Sustainable Aviation Fuel Bill
Public Bill Committee, 15 July 2025.
Mark Pritchard (Conservative, The Wrekin)
I remind Members to switch off or silence electronic devices. As Members know, tea and coffee are not allowed during our sittings.
We will first consider the programme motion on the amendment paper; we will then consider a motion to enable the reporting of written evidence for publication and a motion to allow us to deliberate in private about our questions, before the oral evidence sessions. In view of the time available, I hope that we can take those matters formally, without debate.
I call the Minister to move the programme motion standing in his name, which was discussed yesterday by the Programming Sub-Committee for the Bill.
Mark Pritchard (Conservative, The Wrekin)
Copies of written evidence that the Committee receives will be made available in the Committee Room.
Mark Pritchard (Conservative, The Wrekin)
Before we hear from the witnesses, does any Member wish to make a declaration of interest in connection with the Bill?
Greg Smith (Conservative, Mid Buckinghamshire)
I made this declaration on Second Reading as well; I do not think it is strictly relevant, but I wish to be very transparent: I got a donation of sustainable fuel, to use in a road car, from a company that does not produce sustainable aviation fuel. It is recorded in the Register of Members’ Financial Interests.
Mark Pritchard (Conservative, The Wrekin)
That is noted and recorded.
Luke Taylor (Liberal Democrat, Sutton and Cheam)
As the chair of the all-party parliamentary group for the future of aviation, travel and aerospace, I have met a number of the groups that will be presenting today. In fact, I met Rob only yesterday for information on the Bill and its content.
Mark Pritchard (Conservative, The Wrekin)
That is noted and on the record.
Examination of Witnesses
Mark Pritchard (Conservative, The Wrekin)
We will now hear evidence from Paul Greenwood of Fuels Industry UK, Rob Griggs of Airlines UK and Gaynor Hartnell of the Renewable Transport Fuel Association. You are all welcome.
I remind hon. Members that questions should be limited to matters within the scope of the Bill. I will call colleagues to order if they wander outside the scope of the Bill. We must stick to the timings in the programme order that the Committee agreed; for this session, we have until 10.10 am.
Before I ask the witnesses to introduce themselves briefly for the record, let me say that if I say, “Order, order” at the end, it is because we are on a very tight timetable, so please forgive any abruptness in calling you to order. Over to you.
Mark Pritchard (Conservative, The Wrekin)
I call the shadow Minister.
Greg Smith (Conservative, Mid Buckinghamshire)
Q Good morning, witnesses. From the Second Reading debate and most of the written evidence that we have seen, we know that there is a fair amount of consensus on the price mechanism in the Bill, but the only point of having Committees like this is to seek to make a Bill better, so my straightforward question to all of you is: “How could the Bill be made better?”
Greg Smith (Conservative, Mid Buckinghamshire)
Q That is very helpful. Before we move on to the next witness, may I probe two elements of what you said? On your last point about costs ultimately being passed to the consumer, the Government stated clearly—the Minister said it from the Dispatch Box on Second Reading—that the Department for Transport believes that any addition to, or indeed subtraction from, airfares as a result of the Bill will be no more than £1.50. Do you agree with that point?
Secondly, you have talked about advanced SAF. Does the Bill do enough to safeguard any state involvement in encouraging the right long-term technology, rather than standing up earlier technologies that we can all see might well need to be stood down in 10 or 20 years when something better has come along?
Graeme Downie (Labour, Dunfermline and Dollar)
To pick up on an item raised by Mr Greenwood, we have heard the Government talking about how this is the first legislation of its kind in the world. What impact do the other members of the panel feel it will have on the global market for SAF, and for airlines more generally?Q
Luke Taylor (Liberal Democrat, Sutton and Cheam)
Q Thank you for joining us. I think we are in a slightly unusual position, in that we are all competing to try to make slight improvements to legislation that we all agree is necessary and positive. My question is about the source of the funding for the RCM. The Government made it clear that their preference is that it comes from a levy on users. An alternative, which we see in other jurisdictions, is that it comes from ETS sources, which would slightly more directly couple the emissions component to the consumption. The intention to not predicate the source of funding on the money being provided is clear. Do any of the panellists have an opinion on those two options and the path that the Government have taken for the funding source?
Christopher Vince (Labour/Co-operative, Harlow)
I thank the panel for coming to give evidence. Rob, in your opening statement you spoke about this being an enabling Bill. Could you touch on what you think the next steps would be were the Bill passed? I also have a basic but important question: what do you all see as the impact of this Bill, whether positive or negative, in terms of environmental and economic benefits? Is there a risk in not getting on with it?Q
Christopher Vince (Labour/Co-operative, Harlow)
Q Yes—I recognise that there are a lot of benefits of SAF, but I am wondering how the Bill can help that along.
Paul Kohler (Liberal Democrat, Wimbledon)
Mr Greenwood has made a compelling critique of the basics—“We have a mandate; why do we need the RCM? There might be unintended consequences.” I know you disagree with him, but I would like to hear why you disagree with him.Q
Paul Kohler (Liberal Democrat, Wimbledon)
Q And issues such as tankering?
Mark Pritchard (Conservative, The Wrekin)
We have six minutes left and two other Members want to ask a question. Mr Greenwood.
Mark Pritchard (Conservative, The Wrekin)
Because of the pressures of time, unusually, I will ask Euan and David to ask their questions together.
Euan Stainbank (Labour, Falkirk)
Thank you, Mr Pritchard. Both Airlines UK and RTFA touch on this in their written submissions, but using municipal solid waste will give a substantially higher greenhouse gas saving than incinerating it, as is currently done. What do you think the Government could do further to incentivise use of the feedstock in that way, rather than seeing more energy go towards waste projects and incineration, or do you anticipate that the revenue certainty mechanism and the sub-mandate will be sufficient?Q
David Reed (Conservative, Exmouth and Exeter East)
To pick up on Mr Greenwood’s point about unintended consequences, at a time of increased international instability, the need to produce things domestically in the coming years has become more and more apparent. Do you think this will impact our traditional ways of producing those fuels that we will probably need in the UK?
Mark Pritchard (Conservative, The Wrekin)
Mr Griggs, I am sorry—you have 35 seconds.
Mark Pritchard (Conservative, The Wrekin)
Order. That brings us to the end of the allotted time. On behalf of the Committee, I thank all the witnesses for their evidence.
Mark Pritchard (Conservative, The Wrekin)
Q We will now hear oral evidence from Jonathon Counsell from the International Airlines Group, Luke Ervine from Virgin Atlantic and Lahiru Ranasinghe from easyJet. We have until 10.55 am. I welcome our witnesses. If we run out of time, I will interrupt at the end by saying, “Order.” Forgive me if it is abrupt. Please could you introduce yourselves for the record?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Good morning to our witnesses. It is impossible to consider the Bill without also considering the mandate, side by side. What impact do you feel the Bill will have not just on your businesses but on the fares that you charge passengers on your aircraft, and, for those of you who have cargo operations, the impact on the cost of shipping goods by air?
Greg Smith (Conservative, Mid Buckinghamshire)
Q If I can probe that a little more, you say £1.50 is a conservative estimate. Does IAG have its own estimate?
Alice Macdonald (Labour/Co-operative, Norwich North)
You have all mentioned how essential SAF is to decarbonisation. Could you expand on its environmental impact? When and how will you be able to track the impact of the mechanism on your emissions? How will you directly be able to link it, or SAF more broadly, to any reduction in emissions?Q
Alice Macdonald (Labour/Co-operative, Norwich North)
Q I want to pick up on the monitoring point. For example, say a consumer feels that they have had to pay a little more for a flight that is more environmentally friendly; how soon would you be able to quantify whether that mechanism had had an effect? In a year’s time, would you be able to say that it has meant that the carbon has been decreased by x amount?
Paul Kohler (Liberal Democrat, Wimbledon)
Q Mr Counsell, I would like to quiz you on your first point. Given the premium on SAF, the mandate is going to cost far more than the RCM?
Paul Kohler (Liberal Democrat, Wimbledon)
Q The RCM is all about increasing the ability to produce, which will surely bring down the market price. Is not the RCM, in fact, an investment to cut your costs in the long run?
Paul Kohler (Liberal Democrat, Wimbledon)
Q To your point on the RCM, the money you put into the RCM will bring down your overall costs, because the premium on SAF will go down, will it not?
Lewis Atkinson (Labour, Sunderland Central)
Building on the point Mr Ervine made about the potential wider economic contribution of SAF, I am particularly interested in the jobs. We have heard that 70% of existing fuel is imported, and therefore a significant part of your economic supply chain is essentially providing economic benefit overseas. Could you say a little more about—if we get this off the ground, as it were—how far you think that value chain and economic benefit will shift into the UK Q from imports? In particular, could you talk about the potential regional economic benefits of SAF, as opposed to being concentrated on London and the south-east?
Luke Taylor (Liberal Democrat, Sutton and Cheam)
Q Thank you all for joining us. The evidence that you have given so far has been very helpful. There was a question earlier about waste hierarchy and the availability of waste feedstocks as one source of raw fuel or raw material for some of the second-generation SAF. Is enough being done across Government, in a holistic way, to ensure that the goals of the SAF mandate, the RCM and this Bill are achieved? Is enough being done to ensure that the things that are needed—waste feedstocks, the reforms to planning and energy production for eSAFs—are in place? What is going to hold back what we are trying to achieve in this Bill, and what needs to be done elsewhere?
Graeme Downie (Labour, Dunfermline and Dollar)
Q You alluded to this earlier, but have you done any work with your customers—either passenger or freight—on how much they care about SAF specifically, or sustainability more generally? If you were not working towards the kind of targets that you are, do you think that would impact customer choice? Do you see this as a competitive advantage between yourselves, or globally as well? Also, to pick up on something that Jonathon mentioned earlier, do you think there is enough in this legislation on what needs to happen after, if it is passed, to encourage the necessary investments, particularly in third-generation SAF and beyond that?
Mark Pritchard (Conservative, The Wrekin)
May I say that we want full answers, but we have three other Members who want to ask questions? We have 11 minutes left.
Mark Pritchard (Conservative, The Wrekin)
I will call Chris Vince, then Euan Stainbank and Luke Taylor—will you go one after the other, please?
Christopher Vince (Labour/Co-operative, Harlow)
Q I will be very quick, Mr Pritchard. Thank you all for coming to give evidence. Graeme has stolen a little of my question, which was to understand what you see as the risks to your industry if the Bill does not go forward or, in fairness, if it does go forward. I want to understand the risks involved.
Euan Stainbank (Labour, Falkirk)
We have talked about targeting. Would you support any further specific policy interventions to help to stimulate advanced 2G SAF technologies that might otherwise struggle to scale up?
Luke Taylor (Liberal Democrat, Sutton and Cheam)
I just have a pushback or challenge on the comments about SAF being popular. An earlier pushback, too, was on the £1.50 per passenger on top of tickets. Does that suggest that this might be easier to sell—easier to promote—to passengers than you might have suggested in the first place? I think the suggestion was that certain demographics and certain airline customer groups will be more or less in favour and able to pay it.
Mark Pritchard (Conservative, The Wrekin)
Euan, do you want to follow up on that?
Euan Stainbank (Labour, Falkirk)
No.
Mark Pritchard (Conservative, The Wrekin)
We have two minutes left. Do the other witnesses have any final comments or do Members have any further questions? No. I thank the witnesses for their evidence. We will move on to the next panel.
Mark Pritchard (Conservative, The Wrekin)
We will now hear oral evidence from Sophia Haywood from LanzaJet and Noaman Al Adhami from Alfanar Projects. We have until 11.25 am for this panel. Good morning to you. Could you introduce yourselves for the record?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Good morning to both of you. You are both bringing different technologies to SAF production. Ms Haywood, your SAF is more bioethanol based, and Mr Al Adhami, yours is more waste derived. At what point do you think that the incentives—shall we call them that?—in the Bill, if it becomes law, such as the price mechanism, will mean that you can get your respective products to a cost that is similar to regular, fossil fuel-derived jet fuel in today’s prices? How long will it take you to get prices down?
Greg Smith (Conservative, Mid Buckinghamshire)
Q This question is probably more for you, Ms Haywood, given the ethanol element of your product. Clearly, there has been some concern in the UK that the lower tariffs deal with the United States has quite a significant bioethanol element to it, which has made UK producers nervous, if I can put it that way. Given that what sits underneath a lot of the Bill is domestic fuel security and production here in the UK, how big a concern is it for you, producing SAF that is ethanol derived, that we might not have that UK security, because we will be dependent on imports—in this case, imports of the bioethanol feedstock?
Luke Taylor (Liberal Democrat, Sutton and Cheam)
Q Thank you both. A lot of the criticism and cynicism over the value of SAF and its environmental benefits are around the fuel source or feedstuff—you have alluded to it. The Bill concentrates on second and third generation SAF. Do you see that as enabling a lot of the potential greenwashing of SAF that may have been behind all that cynicism? Does it address some of those challenges?
As a follow-up question, similar to one that I asked the previous panel, what do you see as some of the challenges across Government that will hold back your ability to produce more SAF? You referred to the ability to use some of the feedstuff to produce second generation SAF mixing, but I think planning and energy will be among the responses as well.
Euan Stainbank (Labour, Falkirk)
Q What effect has anticipation of the RCM and the corresponding timetable, which I imagine your companies are now working to, had on your ability to make a final investment decision? Can you give us as much detail as possible about your current plans, spades in the ground and such?
David Reed (Conservative, Exmouth and Exeter East)
Following on from the shadow Minister’s questions about scalability and production, Ms Haywood, you talked about the globally distributed nature of this technology sector. With international supply chains becoming more contested and the view that traditional production methods will be scaled down and SAF will be increased, where do you see the biggest blockers to growth and scalability, and how do you balance that against energy security?Q
David Reed (Conservative, Exmouth and Exeter East)
Q That is a very good answer; I am happy with that, and it is obviously coming from a company’s perspective. In terms of Government engagement, how many conversations have been had with the Cabinet Office and the Department for Energy Security and Net Zero around energy security and your production capability?
Tom Collins (Labour, Worcester)
YouQ have talked a little about this already, but I am interested in the conditions you are operating in and the constraints you are facing. You mentioned regulations and planning, but I am also interested in the availability and maturity of standards and the particular different types of biofuel. I am also interested in how you store intermediates and if there are any issues around that, because I have heard from others that there is perhaps a lack of regulation on the safe storage of some of these intermediates. I do not know whether you are using hydrogen for upgrading at all, but I am interested in whether you have a vision for a future UK hydrogen system, and what that might look like.
Mark Pritchard (Conservative, The Wrekin)
I am afraid you have just two minutes left.
Mark Pritchard (Conservative, The Wrekin)
Order. Photographs must not be taken of the Committee—I am absolutely clear about that. I am sorry to interrupt.
Mark Pritchard (Conservative, The Wrekin)
Order. I am afraid that brings us to the end of the time allocated for questions from the Committee. I thank our witnesses for their evidence this morning. As it is now 11.25 am, the Committee is adjourned. I look forward to seeing you all this afternoon at 2 pm.
Examination of Witness
Mark Pritchard (Conservative, The Wrekin)
We will now hear oral evidence from Doug McKiernan from Zero Petroleum. This session will have to end by 2.20 pm. Good afternoon. Could you please introduce yourself?
Greg Smith (Conservative, Mid Buckinghamshire)
For transparency, I should declare that I have visited Zero Petroleum on a couple of occasions and met with people there. Mr McKiernan, your product is a power-to-liquid product; it is not derived from feedstocks or waste. Do you think that a power-to-liquid solution is the long-term solution for sustainable and synthetic fuels for aviation use? Do you worry that any part of the Bill incentivises short-term solutions over long-term solutions?Q29
Greg Smith (Conservative, Mid Buckinghamshire)
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?
Graeme Downie (Labour, Dunfermline and Dollar)
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?Q
Luke Taylor (Liberal Democrat, Sutton and Cheam)
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?Q
Luke Taylor (Liberal Democrat, Sutton and Cheam)
Q Just for clarity—forgive my technical inexperience—what you are suggesting is production of the hydrocarbon at the source, at the base of a wind turbine, which is then collected in tanks rather than transmission over cables?
Paul Kohler (Liberal Democrat, Wimbledon)
Using carbon dioxide to produce SAF is a wonderfully seductive and brilliant solution. You are addressing the regulatory obstacles, but what are the technical obstacles?Q
Mark Pritchard (Conservative, The Wrekin)
Time is pressing; we have only four minutes left.
Julie Minns (Labour, Carlisle)
I should have said this morning that I previously met with Alfanar prior to the publication of the Bill. Mr McKiernan, it is quite clear that you are very proud of your company, and very ambitious for its future. Do you think the SAF mandate is challenging enough, or could it go further?Q
Christopher Vince (Labour/Co-operative, Harlow)
Partly because you are based in Oxfordshire, my mind goes to universities. I wondered—based on what was said by a previous contributor—where we are with this technology compared with other countries. I do not know whether you are working with universities, but I am sure you are working with young people to develop skills. Is there is a risk, if the Bill is not passed and we did not get the RCM, that some of the skills that you are developing will be lost to other countries?Q
Paul Kohler (Liberal Democrat, Wimbledon)
Q Have you overcome the technical problems? Once you have the CO2, is the technical process now scalable, or are there still many issues involved in it?
Mark Pritchard (Conservative, The Wrekin)
We have a minute left, but there are no further questions from Members. I thank the witness for his evidence.
Mark Pritchard (Conservative, The Wrekin)
We will now hear from Ruben van Grinsven from Shell International. This session will have until 2.40 pm. Can you introduce yourself for the record, Ruben?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Good afternoon. You have talked about the sourcing of aviation fuel and blending SAF as well as fossil fuel for aviation. Shell is clearly a global company, but the Bill’s underpinning is the United Kingdom’s domestic fuel security. Where does Shell sit in terms of viewing domestic fuel security for aviation use within the United Kingdom? Do you think the Bill will deliver on not just that primary goal but increasing UK-based SAF production?
Greg Smith (Conservative, Mid Buckinghamshire)
Q That is helpful, but on this particular point about UK-based production, a global company like Shell—there is nothing wrong with this position; it is what you do—will source SAF from wherever it is cheapest around the world. Does the Bill go far enough to pump-prime UK-based production so that a global giant like Shell—nothing wrong with being a global giant—will choose UK-based plants, or will the mechanism in the Bill not produce SAF at a cost that you think is competitive for your usage, blends and potential future use when compared to that from suppliers overseas?
Greg Smith (Conservative, Mid Buckinghamshire)
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?
Graeme Downie (Labour, Dunfermline and Dollar)
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?
David Reed (Conservative, Exmouth and Exeter East)
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 UKQ ?
Amanda Hack (Labour, North West Leicestershire)
I want to put on the record that I have an airport in my constituency, so many relevant companies are based there.Q
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?
Luke Taylor (Liberal Democrat, Sutton and Cheam)
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?
Tom Collins (Labour, Worcester)
You have just mentioned that you are looking broadly at SAF production and how that is going to play out into the future. Compared with other northern European countries, the UK has excellent access to renewable energy, and we had a very early responding hydrogen industry. What do you see as the UK’s unique opportunities in SAF production?Q
Christopher Vince (Labour/Co-operative, Harlow)
Q Obviously, the Bill is trying to make it easier for us to produce SAF in this country, which is really important. I gather—if this is correct—that part of your role is to source SAF around the world. Do you feel there will be a greater need, and therefore a strong argument that we should be pushing ahead with SAF and producing it here in Britain? Although you said you cannot commit to where you will buy your SAF because of cost, would you say you will be in a place where you need more and more—and so it is very likely that you will have to source SAF from Britain, because you will need as many sources as possible?
Greg Smith (Conservative, Mid Buckinghamshire)
Q If the Bill becomes an Act, Shell will find itself in a peculiar place given that it will be both a levy payer, as a fossil fuel producer, and a developer of SAF potentially looking to benefit from the strike price. The Government put an analysis in the public domain on Second Reading: they suggested that the ultimate cost to the end user, such as somebody getting a flight—there will be a different calculation for those using air freight—will be plus or minus £1.50. Witnesses earlier suggested that that might be a “conservative” estimate—in their own words. Where would Shell see the ultimate cost pass on to the end user?
Paul Kohler (Liberal Democrat, Wimbledon)
Q Some of the evidence we have received from the contributors to the consultation expressed concern over the levy calculation. Under clause 6, it could be based on historic market share. Do you share those concerns about complications in the levy calculation? Should it be a simple levy placed on sales going forward, rather than on historic market share?
Mark Pritchard (Conservative, The Wrekin)
I thank the witness for his evidence.
Mark Pritchard (Conservative, The Wrekin)
We will now hear oral evidence from Matt Gorman from Heathrow airport. For this session, we have until 3 pm. Welcome, Mr Gorman. For the record, can you please introduce yourself?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Good afternoon, Mr Gorman. I will lead with the question that I asked the previous witness about end-user cost. Clearly, Heathrow’s business model relies on you having many people coming through and getting on aircraft, or arriving in the UK on an aircraft. If the cost of flying were to increase significantly, that might impact Heathrow’s very business model, with fewer people being able to take those flights. Some of the evidence we have heard today seems to challenge the Government’s presumption, presented on Second Reading, that any cost increase to the end user, as a result of the Bill and the SAF mandate, would be plus or minus £1.50. Do you share the Government’s view on that, or do you share some of the other witnesses’ views that that might be optimistic?
Greg Smith (Conservative, Mid Buckinghamshire)
Q In respect of procurement of SAF to be available at the airport, will the Bill safeguard domestic fuel security? I ask that question largely through the lens of the challenge to Heathrow if fuel were suddenly to be unavailable in the United Kingdom for you to supply to the airlines on site. Is there any way that the Bill could be improved to shore up the domestic security position?
Julia Buckley (Labour, Shrewsbury)
I have two questions. The first relates to your role on the board of Sustainable Aviation. You referred earlier to the key part the Bill plays in decarbonisation and reaching net zero. On behalf of that board, from the wider sector perspective, do you think that it is possible to reach net zero by 2050 without the Bill?Q
Julia Buckley (Labour, Shrewsbury)
Q So it would be significantly more difficult for you without the Bill?
Julia Buckley (Labour, Shrewsbury)
Q My second question is about your role at Heathrow. We heard from earlier witnesses that, because the generation fuels are drop-in fuels, they are fairly confident that they could rely on existing infrastructure for storage and so on. As the person in charge of Heathrow, our largest airport, how confident are you that existing infrastructure and storage spaces can accommodate drop-in fuels?
Luke Taylor (Liberal Democrat, Sutton and Cheam)
Q My question is relatively straightforward: does the Bill go far enough to allow us to proceed with aviation expansion and be consistent with our climate change goals?
Luke Taylor (Liberal Democrat, Sutton and Cheam)
Q The SAF mandate is 10% by 2030. The EU target is much lower: 6%, I think. Our target goes up to 22% by 2040, but elsewhere the target increases more dramatically. As Heathrow is such a large user—17% is a massive component—will the mandate be achievable alongside the goals and targets set out in the Bill? You have said that other things need to be done and that this is part of a suite, but I guess the question is whether this is enough. Do you need to see more aggression and more ambition, with investment in firms through skills and through the measures we have drawn out from previous witnesses around the protection of IP? Do you see this as enough?
Tom Collins (Labour, Worcester)
Q You have mentioned that the UK is taking a strong leadership position on this stepping-stone technology with SAF. If the UK were to prepare itself now, early on, to be in a leadership position in sustainable aviation using hydrogen, what do you think that would look like?
Paul Kohler (Liberal Democrat, Wimbledon)
Q First, given the obvious international aspect of aviation, does it make sense for the UK mandate and the EU mandate to diverge, or would it make more sense if they were the same? Secondly, we heard from one witness that the levy would encourage tankering, with air operators filling up in other locations. Does that happen now, and is it an issue that you can see being made worse by the levy?
Amanda Hack (Labour, North West Leicestershire)
Q We talk an awful lot about the customers and what they might see on the price of their ticket, whether that is for freight or for going on holiday to Spain or wherever, but are your customers demanding that you be more environmentally friendly? As an airport, how far do you need your customers to support the transition to SAF?
Paul Kohler (Liberal Democrat, Wimbledon)
Q May I go back to my first question? I hear what you say about being more ambitious, as the EU is towards the end of the mandate or as it progresses, but do you see any problems with the mandates being out of kilter? Or is that not an issue?
Mark Pritchard (Conservative, The Wrekin)
There are no further questions from Members. Thank you for your evidence, Mr Gorman.
Mark Pritchard (Conservative, The Wrekin)
We will now hear oral evidence from Josh Garton of the Green Finance Institute. For this session, we have until 3.20 pm. Good afternoon and welcome, Mr Garton. For the record, will you please introduce yourself?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Green finance is something of a minefield across various technologies. A straightforward first question is whether the Bill is the most effective way to get finance into UK SAF production via the price mechanism. If the answer is no, what would be a better way of ensuring UK SAF production and the protection of UK intellectual property in that production? Where do you sit in the debate about what the ultimate cost to the end user will be?
Greg Smith (Conservative, Mid Buckinghamshire)
Q From your experience of securing finance for green projects, and given that the other side of the coin to the Bill is the mandate and its demands for increasing percentages of blend of SAF, do you think that the mechanisms within the Bill that we are considering in this Committee will deliver scalability fast enough to meet those elements of the mandate—the 2%, or the 10% over time—or are we going to find ourselves in the position where, to meet the mandate, we will still need to rely to some degree on imports?
David Reed (Conservative, Exmouth and Exeter East)
Q If British money is being spent on British technologies, and if you are leveraging capital to go on those SAF programmes, where is that money coming from? Is the investment attitude right in this country toward green technologies and SAF? Which countries are quite front-footed in their approach to investing in these technologies?
Amanda Hack (Labour, North West Leicestershire)
Q Obviously, when you are looking at green investment, there is a huge element of risk in new technologies. Are there other levers of Government that would de-risk them from an infrastructure point of view, or are there other things that we could do on top of the Bill to de-risk it?
Julie Minns (Labour, Carlisle)
Q This is a similar question to Mr Reed’s. Would you say that UK SAF developers find it harder, easier or the same as their international counterparts to access finance?
Julie Minns (Labour, Carlisle)
Any international comparator.
Greg Smith (Conservative, Mid Buckinghamshire)
Q Building on those last two questions, in terms of the investment landscape in the UK for technology, and for SAF in particular, we are in an emerging technological race where, for example, the mandate itself starts to wind down HEFA use quite quickly. We can see waste-derived fuels coming down, but then we have heard from witnesses, such as Zero Petroleum and other manufacturers of e-fuels and power-to-liquid fuels, that this might be where the technology settles in the long term. How much reticence is there from those who might finance these projects to go there on a technology that could well be stood down in 10 or 20 years in favour of something else coming upstream?
Greg Smith (Conservative, Mid Buckinghamshire)
Well, first and second, until we get to third.
Greg Smith (Conservative, Mid Buckinghamshire)
Q Can I gently push you on that? We heard from the witness from Zero Petroleum earlier that they are ready to scale now, in reference to a question from one of the Liberal Democrat Members on the Committee. If that is the case, what do you see as the barriers to those later-generation fuels being scalable now, when one witness who actually does it—sat where you are sat not half an hour ago—said they are ready to scale?
Luke Taylor (Liberal Democrat, Sutton and Cheam)
Q I want to be very careful with this question. We have had questions about investors and appetites to put money into these technologies—into refineries, production and particular projects. There was previously a fairly strong consensus on the need to address climate change, and this is one of the projects that we are doing to mitigate those impacts. There is a fair amount of rhetoric at the moment about stopping investment in net zero projects in particular regions, some of which have a heavy dependency on or a high frequency of these sorts of projects—north Lincolnshire, Humberside and such areas. Is there a risk that that sort of rhetoric damages investor confidence and that, with that sort of language and those sorts of pronouncements being made, we see challenges in delivering the jobs and the plants and seeing the capacity that we need come online?
Luke Taylor (Liberal Democrat, Sutton and Cheam)
I admire your faith that that narrative might fall away, but I agree with the rest of the answer.
Mark Pritchard (Conservative, The Wrekin)
If there are no further questions, thank you very much indeed, Mr Garton, for your evidence today.
Examination of Witnesses
Mark Pritchard (Conservative, The Wrekin)
We will now hear oral evidence from Philip New. For this session we have until 3.40 pm. Welcome, Mr New. Just for the record, could you introduce yourself?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Good afternoon, Mr New. Fast-forwarding from your review to where we are today, is there anything that you wanted to see, that you recommended or that you found in that review, that is lacking in the Bill that this Committee is considering? If that is the case, how would you improve it—or is this the mechanism that you think will pump-prime the UK SAF industry?
Greg Smith (Conservative, Mid Buckinghamshire)
Q That is very helpful. As you raised, for example, the black bin waste stream, it strikes me that looking across the differing technologies to produce SAF, the waste-derived ones could end up being the most costly, not least because the bulk of waste goes through local authorities. Many of those—including my own in Buckinghamshire—are tied up in very long-term finance arrangements on incinerators, so they cannot simply take their waste somewhere else because they are locked in a contract. Buckinghamshire is by no means unique in that. Do you see waste-derived SAF hitting an even bigger buffer when the practicalities come, and it either requiring some significant state subsidy to buy out those incinerator contracts or simply not having the waste in the first place?
Julie Minns (Labour, Carlisle)
Q Building on that, we heard from a couple of witnesses earlier today about the waste hierarchy, but in your view, is there a point at which local authorities should be looking at their local plans for waste and minerals? My local authority is already receiving applications for gasification plants, and it is not alone in this. If they come on stream, they could deprive the SAF producers of the materials that they would want to acquire. At what point do local authorities need to be thinking ahead when looking at their waste and mineral plans?
David Reed (Conservative, Exmouth and Exeter East)
Q You did your independent report in 2023. Obviously, the world has changed rapidly in the past couple of years. We are seeing global economic change, with tariffs, international supply chains becoming more contested, and increased conflicts and volatility. How have the conclusions that you drew in 2023 changed, and where would you say that delta is?
David Reed (Conservative, Exmouth and Exeter East)
Q Just a small follow-up, if I can. You are saying that the biggest change is the US pulling back from innovation and production of SAF. Is that in direct response to what the Chinese are doing?
Luke Taylor (Liberal Democrat, Sutton and Cheam)
Q As a good Liberal Democrat, I want to talk about bins again. Incineration and energy recovery facilities are broadly seen as the least worst options. If there is now an alternative, lots of us will be very interested in the opportunities for local authorities and for making conditions better for our residents. If that means cheaper bin collection, we will all be in favour.
I have questions about the big picture. It has the potential to disincentivise recycling. Does the increasing value of SAF feedstock undermine the efforts to recycle? Another, more technical question is: could plastics recycling be better diverted into this process to solve a lot of the problems we have with exporting plastics for recycling and the energy used to do that?
Many of our energy from waste facilities are now linked to heat networks. Is that bigger picture being considered—not just producing electrons, as you say, but using waste heat for district heating networks? There is a bit of additional complexity.
That leads into the bigger question of the holistic view across different Departments and the incentives that the Bill creates, which I am sure are all positive. It promotes better, more sustainable options in different Departments. Is enough work being done elsewhere for this to work within the bigger system? You have 15 minutes.
Luke Taylor (Liberal Democrat, Sutton and Cheam)
Q It is the broader question of how this sits within the system. The implications of this Bill are really broad in the way the incentives will come into a whole different set of markets, including agriculture, waste and local government.
Lewis Atkinson (Labour, Sunderland Central)
Mr New, in your report you say that one of the key asks for industry is around confidence. We have talked a lot about revenue confidence today, but I want to go over that a little bit. You ask how the UK Government can demonstrate that they will stay the course, and I guess the core of that is political confidence.Q
Since your report, of course, we have had a change in Government, and who knows if there might be another one over the investment cycles we are talking about here? Could you say a little about your assessment of how a Bill—putting something in primary legislation, as this does—helps to provide the political confidence that you believe investors are looking for, and also, frankly, helps to mitigate the actions of the varying parties in Parliament as we approach this issue?
Mark Pritchard (Conservative, The Wrekin)
Thank you for your evidence, Mr New. We will now move on to the next panel. Before I call our next witness, Mr Geoff Maynard, I say to colleagues that there may well be a Division around 4 pm, or perhaps 4.05 pm, so we may or may not get through the whole of this session before then. If there is a Division, we will go and vote. Return within fifteen minutes maximum, please. If there is another vote, which I do not think there will be, it will be a further 10 minutes.
Examination of Witness
Mark Pritchard (Conservative, The Wrekin)
Q Welcome, Mr Maynard. For this session, we have until 4 pm. Please introduce yourself for the record.
Greg Smith (Conservative, Mid Buckinghamshire)
Q Good afternoon. Does the Bill get that balance right? Will it increase UK production of SAF to the point that we have domestic fuel security, or is there a better way of decarbonising aviation fuel?
Greg Smith (Conservative, Mid Buckinghamshire)
Q But it is the mandate that tells them they have to use it. The Bill is about domestic SAF production.
Greg Smith (Conservative, Mid Buckinghamshire)
Q That is a very fair answer. On the cost basis, the Government have said that the end-user cost—as opposed to the cost to the airline or the producer—of buying a plane ticket is plus/minus £1.50 on a fare. We have heard from multiple witnesses today that that is potentially an optimistic figure. Where does your organisation’s analysis put it?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Where does your organisation see the price of SAF going in the medium and long term? In theory, if the Bill works, SAF production in the United Kingdom will increase exponentially. Therefore, the unit cost—the per litre or per tonne cost—will come down. How long does your analysis suggest it will take us—as a country, as opposed to a global market—to be able to supply SAF to the airlines at a cost that is closer to the fossil-fuel equivalent today?
Tom Collins (Labour, Worcester)
Q As you mentioned, this is an enabling Bill and what will really count is how the RCM rounds are designed. You have talked about the need for us to realise economies of scale and advances in technology as we move through larger and larger availability of feedstocks. Do you see that kind of mechanism as being a useful vehicle for us to make those economies of scale and bring that innovation to bear?
David Reed (Conservative, Exmouth and Exeter East)
Q Mr Maynard, thank you for being with us. In your role within the aviation policy group, have there been any conversations with colleagues from the Ministry of Defence about the Royal Air Force potentially using SAF and the international logistical challenges of getting SAF into the UK? You raised some concerns earlier on.
David Reed (Conservative, Exmouth and Exeter East)
Q It does. Do you see this developing in the private sector far faster than in military environments?
Mark Pritchard (Conservative, The Wrekin)
Any other questions? No. Mr Maynard, thank you very much indeed for your evidence this afternoon. We are grateful to you for taking the time to meet with us.
Mark Pritchard (Conservative, The Wrekin)
We will now hear oral evidence from Professor Mark Maslin from the UCL Centre for Sustainable Aviation. We have till 4.20 pm for this session. Welcome, Professor Maslin. Would you state your name and so on for the record?
Greg Smith (Conservative, Mid Buckinghamshire)
It is always good to get an academic perspective on these matters. We can get locked into all sorts of technical discussions and lose the bigger picture. FromQ your work in the UCL centre, is there an academic view—a big picture view—on which of the technologies that the Bill could support through the price mechanism to scale up production in this country has the best chance of breaking through and being a long-term solution, on a scale that will give us domestic fuel security and at a cost that will not drive commercial passengers and holidaymakers away from the airlines?
Greg Smith (Conservative, Mid Buckinghamshire)
That is very helpful. You may have heard me ask previous witnesses about the cost to the end user. The Government’s analysis is that it would end up being plus or minus £1.50 on the airfare, but a succession of witnesses have not been willing to put their name to that, or even to go as far as saying that they think that that is a conservative estimate. Where does your analysis sit onQ that?
Tom Collins (Labour, Worcester)
Q As someone who works in research and innovation, you will be familiar with the UK pain point, where we are often excellent at planning the technologies at low technology readiness levels, and then we lose them to that mid-level valley of death. The UK is strong in sustainable fuels at the research level; this mechanism is intended to help us to navigate through the valley of death, and to reach scale and economic viability. Do you think it is a good mechanism for that and that it will help us to break that trend in the UK?
Tom Collins (Labour, Worcester)
Q Obviously, Innovate UK is our key player in that space. Do you see it as active in this space? Is there anything you would like to see us doing slightly differently to support SMEs and innovators better?
Joe Robertson (Conservative, Isle of Wight East)
I have realised that Professor Maslin was an undergraduate tutor of mine quite a few years ago.
Joe Robertson (Conservative, Isle of Wight East)
Q By the look of it, you have had an easier life than I have had. I have a fairly brief question. This morning, we heard representations that the SAF mandate is enough in that it creates the demand and requirements that the market will adjust to and fulfil, and that the Bill is therefore not needed. I invite your thoughts and comments on that bold statement.
Amanda Hack (Labour, North West Leicestershire)
Q On the potential economic benefits of the Bill, you mentioned the other layer of infrastructure that we need to put in place. How do we ensure that we have individuals with the skills and smaller organisations with the financial capacity to ensure that we maximise the economic benefits from trying to be the market leader?
Amanda Hack (Labour, North West Leicestershire)
Sorry.
David Reed (Conservative, Exmouth and Exeter East)
Q Professor Maslin, thank you for being with us today. You talked powerfully about the international nature of this technology set. If a country or business is not going through a good time, that technology might not come through the supply chain. From a UK perspective, where are the main weaknesses with the international supply chain? As a follow-on, are any hostile states actively trying to weaponise elements of that supply chain?
Luke Taylor (Liberal Democrat, Sutton and Cheam)
Q May I start by heartily endorsing your encouragement of engineering as a career or an education? As an aeronautical engineer before I came to this place, I am available for motivational speeches whenever necessary.
From my discussions with industry on the Bill up until now, I am not quite sure that I am convinced about being agnostic to SAF production, source and mechanism. My worry is that it does not give enough ability to shape the environmental benefit of that SAF stream and to incentivise the most beneficial SAF production, such as PTL compared with the earlier gen SAFs, even 2g SAFs. Does the Bill as presented give enough of the right mechanisms to incentivise the right sort of SAFs that will be most beneficial and provide us with the greatest environmental benefit?
Mark Pritchard (Conservative, The Wrekin)
Professor, thank you for your evidence and for illuminating us with the alumni in our midst.
Mark Pritchard (Conservative, The Wrekin)
Thank you, Professor, for a very interesting contribution. We very much appreciate your time today.
Mark Pritchard (Conservative, The Wrekin)
We now move on to the Minister, and we have until 4.40 pm for this session. I suspect that we will be interrupted shortly by a Division, but I think we should proceed. Minister, while you have been active in our proceedings today, taking notes and so on, could you please introduce yourself for the record?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Minister, no doubt we will be able to go through much of this on Thursday and next Tuesday, but a central feature of the debate on Second Reading was the ultimate impact on airfare payers of the price mechanism in the Bill, on top of the mandate. You were very clear at the Dispatch Box that it was plus or minus £1.50. I have no reason to doubt that, but some of the witnesses today have. Is there some more work to be done by the Department as the Bill progresses to kick the tyres on those assumptions? How confident are you that it will stand the test of time, given that multiple witnesses today have challenged that number?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Thank you. That is helpful. Can I also ask for your views on a couple of other areas of evidence we heard today? The first is about a point that also came up on Second Reading: the protection of UK intellectual property as contracts are let and participants come forward to take part in the price mechanism. Has the Department done any more thinking on UK IP, so that we are not just producing SAF, of whichever technology, within the United Kingdom for our own fuel security, but doing so with genuinely UK technology driving it?
Greg Smith (Conservative, Mid Buckinghamshire)
Q This is my final question before we get to go through the Bill in detail on Thursday and next Tuesday. Accepting the agnostic position, has anything you have heard today from the various companies who have given evidence, be that global giants such as Shell, UK-based innovators such as Zero Petroleum or the companies developing SAFs from waste, changed your thinking on whether there might be emerging winners and losers, given some of the challenges that we have heard about—not least the municipal waste challenges?
Christopher Vince (Labour/Co-operative, Harlow)
Q The evidence session has been very positive—I think you would agree—with a lot of positive evidence about the Bill and sustainable aviation fuel in general. I have the same question that I have asked a number of those giving evidence today: will you elaborate on what you think would be the risks and potential disadvantages to the UK, if we were to stall on the Bill and not pass it on Third Reading?
Tom Collins (Labour, Worcester)
Q We heard some of the evidence about how effective the RCM could be in light of the difference that CfDs have made. You have already explained how to manage the levers and the number of contracts allocated to get the economics right, but can you explain how that sits alongside the SAF mandate to help us to steer UK innovation and maximise the opportunities for the UK to lead in this sector?
Luke Taylor (Liberal Democrat, Sutton and Cheam)
Q I have one straightforward question, and one that is a little more spiky. First, we have heard a lot about the need to work across Government to ensure that we get the most effective outcome from the Bill. From all the evidence we have heard, it seems to be the right thing and structured well, but how do we ensure that municipal waste streams match up with incentives for heat networks, waste hierarchies and that sort of stuff? We hear a lot about mission-based Government—is that what will give the advantage to being able to co-ordinate across Departments? Will you give us an account of what you are doing so far to pull those Departments and different groups together to make sure it works?
Mark Pritchard (Conservative, The Wrekin)
Order. I am suspending the Committee for a Division in the House. We will try to get back as quickly as possible.
Mark Pritchard (Conservative, The Wrekin)
We now continue with our proceedings. I call Luke Pollard to continue—[Interruption.] Sorry, you are not a Minister of State yet, but you will be soon, I am sure. I call Luke Taylor.
Luke Taylor (Liberal Democrat, Sutton and Cheam)
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?
Amanda Hack (Labour, North West Leicestershire)
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?
Paul Kohler (Liberal Democrat, Wimbledon)
Q I have been looking at some of the written evidence we have received in addition to the testimonies from the witnesses. I understand why clause 6 is widely drawn, but do you recognise that the levy being calculated in too complex a way would produce uncertainty, a lack of transparency, and externalities or transaction costs that we do not need?
Paul Kohler (Liberal Democrat, Wimbledon)
Q I do not know whether you have seen it, but Valero makes the point in its written submission that if the way that you calculate the levy is too complex, and if you base it on historical market data rather than current data, then with just a standard levy, that will produce problems, whereby new entrants will not be subject to the levy. We have to be sensible about how we calculate the levy. That is all I am suggesting. Do you recognise that as an issue?
Mark Pritchard (Conservative, The Wrekin)
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.
Graeme Downie (Labour, Dunfermline and Dollar)
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?
Euan Stainbank (Labour, Falkirk)
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?
Euan Stainbank (Labour, Falkirk)
Q To follow up on that, the Government have been quite consistent in their response to this question, but I just want to reconfirm: are the Government committed to maintaining their current position on the HEFA cap?
Lewis Atkinson (Labour, Sunderland Central)
Q I am neither a chemist nor an aviation policy expert, so I will ask my questions from the perspective of my constituents in Sunderland. Looking at this policy area, they would be interested in the potential impacts on jobs and airfares. On jobs, could you say a little more about what you think the potential upside is in areas like mine? On airfares, can you confirm that clause 10, which deals with the payment of potential surpluses back to levy payers, creates the potential for downward pressure on airfares, depending on where the strike price ends up?
Mark Pritchard (Conservative, The Wrekin)
If there are no further questions, thank you, Minister, for your evidence this afternoon. That brings us to the end of today’s session. The Committee will meet again at 11.30 am on Thursday 17 July to begin line-by-line consideration of the Bill.