Lords Chamber

Thursday 20th November 2025

(began 3 hours, 35 minutes ago)

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11:08
None Portrait Introduction(s): Lord Whitehead
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Charles

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Charles III, Charles III, by Charles III, by the Charles III, by the grace Charles III, by the grace of Charles III, by the grace of God of the United Kingdom, of Great Britain and Northern Ireland, and of our other realms and territories, King, head of the Commonwealth, King, head of the Commonwealth, defender of the Faith to all Lords, spiritual and temporal, and all spiritual and temporal, and all other our subjects. Whatsoever to whom these presents shall come.

whom these presents shall come. Greeting. Know ye that we of our especial grace, certain knowledge, and mere motion, in pursuance of the Life Peerages Act 1958, and of all other powers, in that behalf us enabling do by these presents advance, create, and prefer our advance, create, and prefer our trusty and well-beloved Alan trusty and well-beloved Alan Patrick Vincent Whitehead commander of our most excellent order of the British Empire to the state degree, British Empire to the state degree, style, dignity, title and honour of style, dignity, title and honour of Baron Whitehead, of Saint Mary's in our city of Southampton.

And for us, our city of Southampton. And for us, our heirs and successors do appoint, give and grant unto him the said give and grant unto him the said name, state, degree, style, dignity, title and honour of Baron Whitehead, to have and to hold unto him for his life. Willing and by these presents granting for us our heirs and successors, that he may have, hold and possess a seat, place, and voice in the parliaments and public assemblies and councils of us, our heirs and successors within our United Kingdom, amongst the Barons, and also that he may enjoy and use all the rights, privileges, pre-eminence, immunities and advantages to the degree of a Baron duly and of right belonging, which Barons of our United Kingdom have heretofore used and enjoyed, or, as they do at present, use and enjoy.

In witness whereof we have caused these our letters to be made patent witness ourself at Westminster, the 19th day of November, in the fourth year of our reign, by warrant under the King's sign-manual.

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I, Alan Lord Whitehead, do solemnly, sincerely, and truly solemnly, sincerely, and truly declare and affirm that I will be faithful and bear true allegiance to His Majesty King Charles, his to His Majesty King Charles, his heirs and successors, according to
11:13
None Portrait Oral questions: Water and sewerage companies as consultees on nationally significant infrastructure projects
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The The Lord The Lord Frost The Lord Frost oral The Lord Frost oral question

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The Lord Frost oral question Baroness McIntosh of Pickering. I beg leave to ask the question, standing in my name on the Order
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None Portrait Oral questions: South Western Railway: performance since nationalisation
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Second oral question Lord Strathcarron. My Lords, I beg leave to ask the question. Standing in my
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None Portrait Oral questions: Compensation awards to victims of child grooming scandals
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Lord O'Neill question Baroness Nicholson of Winterbourne standing.
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Lord Coaker Portrait Lord Coaker, The Minister of State, Ministry of Defence (Labour)
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Well, as.

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A as I've said, the the nuclear Non-Proliferation treaty is an essential part of the government's policy. We remain committed under that treaty to the aspiration of a nuclear free world, which may seem a long way off at the present time, but that's the aspiration that we have. All I can say with respect to have. All I can say with respect to this is to reiterate again, the complete commitment that the government has to the nuclear government has to the nuclear Non-Proliferation treaty to the meeting next, next year in New York.

meeting next, next year in New York. And what we want to see is, as I say, that conference being a success. But let me be saying, the success. But let me be saying, the UK remains an active participation in all of the nuclear Non-Proliferation treaty forums. I Non-Proliferation treaty forums. I think alongside the commitment to maintain for as long as it's necessary, and nuclear deterrent. I necessary, and nuclear deterrent. I think the commitment we also have to that nuclear non-proliferation treaty is important as well.

And I

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treaty is important as well. And I think that's good UK government policy. My Lord. That concludes our

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My Lord. That concludes our questions for today. Any members who wish to leave the chamber may who wish to leave the chamber may

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I I have I have Lords.
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None Portrait Business of the House
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I have Lords. We now come to some instruments previously debated in Grand

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Committee. Broadcasting (Independent Productions) Regulations 2025.

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Productions) Regulations 2025. And two other motions the Baroness Twycross.

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Baroness Twycross. My Lords, with the leave of the House, I beg to. Move the motion. Standing in my

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Move the motion. Standing in my name on the Order Paper. En bloc. The question is that the three motions in the name of Baroness motions in the name of Baroness Twycross be agreed to en bloc as many as are that opinion will say content the contrary not content. content the contrary not content. The contents have it Merchant Shipping (Marine Equipment)

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Shipping (Marine Equipment) Regulations 2025 the Lord Hendy of Richmond Hill. My Lords, I beg to move the

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motion. Standing in my name on the Order Paper. Question is that this motion be agreed to. As many as are of that agreed to. As many as are of that opinion will say content the contrary not content. The contents contrary not content. The contents have it. Infrastructure Planning (Business or Commercial Projects) Amendment Regulations 2025. The

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Baroness Taylor of My Lords, I beg to move the

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My Lords, I beg to move the motion. Standing in my paper. Question is that this motion be agreed to. As many as are of that agreed to. As many as are of that opinion will say content the contrary not content. The contents have it questions. On a statement
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Lord Davies of Gower Portrait Lord Davies of Gower (Conservative)
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from within their own ranks and implement them. There is another welcome truth that the Home Secretary has implicitly accepted that up to now, the government's measures to tackle illegal migration have failed. The Border Security, Asylum and Immigration Bill, which we have spent many hours debating in this House, is woefully inadequate to deal with the issue. My Lords, it is a shame that it took the government so long to realise this, but we are where we are. We will now have to have another immigration and asylum bill next year, because the government are too slow to reach the logical conclusion that their plans are not working.

These new announcements are at least a tacit acceptance that that bill did not go anywhere near far enough to seriously tackle small boat crossings. There are a number of proposals here that are very similar to amendments I tabled at Report stage of the Border Security Bill amendments the government completely opposed. It is heartening to see that they have finally come round, but it might have been easier for all of us if the government had compromised earlier. For example, the government opposed my amendment to create third country removal centres.

The noble or the Minister criticised that for wanting to rehash the Rwanda policy, but that is a complete falsehood. The Rwanda policy would have sent illegal migrants to Rwanda, where their asylum claims would be processed. The amendments I brought to the border security bill would automatically reject that asylum claim brought by an illegal migrant, and then return them to either their home country or a safe third country. Their claims would not be processed in Rwanda, because they would never be allowed to make the claim in the first place.

That amendment was about having safe third countries where we can send failed asylum seekers and illegal migrants who cannot be returned to their home country. Now, in their policy statement, the government says, and I quote, we will continue to explore the use of return hubs which are safe. Third, countries that failed asylum seekers can be sent to instead of their country of origin. Negotiations with a number of countries are ongoing, unquote. This is precisely what we were pushing the government to do, and I am pleased they have announced they will look to send failed asylum seekers to safe third countries.

But this could all have been much easier if they had come to this conclusion earlier. The government have also announced changes to the appeals procedure. The statement says that the Home Office will create a new appeals body staffed by professional, independent adjudicators. They do not, however, mention whether this appeals body will run alongside the first tier tribunal, Immigration and Asylum Chamber or replace it. So could the noble Lord, the Minister, please clarify this? Are the government going to be running this new body alongside the judicial appeals tribunals? If so, how would they decide whose appeal is heard before which body? Or are they proposing to abolish the Immigration and Asylum Tribunal and replace it with the Home Office review body? If so, then that was exactly what I proposed by way of amendments 46 and 47 to the Border Security Bill, 128 peers voted against that report on the 5th of November.

If they had changed their mind on this, it is very embarrassing, to say the least, and disappointing for them to vote against that proposal and then come up with something very similar. Lord Low, the Home Secretary, has claimed she is following the lead sent by set by Denmark, but this is only a partial truth because Denmark requires asylum seekers to prove full time employment for several years before they qualify for permanent residence, the government's plans extend the waiting time to get indefinite leave to remain to ten years.

Once a person's refugee status has been granted and they entered legally, this would be 20 years for those who entered illegally. But this does not impose any conditions. Theoretically, a person could enter illegally, languish on benefits for 20 years, and then be granted the right to indefinite leave to remain. Whilst I am pleased to see asylum status become temporary, and for anyone whose home country becomes safe to be returned there, it is absolutely wrong that a person could enter illegally and still be allowed to remain, especially given the government's opening of new safe and legal routes.

If we are to have legal routes for refugees, then we absolutely cannot reward those who enter illegally. That will make even more of a mockery of the whole system. Why would a person bother to apply for the legal route if they know they can board a boat and be allowed to stay here? The government needs to follow this plan to its logical conclusion and ban asylum, human rights and protection claims from any illegal migrant. Finally, the plan to reform article eight is all well and good, but the government has to know that this will not be enough.

Whilst we have the Human Rights Act in force and our party to act, we will face the same barriers to removals that we do currently. Reforming the interpretation was simply allow crafty human rights lawyers to find innovative new ways to circumvent it. Only a wholesale repeal of the Human Rights Act and withdrawal from the can finally remove the legal barriers to deportation. The government has started moving in the right direction, as my right hon. Friend, the Leader of the Opposition said, we will support the government in making these changes, but I do fear that there will not be enough and that the government will end up coming back to us next year with further changes.

If they simply accepted that fact now, and we were to go even further with these changes, it would save us all a lot of time down the line.
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Lord German Portrait Lord German (Liberal Democrat)
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My Lords.

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I am minded. To think of the. Title of that great film, The

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Title of that great film, The Good, the bad and the ugly, and I'm afraid these proposals have all three within it. And I.

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And I. Just want to go through some of those, starting with the positive. We do support. The.

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Government's intent. To bring order in the asylum. System, and we welcome. The announcement of new. Capped

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The announcement of new. Capped safe and legal routes for refugees. These pathways. With security checks and controls.

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controls. Are the correct. Way to. Fulfil the UK's responsibility to those. In need.

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In need. Confirmation that the government will not leave the European welcome. As is.

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The recognition that early legal advice should be a core part of the advice should be a core part of the appeal system. Moving on to the the. Impractical the argument that asylum seekers should contribute is asylum seekers should contribute is undermined when they are denied the means to earn their way. Denmark means to earn their way. Denmark allows asylum seekers to work after six months. Why is the government persisting in stopping asylum persisting in stopping asylum seekers from working when there is no evidence that this is a pull factor, we question the assumption of the UK as a magnet, given that we receive far fewer asylum seekers per capita than our European neighbours.

Home office analysis itself found that asylum seekers have little to no understanding of welfare policies before arrival. Shared language, diaspora communities and perhaps even colonial connections are the primary drivers for asylum seekers taking irregular routes to the UK. Can the UK government provide evidence rather than simple assertion in this matter, revoking the duty to support risks, creating more destitution and pushing more asylum seekers towards illegal working and exploitation? What assessment has been made of this risk? What action is the government taking to avoid passing the financial strain onto already struggling local authorities? The use of immoderate language is also unhelpful and risks stoking division.

Why does the government feel the need to create a whole new asylum appeal structure? Why not simply expand the existing system? My Lords, the most severe criticisms target the core protection model and its administrative fallout. Poor protection requires a status review every 30 months and delays permanent settlement for 20 years. In my view, both unnecessary and cruel. This prolonged state of instability will inhibit successful integration by making it difficult for refugees to secure tenancies, employment or higher education.

The Home Office is currently struggling with a backlog, yet this policy would impose what has been called bureaucratic Magnus, requiring a huge increase in capacity to review the status of an estimated 1.45 million people by the end of 2035, potentially costing £872 million. Does the government accept these figures, or has it alternative ones, to offer? Scrapping the refugee family reunion route pushes children and spouses into the hands of smugglers, directly contradicting the goal of safe migration.

Has this risk been assessed? How long? How will the long term separation from family impact the refugees ability to contribute and reduce their reliance on state support? Will the government be detaining and deporting children who were once accepted as refugees, but subsequently not so when their home country is deemed safe? Given that Denmark's temporary protection scheme clearly failed to result in returns for Syrians, how does the government justify the massive cost and profound uncertainty imposed by the UK version? What's the timescale for these changes? When will they be implemented and how long and what method will be used to implement them? And finally, does the government agree with the report in the newspaper that deport deportations will be retrospective? I quote from the newspaper, it means that if a refugee has not already been granted indefinite right to remain before the Home Secretary's new legislation comes into force, they will be deported if their home country is subsequently deemed safe by the government.

I look forward to the government's responses to these questions. questions.
12:10
Lord Hanson of Flint Portrait Lord Hanson of Flint, The Minister of State, Home Department (Labour)
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Here Lord Dobbs report.

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The Lord Brooke Lord Davies of Gower and I'll try and answer his questions. First of all, I'm grateful for where he has welcomed grateful for where he has welcomed the proposals from the government, and I remind him that the reason we're undertaking these reforms is we're undertaking these reforms is we have inherited a very broken system, a system which has been in operation now for 14 years, where operation now for 14 years, where the number of asylum claims has risen, where the backlog has grown, where the deportations have not where the deportations have not existed, where they are rightfully proposed to exist.

And we have a proposed to exist. And we have a duty on behalf of the British people to take some difficult decisions to sort this out. Now he mentions that the border security bill, which we have completed bill, which we have completed passage by one Commons amendment, has not been effective. Let me remind him that we have introduced remind him that we have introduced a border security commander who has negotiated deals with France, negotiated deals with Iraq, negotiated deals with Iraq, negotiated deals with the Germans, has been put on a legal footing by this bill.

We have put extra this bill. We have put extra measures in place to support penalties for people smugglers, which will now be, once royal which will now be, once royal assent is achieved in place, to actually take some further deterrent effects on people deterrent effects on people smugglers to end that vile trade, we put in place mechanisms to stop the use of boats, and the manufacture and use of boats to seize engines and to do other things which, once the Royal assent is agreed, will be in place.

So I don't accept his contention, first and foremost, that the border security bill, about which we placed many hours of discussion is pointless. But I have to say to him that, you know, the government has to keep these issues under review. There is self-evidently a broken system, which is why we've put in place additional people to speed up the backlog. And these measures before the House today in the statement will be brought forward in legislation, are subject to consultation, but will also look at a range of other issues we need to take to fix the system we've inherited from the noble Lord and his political party.

Now, he may not like that. I don't want to politicise that. I want his support for this. But we've had to take those steps because of where we are, and I think that is reasonable. And the support he has given for some of those steps are particularly good. Now. He's mentioned, for example, the tightened criteria. I think it is fair and proper that if a country is deemed safe after two and a half years, that the individual concerned is encouraged and supported to return to that country, or as is in this proposal, can apply for a different route through work or study to get permanent residence downstream.

But if the country is safe, then it is perfectly reasonable to look at how we can remove that individual in the proposals. There is tackling increased enforcement on illegal working. I think it's perfectly reasonable to actually put some pressure and heat into the system to tackle people who are being employed illegally, to look at increasing the checks, increasing the right to work checks, providing digital ID requirement, which I suspect he will oppose to ensure that there's mandatory right to work checks and collaboration to verify companies.

I think that's reasonable. I think it's reasonable to look at return hubs, not Rwanda, not £700 million being wasted, not two people being removed voluntarily, but to discuss proper return hubs where people don't have safe countries, but where their asylum claims have failed. And I think it's perfectly reasonable to remove people whose asylum claims have failed because their asylum claims have failed. That is perfectly reasonable to do. I think it's perfectly reasonable to do what we're doing in this proposal to speed up assessment and appeals.

He asked about the first tier tribunal. We're going to put extra hours into the first tier tribunal, and we're going to ensure that we look at improving the legal system to get appeals dealt with and tribunals dealt with much more quickly. I think it's reasonable. And this is again, where we'll have a bit of blue and red water between us. It's reasonable to actually be committed to the European Convention of Human Rights, to be committed to legislation to uphold human rights, but actually to say, if you want to look at how we can tweak that, to make sure it acts in the interests of our country, at the same time as being part of our international obligations, which is where we are.

He wants to leave those conventions. I don't, the government doesn't, but we need to make sure we make them work in a better way to deal with this issue. I think it's reasonable for us to do all of those things, and I hope and look forward to his support on them. Now, again, I welcome from the noble Lord German his welcome. It's been overlooked in this, but there are safe and legal routes that we want to develop as we have done, for example, and bespoke schemes potentially, as we have done for Iraq and for Iraq.

Sorry for, for the for, for Ukraine and also for Syria. There are bespoke routes that we can develop. There are safe legal routes that we can look at in this statement. My right hon. Friend, the Home Secretary has said that we wish to to look at doing that. We are committed to human rights, but we are committed to looking at these particular issues. We will encourage people to look at the work route, if necessary, for safe and legal routes and work routes, and we will ensure that there are a range of other issues to examine.

Now he takes he takes issue with the the core protection issue that we have before us in this proposal here. I think, again, it's reasonable, given that where we are to look at how we can ensure that those people are assessed very quickly within two and a half years, 30 months, if the country is safe for return, they can return. If not, let's get that asylum claim approved. Well, let's get that asylum claim rejected and the individual then returned.

I think that is reasonable proposals. I think it's reasonable that we look at family reunion, but I think it is also reasonable that if individuals and he asked about child deportations, I don't want to see child deportations. But what I want to see is if people have failed their asylum claim or if indeed they are a foreign national offender, of which we have many languishing in UK jails at the moment, that we find mechanisms to return those individuals fairly and properly to the communities if they are safe or if not, to look at the issue that we've talked about here, about an alternative holding establishment at the moment, all of this will be consulted on.

And he asks again about when and how this will be brought in. There will be legislation brought before both houses of Parliament at a point to be determined. And the consultation will take place. But I ask all those noble Lords who may and ladies who may criticise the proposals, is are they happy with the status quo? Do they think the status quo is a good place to be? I think nobody in this room, in this chamber will will say the status quo is a good place to be and therefore my objectives with the Home Secretary in the Home Office is to look at ways in which we can maintain our international obligations, welcome genuine refugees and asylum seekers, but also speed up a broken system to make sure it works effectively.
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Lord Hanson of Flint Portrait Lord Hanson of Flint, The Minister of State, Home Department (Labour)
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I'm grateful to my noble friend. Well, what we're seeking is international reform. To the application of article three. We're going to work with partners to reform the application of the prohibition on inhuman or degrading treatment. Now, that means that we do have to discuss with our partners and get joint agreement. But it's an objective. The government is committed to. It's one that will be tested. It'll be in our consultation in due course. And on article eight, we will bring forward primary legislation with a definition of family life for the purposes of article eight.

And that will be legislation will be subject to scrutiny, but it will be within the spirit of maintaining our commitment to the European Court of Human Rights application. I think there are fair and legitimate objectives, and I hope that my noble friend will, in due course, support them.

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Thank you. Ended by saying that her reforms were designed to bring unity where others seek to divide.

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I think. My greatest worry about them is that making refugee status only that making refugee status only temporary and subject to review and deportation every 13 months will deportation every 13 months will have the opposite effect. It will not bring unity. It will not encourage community, it will not encourage integration. And it isn't very British. The Attlee government very British. The Attlee government didn't try to deport Lord Dubs in didn't try to deport Lord Dubs in 1945.

The attempt to send round 1945. The attempt to send round south London trucks, generating hostile environment and telling people to go home, was called off people to go home, was called off very quickly because of the public revulsion. I remember being formed revulsion. I remember being formed to see the crowds in Glasgow blocking the streets to prevent the blocking the streets to prevent the deportation of their neighbours. I have two questions for the for the
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Lord Hanson of Flint Portrait Lord Hanson of Flint, The Minister of State, Home Department (Labour)
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Let me try and answer. I think three broad issues within that, if I may. The first is the reduction in time from five years to to 30 months. That is not a at the end of 30 months you are deported. That is, at the end of 30 months, an assessment will be made as to whether, going back to the noble Lords point, the country that you've come from is deemed to be safe. Now again, I hope and this is the the purpose of speeding up other measures in this, that we don't have long backlogs on asylum claims in the first place, because parts of the problem of why people are waiting five years and beyond is because the asylum claims are not met.

And again, from our perspective, if asylum claim can be met and speeded up, then a decision is taken to grant asylum, in which case the individual has asylum again, admittedly with a longer period for final settlement, or they are removed from the country under a deportation route. So the purpose of that is to try to again put some energy into the system to get that speeded up very quickly. He's asked about safe and legal routes and the annual cap. Now the Home Secretary is going to examine this and consult on this as part of the proposals.

But I think it's perfectly reasonable to try and set an annual cap in discussion with where our refugee convention and other obligations are to see whether or not, you know, what can the country bear in terms of housing support and everything else in that annual cap is based on community capacity. And then we can, in my view, as we as we want to do, look at safe and legal routes that help support individuals to come here rather than using the illegal routes, which are, I think, across the house, universally condemned.

And we will maintain the flexibility that we've got for things like the Ukraine scheme and the Gaza scheme, because we don't know yet if I'd have been putting this before the House six years ago, we wouldn't have been talking about a Ukraine scheme. Who knows what's going to happen next. We retain our international obligations to do that. Now. Again, he's asked about retrospection. That will be part of the discussion and that will be part of the consultation that that takes place. But legislation will be brought forward which will address what happens going forward.

And that will be subject to tests by both houses of Parliament. by both houses of Parliament.
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Lord Harper Portrait Lord Harper (Conservative)
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Forward to.

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This statement. There's not a word in it that wasn't true. On the day he became Prime Minister.

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day he became Prime Minister. So it's it's. Just welcome. The government's got to where it's got to. And the noble. Lord.

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Lord. The Minister, referred to our record. My recollection is every time we propose tough things, they time we propose tough things, they were opposed by the party opposite. I don't remember us ever being challenged because we weren't being tough enough. But my question is tough enough. But my question is this having read through the statement carefully and the policy document, there are a number of document, there are a number of measures that require changes to the immigration rules, which is obviously secondary legislation.

But there are a number, as has just But there are a number, as has just been referred to, that will require amendment to primary legislation. And certainly my sense of the Home And certainly my sense of the Home Secretary's demeanour is she feels this is a very urgent matter to deal with. So can I ask the deal with. So can I ask the Minister, has the legislation been drafted and is it ready, and when is it going to be introduced? Is it is it going to be introduced? Is it going to be introduced in this session to carry over, or is it going to have to wait until the next session of Parliament? If it's
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None Portrait Legislation: Sustainable Aviation Fuel Bill - second reading
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Second Reading of the Sustainable Aviation Fuel Bill. The
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Lord Hendy of Richmond Hill Portrait Lord Hendy of Richmond Hill, Minister of State (Department for Transport) (Labour)
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this bill be now read a second time. I am pleased to present the Sustainable Aviation Fuel SAF bill for Second Reading today. My Lords, firstly, I'd like to welcome and congratulate the Right Reverend Prelate and the Lord Bishop of Chester on making his maiden speech in your Lordships' House today. I look forward to hearing his contribution to this important debate, and to his many contributions in the months and years ahead. If we are to be an outward, confident trading nation that is connected to the world and leading the way on innovation, we must move as fast as we can towards a greener, cleaner future for flying.

Domestic transport accounted for 29% of the UK's greenhouse gas emissions in 2023. Aviation is currently the second largest contributor and faces unique barriers to decarbonisation. By 2040, it is set to overtake road vehicles as transport's largest emitter. SAF will be key to decarbonisation, a drop in solution that can be used today in today's aircraft. With today's infrastructure, SAF also has huge economic benefits with the wider low carbon fuels industry potentially supporting up to 15,000 jobs and contributing up to five £5 billion to the economy by 2050.

SAF is not the only measure that we are supporting to address emissions in the aviation sector. The government is supporting the development of more efficient and zero emission aircraft technologies, and announced a further billion pounds of funding for the Aerospace Technology Institute to help spur green aerospace innovation. The Civil Aviation Authority, supported by my department's funding, is shaping regulations for zero emission aircraft through its hydrogen challenge. Alongside this, we're advancing airspace modernisation to enable cleaner, quicker and quieter journeys.

The government is also establishing a UK airspace design service with the Civil Aviation Authority and the National Air Traffic Service Nats, who are working together to launch this by the end of the year. Turning to aviation fuel, the government, alongside industry, is working collaboratively to ramp up the UK's SAF industry. 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 came into force on the 1st of January this year.

We've also invested £63 million in 17 projects through the Advanced Fuels Fund, which will drive growth, support good jobs and deliver emissions reduction. The Revenue certainty mechanism RCM introduced in this bill is a scheme designed to support the UK to support UK SAF production to drive growth and opportunity across the country. It addresses the lack of clear, of lack of a clear and predictable market price for SAF. One of the biggest constraints on investment in UK SAF production. The RCM builds on the established precedent of contracts for difference in the renewables sector.

Under the RCM, a SAF producer will enter into a private law contract with a government owned counterparty, which sets a guaranteed strike price for SAF. If SAF is sold sold for. Under this price, the counterparty will pay the difference to the producer. If SAF sold above the price, the producer will pay the difference to the counterparty. It is important to emphasise that no final decisions have been taken on how the strike price will be determined. The RCM contracts must set a strike price that finds a balance between securing the appropriate protection for the producer and its investors, whilst also providing value for money for the scheme and wider sector.

This is a new and emerging market. This will be the world's first SAF RCM and it will de-risk SAF projects by addressing barriers to investment in a nascent market that is using innovative technologies like similar schemes in the low carbon electricity sector. This will help provide a greater certainty of future revenue, help attract investment into first of a kind SAF plants, and support growth and opportunity across the country. Turning to the piece of legislation, there are four key areas of the bill.

Firstly, the bill will enable the Secretary of State to designate a counterparty that is wholly owned by government. Secondly, the Secretary of State can direct the counterparty to enter into private law contracts with SAF producers, guaranteeing a price for the sale of eligible SAF over a period of time. The mechanism is there to support the development of a first of first of a kind plant by increasing investor confidence, whilst first of a kind plants are likely to be more expensive than future plants, supporting them allows for future cheaper plants to get constructed and start producing SAF.

The contract allocation process will be designed to maximise competition, with all contracts to be underpinned by robust technical and commercial due diligence. To ensure that successful projects represent value for money. Thirdly, this bill will enable the Secretary of State to make regulations imposing a levy on suppliers of aviation fuel in the UK to fund the RCM. This will allow the to collect a levy to cover the costs of issuing payments under contract scheme. It is right that the costs of decarbonising air travel should at least be partially borne by the aviation sector, rather than the taxpayer.

We are levying aviation fuel suppliers because placing the levy higher up the supply chain spreads cost across the sector, and because aviation fuel suppliers will benefit from the greater volumes and lower prices for SAF that the RCM will create. The RCM will only provide support if SAF is actually being produced. If a project fails, then there's no obligation on the government to provide support. Whilst novel technologies can have a higher can have high failure rates, we can support multiple technological technology pathways to minimise risk and strengthen the UK's project pipeline.

Fourthly, the bill will also enable the Secretary of State to enforce certain provisions imposing financial penalties. Secretary of State may impose a financial penalty on a person that fails to comply with levy levy regulations, or fails to comply with requirements under regulations made that ensure any paid out surplus is used to benefit fuel suppliers customers. This is a comprehensive and focussed bill that lays the foundations for a thriving UK SAF industry by delivering investment certainty, cutting emissions and securing the long term sustainability of the aviation industry.

More SAF supply and lower prices are good for the aviation sector and ultimately good for those who wish to fly. This bill is an essential part of securing our world class aviation sector's future, and we want them to do it sustainably. I look forward to engaging with my noble

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Lords on this piece of legislation. I beg to move. The question is that this bill
12:47
Lord Davies of Gower Portrait Lord Davies of Gower (Conservative)
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be now read a second time. My Lords, it's a pleasure to contribute to this debate on the contribute to this debate on the Second Reading of the Sustainable Aviation Fuel Bill and your Lordships' House. And I should perhaps begin by declaring an interest as Vice-Chair of the aviation All-Party parliamentary Group. I don't intend to make a lengthy speech, but I do want to touch on the essential ingredients, the of the bill. And that, of course, is the introduction of a revenue certainty mechanism to support the production of sustainable aviation fuel in the UK.

We know, of course, that the government currently imposes a mandate on the aviation industry that 2% of aviation fuel used in the UK must be SAF. This target is set to rise to 10% by 2030 and 22% by 2040. Somewhat ambitious, I believe, but nevertheless it is the target. I've met and spoken with representatives of all aspects of the industry at their request. Over the last year. Airport owners, airlines and SAF producers to name but a few. They all have one thing in common, and that is a genuine desire to see the introduction of lower carbon alternatives to conventional aviation fuel, which is, of course, very encouraging, particularly when you look at some of the other sectors.

And worthy of mention, perhaps, is that on the domestic front, in 2022, the Royal Air Force and industry partners carried out the world's first 100% SAF flight in an RAF Voyager and Airbus project, which I might add, with wings constructed in Wales. We know that most of the SAF currently produced is HEFA based SAF, that is to say made from hydro rated esters and fatty acids, hence the acronym HEFA. This is derived from oils and fats such as cooking oil. A 2025 market report produced by companies in the sector stated that globally, 82% of SAF current capacity relies on HEFA technology, which is limited by available feedstocks.

Moving forward, we look to second and third generation SAFs from solid waste and other materials. The Climate Change Committee, the independent advisers to the UK government, Climate Risk, said in its 2025 report to Parliament that SAF supply was sufficient to meet the government's current SAF mandate, that 2% of aviation fuel must be SAF. However, it said meeting the government's 10% target by 2030 was uncertain as production of different forms of SAF would need to scale up. The Climate Change Committee said SAF producers must now start to diversify away from HEFA based forms of SAF.

If the 2030 target was to be achieved. Which brings me on to the main points that I wish to raise with the government today. I believe that this bill will be successful if it includes the necessary provisions to protect existing SAF production in the UK and maintain its competitiveness in the international market. There are a number of global renewable companies who are in the process of developing techniques to produce low cost, low carbon SAF who have chosen to conduct business here in the UK.

And I know this to be true because I've met with them and they see the UK as a convenient climate in which to operate. Coupled with the SAF mandate already in force, this can make the UK a leader in green aviation fuel production. But if the government is serious about building a UK SAF industry and capturing the green jobs and fuel security benefits of doing so, the revenue certainty mechanism needs to be introduced at pace. Other major economies are moving ahead with their own plans to support domestic production, particularly in Europe, through the EU's Green Deal industrial plan, which provides billions of euros in incentives.

And if the UK policy incentives do not keep pace with these markets, this will at best delay production and at worst mean companies move their global hub and associated production facilities overseas. So I ask the Minister, how seriously does the government take the need to move at pace to retain companies developing SAF in the UK? And does he agree with me that if SAF production is to be viable for developers, then they will require early access to the designated counterparty for revenue certainty mechanism negotiations ahead of the bill's ratification, but also was keen to attract foreign investment.

Can the Minister say what steps the government are taking to ensure that grants from the advanced field funds are being directed to support British technology? And finally, can I ask the Minister what assurances can the Minister give to the travelling public that the government's estimated impact of ticket prices of between -150 to plus 150 is accurate? International Airlines Group commented during the Committee stage. In the other place that some elements have not been included in the calculation, noting the cost would be nearer £10.

So I look forward very much to the

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Minister's response on those points. My Lords, we. Do look. Forward to.
12:53
Lord Russell of Liverpool Portrait Lord Russell of Liverpool (Crossbench)
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Forward to. The maiden speech from the Bishop of the Noble Prayer, right reverend Prelate, the Bishop of reverend Prelate, the Bishop of Chester, and we welcome him to the House. My Lords, we are generally supportive of the measures in this Bill. We have some concerns about areas of government policy that lie beyond the scope of the bill, and we have a few questions about the details. To put this bill in its legitimate context, it will help reduce CO2 emissions from aviation.

But it is not a magic bullet alone. It is not a sustainable answer to the challenges that we face. Aviation is, of course, one of the hardest sectors to abate and is one that is expected to show continued and rapid upward growth. Aviation, my Lord, is critical to our economy and our way of life. It moves some 240 million international passengers and 2.4 million tonnes of freight each year, adding one, adding £14 billion GVA to the UK GDP The industry also supports 1 million associated jobs and £4.2 billion in associated passenger duty aviation.

My Lords accounts for 7% of the UK carbon emissions, but this figure is due to rise significantly to 11% in 2030 and 16% in 2035, unless decisive action is taken on a broad range of fronts beyond the scope of this bill, we will not meet those targets. My Lords, net zero 2050 is not optional. It is imperative we on these benches do not wish to challenge any UK's family's right to a holiday. I want to be clear that the more it needs to be done and that we have concerns about over expansion of our airports on these benches.

Sorry to be clear. When we debate this bill, we need to be clear that 15% of people in this country take 70% of the flights taken, and we need to change that. The climate change Committee was clear in 2023 when they said that SAF alone is a risky strategy. My party would reform the Air Passenger Duty to target the most frequent flyers. We would ensure that we have an escalating passenger duty so that those that fly most frequently pay more.

We also oppose overexpansion of the airports, particularly in the South east. This government has chosen to take a different path, and it will be for them to balance this path of increased airport expansion against their climate change commitments and targets. Therefore, we welcome the bill, but we note the caveats that we have. SAF is widely considered as the main available pathway available today to decarbonise our aviation SAF can cut the lifecycle emissions by up to some 70% compared to conventional jet fuel.

It is, as we heard, a drop in tech fuel that can be used alongside existing aircraft and infrastructure. The SAF mandate, passed last year, starts at 2% and rises to 10% by 2030 and then to 22% in 2040 from 2040, obligations will remain at 22% and unless there is greater certainty of supply, the SAF mandate could, it is claimed, deliver up to 6.3 megatonnes of carbon savings each year by 2040? On these benches, we welcome the revenue certainty Mechanism.

This will serve to strengthen investor confidence and unlock significant capital investment in the production facilities that are necessary to be based here in the UK. It allows for that long term stability and long term contracts through the guaranteed strike price. And as the Minister have said, this is a mechanism that's been widely used in renewables sector and we know that it works. It will provide certainty to these suppliers. The approach is logical. The industry will stand to benefit from cheaper SAF, and it will also spread the cost widely throughout the industry.

We recognise the UK's approach and the long term mandate, and the proposed revenue support, and the degree of certainty that it will provide to help with this transition. Indeed, the UK is seen as an example of best practice, with ambitious targets and support mechanisms. Establishing a home-grown low carbon fuel sector will bring significant jobs and benefits to the UK industry and the wider society. Can I ask the Minister to update the House on the progress of negotiations that are ongoing, with industry running parallel to the bill? And can I ask the government further when they'll be able to provide details on how the strike price will be set and what mechanism will exist for adjustments? When does the government anticipate that the first contracts will be signed? My Lords, while we welcome this bill, we stress that staff SAF is only a first step.

It's not merely blending fuels, it is also seeking alternative, more sustainable, climate friendly options for the longer term. And that needs continuous investment and innovation in the next generations of technologies, which include battery electric and hydrogen fuelled. The bill sets the policy framework, but crucial details are left to subsequent negotiations. We have several key several key questions regarding the bill's ambition, scope and technical design. The SAF mandate requires 22% of jet fuel to be sustainable by 2040. But I ask the government this means that 78% of fuels will still be polluting just a decade before our net zero deadline.

So can I ask the government how they will achieve this target? In addition, the European Union has a higher target of 70% by 2050. So what action will the government take to bring further alignment, not just with our EU partners, but also more internationally? We also have some concerns about the SAF and feedstocks and the amount of cooking oil that's imported. Imported. It is important that we have a reliable domestic supply. We note also some concerns about bioethanol and the closure of plants, particularly the Virgo plant in Hull and impact of US trade deal and subsidies on US ethanol.

So we are concerned about potential for future bioethanol plant closures. What consideration has the government given to the inclusion of intermediate cover crops such as catch and cover, and scalable feedstock outside of the HEFA cap to expand the resource base with with competing, without competing with food markets? We believe that the transition to a sustainable aviation industry must be strategically linked to our existing industrial base. So can I also ask the government what actions they are taking to use to to see the existing industrial plants are brought back into use to, to make sure that the planning system is fit for purpose and ensures that these plants can be brought online quickly.

While the government is committed to undertaking a comprehensive assessment of these industrial sites to see that they're brought back online, given the importance of public trust and accountability, transparency is paramount. The funding levy should also not be placed. Undue financial burden on air travellers. So can I ask the government what impact and what review they'll have to ensure that the levy does not include further burdens on air travellers? How will the government in. Sorry? Finally, for the sake of public accountability, can I ask, is the government amenable to ensuring that the the airlines report publicly on their use and the amount of staff that they're supplying? We broadly welcome this bill, but this bill alone is not a sustainable long term solution, and

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we call for greater monitoring, transparency and openness. Yeah.

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Yeah. My Lords, I declare my. Interests as a chief engineer working for Atkins Wireless and co-chair of legislators for nuclear,
13:01
Lord Ravensdale Portrait Lord Ravensdale (Crossbench)
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co-chair of legislators for nuclear, and also look forward to the main speech of the Right Reverend Prelate, the Bishop of Chester. I do support the bill with the caveat that costs to consumers of these measures must always be front and centre with all of the freedoms that cheap air travel has opened up to people from all backgrounds in recent decades. But I do accept that there's a strategic need to invest in the long term sustainability of aviation fuel for the UK, and that we do need a revenue certainty mechanism alongside the the mandates.

So, my Lords, three, three broad points that I have to make. My first point is around the definitions within the bill of fuels that are eligible for the revenue certainty mechanism. So if we go to clause 16 that defines sustainable aviation fuel as aviation fuel, that is renewable transport fuel and renewable transport fuel is then defined in the same clause as anything that is or is treated as renewable transport fuel. For the purposes of chapter five, part two of the Energy Act 2004, and it refers to sections one, three, 1d and one three, two.

Now, my Lords, I propose the amendment to the Energy Act 2023 that led to 1.3 1d, which treats recycled carbon fuels and nuclear derived fuels as renewable transport fuels, and this amendment was therefore a key enabler for this bill and enabling support for second generation and types of third generation SAF. However, this does require secondary legislation to take effect and treat these fuels as renewable transport fuels. This hasn't been completely done for the surface transport, renewable Transport Fuel order, for it's only been done for recycled carbon fuels, but has been done for the sustainable Aviation Renewable Transport Fuel Order.

So my Lords, we do have quite a convoluted legislative route here between various acts and between secondary legislation. So can the Minister please confirm that recycled carbon fuels and nuclear derived fuels are within the scope of the revenue certainty mechanism as outlined in this bill? Because clearly recycled carbon fuels are going to be very important near term and over the medium to long term, nuclear could well be a significant source of synthetic fuels due to the potential economic efficiency it brings to hydrogen production, whether that's high, high temperature electrolysis with the current pressurised water reactor plants, and looking further ahead, the sulphur iodine cycle in advanced high temperature nuclear plant.

My second point, my Lords, is around the powers that the government is taking in the bill. Now, the government has clearly stated that it does not intend to offer contracts for first generation SAF based on HEFA, hydrogenated esters and fatty acids. So I wonder if this should therefore be stated in the bill. The government should only take on the powers it needs. Given that this bill is a framework for the long term. So I believe that the powers in the bill, or there is a case that the powers in the bill should be limited to second and third generation sustainable aviation fuels.

I don't foresee any good reason why HEFA fuels would need such support. So I believe this could be clearly stated in the bill. My third point, my Lords, is around value for money and competition. Now, we rightly heard a lot of discussion in the other place around cost consumers and the analysis on the the £1.50 impacts on airfares. The Minister clearly stated we need to get the right balance between investors and consumers with the prices that are negotiated.

But another way of looking at this, my Lords, is on the competitive structure within the bill. Now, of course, the way the bill is structured around bilateral negotiations rather than a competitive process is what is needed for the the SAF market at this stage, noting its immaturity, an auction process such as that which we have for offshore wind isn't perhaps appropriate at this stage. However, this bill does need to be fit for the longer term. My Lords, competition is the way to drive down costs for consumers in the long term, and this has been demonstrated in more mature markets such as offshore wind.

So longer term, we we do need that mechanism for auctions and competitions within the bill. But looking through the bill, I can't see a mechanism for setting up such a competitive process. So in other government legislation, for example, the Energy Act 2013 for CFDs for renewable energy generation, that clearly states provision may by regulations may include provision for the determination of a matter on a competitive basis. And we also have that in the Energy Act 2023 for low carbon hydrogen, which also clearly states provision falling within subsection may include provision for the determination of a matter on a competitive basis.

And this bill makes no provision for regulations to cover the determination of a matter on a competitive basis, or indeed for allocation frameworks. So I would be grateful if the Minister could state whether, in his view, a competitive framework is covered by the Bill as written and if not, whether it it should be because the bill should be fit for the future to avoid the need for future legislation in this area and structured to minimise cost to consumers, which in the end will be enabled through competition.

Now, my Lords, I would make one final point. This bill will go a long way to realising second and third generation SAF production in the UK, but the government does need urgently to address broader challenges as well, not least our high industrial electricity prices. I've spoken to a number of companies who want to set up SAF plants, who want to set up related infrastructure in the UK, but they simply can't make the numbers stack up when our electricity is four times as expensive as competitors such as the USA.

This is a very energy intensive industry. So alongside the measures in this bill, we need to address the fundamentals also to ensure that we're being fair to consumers and that we're minimising required subsidies. So I hope the government will think about the broader framework as well, and not just see this as a problem

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to be addressed through subsidies. My Lords. I thank. You. For your. Warm welcome.
13:08
Lord Bishop of Chester Portrait The Lord Bishop of Chester (Bishops)
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Warm welcome. Although I confess that sustainable aviation fuel was not the subject I imagined I would be the subject I imagined I would be addressing. When various of you have given me advice about maiden speeches. I am grateful, though, for your wisdom, for your warmth, and for your welcome, and especially that of the doorkeepers and staff of this House. It seems perhaps I should have taken you rather more literally when you said I would be working with high flyers,

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and rather less literally, when you pointed out that not everything was rocket science. Oh.

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Oh. I speak, my Lords, as one born almost 2500 miles from where we sit. almost 2500 miles from where we sit. Indeed, the first serious journey of my life was by air back here to the UK. I'm also a father and like the UK. I'm also a father and like the rest of this noble house, entrusted with passing on entire to entrusted with passing on entire to the next generation, this good earth sustainability matters. The good Lord provided us with many good Lord provided us with many things, but a spare planet was not among them, at least in this age.

And it is this balance of pragmatism that means I speak largely in support of the bill. On largely in support of the bill. On the one hand, we need to be real about air travel being vital to modern life. It builds community, modern life. It builds community, enables encounter, and it crosses divides. My own diocese, that of divides. My own diocese, that of Chester, serves communities in two nations and 23 local authorities. nations and 23 local authorities. It spurns urban spans, urban and rural wealth and extreme poverty.

rural wealth and extreme poverty. We gaze at the universe from Jodrell Bank. We support half of the Mersey's industrial life. We the Mersey's industrial life. We rejoice in our schools and in Chester University, and we cherish our world renowned zoo. Indeed, according to the I newspaper this morning, we also have Warrington, which may be Britain's hardest working town, who knew all our part of the life of the diocese. From the newest migrant to the most established amongst the Cheshire set, from those who take penalties on the sporting field, to those who serve a very different type of penalty.

We are linked to the world both by Liverpool Airport, which is in the Diocese of Liverpool, just across the River Mersey, and Manchester Airport, where you actually land in the Diocese of Chester, but disembark in the Diocese of Manchester. And my Lords, to repeat myself, the Diocese of Chester touches two nations. I serve a border people, just as I did in my former see of Berwick upon Tweed in Chester. We have several parishes which are all or partly in Wales, my Lords, or as I should say, the ugly.

We are doing right now. I apologise for my lamentable Welsh accent, but I am learning a little bit of Welsh because, well, partly because I carried on with Duolingo long after lockdown. But much more importantly, communication is a vital gift for those of us who nurture and curate community and in communication. We need to learn to speak and to listen, and that is almost always best done in person and directly. Indeed, I would argue that one of our primary vocations in this noble House is to be with and to listen for.

Few disciplines are more vital in the search for wisdom, and that is the search I so often witness in your Lordships' House. The question for me is not so much how we can be great again, but how we can be present and kindly. Present greatness is great, but grace is greater. Air travel does more than build community. It enables partnership and commerce. It is a vital part of the defence of our nation. As I witnessed when offering chaplaincy to our armed forces, it is the backbone of much international aid provision and it enables care for people and the planet.

Chester Zoo, for example, serves ecosystems around this world and the relative ease of transport is one factor in this. My own experience working in the university sector showed just how much journeys matter in the service of education. Air travel is vital and it is here to stay, but its environmental impact must be addressed, which means that net zero matters. But it's not the only sustainability consideration. Mike Berners-Lee points out when ostensibly discussing the environmental impact of bananas, that the problem is not only emissions, but where they are released.

Sustainable fuel is far from carbon neutral, and whilst it shortens the life cycle of released carbon in the sense that it releases carbon, which is only recently being captured, it also moves that carbon into the upper part of the atmosphere where they are most harmful. So I welcome this bill's creation of an economic framework framework in which SAF becomes a viable investment. I welcome the balancing of the use between investment by directing costs towards those who make use of the service, in effect, taxing flights to enable more sustainable flights seems very sensible to me by itself, though I argue that this bill does not do nearly enough.

The move it encourages from first to second, and then vitally to third generation SAF is essential. Hinet, in which the University of Chester is a partner, which makes use of the geology and the industrial infrastructure in the northwest, is one other expression of this kind of investment. The production of green hydrogen, which combines captured carbon with sustainably electrolysed hydrogen, really is the holy grail here. Although learnt any budding and noble theologians note that I do not use that term in a technical sense.

Alongside this bill, we must invest in rail and environmental road transport if we are to progress to sustainability. It cannot be right, to my Lords, that well over half my return trains from this place to my home in Chester seem to be delayed or cancelled. I would like to ask the noble Lord, the Minister, what the projected timescales are for substantive provision of third generation SAF, and whether consideration is being given to roll out this technology beyond aviation.

This bill, though, helps us play our part in global well-being in every sense. The question with which I come to this House is not so much how we make Britain great again, as I mentioned earlier, but rather how we make Britain kind again. Such kindness and responsibility is what leads to greatness in a manner which actually lasts and which embraces all. And in this, this bill matters. Our infrastructure must line up with our fundamental identity and our core vocation if we are to thrive.

My Lords, this bill represents one structural step, but it's a step in the right direction, and I support it.

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In my Lords, I rise to. Welcome this Bill and to commend the government for bringing forward
13:16
Lord Raval Portrait Lord Raval (Labour)
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a serious and long awaited framework to decarbonise the sector that accounts for an ever rising share of, the Minister said of our national emissions. But before I turn to aviation fuel, an altogether more uplifting and sustaining subject commands our attention. It is an extraordinary privilege and an honour to congratulate the Right Reverend Prelate. The Bishop of Chester on his outstanding maiden speech, a contribution that displayed the wisdom, moral seriousness, humour and quiet authority with which he will flourish in the work of this house.

If I may declare a personal interest, long before he was a bishop, the Right Reverend prelate joined a senior Faith in leadership programme that I directed across residences with rabbis, imams, priests, business leaders, medics and public servants. I observed firsthand the depth of his character. He remained firmly rooted in his own tradition while offering genuine friendship across boundaries. In our digitally recorded conflict simulations designed to test even the most devout, he kept his cool, listened with generosity, mediated with a humility that enabled others to shine.

And, as I recall, he won. I learned then that although he had read mathematics at Cambridge, with every conventional avenue of worldly success open to him, he could not escape a deeper calling to ministry. As warden of Cranmer Hall and vice principal of Saint John's, Durham. He nurtured generations of leaders and equipped them to grapple with exactly the kinds of questions he has raised a few moments ago about community, purpose, presence and belonging. His recent doctoral thesis offers a further window into his nature a pastor scholar, attentive not to abstractions, but to how real people grow, collaborate and serve.

In it, he explores the call to integrate a leadership that is rooted ultimately in love and, in the words of the Right Reverend prelate himself, a combination of spiritual, emotional, rational and pragmatic intelligence reflecting a relational understanding of humanity. My Lords, we mark. We meet. As was underscored by the previous debates immediately before this one, and indeed this one. We meet in a time marked by a by polarisation, disaffection, a growing distance from once trusted institutions, and the unsettling acceleration of trends intensified by digital habits, including, regrettably, the amplification of hatreds that distort our public square.

The Right Reverend prelate brings precisely the countervailing gifts this moment requires not only the intellect, analytical clarity, logic and tech savviness to address these forces. He's really brainy, but the pastoral breadth to speak, as he reminded us only moments ago with the communication and genuine connection needed both for those who share his convictions and for those who feel unheard or left behind. It is often communities whose social anchors have shifted, who can be drawn towards simpler, louder narratives.

The right reverend Prelate offers instead an approach. That sees diversity not as a difficulty to be managed, but also including a tapestry of human intelligences to be woven for the common good. Such leadership is not merely timely, it is essential. We look forward to, and indeed need the Right Reverend prelate statesmanship in this House. So if I may now turn briefly to the bill before us, the Sustainable Aviation Fuel Bill, working alongside the SAF mandate, provides clarity and confidence.

Industry has long sought, with first of a kind plants costing between £600 million and £2 billion and typically running at a loss in their early years. The Revenue certainty mechanism. Is a critical enabler of the investment this industry requires. This is precisely the sort of pragmatic, investment led policy that creates jobs, strengthens supply chains and positions the United Kingdom to lead in clean aviation technology. But ambition must meet delivery. Industry modelling suggests that announced UK SAF projects may deliver only around half of the volume required under the 2030 mandate, unless further policy and investment steps are taken.

Meanwhile, total UK greenhouse gas emissions, including aviation and shipping, amount to approximately 414 million tonnes of CO2 equivalent. Aviation will not decarbonise itself, and this bill helps ensure that the UK does not fall behind while others race ahead. I therefore strongly support its direction of travel. My question to the Minister concerns the feedstocks that will power this transition. As has been said, many early SAF pathways rely on using used cooking oils, industrial residues and critically black bin bag and other residual wastes.

As we rightly reduce such waste and increase recycling, how does the government's modelling ensure a stable, sustainable and ethically sourced supply? And how will Ministers balance emerging SAF demand with existing waste to energy plants and local authority waste reduction targets, so that one green ambition does not inadvertently undermine another?

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Om Shanti. Om it's it's. A particular pleasure to to
13:23
Lord Grayling Portrait Lord Grayling (Conservative)
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A particular pleasure to to follow on from, I thought, a very well articulated tribute to the right reverend Prelate, and I'd like to offer him my congratulations as well for a very well made, a very thoughtful and very appropriate maiden speech. He will undoubtedly make a major contribution in this House, and I think all of us welcome him to this place. Let me also start, ironically, by also referring to my entry in the Register as an adviser to Atkins, as well as to Hutchinson.

But it's a particular pleasure for me to speak in this Second Reading debate. Two years ago, I was responsible for an amendment to the then energy bill, which mandated the government to set up a revenue support mechanism for sustainable aviation fuel in the UK. I stopped after getting 56 conservative signatures on the amendment, which proved enough just about to finally jilt the government and particularly the Treasury, into action and starting a process which has brought us to this point today.

And I'm glad that I'm also going to be speaking alongside my noble friend, who followed on from that by playing a significant part in delivering us to the point we're at today. Lord Harper, another example of why this is a genuinely bipartisan bill the debates, differences, discussions about the detail. But there has been strong support across all sides for the principles that underlie the bill recognised they needed to do something. And I'm very pleased that Ministers in the current government have continued the work that we started and has delivered this piece of legislation which I strongly support, albeit with some caveats and questions, which I want to push the Minister on today and in committee.

And subsequently, I do think there are some things that need to be tightened up and some questions that need to be answered. But the principle, I think, is absolutely right. And for me, the reason this all matters is very simple. The aviation industry is under growing pressure over its carbon footprint. Now, whether you are an opponent of net zero, whether you're a supporter of net zero, to my mind is completely irrelevant to this debate. This is actually about the market pressures on the airlines themselves, and particularly from a younger generation of of potential customer, where flight shaming has become more visible.

And so the industry has got to address those concerns, and we have to help them address those concerns and to help them address the industry's impact on the environment. So it's not just about politics, it's actually about what is commercially necessary for what is one of our most important economic sectors. And of course, that is why Virgin Atlantic, Boeing and Rolls-Royce collaborated on the groundbreaking transatlantic pioneering flight using sustainable aviation fuel two years ago. We were both on that flight.

It was a very unique experience, and it's why also, I know that most of the industry strongly supports this legislation. It's why the last government brought forward plans for the SAF mandate, and why this government continued to introduce the mandate at the start of this year. So why then, do we need a revenue certainty mechanism of the kind set out in this bill? Our airlines could just buy stuff from overseas. The initial product being used in this country is almost certainly going to come principally from the United States.

Well, there are two very good reasons why this bill remains necessary. First of all, our aviation sector is, as I say, a key part of our economy. It's the strongest sector in Europe. It's it's fundamental to our region's, to the economy of so many different parts of the country. Do we really just want to import the fuel it needs for the future, or is it better to encourage serious investment here of the kind that companies like Alfen are planning for Teesside, like parts of the country that clearly wants and needs investment? Even in a world of free markets, sometimes I really think we need to make sure that we do some important things for ourselves, and I think we can have a successful SAF sector in the UK which brings investment and which creates jobs.

But SAF plants require a very large amount of capital, and investors are always cautious about new markets and developing technologies. The truth is, the first plants in the United States, of which there are just a handful, received investment support from the Biden administration. The EU is poised to introduce its own revenue certainty mechanism. The Minister was right to say that ours is the first in the world, but it's not going to be the last. So it comes down for me to a straightforward choice.

Do we want a SAF industry in the UK, or do we just have to depend on imports? And I don't think we have to. My view is that we do need that industry in the UK, and I really strongly support this bill as a result. But there's also another reason for caution about buying SAF from elsewhere. I think the UK approach is much smarter and much better in the United States. SAF is being produced primarily from corn in the EU. SAF will be produced for what is called, we heard HEFA.

In other words, basically used cooking oil. I absolutely do not support growing fuel in fields that can be used for growing food. I've long been uneasy about the practice of growing crops for purposes other than food, but I think it is mad to use the space that the world needs to feed itself to grow aviation fuel. The UK has right also to accept, I think for now, that HEFA will be needed for the time being. But also we need to understand that it's not going to be there forever and it's right that its future use is capped.

There are serious question marks about the availability of HEFA, and the suggestion is also there that it's often not really used cooking oil at all, but near virgin oil that has been doctored to create the semblance that it has been used in a kitchen. And of course, much of it comes from the Far East and South. Mandates are going to spread there, too, and so there is absolutely no certainty of supply going forwards. So the UK's approach, which has been to push quickly towards SAF produced from biowaste, of which we have quite a lot here already.

And then of course, of course, in due course from municipal waste has got to be the right one to me. Now this really is the nirvana around sustainable aviation fuel. If we can turn our waste what we put in our black bins each week into fuel oil, removing the impact of landfill and incineration and the rest, that has got to be a good thing. But I do have a question for the Minister, and this is the first of the points I want to put to him.

There are rumours around the government wants to allow first generation saffron crops here. I really hope that is not true. And I'd ask the Minister to set that one to rest by confirming there are no such plans. We should not be growing agricultural crops to turn into fuel. Now we've taken a said, a much smarter approach in this country to deliver aviation fuel that has a positive environmental impact. We must not see that compromised in any way. And then there are a number of other issues I have with the bill that I want to put to the Minister, issues that I want to see addressed in the debates ahead of us, and at least one which I'm very committed to asking the government or this House to put on the face of the face of the bill.

My first concern is about how the levy is applied on conventional aviation fuel manufacturers. I know that the government's initial intent was to assign the levy based on the previous year's market share. I genuinely do not think that approach is viable. It misses out the impact of changes in the composition of the market, which could mean a new player facing a period without charges and able to undercut the existing market. The levelling up process that then will come way down the track after a long period of time when there had really been a price discrepancy between the two and a competitive advantage, the newcomer.

And also, if someone disappears from the market and we've seen two refineries close in recent times, such a delay would also cause complications for the counterparty. So I do think that the mechanism to apply the levy has got to be immediate. I mean, I don't really understand why it can't just be done per barrel of fuel as it leaves the refinery or as it leaves the terminal. And I think the Minister needs to explain to all of us why that can't happen.

And I appreciate that's going to come in secondary legislation, but I think we really do need to understand how it's going to be applied, and it's got to be done in a timely way. It can't happen way after the event. I was grateful to the Minister for spending some time with me and allowing his officials to spend some time with me, and I know they've thought about this, but I do ask him to to to put now some of the government's thinking on the record about this so we can understand where it's going as we go through the bill.

My second concern is there's got to be a direct link between the commencement of the levy and the opening of the first SAF plant. Now, we don't realistically expect the first plant in the UK to be operational much before 2030, and so the levy can't start until close to 2030. Otherwise we'd be raising money which passengers are paying more for and just leaving it sitting in the bank. So it's really important that there has to be a a clear linkage between the arrival of SAF manufacturing in the UK and the application of the levy.

And actually, when we're talking about time frame, one other thing I'd just ask the Minister to consider at the moment, because the fact there's not an awful lot of SAF capacity anywhere in the world, what we mustn't do is be applying the mandate on a ratchet scale up to 2030, in a way that is detached from the reality of the availability of SAF in the marketplace. So I would ask him to keep monitoring the mandate as we go towards 2030 and make sure we're not actually out of kilter with the availability of SAF for the airlines to actually put in their planes.

Third concern I'd ask the Minister to address. There has got to be no legal doubt whatsoever that the proceeds of the levy will only be used to support investment into the manufacturing of SAF in the UK. There's just got to be a proper safeguard against any other part of government going, oh, that's some money there. We'll have that for something else. It does happen. It has happened in other countries, in similar areas. We need that certainty in the bill. But the thing I think is the most important addition to the bill, and I'd really ask the Minister to go away and think about this, because I think it must be in primary legislation.

So there is no doubt in the courts going forward. There has to be absolute certainty that the revenue support mechanism is only going to be used for the manufacturing of SAF in the UK to support the production of SAF in the UK. There's got to be no legal doubt about this, no loopholes whatsoever. And the Minister knows the government already knows that there are loopholes out there. There are people trying to take advantage of those. Governments already had to stop one multinational in the hydrogen marketplace from benefiting from UK financial support, while planning to produce part of its product in the Middle East.

It would be relatively easy for a manufacturer of SAF to import an intermediate fuel into the UK, processes e-SAF and claim the benefits that the RCM would offer. The legislation has got to be absolutely categoric that cannot be allowed to happen. So what I'm after is the bill to say very explicitly that any certified fuel that is a component of SAF has to be manufactured in the UK, and that only the feedstock can be imported. Of course, there'll be times if we buy Biowaste from other European countries that's perfectly reasonable.

But we can't produce is a kind of three quarters finished fuel that you just adjust and turn into SAF at the end and claim that should benefit from the from the revenue support mechanism. So only the feedstock will I countenance being imported. And hopefully as we see the move towards urban municipal waste and even sewage turned into fuel, even that will not be necessary. But that's really, really important that we have that on the face of the bill. Courts do strange things. They interpret laws in in different ways, the ways that sometimes those in Parliament don't expect or don't want to be the case.

We've got to have absolute certainty on that in primary legislation. And I mentioned this now to the Minister ahead of committee to give him advance warning that I really do want to explore this in detail. So, my Lords, I believe this bill to be essential to the UK benefitting from a new industry that we have ourselves mandated as central to one of our most important sectors. It makes no sense to tell airlines to buy SAF, but then ignore the opportunity to produce it here and let other governments incentivise their own investments and their own industries instead.

I'm very glad that both the last government on this one accepted the intent behind that amendment two years ago, and I look forward to seeing this bill pass into law. But our job in this House is to make sure it needs no loopholes, and then to encourage the government to get on with the secondary legislation. So the contracts and the constructions can begin as quickly as possible. Here.

**** Possible New Speaker ****

I rise to support this bill. I'm not often I'm not often known to be not often I'm not often known to be supporting aviation, but this one is the first time there's been a is the first time there's been a serious attempt to reduce the carbon emissions, and at the same carbon emissions, and at the same time, it'll also can be used to help the millions of households across Britain who actually don't have access to gas.

I spoke about this in in the debate in the energy
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Lord Berkeley Portrait Lord Berkeley (Labour)
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oil. But, my Lords, there's 1.7 million homes in the UK serving about 4 million people that are off the gas grid and only rely on heating oil. Now, there'll be heating oil. Now, there'll be suffering at the present time when it's really cold. And then the mostly in the rural community areas, mostly in the rural community areas, which alternatives such as heat pumps. Well, they work sometimes, pumps. Well, they work sometimes, but not always, but what's come out but not always, but what's come out of the recent debate is that HVO hydrogenated vegetable oil is a hydrogenated vegetable oil is a renewable fuel that can cut emissions from home heating by up emissions from home heating by up to 88%, compared with kerosene that's used at the moment.

And it works as a drop in replacement. You just tip it in the tank as I don't know, because I haven't tried it, know, because I haven't tried it, but the the reason for my bringing it up again this morning is that. HBO is a by-product. It's only about 30% of the output from SAF. And as SAF production goes up, we can increase the domestic supply of h o. The Ministers have rightly said that HEFA HBO will play will play a vital role in our aviation decarbonisation journey, and I certainly agree with it, but it looks as if the SAF mandate will accelerate that growth from I think it's about 2% of jet fuel demand today, rising to 10% in 2030 and 22% in 2040.

And that's enough HVO to provide a 66% or so blend of heating oil, which will sort out the decarbonisation needs of most off grid homes. So especially at this time of year when it's really cold, it's just something this is a benefit not only for the aviation industry, but also for people that live in the countryside or can't connect to alternatives. And my Lords, just we need the right mechanism, as other noble Lords have spoken about.

Section 159 of the Energy Act 2023 gives the government the power to create a renewable liquid heating fuel obligation, which is mirrors from what the Labour government did with the Transport Fuel Obligation last time. I was really pleased, therefore, to read an announcement from the government on Tuesday this week about a consultation on this. And I know that the industry, this is the industry that provides the SAF and other similar material working with off grid customers, has built up a considerable bank of evidence and data to show that this policy will actually benefit both the consumers and the environment.

So I hope now that the consultation will allow things to move forward at pace. I was interested to read that the Irish government recently confirmed its intention to implement a renewable heat obligation, confident that their feedstocks are available to supply its off grid homes. And that's terribly important, as the noble Lord Sewell Lord Grayling was referring to. If there's enough feedstock, then it'll it'll work. The market will work. So, my Lords, I think this is an opportunity to deliver a win win.

Cleaner skies and warmer homes. And I do hope that my noble friend will discuss this with his new, I think, new ministerial colleague, Lord Whitehead Lord Whitehead, who we introduced today, who's got a lot of experience to the confirm the Irish government's conclusion and to commit to implementing section 159 swiftly following the consultation. And on that basis, I hope we can have a win win solution for aviation and home heating.

**** Possible New Speaker ****

My Lords, I welcome the right reverend Prelate of Chester and I was absolutely delighted to hear
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Baroness Jones of Moulsecoomb Portrait Baroness Jones of Moulsecoomb (Green Party)
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was absolutely delighted to hear him remind the House that there is no spare planet because quite honestly, the rate at which we humans are trashing our planet suggests that we actually do think we can go to Mars or do something spectacular like that and still live a good life. And I'd like to point out that if we destroy this very beautiful planet, or make it less and less beautiful, less and less diverse, that means our lives will be utterly constrained as well.

Now, I do like to say something nice about the government occasionally, if I possibly can, and I noted the noble Lord, the Minister's statement at the start saying, you know, this aims for a greener, cleaner future for aviation. That's a very noble aim. But of course it's impossible, I'm afraid, unless we radically rethink how we're going to deal with it. About 25 years ago, when I was on the London Assembly, we London Assembly members and the mayor had who was Ken Livingstone at the time, had a presentation by Heathrow.

They promised, remember, this is 25 years ago. They promised they could could become sustainable within a few years. They claimed they should be given permission to expand because they would soon be polluting less. Now. It took us a couple of years, but the mayor and the assembly soon realised that Heathrow had lied. It still lies about expansion and pollution. It lies about how important it is to the economy and about how much public subsidy it gets. The truth is that the aviation industry cares about profits, not the environment.

You can no more have sustainable aviation aviation than you can have a crocodile with a conscience. It just doesn't exist. There's absolutely no techno fix for the pollution that aviation causes. The Royal Society worked out that to reach net zero for aviation fuel. Is this what we're calling jet zero? So snappy we need at least half the UK's agricultural land to grow the raw materials. And that would be over two thirds if farmers only grew rapeseed. Now that means less wheat, less barley and fodder for livestock.

That means higher prices for cereals and food. We already have food inflation due to floods in some areas and droughts in others. Last year, the 2025 UK harvest was the second worst on record. If the government wants farmers to grow jet fuel instead of food, then prices in the shops are going to rise in order to keep the planes flying. As we enter the era of climate crisis impacting on world food production, our country will have less farming land but will want more of it devoted to support the oxymoronic idea of sustainable aviation.

In the past 25 years, the UK has lost 770 100,000 hectares of farmland, contributing to a 12% fall fall in food self-sufficiency. That decline is about to get worse with the disastrous planning bill the government has passed. I love the effort going into expanding renewable energy and battery storage, but as the climate committee pointed out, that doesn't stop aviation becoming the number one contributor to emissions in the next few decades, this government has lost all claim to be a green government, with its attack on nature in Britain and with its decisions to expand aviation.

The go ahead for the expansion of London City Airport, Luton, Gatwick and Stansted means an extra 51 million passengers per annum. If the government adds Heathrow to that total, then that's an extra 65 million passengers. If all those extra flights resulted either extra emissions or in extra farmland taken up growing jet fuel, that means rising food prices and more public subsidy. Of course, the reality is that we won't switch two thirds of our farming land to jet fuel. This whole bill is greenwash, designed to provide political cover for aviation expansion and their bigger profits.

The real solutions are to tax private jets and the ultra frequent flyers, to stop short haul flights and make train journeys cheaper and more reliable. The solution is less flying. Not this fiction of sustainable aviation. I am not trying to somebody over here said flight shame people. I think that it is understandable that families want to go on holiday once a year. But as the noble Lord there are, Russell pointed out, 70% of flights are taken by 15% of the population.

Now, that suggests that those people are grabbing their unfair share of the pollution that we can each expect to produce. And so I really would like to ask the noble Lord, the Minister, if he doesn't approve of making train journeys cheaper and more reliable and actually putting a tax on private aircraft and on frequent flyers. I did say to the owners of Heathrow 20 years ago, much to their annoyance, if you want to show how environmentally you are, then go ahead fix the major problems of noise and air pollution.

Stop ruining the climate. And once you've done that, then and only then can we have a conversation about expansion of airports and of aviation. And I'm so disappointed with this government that it can't see that I recognise they feel the need to go ahead and explain that aviation can go on just as it is, and just as it has been in the past,

**** Possible New Speaker ****

but that simply isn't true. My Lords, first of all, let me declare my interest as a non-executive chair of Rvl Aviation. non-executive chair of Rvl Aviation. And then I also want to add to congratulate the right reverend Prelate on his excellent maiden Prelate on his excellent maiden speech. I thought I did think before he started, I was wondering before he started, I was wondering whether he was going to set out the Church of England's policy on sustainable aviation, and I was pleasantly surprised by the excellent contents of his speech, and I look forward to his further contributions in the House and the.

The bit I will remember is his particularly remember is his particularly remember is his injunction to be kindly present, which I think is something we should all strive to do. And if I
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Lord Harper Portrait Lord Harper (Conservative)
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should all strive to do. And if I ever require a referee or someone to provide a reference for me, I will think of the noble Lord Lord Raval and who spent, I think, most of his speech. Rather than talking about this bill saying fantastic things that the right reverend Prelate would have been too humble to have said himself. And he painted a a very rich picture of the right reverend Prelate skills. And I look forward to, as I said, his contribution in the future.

The noble Lady, Lady Jones will not be surprised to know that I disagreed with almost every word of her speech. Just on on flying. She she did reference. The ability of people to go on holiday. I think we had a very interesting test case during the pandemic when we not not for this reason, but we effectively told people they couldn't fly. And it was very clear from my experience then as a member of Parliament, listening to constituents, the breadth of the reasons that people value aviation, the right reverend Prelate, the Bishop of Chester touched on some of them about bringing people together, enabling people to see friends and family around the world.

It's not just about holidays, it's about bringing people together. And I also don't share the noble Lady's distaste for frequent flyers. Most, most of the people that do frequent flying are people who are involved in business, involved in investment globally, involved in growing both the British and the global economy. And that is essential to generate the wealth that we will need to green the economy and to make it more sustainable. We're only going to have public acceptance of a lot of this if we also make people better off.

And so I think it's incredibly important that we support flying. We enable more people to fly. I want people who currently don't have the opportunity to fly, both in the United Kingdom and globally, to have the chance to do so. But, but, but where I do agree with the noble Lady is we absolutely need to do that in a sustainable way, and that will be done by the use of, of technology. And I'll just move on to the subject of this bill in a moment.

But it's also worth just saying that there are actually a range of technologies that are available. And it's interesting that the aviation industry that's airlines, airports, the aerospace sector that are involved in developing the technology and manufacturing the planes are I think I was I was surprised when I was Secretary of State, the unanimity across the industry about the importance of sustainability and decarbonising it. We never had any arguments with the industry or had to try and push them in this direction.

They were already there and moving at pace, and I found that incredibly encouraging. So there's technology around hydrogen fuel cells, and innovative companies like Zeroavia are based in the United Kingdom who are working on that technology, which will be available in the future. There are companies developing will. Come on. I'll talk about SAF in a minute. There are also companies working on electric planes. There's also the important work that the government's doing on airspace modernisation that we kicked off when I was Secretary of State.

That's also going to make a contribution. And in order to get to net zero aviation, we will also for the bit, you can't abate this technology in terms of the planes. We will also need to use carbon capture and storage. And I know a great deal of work is going on in that space as well. And the government, I was very pleased, carried on. Its slightly renamed it, but that's a minor detail but carried on with our Jet Zero Council, which they now call the Jet Zero Taskforce, which brings together the industry and government and academia, and also, importantly, representatives from the Climate Change Committee who provide helpful advice to the Jet Zero Taskforce, but also therefore learn about where the technology has got to to inform the advice that the Climate Change Committee then provides to the government.

And so that is very welcome on sustainable aviation fuel itself. My noble friend Lord Grayling referred to the VS 100 flight that Virgin Atlantic put on, funded by them, but also supported by a contribution from the the taxpayer as a result of a competition run by my my my predecessor. That flight took place in November 2023. It captured an enormous amount of public interest and attention. It was one of the rare occasions that I was able to do the morning round from Heathrow Airport, standing in front of the plane.

Great backdrop, but also had a really good response from broadcasters who found the whole thing very interesting. Had done great explainers for the public to explain some of this technology and and wished us well with the endeavour, which is not something that broadcasters usually did to government Ministers who were doing the morning broadcast round. But it was also it didn't just capture attention in Britain, but it actually captured attention around the world. And when I was then shortly afterwards went to the climate change conference, Cop 28, I was able to speak about that particular flight, and it was a very good example of Britain leading the way in this area and demonstrating the value of technology.

We then introduced or started the introduction and developed and did the consultation of the SAF mandate, which is effectively providing the demand side of the equation for sustainable aviation fuel. And I'm very pleased again, that the present government has been an enormous amount of continuity in policy in this area and have continued with that approach. On the supply side, the Minister referred to the excellent work being done by the Aerospace Technology Institute, which I would also support. And in terms of the domestic production of sustainable aviation, fuel, the capital cost of that which has been referred to, including by my noble friend Lord Davies of Gower, has been supported from the Advanced Fuels Fund.

And I think the third round of that has recently taken place. The first round happened when we were in government, and I'd be interested if, in his winding up speech, if the Minister can provide us with an update, perhaps on where those the development of those plants has got to and when we might see my noble friend Lord Grayling suggested one time frame for that, and Davis as well. The Minister can give us an update on progress in this area, and it would be helpful as well, if he set out the value, which I think my noble friend Lord Grayling touched on the value the government places on domestic production of sustainable aviation fuel.

And I think part of the case for that, there's a national resilience case, because again, we saw during the pandemic, countries, regardless of the contractual obligations that businesses had very much protected their domestic supply of this sort of fuel. And you can very quickly find that your reliance on getting this from overseas rapidly dries up. So I think actually having some domestic resilience is actually very important. And I'd be grateful if the Minister set out the government's view.

Now, turning to the purpose of the bill specifically, which is the revenue certainty mechanism, my noble friend Lord Grayling touched on this, and I remember very clearly his what I might term his rebel amendment to force the pace on this. And it was it was good that he provoked that debate. Now, I have to confess, I took quite a bit of persuading when I was Secretary of State about the need for the revenue certainty mechanism. And I'll just say a few words about that, because I think it's it's helpful, I think, imposing some questions to the Minister, both here and when we get to committee.

So I was very clear when the industry was lobbying for it. And indeed, my noble friend, I was very clear. I wanted to understand what the market failure was that we were trying to fix with the revenue support mechanism. And I think we've ended up with a clear enunciation of it. In the explanatory notes for the Bill. And the Minister touched on this in his opening remarks about the need to develop first of a kind technology that's not currently in existence, which requires a significant amount of capital and is a very high level of risk.

The caveat, though, is when I had some of these discussions in some roundtables, both here and in the United States with with some of the investors, they understandably quite like the idea of some guaranteed demand for a mandate. And they also quite like the idea of guaranteed pricing through a revenue certainty mechanism. And I did gently point out to them that they do have to take some risk in this process in order to justify the return. And so I think the trick here is not to remove all risk, it's to get the risk to the level of comparable investment projects, so that we make sure that you get appropriate levels of investment.

But what we've got to guard against is what's happened in some of the rest of the energy sector, where you get very long run contracts guaranteeing returns to investors that are higher than are strictly necessary, with the costs being paid for by the consumer. And it's very important that when the detail work is done here, that we get the balance right between getting the investment in the domestic SAF production, minimising the cost to the consumer and getting the length of those contractual terms right.

And I don't pretend that's easy, but it's going to be very important to do that. So I think at committee we will be having a discussion. I think about how you how you design the levy obligations on the fuel suppliers. And my noble friend Lord Grayling touched on some of the detail questions around there, how the levy interacts with the UK's emission trading scheme, the Corsia scheme that's been set up internationally, and the EU scheme, and particularly as the the the free allocations expire for aviation under the Emissions Trading Scheme.

There is an argument that is made by some that actually it's it's payments under the emissions trading scheme that should be used to fund sustainable aviation fuel plants, rather than creating yet another obligation. And I'd be interested if the Minister set out how he and the government see those schemes interacting with each other to make sure that consumers are paying more than once. The final point I wanted to make is just to raise the point that was also touched on by my noble friend Lord Grayling about the composition of sustainable aviation, fuel and the international dimension.

For this. Now it's quite right, and I agree in principle with what Lord Grayling said about not using food crops or land that could be used for food crops to produce a SAF. But there is one thing that I think we do need to be realistic about, which we maybe shouldn't have to, but we do. There is a big lobby in the US which my noble friend touched on that wants to use corn ethanol for SAF. And now normally I would be very much against that.

The only argument in favour of it is whether it may be necessary to engage the US administration, which isn't enormously well disposed towards sustainability and net zero about what international agreements we may need to have with them. Because I think it's really important in this area to keep the United States administration broadly aligned, given that aviation is, by definition, an international industry, it's going to be quite difficult to decarbonise the industry if the United States is heading in a different direction.

So I'd be interested to know what discussions the British government's having with the United States government about trying to keep them in this space, and whether and what sorts of discussions are going on with fuel providers. That would be the only argument, I think, for using food crops for this. If by doing so, it meant that we could keep the United States in this place. But in summary, my Lords, I strongly support aviation. I strongly support making it more sustainable. That will be done not by stopping people flying, but by using technology.

All of the technology, sustainable aviation fuel is the technology solution that's going to be available first. It's available now. The Virgin flight that I referred to demonstrated that you can have a 100% sustainable aviation fuel flight that works. It's a drop in fuel with existing technology and the revenue certainty mechanism that's enabled by this bill. If the design of it is correct, and we'll test some of that in committee, I think will help get that domestic production up and running.

So with those caveats, I support the bill and look forward to further debate in committee with the Minister. And I suspect, a number of the noble

**** Possible New Speaker ****

Lords that are here today. My Lords, first.

**** Possible New Speaker ****

I would like to add my congratulations to the Right Reverend Prelate for Bishop of Reverend Prelate for Bishop of Chester on his entertaining and informed speech. I think he should
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Viscount Trenchard Portrait Viscount Trenchard (Conservative)
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informed speech. I think he should moonlight and take a second job on the Climate Change Committee. It's a great pleasure for me to follow my noble friend Lord Harper, who rightly stressed that we should lead the way, continue to lead the way in developing new technologies, and perhaps the government could pay more attention to the absurdly high level of electricity costs in this country and the high levels of taxation. I thank the noble Lord, the Minister, for introducing this bill today.

I have been a frequent flyer for most of my working life and still travel regularly overseas, especially to the Far East. So I declare my interest to set out in the register, especially in connection with advising Japanese companies and British companies with regard to their Japanese business. My noble friend Lord Grayling knows a great deal about this subject and made a compelling speech. The rapid adoption of SAF is still broadly supported by the Conservative Party, but I believe the science have been shifting on the whole question of how quickly and at what cost businesses and individuals should be compelled to adopt a net zero and clean energy agenda.

In particular, if the larger carbon dioxide emitters such as China and developing countries in Africa and Asia are not imposing similar constraints on market forces in their countries, I think that logic suggests that we shouldn't do so either. It seems to me that the effect of the act is to distort the market for sustainable aviation fuel. I suspect that the cost of this distortion will ultimately be borne by consumers. The bill is about the creation of a revenue certainty contract, which will effectively insulate the quango which will be created as the counterparty from market risk.

I am very sceptical about the government's claim that the net cost per passenger of implementing the Revenue Certainty mechanism will be between -1.5 and plus £1.50 per passenger. How can this be possible if the cost of the SAF itself is going to be more like £10 per passenger? In any event, ticket prices have soared beyond our wildest expectations over the last few years. So whether the cost of the RCM amongst one cup of coffee or 100 cups of coffee isn't really relevant, my Lords, I'm also not certain that forcing an increase from 2% to 22% of the SAF component of aviation fuels over the next 15 years is likely to save the planet.

Could the Minister tell us whether the government will interfere with airlines freedom to refuel their aircraft in other jurisdictions at will, including those which have not imposed any mandate for inclusion of SAF, or which have imposed a less onerous The Minister to tell the House what evidence there is that fuel economy and, crucially, safety are not at all impacted by the quite steep and burdensome mandate imposed on an already challenged aviation sector. My noble friend Lord Davies of Gower, in his interesting speech, encouraged me to be more positive about SAF and to recognise its benefits and its importance.

But he did point out that the government's mandate will be difficult to achieve without diverging from HEFA based SAFs, and there is doubt about whether second or third generation SAFs will work well or not. There are more than 160 ships powered by small nuclear reactors, and the noble Lord Lord Ravensdale rightly drew attention to nuclear power as a potential source of power for aircraft. In particular, he pointed out that high temperature gas cooled reactors enable the production of hydrogen at scale, and hydrogen technologies are already capable of powering aircraft.

Airbus plans to have commercial hydrogen aircraft in service by 2035. Unfortunately, the government's hydrogen strategy doesn't recognise the role of nuclear in producing hydrogen at all. And I would ask the Minister why this is the case. Our Japanese friends are disappointed that we are moving so slowly with their project to develop the high temperature, gas cooled reactor technology with the National Nuclear Laboratory, and believe that Poland may be a better partner than we are likely to be.

My Lords, could the Minister tell the House about the counterparty? He is going to have a great number of powers to direct it. How many people will it employ, and what does he expect will be its annual cost of operation? This bill is designed to enforce a piece of industrial policy. Is the Minister certain that the counterparty will be well placed to manufacture SAFs competitively in this country, given our very high energy costs? Surely, my Lords, if either the taxpayer or the consumer is going to have to pay for the cost of the counterparty and its activities, it follows that the legislation should require the government to monitor costs, and the counterparty should be required to prioritise British technologies.

Could the Minister tell the House why the government declined to accept a perfectly reasonable and sensible amendment to require transparency over the
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