Sustainable Aviation Fuel Bill (Second sitting)

Debate between Luke Taylor and Amanda Hack

Committee stage
Tuesday 15th July 2025 Public Bill Committees

[Amanda Hack (North West Leicestershire) (Lab)]

Q I want to put on the record that I have an airport in my constituency, so many relevant companies are based there.

You are a global company in a global marketplace. The airlines I have spoken to want to source SAF from UK markets. How attractive is that to your organisation as a global business—responding to your customers’ wanting you to deliver locally? How much does that play a part in that investment?

Ruben van Grinsven: I am going to answer in a slightly similar way. My role is very much investigating and developing supply assets. I am really looking at building SAF plans. I am not very familiar with how customers demand locally produced fuel. In general, customers look for affordability and, therefore, at price and eligibility legislation. At this point, those are the more driving factors for people to buy certain fuels.

[Luke Taylor]

Q Mr Downie stole my question, so I will develop it a bit further. The RCM sets the levy on to the fuel producers who will likely pass it on to passengers. You operate internationally and see mechanisms being implemented elsewhere in the world. We mentioned the alternative of using the ETS to fund the RCM. How do you see the advantages of one system or the other, and where have you seen alternatives implemented elsewhere that have worked well?

Ruben van Grinsven: That is a good question. First and foremost, the UK is ahead of pretty much everybody else when it comes to developing those mechanisms. I know the EU is basically inspired by the RCM and trying to come up with a similar framework, which it will be announcing in September in the sustainable transport investment plan. I think the initial thoughts are indeed to fund that through ETS.

I do not have a strong preference between ETS-funded or levy-funded. The most important thing is that it is clear, transparent, consistent and predictable. Once we know the details and find out how the whole mechanism will work, we can perfectly live with the levy mechanism—as long as it works practically. So we do not have a strong preference between ETS or levy funding.

--- Later in debate ---

[Luke Taylor]

Q Thank you, Mr Pritchard. Minister, your first answer was very helpful. My second question is on a theme that I have brought up a couple of times, and which echoes the evidence around ETS funding from a couple of the witnesses. I am going to be a bit pointed, but if you had had the choice and the permission from the Treasury to get the funding from the ETS, rather than passing it on to firms and then passengers, would you have seen that as an optimal solution, in these constrained times?

Mike Kane: As the departmental Minister, I want to avoid the pitfall of commenting on Treasury policy, but I did hear some earlier evidence that £500 million came in from the ETS. What did they get back for it? Well, £2.3 billion of investment in the ATI, which is looking at engine capacity, hydrogen and reduced noise technologies. We are investing more than we ever have in that area. We are also now aligning, or are in negotiations to align, our ETS with the European Union. That would give us a bigger market, and therefore help aviation in this space.

In addition to the £2.3 billion, the Chancellor recently announced £63 million for the advanced fuels fund. The Government are putting their money where their mouth is. As part of the work that I have done this year to restart our confidence in aviation, I set up the jet zero taskforce, which is jointly chaired by me and the Minister for Industry, my hon. Friend the Member for Croydon West (Sarah Jones), at DBT. There is an awful lot of joined-up thinking in this area.

[Amanda Hack]

Q In terms of SAF’s growth potential, I would be interested to hear more about how smaller organisations can get involved and how we can ensure that lots of businesses benefit from this huge step forward for our economy. A lot of SAF production will be in coastal areas, but my constituency, which has an airport, is inland. How can that growth potential reach all parts of the UK?

Mike Kane: Indeed, and Amanda, you are a great champion of East Midlands airport in your constituency—I have Manchester airport in mine, and I see from day to day the benefits that growth brings in terms of jobs, skills and inward investment. You make exactly the right point. Good strategy is turning what you have into what you need to get what you want.

We have industrial heartlands dotted right across our nation, including in our coastal communities. They are almost oven-ready to host the technology, inward development and jobs. Our analysis, which was a minimum compared with those of everybody else in the room, is that this would create 15,000 jobs in the next few years and £5 billion in GVA. Those jobs are in many of our run-down coastal communities and industrial heartlands, so this is a win-win on many levels—in terms of decarbonisation, carbon capture, production and the regeneration of parts of our nation that have been left behind for far too long.