Sustainable Aviation Fuel Bill

Edward Leigh Excerpts

Report stage
Wednesday 15th October 2025 Commons Chamber

[Sir Edward Leigh (Gainsborough) (Con)]

I am listening very carefully to what the hon. Gentleman says and I completely support his good intentions. The problem with sustainable aviation fuel is that it is perhaps five times more expensive than what we are currently paying, and that stocks are very limited and—we have been talking about livestock feeds—even more difficult. I am completely with him on the ambition, but we must also protect consumer rights, the right to fly at a reasonable cost and the cost to the economy. As with all green energy policies, there must be a balance. I am sure he will agree with that.

[Iqbal Mohamed]

I thank the right hon. Gentleman for his intervention and I do understand his point. This is a transition. We are moving away from fuels that are killing our environment and our ability to survive on planet Earth. It is a responsible thing to do to find ways to reduce our reliance on carbon-generating fossil fuels through cleaner alternatives. This may not be the final solution for aviation—it might be a transition. Future technologies and innovations might allow us to stop the use of such fuels altogether.

More than 130 organisations from airlines and clean energy firms to researchers and investors have called on the Government to prioritise PTL through the Bill. They have called for urgent engagement, timely regulation and a clear pathway to a commercial-scale plant in the UK by 2026. As I have mentioned, the EU, Canada and the United States are moving faster. We must not miss this industrial opportunity to take a lead in progressing innovative SAF alternatives and licensing that technology around the world. We must act decisively, not incrementally.

I support the Sustainable Aviation Fuel Bill, but I believe we have a responsibility to make it stronger, bolder and more targeted towards the fuels that will truly deliver net zero. My amendments are practical, proportionate and widely supported. They add not cost, but clarity, confidence and a commitment to a sector that needs all three. If we want to lead the world in clean aviation, we must lead with action, not just ambition. I call on friends and colleagues across the House to support the amendments in my name, and in doing so to give PTL the foothold it needs to take off in the UK.

--- Later in debate ---

[Sir Edward Leigh]

I commend my hon. Friend on his speech. Does he agree that the Conservative way is to ensure practicality over mere ideology, and consumer rights over Government imposition of controls and regulations that can do serious damage to the economy and people’s livelihoods?

[Greg Smith]

I am grateful to my right hon. Friend the Father of the House; I could not have put it better myself. It is essential that whatever measures, on any matter, are brought forward by any Government—be it the current Government or any future Government—real people’s lives and the cost base be reviewed regularly, so that we are not making people poorer, or stopping people from being able to do what they want, be it go on holiday, travel for business or move goods around.

With that, I come to amendment 8 and the cost impact on passengers. The amendment would require the designated counterparty to report on the impact of the revenue certainty mechanism on passenger air fares. One of the most contentious areas surrounding the Bill, and indeed the Government’s whole approach to net zero, is: what does it actually cost real people? The amendment seeks to clarify that, and it gives the Government the opportunity—in theory, they should cheerfully embrace this—to lock in a claim that they profess to believe, namely that the Bill will have an impact of plus or minus £1.50 on air fares. The previous Minister repeated that statistic time and again on Second Reading and in Committee. The new Minister has the challenge today of either sticking with his predecessor’s assertion, backing the amendment and locking in protections for consumers, or admitting that this may well be more costly to air travellers.

It is worth noting that during the evidence stage of Bill Committee, none of the witnesses was willing to affirm the Government’s figure. In fact, some noted that the estimated price appeared low. For example, Jonathon Counsell from International Airlines Group stated:

“We think there are potentially some elements that have not been included in that calculation, but £1.50 per passenger feels quite low when you think the costs of the SAF itself will be nearer to £10.”––[Official Report, Sustainable Aviation Fuel Public Bill Committee, 15 July 2025; c. 17, Q12.]

Consumers need peace of mind that the Bill will not cost them dear, and will not act as a financial barrier to the family holiday or any other trip, so failure to back the amendment can only mean uncertainty.

I turn to amendment 11, which is focused on transparency. The amendment would require the Secretary of State to set a standardised levy rate, payable by all suppliers of aviation fuel, that must be publicised by suppliers of aviation fuel on invoices to their customers. Valero, for example—one of the world’s largest renewable fuels producers—has contacted the Opposition arguing for the amendment, saying that it would offer a workable solution; it would support the development of new SAF production without significantly impacting the industry as a whole. The amendment would apply the levy equally to all jet fuel suppliers, providing a fair and transparent mechanism for supporting the broader SAF industry.

Just this week, I have been contacted by Virgin Atlantic, which is arguing that transparency safeguards must be in place to keep costs low for consumers. As organisations including the International Air Transport Association have highlighted, since the mandate came into effect in January 2025, fuel suppliers have been adding compliance risk premiums to the cost of mandated SAF, contributing to the price of SAF and doubling it for some carriers. That is to cover the eventuality that they do not meet the 2% mandate target and must pay the buy-out price for any missed volume. Virgin Atlantic has argued that to prevent SAF prices increasing further, the revenue certainty mechanism must have sufficient safeguards in place to ensure transparency over cost pass-through. There must also be a transparent process for refunds in the event of over-collections, and all revenues generated under the RCM should be ringfenced, rather than going into the general taxation pot.

Amendment 9 looks at British technology and intellectual property. It would require the designated counterparty to prioritise UK-based technology when entering contracts. As I said from the Dispatch Box on Second Reading, there is a historical reality that we need to confront, and the amendment would stop history repeating itself. The historical error that I refer to is this: a great many projects supported by grants from the advanced fuels fund use foreign-owned technology. It cannot be right that the British state, while arguing for domestic fuel security, funds overseas technology when we have incredible innovators and manufacturers right here.

Domestic fuel security must mean domestic fuel IP, manufacture and supply. It is important both to develop a UK market for SAF, eSAF and local production, as is provided for by the Bill and the mandate, and to support and encourage the use of home-grown technology for the manufacture of those products. That not only retains revenue in the United Kingdom but leverages a huge amount of revenue for future exports through technology licensing. The amendment tackles that head-on, and a failure to back it would be a failure to back United Kingdom innovators.

Lastly, amendment 10 is on technological choices. It states:

“The terms under subsection (4)(c) must include a requirement for the producer to consider the longevity of supply and relative environmental impact when prioritising between organic and synthetic derived sustainable aviation fuel solutions.”

I feel incredibly strongly about this amendment. It is on a matter that I have championed in this House for many years—in the last Parliament, during my time on the Transport Committee and, since July, from this Dispatch Box. The amendment is in the name of the shadow Secretary of State, my right hon. Friend the Member for Basildon and Billericay (Mr Holden), and it is relevant to new clause 7 and amendment 12 in the name of the hon. Member for Dewsbury and Batley, both of which I have a great deal of sympathy for.

Governments of all political persuasions have professed to be technologically neutral. They seldom are. There is a natural tendency to pick winners and losers. We need to look through that lens, and ask ourselves what the Bill is promoting and using the levers of primary legislation to enable. The disappointing answer to that is the potential to bring alive SAF plants using technologies that have already been superseded—plants that would therefore be temporary at best. Stepping up something with no longevity, and with an estimated build cost of between £600 million and £2 billion, would be no small mistake.

Power-to-liquid solutions, otherwise known as eSAF or synthetic fuel—liquid hydrocarbons literally made out of air and water—are surely the better and sustainable future for aviation fuel. We had debates on Second Reading and in Committee about other solutions. I cannot imagine that anyone is ready to defend growing food to burn it, but equally, waste-derived fuels simply are not sustainable in the long term. Solid waste is not readily available; the primary source is local authorities, the majority of which are on contracts with energy-from-waste facilities and incinerators that have decades to run. Likewise, I am not sure there is enough chip oil in the country to meet our aviation fuel needs.

That leaves power-to-liquid solutions and eSAF. Many say that it is not ready; some say it is too expensive; but those of us on the Public Bill Committee heard loud and clear from Zero Petroleum that it is ready to scale right now. It just needs the green light from the regulators, and with scale will come affordability. Amendment 10 is in many ways a light-touch amendment to bring this debate to the fore. It does not close down other technological routes, but forces the Government to acknowledge the risk, both to the environment and in terms of cost, when choosing contracts under the RCM.

As other speakers have said, the Bill can still be improved. I urge the Minister to accept the amendments, which would improve the Bill, and to ensure a strong and affordable future for sustainable aviation fuel in our great United Kingdom.