision to amend amounts in the light of inflation. Are those the only circumstances in which penalty amounts can change? Under clause 14, what oversight does he envisage if financial assistance is required to ensure value for money?

Clear and stable policy frameworks like this SAF Bill will be essential to unlocking private investment, accelerating SAF supply chains and positioning the UK as a global leader in the net zero transition, but the pace at which the legislation is introduced will be key, so will the Minister consider what steps he can take to accelerate the creation of a successful SAF industry here in the UK? As my hon. Friend the Member for Falkirk (Euan Stainbank) asked earlier, will the Minister begin work to create strike price contracts so that they are ready as quickly as possible when the legislation is passed? Will he consider moving the start date for the revenue mechanism forward to allow projects to get started as quickly as possible?

The Bill will be a significant part of the future of British aviation, British industry and British growth. I look forward to seeing its progress through the House.

17:15

[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.

17:18

[Chris McDonald (Stockton North) (Lab)]

We heard earlier from my hon. Friend the Member for Doncaster Central (Sally Jameson) how proud the people of Doncaster are of their airport, but I challenge her to a “pride in your local airport” competition, because nowhere is more proud of its local airport than Teesside—to the extent that whether politicians promise the continuation of flights from Teesside to Alicante is the most important issue in local politics. Quite right, too, because working people in Teesside save all year round for their seven days in the sun, and that is important to me and to everybody else who lives there. People who say that we need to reduce flights and the opportunity for working people to go on holiday are not living in the real world —they are certainly not talking to the people I talk to and live with.

[Deirdre Costigan]

I support the right of my hon. Friend’s Stockton North constituents to go on holiday to Alicante. Equally, in my Ealing, Southall constituency, 53% of people—including me—were born in a different country. Does he agree that they have the right to go home and visit family and friends, so it is important that we accept the reality of air travel and focus our time and energy on realistic plans, such as the one before us, to invest in sustainable air fuels?

[Chris McDonald]

I could not agree more. As my hon. Friend the Member for Dover and Deal (Mike Tapp) said, we are indeed an island nation, if anyone had not spotted that, and the quickest way to get about is to go by air. What everyone wants is to wake up on a morning in Stockton and then be sat on a beach in Benidorm by lunch time, and of course they can do that at Teesside airport.

The people of Teesside know that our future is about decarbonising. This Government have invested £4 billion in carbon capture and storage. We have the largest offshore wind monopile factory in our area, and we are producing green hydrogen in Billingham in my constituency—in fact, Billingham produces 50% of the UK’s hydrogen, and Billingham and Teesside more generally is set to become Europe’s main centre for sustainable aviation fuel.

I am sure that sustainable aviation fuel will be produced in Grangemouth, Humberside, the north-west and south Wales, but the market is enormous and, as we heard from my hon. Friend the Member for Middlesbrough South and East Cleveland (Luke Myer), Teesside and Billingham in my constituency is best placed in the whole of Europe to deal with this. The biggest threat to that at the moment is not the fantastic plans of this Government, but the ideological adherence of members of Reform to anti-net zero. As usual, I find myself in this House standing up for new jobs for industrial communities in my area, alongside my hon. Friend the Member for Middlesbrough South and East Cleveland. Where are the Reform Members? They are not here—they are never here.

[Lewis Atkinson (Sunderland Central) (Lab)]

As well as the welcome developments that my hon. Friend alludes to in the Tees, this is about the wider north-east. In my constituency, Wastefront has a £100 million investment and is creating 100 good jobs on the River Wear. Does he agree that jobs are being made in the wider north-east through this Government’s policy and that they are under threat from the policies of Opposition parties that he mentioned?

[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.

17:24

[Greg Smith (Mid Buckinghamshire) (Con)]

Before I begin, I draw the House’s attention to my entry in the Register of Members’ Financial Interests, with respect to a donation from P1 Fuels. Although it does not make aviation fuel, it was in the synthetics business, and—as the Minister well knows—I ran a classic Land Rover on that fuel last summer to prove the point that this stuff works.

The test that net zero must meet is that all our constituents must still be able to do everything they do today—be it fly on holiday, drive, or get a ferry or anything else that runs on a liquid hydrocarbon—and that businesses must still be able to move goods around the world and trade at the same price as today, or for an equivalent price, just greener. In that, technology is our friend, as is the innovation we see—particularly on these shores, but also innovation that is happening abroad. As my hon. Friend the Member for Orpington (Gareth Bacon), the shadow Secretary of State, said earlier in the debate, the Opposition do not seek to divide the House on Second Reading. This Bill is an extension of the previous Government’s agenda in this regard, and we fully recognise the need to replace fossil fuels over time and, in this instance, to replace aviation fuel with a cleaner, greener alternative. However, there will be key questions that the House should look at as this Bill goes through Committee and its later stages, which do need answers. We have heard some of those questions throughout this afternoon’s debate.

We have had a good and wide-ranging debate, with very little deviation from the core consensus that sits underneath the Bill. On the Conservative Benches, my hon. Friend the Member for Mid Bedfordshire (Blake Stephenson) made the important point that aviation will be critical to get the tourists into the new Universal theme park in Bedfordshire when it eventually opens. He also focused on the important role that Cranfield University and industry in his constituency are playing—they are providing part of the solution to the problem that this Bill seeks to support and deliver. Equally, he asked the legitimate question of how the United Kingdom mechanism and mandate compare with those overseas, which I hope the Minister will reflect on in his winding-up speech.

On the Government Benches, the chairman of the Transport Select Committee, the hon. Member for Brentford and Isleworth (Ruth Cadbury), spoke well and in an informed way on this subject. She and I both served on the Transport Committee in the previous Parliament, and we both worked on the inquiry and report on the fuels of the future that the Committee produced during that Parliament. She rightly made good points about the supply of waste for SAF technology and the trade-off with energy from waste facilities, for example. There will have to be some conversations within Government, particularly with the Ministry of Housing, Communities and Local Government, about the way in which so many councils, including my own in Buckinghamshire, now send all general waste to an energy from waste facility. Those incinerators and facilities have been financed through multi-decade deals, and if we are to get that waste into SAF production, some of those deals will inevitably have to be undone or renegotiated. Who will bear the cost of that?

The hon. Lady equally raised an important point about bioethanol—I do not know whether it was just shadow Ministers who received an email from Vivergo Fuels this week, or whether it was all Members of the House. That email gave a pretty stark warning, particularly about the impact of the US trade deal that the Government have done on the bioethanol space. Essentially, it warned that that deal could completely undermine the UK bioethanol industry. That is a serious concern that the Department for Transport and the Department for Business and Trade will have to work out if we are to have domestic bioethanol production, as much for sustainable aviation fuel as for petrol. We largely all fill up—unless we have classic cars—with E10 at the pump. E5 is still 5% bioethanol. As this Bill passes through the House and as the petrol debate for road cars moves on, that serious question will have to be answered. When we get a warning from industry as stark as the one from Vivergo Fuels, it needs to be addressed.

The hon. Member for North Somerset (Sadik Al-Hassan) mentioned the role of hydrogen in the mix, and I look forward to debating that with him when he has a debate on this issue in Westminster Hall next week, I think. He is absolutely right that there are other technologies and other fuels out there. The hon. Member for Derby South (Baggy Shanker) correctly pointed out that there can be no net zero without many of the elements of this Bill. The hon. Member for Doncaster Central (Sally Jameson) spoke passionately about Doncaster airport and the sustainable future that the Bill will help bring about.

The hon. Member for Falkirk (Euan Stainbank) spoke in support of the Bill, and the hon. Member for Kilmarnock and Loudoun (Lillian Jones) spoke in an informed way about SAF production, which forms such an important part of the Bill. The hon. Member for Norwich North (Alice Macdonald) rightly spoke of the innovative landscape, although the drone taxis did worry me a little bit—I am not sure we have completely got goods being delivered properly by drones yet, so we should do that before we start putting people in them. Equally, she rightly spoke about the world-leading engineering jobs that will be created.

The hon. Member for Alloa and Grangemouth (Brian Leishman) slightly broke the consensus, but he was entirely right to speak up for his constituents and his constituency interests so passionately. I think there is a legitimate debate about the refineries that we have lost, the refineries that we still have and how this debate intersects with them.

I will not dwell too much on the puns of the hon. Member for Harlow (Chris Vince). I thought he was a teacher before he entered this House, but perhaps he also wrote for Bobby Davro, given some of the puns he came up with.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

For the benefit of younger Members, Bobby Davro was a comedian.

[Greg Smith]

The hon. Gentleman shows my age, and no doubt his own, with that sedentary interjection.

The hon. Member for Harlow was right to focus on the skills agenda that underpins this legislation, on which I do not think we have heard so much from the Government. Likewise, the hon. Member for North West Leicestershire (Amanda Hack) rightly pointed out the lived experience of Jet2 and the impact on cargo. We have heard a lot in this debate about moving people around the country and the world using aviation, but not so much about cargo, which is an equally important part of our role as a global trading nation. The hon. Member for Dunfermline and Dollar (Graeme Downie), putting aside his little geek-off with the hon. Member for Sutton and Cheam (Luke Taylor), was right to focus on that agenda of moving goods as well as people.

We also heard from Teesside, with the hon. Member for Middlesbrough South and East Cleveland (Luke Myer) and the hon. Member for Stockton North (Chris McDonald). In fact, I am a little worried. This morning I was in Westminster Hall with the hon. Member for Stockton North, for a debate on the space industry, in which I agreed with every word he said, and I am a bit nervous to say that I agreed with him this afternoon, too. That does not often happen in this House, but he was absolutely right that all our constituents work hard and save hard. They want that family holiday or that weekend away or whatever it is every single year, and it would be a gross dereliction of duty for any of us to lumber them with higher airfares or to try to make their holidays more expensive. That is not what any of them send any of us here to do; they want us to ensure that they can still live their lives in the way they wish.

Briefly, the hon. Member for Sutton and Cheam warned us that he might be boring but, uncharacteristically for a Liberal Democrat, he actually was not. [Laughter.] I very much enjoyed his speech and the knowledge that he brought from his 16 years of work in the aviation sector. The hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter) was equally right to focus on another matter that a few Members have raised in the debate: the use of SAF by our armed forces, particular the Royal Air Force and the Royal Navy.

The use of technology, from fuels derived from waste and feedstock to pure synthetics, is where I think much of the debate will go in the coming years. In fact, the technology to enable us to move on from those feedstock and waste-derived fuels already exists. In 2021 the RAF flew a plane not on a blend of SAF, but on 100% synthetic fuel made right here in the United Kingdom by a company called Zero Petroleum, which was mentioned by my right hon. Friend the Member for Goole and Pocklington (David Davis).

Let me now turn to a part of the agenda on which I think we will need to have a conversation when the Bill goes into Committee. The Bill gives no detail on the approach to be taken regarding the specifics of the contracting between the producer and the counterparty, the Government contractor for the strike price. In the background material, especially that which can be found in the Government’s response to the consultation on the SAF revenue certainty mechanism, the ambitions are largely there, and we are not critical of the ambitions that sit within that document, but it might be beneficial to be sure that the contracting will follow those ambitions.

Given that the SAF mandate already in force includes a ringfenced mandate for an electro-sustainable aviation fuel quota, it is critical that eSAF projects are supported equally within the revenue certainty mechanism. It is important both to develop a UK market for SAF and eSAF, and local production as created by the Bill and the mandate, and to support and encourage the use of home-grown technology for the manufacture of SAF and eSAF, as that not only retains revenue within the United Kingdom but leverages a huge amount of revenue for future exports through technology licensing. Sadly, a great many projects supported by grants from the Advanced Fuels Fund are using foreign technology.

Perhaps I could suggest that the Government reflect, ahead of the Committee stage, on the possibility of adding another ambition to those that they have already set out: namely, to reward or incentivise the use of UK technology in projects supported by the revenue support mechanism. The House may be surprised to know that, despite the various programmes of UK Government support for SAF and eSAF, AFF grants, SAF mandates and the SAF revenue certainty mechanism, no UK Government bodies are mandated to support the development of the core technologies of fuel synthesis.

We have a great tradition of research and development in this country. Companies such as Zero Petroleum have been funded entirely by private capital—which is largely a good thing—and also through some of their RAF and Ministry of Defence contracts, for different reasons. Notably, however, the Aerospace Technology Institute is the Government-funded body that should be supporting SAF and eSAF manufacturing technology. It supports everything else, including hydrogen and electric aircraft, but, bizarrely, it is not permitted to fund SAF and eSAF technology programmes. That is a huge misalignment in the strategy, which I hope the Minister can address.

I have a few key questions for the Minister, and he is showing great enthusiasm about answering them. We will be spending three days in Committee, so there will be many more to come.

[Max Wilkinson (Cheltenham) (LD)]

Only three?

[Greg Smith]

We can negotiate more, I am sure. [Interruption.] The less we hear about the hon. Gentleman’s date at Heathrow, the better.

Are the Government able to outline their level of certainty about the costs to taxpayers? Is there confidence that the levy imposed on fuel suppliers will not lead to significant rises in ticket prices? In other words, what will ensure that the £1.50 variance in either direction is not a hope, not a dream and not a best-case scenario, but a reality about air fares?

It would also be helpful if details could be provided about the expected cost of importing SAF in comparison with the cost of producing it in the United Kingdom. If we are imposing costs on passengers through levies, is it expected that SAF can be produced more cheaply in other regions, or is the policy focused primarily on energy security? As I have said, our view is that we should make the fuel right here in the United Kingdom using our technology, but in order to get the right price from our technology in the UK, it is important that we understand the market overseas.

Can the Minister outline what proportion of the SAF used in the UK is expected to be produced domestically in the first instance? What would constitute success in the first iterations? The Government have suggested that financing a plant costs between £600 million and £2 billion. From a regulatory perspective, what can be done to ensure that plants fall towards the lower end of that cost range?

There are many questions to be answered in getting the Bill right. We want to get it right, and we want to see sustainable aviation fuel used in our aircraft. We will not divide the House today, but the test, as always, is this: have the Government got it right?

17:40

[The Parliamentary Under-Secretary of State for Transport (Mike Kane)]

I thank nearly all Members—no, all Members—for their consideration of the draft Bill and for their valuable contributions to this debate. I am grateful to the Opposition for their questions and scrutiny, and we will make sure as a House that we get this right for our nation.

I fully concur with the shadow Minister, the hon. Member for Mid Buckinghamshire (Greg Smith), that the Liberal Democrats have not been boring today, and I am grateful for their support in this matter. Having worked with the Liberal Democrats in the past, I know that they are always with you in the room until the fight breaks out, so let us see how we get on over the next period.

[Max Wilkinson]

Will the Minister congratulate innovators such as my constituent James Hygate, who was recently awarded an OBE for his work on green fuels? Over genteel tea and cake—as the House can imagine, this happens all the time in Cheltenham—he told me of his plans to turn human faeces into SAF. He is an innovator at the leading edge, and he says that the Minister might be able to work with his friends in the Department for Environment, Food and Rural Affairs to solve some of the problems that we have with sewage in our rivers, by taking it out at source. Is the Minister considering that as part of this legislation?

[Mike Kane]

I thank the hon. Member for his contribution and join him in thanking James Hygate OBE for his work in this area. On the serious point about waste, I sit on the small ministerial group for the circular economy. It is a big part of what this Government are trying to do, and we will see how that work progresses.

The UK stands at the forefront of global efforts to decarbonise aviation. When this Government came into power, we acted immediately by laying the statutory instrument for the SAF mandate, which has been in place since 1 January. We have established the UK airspace design service, a programme of work that will modernise the airspace above us by decarbonising and supporting cleaner flights with fewer delays. We are now the first legislature on the planet to introduce a revenue certainty mechanism, and the world is looking to us. I hope that this House can get behind us.

[Jim Shannon (Strangford) (DUP)]

We cannot help but be excited about the Bill because of its potential to deliver. The Minister is a good friend of us in Northern Ireland, and a good friend of all of us in this Chamber and across this great nation. There are innovative people in Northern Ireland who have the technology, and they wish to play their part. Is it the Minister’s intention to ensure that everyone across this great United Kingdom of Great Britain and Northern Ireland has the opportunity to feed into SAF and to gain the benefit from it?

[Mike Kane]

I am always delighted to answer questions from the hon. Gentleman, who represents a place that I love dearly. I have responsibility for maritime travel, and we see Artemis Technologies decarbonising our maritime sector. We have refineries in Belfast. I spoke to a major chief executive whose family emigrated to Canada from Belfast and who is very fond of the city. We expect him to talk to his companies about applying for the contracts when we eventually let them do so, and that will be key.

I have a lot of questions to get through. The £1.50 that the hon. Member for Orpington (Gareth Bacon) mentioned could be £1.50 more or £1.50 less, but I am happy to hand over £1.50 to him now, if he wishes. That is not going to have an impact on people’s ability to fly to destinations, as he rightly said. I think people flying for their annual holiday is key to the British way of life, and I do not want to damage that whatsoever. That analysis comes from Department for Transport business team itself.

Many of the questions were about going faster. I must gently point out that we were promised four plants by 2025 by the last Government, but I am not going to get into that. We could not go any faster—this is still the first Session—and we had to introduce the mandate and we are now introducing part 2, which is the RCM. So I would say we are going at as fast a pace as humanly possible.

We are neutral on when the contracts are bid for, so I say to those worried about waste or HEFA streams that these contracts change over time, and we will see what bids come in. The hon. Member for Orpington also mentioned large plants, and he will have seen Members—mainly those Government Members behind me—from our industrial north, south Wales and other places queuing up to get advanced, high-manufacturing facilities with well-paid, trade-unionised jobs. As we advance this, we are working with the industry on the strike price.

The Chair of the Transport Committee, my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury), said this is not a silver bullet, and it is not, but it is part of the package—airspace modernisation, sustainable aviation fuels, carbon pricing, carbon capture technology and zero emission flight—that this Government are pursuing to decarbonise aviation in our country, and we are investing £1 billion in the Aerospace Technology Institute to do that.

My hon. Friend also mentioned Heathrow, and my right hon. Friend the Secretary of State, who has shown great leadership in this space—along with other Members, officials and the industry—has pointed out that the expansion of Heathrow is accounted for in the sixth carbon budget. I thank the hon. Member for Wimbledon (Mr Kohler) for his thanks to me for getting on with what is part of a package of decarbonisation, as he rightly pointed out.

My hon. Friend the Member for North Somerset (Sadik Al-Hassan) is a doughty champion for Bristol airport—he mentions it every time I meet him in the Tea Room—and a champion for hydrogen. I look forward to visiting his airport and to replying to his Westminster Hall debate on Tuesday.

The hon. Member for Mid Bedfordshire (Blake Stephenson) takes any opportunity he has to plug the Universal theme park. He spoke about his support for Luton airport, and how it will be a gateway for regeneration in his area. On how the approach differs from those of other markets, we are the first ones to do it. If we get this done in the next few weeks, we will be the only legislature on the planet to have done so, and the world is looking to us to move this forward.

Coming to my hon. Friend the Member for Derby South (Baggy Shanker), there was a bit of an arms race between Members, if they do not mind my saying so, about who loves their airport the most—Teesside, Norwich, East Midlands and on it went. I think we should have an independent competition for who loves their airport—

[Luke Myer]

rose—

[Mike Kane]

I think the hon. Member representing Teesside is about to intervene on me.

[Luke Myer]

Does the Minister agree with me that Teesside International airport is a real gem in our region, and it is absolutely critical that it returns to profitability as soon as possible?

[Mike Kane]

How could I not agree with my hon. Friend. We are proud of our airports—I am proud of mine in my constituency—which provide jobs and services. As everybody has said, they have a great history and provide great innovation, and we should celebrate them.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

Stoke-on-Trent does not have an airport, but we do use Manchester airport quite a lot, so while the Minister is sitting next to the Transport Secretary on the Front Bench, could he put in a word for a direct train link from Stoke to Manchester airport, so we can all enjoy his airport as much as he does?

[Mike Kane]

Personally, I disagree with my hon. Friend, because I think Stoke has a great airport—it is in my constituency, and it is called Manchester airport.

I can assure the House that I am not going to take any lessons on date nights from the hon. Member for Sutton and Cheam (Luke Taylor). [Laughter.] But it is great to hear his expertise in this area. We do value that expertise in the House and I hope he makes the Public Bill Committee. He mentions ZeroAvia, which I worked with in opposition and in government, and how well it is doing with zero emission flights. He may have to run that equation past me again—I did not pick it up the first time.

What a doughty champion for Doncaster Sheffield airport my hon. Friend the Member for Doncaster Central (Sally Jameson) is. It was great to hear the Chancellor mention it in her statement today.

I am glad that the hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter), the transport spokesman for the SNP, welcomes the Bill. It is really good to see how the military and our armed services are getting in on the decarbonisation agenda. The RAF Lossiemouth, in his patch, is showing good practice.

My hon. Friend the Member for Falkirk (Euan Stainbank) talked with passion about Grangemouth near his constituency. In direct answer to his question, we have no plans to review the HEFA cap. This is about security in a fragile geopolitical situation and also about competitiveness. I remind him and my hon. Friend the Member for Alloa and Grangemouth (Brian Leishman) that the Government are considering EY’s report and recommendations regarding the refinery. The national wealth fund stands ready, and we encourage investors to come forward and secure the long-term future at Grangemouth.

My hon. Friend the Member for Kilmarnock and Loudoun (Lillian Jones) is right. This industry produces well-paid, unionised jobs often in industrial areas that have been deindustrialised. I thank her for her work chairing the APPG for the wood panel industry, and I am happy to accept her offer to speak to it.

My hon. Friend the Member for Norwich North (Alice Macdonald) is another doughty campaigner for Norwich airport and its sustainable aviation hub. She is pushing that so hard. I was glad to meet her recently and I hope to visit Norwich in the near future. She talked about the jobs and apprenticeships that go with it.

My hon. Friend the Member for Alloa and Grangemouth —I will refine my remarks on Jim Ratcliffe; as a Manchester City fan, I had better be careful that I do not say anything out of turn—is right to talk about deindustrialisation. I saw that in east Manchester growing up in the ’70s, with the chemical and the mining industries. We are only now getting over that in parts of our great city. I just remind him that if we do this right, we are looking at 15,000 jobs and £5 billion to the economy by 2050.

I once tried a joke in the House and Mr Speaker said, “Don’t give up the day job.” I remind my hon. Friend the Member for Harlow (Chris Vince) of that advice. At every opportunity, he raises the work he does with Stansted airport. He ended his speech really strongly, saying that the country should be ambitious in this field. I completely concur.

My hon. Friend the Member for North West Leicestershire (Amanda Hack) talked about her love affair with East Midlands airport and how important it is to freight. I have had roundtables with the freight industry on how we grow our freight industry in the UK. If I can get to her airport’s 60th birthday celebrations, I will.

I wondered where my hon. Friend the Member for Dunfermline and Dollar (Graeme Downie) was going with that police story. And then we got into a very geeky arms race with the hon. Member for Cheltenham (Max Wilkinson). He is right to say that aviation, while a small emitter now, becomes a much larger emitter, or the largest, by 2040. That is why it is imperative that we do this now—another call to arms to go faster.

I think my hon. Friend the Member for Middlesbrough South and East Cleveland (Luke Myer) said he was a supporter of the airport near his constituency. Alfana, Arcadia, Iogen and a plethora of companies could bid for contracts in the region and support a manufacturing renaissance. Just to remind him about carbon capture, which he mentioned, the Prime Minister recently announced £22 billion of Government money to research carbon capture and technology at Stanlow.

In the arms race for who loves their airport most, my hon. Friend the Member for Stockton North (Chris McDonald) talked about hydrogen, wind, solar and clean energy.

Reform Members are not present, which is key because—[Interruption.] Oh, they are here now. Reform promises that it is going to re-industrialise these areas, but without a financial plan that adds up. This Government are actually getting on with it, and we will continue to get on with it.

This Government have demonstrated that we are committed to supporting our world-class aviation sector through what we have done in the first short few months of this Government. We have the third biggest aviation market on the planet, which is world class and competitive, and we want it to remain that way. We want more people to be able to fly, and we want them to do it sustainably, and that is why the transition to SAF is not a mere aspiration, but an imperative. I recognise that there will be challenges, but SAF will have our unwavering support, which is why we are backing it in the Bill, and I am grateful for the support around this Chamber today.

The revenue certainty mechanism will help new SAF plants to get off the ground, supporting good, green jobs in places like Teesside. Our SAF policies are helping to create the right environment for companies like Exolum, based in the constituency of my hon. Friend the Member for Chester North and Neston (Samantha Dixon), which pipes the sustainable fuel to Heathrow, Gatwick and, of course, the UK’s fastest-growing airport, Manchester.

The Bill is delivering on our growth and clean energy missions and on our manifesto commitment to secure the aviation industry’s long-term future through promoting SAF. I urge this House to give the Bill its full support, and I stand ready to work with Members across this House on that. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Sustainable Aviation Fuel Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Sustainable Aviation Fuel Bill:

Committal

The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 22 July.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Consideration and Third Reading

(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.

Other proceedings

(7) Any other proceedings on the Bill may be programmed.—(Heidi Alexander.)

Question agreed to.

Sustainable Aviation Fuel Bill (Money)

King’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Sustainable Aviation Fuel Bill it is expedient to authorise the payment out of money provided by Parliament of any expenditure incurred under the Act by the Secretary of State.—(Heidi Alexander.)

Question agreed to.

Sustainable Aviation Fuel Bill (Ways and Means)

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Sustainable Aviation Fuel Bill, it is expedient to authorise:

(a) provisions by virtue of which persons may be required to make payments, or to provide financial collateral, to a designated counterparty, and

(b) the payment of sums into the Consolidated Fund.—(Heidi Alexander.)

Question agreed to.