Sustainable Aviation Fuel Bill (Second sitting)

Graeme Downie Excerpts

Committee stage
Tuesday 15th July 2025 Public Bill Committees

[Greg Smith]

Q It does. I have one brief additional question, mindful that we have only 20 minutes with you. Off the back of that protection of UK IP, do you think the Bill could be strengthened to bring in greater protection of technologies such as those that have been developed by Zero and other companies in the UK, so that when the strike price is set it does not end up with foreign-owned technology being incentivised in the United Kingdom? Do you believe that you, along with others that have similar technologies, can scale fast enough to meet the other side of the coin of this Bill, the SAF mandate?

Doug McKiernan: That is a very good question. I think we are in a race. At the moment we need the Bill to give confidence to investors. That will help us to scale. That is the main benefit in the short term. With regard to the IP, there needs to be a mandate somewhere in Government to support core e-fuels development. A lot of small companies at the moment are not getting that, so we are at risk of going abroad with the technology. The Aerospace Technology Institute heavily sponsors hydrogen and electric, but does not really support the core technology of e-fuels. Although we have this mandate, which we think is great, there is a bit of a gap there that could do with addressing.

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

Q This morning, we had a witness say that they did not believe the revenue certainty mechanism was required, that the market would essentially take care of the solution itself, and that the mandate was all that was needed. What is your response to that, and how would it affect your company in particular?

Doug McKiernan: Without this Bill and the mandate and quotas that have been set, I think the investment industry will step back from that, which would hurt us as a company. We would not be able to scale up. It would make things extremely difficult and would push the pace at which we could get to net zero to the right.

[Luke Taylor (Sutton and Cheam) (LD)]

Q You have given a really helpful view of the long-term solution. I do not think many would argue with PtL being the solution for the industry. This question is similar to one I have asked other panel members: how do other parts of Government, other levers and other enablers need to be brought in place to enable you to do what you need to do? What conditions does the Bill need to set? What do you see as the main challenges for the Government to act? You have spoken about skills. What else needs to be done in the Bill to enable you to be successful and for the Bill to achieve what it needs to achieve?

Doug McKiernan: Coming back to the IP, there needs to be some sort of support for e-fuels core technology development. That is very important. If you want e-fuels to be part of the future, we need to make sure that that research is supported in the UK and that when it is supported in the UK there is proper IP regulation of that. That needs to be mandated as part of the support from the Government.

What is happening in the aviation area is clearer cut, because you cannot get the energy density into an aircraft with hydrogen or electric, so it is kind of obvious, but I think it is a solution for a lot of the fossil-based fuels, including gasoline and diesel. I think what we will end up doing is that, if we can develop that core technology, it is then transferable to other sectors, and with that we will be able to deal with the real problem, which is the end-to-end solution of getting renewable energy to the consumer. That is the real challenge.

At the moment, we are talking about sustainable aviation fuel, but actually there is a lot of energy in the North sea that is not getting used because of the challenge of the cost of getting it from there to the consumer. This is where e-fuels come in. The Bill would help to move us in the right direction to start to tackle that problem, because you would have these companies with the new tech working out how to make that viable. There is a very good, well researched paper by the National Renewable Energy Laboratory in the US and the Department of Energy. It was done back in 2021.

I had a conversation with our CEO and the board one day and realised, “We’re not actually a fuels company, although we’re called Zero Petroleum and we’re making jet fuel and gasoline. We’re actually an energy transmission company, because all the problems we have with renewable energy are solved by liquid hydrocarbons”. If you look at the paper I referred to, done back in 2021, the cost of getting energy from the North sea in a cable to the consumer is probably forty to fiftyfold what it is if you wanted to do it with a liquid hydrocarbon. That is the fundamental problem that we are going to struggle with going forward. We are slowly going to morph as technology and engineering rather than policy dictate what the solution is.

--- Later in debate ---

[Greg Smith]

Q That is very helpful. On one last point of clarity, when you talk about the long term for e-fuels, we can all put a different definition on “long term”. What do you mean by that—10, 20, 50 years?

Ruben van Grinsven: I do not know. I do not know exactly what the price projections are for renewable power in the UK. It is hard to guesstimate that, so I do not know.

[Graeme Downie]

Q Sitting in the audience, you will have heard me ask this question of the last person. We had a witness this morning who said they did not believe the revenue certainty mechanism was required, and that the market would essentially take care of this on its own. You described it there as “compelling”. Do you agree that the RCM is required in the Bill, or do you think the market could take care of itself?

Ruben van Grinsven: Ideally, you want the market to take care of it. As evidenced by a lack of investment to date and by a lot of feedback from industry, it is difficult for investors now, without the revenue certainty mechanism, to invest. Is it essential? That is a very black-and-white question. I think it is going to be extremely helpful to convince people to invest.

We absolutely support the Bill because additional SAF production in the UK is going to be helpful for decarbonising the aviation sector, and we very much support that. Additional supply projects in the UK are going to be very helpful to meet the targets and help decarbonise the aviation industry. Yes, we very much support the Bill.

[David Reed (Exmouth and Exeter East) (Con)]

Q I think it is fair to say that the international supply chain is becoming more constrained and that there is a more protectionist international global economy. Can you give us a flavour of some of the economic and logistical challenges that you would face, importing SAF into the UK? As a follow on, if there is a requirement around energy security to set up shop in the UK, given the known knowns, would you look for subsidies from the current Government to set up production in the UK?

Ruben van Grinsven: I am afraid I cannot fully answer that question because it is not the part of the business that I am in. I am not importing SAF to the UK, so I do not know how trade limitations are currently impacting SAF supply. I would have to ask a colleague and come back to that question. It is also hard to predict what the future is going to bring for global trade and how protectionism will impact the global free trade of all types of fuels.

If you produce domestic fuels, that is, of course, going to be helpful if you want energy security. I must say, though, that if you look at the volumes that we are talking about today, the energy security element in the early days is going to be limited because of the volume of the fuels involved.

--- Later in debate ---

[The Chair]

I am sure Hansard will pick it up, but just for the record, Minister, you have mentioned Mark twice. I believe it is Professor Mark Maslin you are referencing, rather than the Chair, who of course remains neutral—and is not in a seesaw chair.

Mike Kane: You are always Mr Pritchard to me.

[Graeme Downie]

Q This question has come up in some of the other discussions today, but do you think there is enough in the Bill to properly incentivise the move beyond first and second generation SAFs, into what I think some of the witnesses described as the ultimate place we want to end up in—and where there is probably the most opportunity for UK IP, UK innovation and subsequently UK jobs and growth—such that the UK is where SAF happens and is created, as well as where it is developed in future? Do you think there is enough in the Bill for that? How do you see the Bill, and the next steps after that, as making sure that we can really achieve that and ensure that proper added value for the economy, while meeting climate targets?

Mike Kane: First, you are a great champion for Edinburgh airport in your constituency. You know the value of aviation to local communities in particular and you have championed that since you have been here.

Does the Bill give you innovation? I am not sure it does. I think it gives you a platform for what you want to do, in terms of the contracts that we will let going forward, which are about going from HEFA and first generation, to second and third generation. This gives you the substructure to build that capacity for intellectual property, inviting bids for various ways of doing things, and then protecting and supporting that, and bringing new entrants into the market. I think that is what the Bill does.

[Euan Stainbank]

Q We have heard quite a lot about what we can do to enable second-generation fuel from municipal solid waste, large volumes of which are currently going, and have been for a while, to electricity generation through waste incineration. Has the Department held any preliminary discussions with other Departments or external stakeholders about what local authorities need in order to have the confidence to send more of their municipal solid waste to make SAF?

Mike Kane: This will depend, again, on the contracts. I know that you are a neighbour to the Grangemouth refinery, where there could be potential in the future. We know that SAF can be made from a wide range of feedstock, including household waste. The SAF pathways are developing rapidly, and will do even in the weeks and months while the Bill goes through. We just need to make sure that this legislation adapts to the technology and pathways that are coming forward, which will involve further discussions with DBT, other parts of Government and possibly local authorities.