Sustainable Aviation Fuel Bill

Lord Davies of Gower Excerpts

Thursday 20th November 2025 Lords Chamber

[Lord Davies of Gower (Con)]

My Lords, it is a pleasure to contribute to this debate on the Second Reading of the Sustainable Aviation Fuel Bill. I declare an interest as vice-chair of the Aviation All-Party Parliamentary Group.

I do not intend to make a lengthy speech, but I shall touch on the essential ingredient of the Bill: the introduction of a revenue certainty mechanism to support the production of sustainable aviation fuel in the UK. We know that the Government currently impose an SAF mandate on the aviation industry whereby 2% of aviation fuel used in the UK must be SAF. That target is set to rise to 10% by 2030 and 22% by 2040—somewhat ambitious, I believe; nevertheless, that is the target.

I have met and spoken to representatives of all aspects of the industry, at their request, over the last year—airport owners, airline representatives and SAF producers, to name but a few. They all have one thing in common: a genuine desire to see the introduction of lower-carbon alternatives to conventional aviation fuel, which is very encouraging, particularly when you look at some other sectors.

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, an Airbus product with, I might add, wings constructed in Wales. We know that most of the SAF currently produced is HEFA-based: that is to say, made from hydro-processed esters and fatty acids—hence the acronym HEFA—that are derived from oils or fats such as cooking oil. A 2025 market report produced by companies in the sector stated that globally, 82% of current SAF capacity relies on HEFA technology, which is limited by available feedstocks. Moving forward, we look to second-generation and third-generation SAFs from solid waste and other materials.

The Climate Change Committee, the independent adviser to the UK Government on 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 that meeting the Government’s 10% target by 2030 was “uncertain” as production of different forms of SAF

“will need to scale up”.

The committee said that SAF producers must now start to diversify away from HEFA-based forms of SAF if the 2030 target is to be achieved.

That brings me to the main points that I wish to raise with the Government today. I believe that the 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. A number of global renewables companies are in the process of developing techniques to produce low-cost, low-carbon SAF, and they have chosen to conduct business here in the UK. I know this to be true because I have met them. They see the UK as a convenient climate in which to operate. Coupled with the SAF mandate already in force, this could make the UK a leader in green aviation fuel production.

However, if the Government are 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 SAF production, particularly in Europe through the EU’s green deal industrial plan, which provides billions of euros in incentives. If UK policy incentives do not keep pace with these markets, this will at best delay production and at worst mean that companies move their global hub and associated production facilities overseas.

I ask the Minister: how seriously do the Government take the need to move at pace to retain companies developing SAF in the UK? Does he agree that if SAF production is to be viable for developers, they will require early access to the designated counterparty for revenue certainty mechanism negotiations ahead of the Bill’s ratification? Also, while they are keen to attract foreign investment, can the Minister say what steps the Government are taking to ensure that grants from the advanced fuels fund are directed to support British technology?

Finally, what assurances can the Minister give to the travelling public that the Government’s estimated impact on ticket prices, of between minus £1.50 and plus £1.50, is accurate? In Committee in the other place, the International Airlines Group commented that some elements have not been included in the calculation, noting that the cost

“will be nearer to £10””.—[Official Report, Commons, Sustainable Aviation Fuel Bill Committee, 15/7/25; col. 17.]

I look forward to the Minister’s response.