Sustainable Aviation Fuel Bill (Fourth sitting)

The Committee consisted of the following Members:

Chairs: Mark Pritchard, † Matt Western

† Atkinson, Lewis (Sunderland Central) (Lab)

Buckley, Julia (Shrewsbury) (Lab)

† Collins, Tom (Worcester) (Lab)

† Dearden, Kate (Halifax) (Lab/Co-op)

† Downie, Graeme (Dunfermline and Dollar) (Lab)

† Hack, Amanda (North West Leicestershire) (Lab)

† Kane, Mike (Parliamentary Under-Secretary of State for Transport)

† Kohler, Mr Paul (Wimbledon) (LD)

† Macdonald, Alice (Norwich North) (Lab/Co-op)

Mayhew, Jerome (Broadland and Fakenham) (Con)

† Minns, Ms Julie (Carlisle) (Lab)

Reed, David (Exmouth and Exeter East) (Con)

Robertson, Joe (Isle of Wight East) (Con)

† Smith, Greg (Mid Buckinghamshire) (Con)

† Stainbank, Euan (Falkirk) (Lab)

† Taylor, Luke (Sutton and Cheam) (LD)

† Vince, Chris (Harlow) (Lab/Co-op)

Lucinda Maer, Dominic Stockbridge, Committee Clerks

† attended the Committee

Public Bill Committee

[Matt Western in the Chair]

Sustainable Aviation Fuel Bill

New Clause 7

Review of the impact of the Act on the sustainable aviation fuel industry and measures to further encourage production

“(1) Within twelve months of the day on which this Act is passed, the Secretary of State must lay before Parliament and publish a report assessing the impact of this Act on the strength of the United Kingdom’s sustainable aviation fuel industry and how the production of sustainable aviation fuel might be further encouraged.

(2) The report required under subsection (1) must include, but is not limited to—

(a) an assessment of the impact of this Act on the level of production of sustainable aviation fuel in the UK and its use by the aviation industry;

(b) recommendations on how the production of sustainable aviation fuel in the UK can be further encouraged including—

(i) measures to encourage innovation leading to commercial take-up,

(ii) measures to encourage the construction of sustainable aviation fuel plants, and

(iii) any further support mechanisms which would encourage the increased competitiveness of and production by the UK sustainable fuel industry;

(c) a statement on how the findings of the report will be addressed in order further encourage the production of sustainable aviation fuel.

(3) In preparing the report required under subsection (1), the Secretary of State must consult relevant stakeholders, including, but not limited to—

(a) sustainable aviation fuel producers,

(b) aviation fuel suppliers,

(c) airlines,

(d) environmental organisations,

(e) academic experts, and

(f) representatives of impacted communities.”—(Mr Kohler.)

14:00:00

I beg to move, That the clause be read a Second time. If we are serious about meeting our climate obligations and economic ambitions, then transparency, accountability and evidence-led policy must be at the heart of the legislation. The ambition of the Bill to build a whole new industry is to be lauded, but it lacks the level of scrutiny that such a large project entails. The Bill sets a framework, but frameworks alone do not produce fuel. Nor do they deliver jobs, attract investment or lower emissions. We must not content ourselves with well-intentioned ambition. After previous broken promises by—I am sorry to say—the Conservatives—to have five plants up and running by now, we have already seen that ambition alone will not deliver what we need. To truly build the sustainable aviation fuel industry, we must track progress, identify bottlenecks and act on evidence. That is what the new clause provides. It demands a detailed assessment of SAF production levels, uptake by airlines and investment in infrastructure. Further, it requires the Government to consult widely with a full range of stakeholders, widely enough drawn to include employees and unions, as well as producers, suppliers, environmental experts, academics and, importantly, the communities whose lives will be affected, whether by new plants, changes in aviation demand or environmental impact. The new clause would ensure that Ministers come back to the House not with warm words but with evidence, consultation and a plan. I urge the Minister to accept it in the spirit in which it is offered—constructive, collaborative and committed to making the legislation truly fit for purpose.

I thank the hon. Member for the new clause, which seeks to ensure parliamentary scrutiny and that the SAF revenue certainty mechanism will run effectively. I also thank him for saying that I am full of warm words, because I am. I agree with the hon. Member that it is important to have measures to assess the impact of the Bill and make necessary recommendations; however, significant developments in the SAF industry are unlikely within the first 12 months after the Bill becomes an Act. We are committed to deliver the revenue certainty mechanism as soon as possible, but it is vital that such complex contracts are considered carefully, with time taken to get them right. That will involve negotiations with potential SAF producers. I reassure the hon. Member that we are committed to transparency in the Bill. We have committed to publishing details of who receives revenue certainty contracts and on what terms. We will also continue to publish annual data on the volume of SAF supplied under the SAF mandate. I hope that he accepts the explanations in the spirit in which they are given and withdraws his new clause.

I am grateful for the Minister’s flattering and sometimes unctuous words. He makes a good point about 12 months not being sufficient time to give such a report, and I acknowledge the assurances that he has given. I beg to ask leave to withdraw the motion. Clause, by leave, withdrawn. New Clause 8 Review of the Potential Conversion of Industrial Sites for Sustainable Aviation Fuel Production “(1) Within twelve months of the day on which this Act is passed, the Secretary of State must lay before Parliament and publish a report into the merits of converting disused oil refineries and other relevant existing industrial sites into facilities for the production of sustainable aviation fuel. (2) The report required under subsection (1) must include, but is not limited to— (a) an assessment of the technical and operational feasibility of such conversions; (b) an evaluation of the economic viability of such conversions; (c) the cost effectiveness of such conversions compared to new build production facilities, taking into account— (i) the ability to use existing infrastructure such as tanks and pipelines; (ii) the complexities of environmental remediation and site preparation. (iii) the availability and suitability of a skilled workforce within proximity to such sites. (d) recommendations for government actions to facilitate and incentivise such conversions, where they are deemed beneficial for enhancing the resilience and increasing the domestic production of sustainable aviation fuel industry. (3) In preparing the report required under subsection (1), the Secretary of State must consult relevant stakeholders, including, but not limited to— (a) sustainable aviation fuel producers, (b) representatives of the oil and gas industry and workforce, (c) environmental organisations, (d) local authorities, and (e) academic experts. (4) The report must be accompanied by a statement from the Secretary of State on how the findings of the report will be addressed through Government action.”—(Mr Kohler.) This new clause mandates the Secretary of State to publish a report within twelve months, reviewing the merits of converting disused oil refineries and other industrial sites for Sustainable Aviation Fuel production. Brought up, and read the First time.

I beg to move, That the clause be read a Second time. New clause 8 calls on the Secretary of State to publish a report within 12 months on the merits of converting disused oil refineries and other existing industrial sites into sustainable aviation fuel production facilities—and there is an opportunity to have such a report early on. Many Members present, including, notably, the hon. Member for Falkirk, have spoken about the strength and possibilities of SAF to reinvigorate and reuse industrial sites. The UK has several disused oil refineries and industrial sites, which already possess critical infrastructure—storage tanks, pipelines, grid connections—and are often located near skilled workforces familiar with complex industrial processes. That presents a real opportunity to repurpose existing assets, accelerating the deployment of SAF production, supporting local economies, and reducing the cost compared with greenfield sites, but we must proceed with a clear understanding of the technical feasibility, operational requirements and environmental considerations for such conversions. Environmental remediation, site preparation and ensuring community support are complex challenges that require careful evaluation. The new clause would mandate a thorough, evidence-based report that would address such technical, economic and environmental factors, and include consultation of a wide range of stakeholders, including SAF producers, the oil and gas workforce, unions, environmental organisations, local authorities and academic experts. The findings will help the Government to shape policies and incentives that maximise the benefits of such conversions where appropriate. I do not think we can simply leave it to market mechanisms; the Government need to intervene here. This is not about preserving the fossil fuel past, but transitioning our industrial heritage and workforce, and some of our dying economies, to a new sustainable future. The UK’s industrial regions deserve a just transition that leverages their existing strengths to help to power the green economy. The new clause would be a step towards securing the resilience and growth of a domestic SAF industry that can create good jobs, strengthen supply chains and reduce reliance on imports. I urge the Minister to welcome this practical proposal, accept the new clause and commit to a clear timeline for delivering the report. The future of UK aviation depends on not only ambitious targets but pragmatic steps to make those targets achievable and bring the country with us. The new clause would help us to take one such step.

New clause 8 has considerable merit. It is always preferable where new industrial facilities are to be built—in this case for the production of sustainable aviation fuel—for those identified sites to have had former brownfield status and former industrial use. I have no argument with that element of the new clause. The one note of caution I have on the new clause is that many of the existing sites—certainly oil refinery sites—are not necessarily located in the right places currently for certain SAF technologies. That includes the e-fuels and power-to-liquid solutions, which require, as part of the process, electrolysis and the creation of green hydrogen. Of course, if the hydrogen element that goes into making the SAF is not green hydrogen, the whole problem becomes rather academic—we could still make the fuel, but the reality is that it would not be as green as we want it to be. Those SAF production facilities, by definition, would need to be located in places with potential large-scale offshore wind, electricity production or, possibly, nuclear generation. If we look across the world at such fuel plants that have been created, Porsche, for example, chose the hills of Chile to produce its particular fuel, because it can leverage off the wind power that it can get up there. In our country, Orkney seems to have been a popular site for harnessing the offshore wind technology available up there. While I fully support the principle that underpins the new clause—for many SAF production sites to be on former industrial or oil refinery sites—I simply wish to add the note of caution that they might not be suitable for every application and technology out there.

On new clause 8, the hon. Member for Wimbledon is right to talk about deindustrialisation. Growing up in the 1970s, I saw the impacts of that, particularly on the east side of Manchester, with the chemical and mining industries being wiped out. In this day and age, we are still getting over that in my great city. I reassure him that we are supporting the SAF industry, in part, to grasp this opportunity for deindustrialised areas. Emerging SAF projects are often located on former industrial sites, and I remind the Committee that, if we do this right, our low-carbon fuels industry can support up to 15,000 jobs and £5 billion to the economy by 2050. I also reassure the hon. Member that work is ongoing across Government on the future of our refineries. We are acting urgently in response to the deeply concerning news of insolvency at Prax Lindsey oil refinery, and have put £200 million into the National Wealth Fund to back investment at Grangemouth. I want that work to continue at pace, and am conscious that specific sites will need to be considered on a case-by-case basis. Commissioning an additional separate report would not be beneficial, and would risk delaying potential investment decisions. Given that, I ask the hon. Member to withdraw the motion.

I am saddened by the Minister’s response. We cannot just leave it to the invisible hand of the market to make sure that sensible decisions are made regarding old oil refinery sites.

In Grangemouth, we have £200 million dedicated from the National Wealth Fund, and Project Willow, which has two SAF options contained within it. Does the hon. Member acknowledge that, and acknowledge that we need to move at pace to deal with deindustrialisation in such places? His new clause would risk potentially adding another layer of report-making, rather than the real action that needs to be taken in places such as my constituency.

Such a report would not require there to be a delay. The report would be within 12 months, and we have already heard from the Minister that not much will happen within the first 12 months. That was the excuse given earlier in Committee for not doing various things. A report to focus attention on these sites would be useful and helpful, and I really cannot see why there should be any objection to it. Question put, That the clause be read a Second time.

3|0|3|10|The Committee divided:|Question accordingly negatived.||0|0

Clause 15

Regulations

I beg to move amendment 1, in clause 15, page 8, line 7, leave out paragraphs (c) and (d) and insert— “(c) section 10 (payment of surpluses to levy payers); (d) section 11(4)(a) (power to amend maximum financial penalty);”. This amendment switches the order of paragraphs (c) and (d) so that the sections referred to appear in sequential order. It also corrects a cross-reference. The substance is unchanged.

With this it will be convenient to discuss clauses 15 to 19 stand part.

Clause 15 provides that regulations are to be made by statutory instrument and that they may make different provision for different purposes and supplementary, incidental, transitional or saving provision. As we have already discussed, the regulation-making powers in clauses 1(6), 6(1), 10 and 11(4)(a) are subject to the affirmative procedure. The regulation-making powers in clauses 3(1) and 11(4)(b), which are largely administrative, are subject to the negative procedure; these powers will not alter the fundamental elements of the revenue certainty mechanism. Clause 16 provides information on how terms that are used throughout the Bill should be interpreted. It should be noted that our intention is for the revenue certainty mechanism only to support SAF production that would be eligible for the SAF mandate. This will be set out in the eligibility criteria during contract allocation. Clause 17 states that the Bill extends to England and Wales, Scotland and Northern Ireland. Clause 18 sets out when the provisions of the Bill will come into force. We expect all the legislation for a revenue certainty mechanism to be in place by the end of 2026. We will continue to monitor the estimated delivery date and work with industry to deliver an effective revenue certainty mechanism as soon as possible. Clause 19 confirms that the Bill will be named the Sustainable Aviation Fuel Act upon Royal Assent. Amendment 1 agreed to. Clause 15, as amended, ordered to stand part of the Bill. Clauses 16 to 19 ordered to stand part of the Bill. Question proposed, That the Chair do report the Bill, as amended, to the House.

Thank you, Mr Western, for chairing the Committee. I also thank the Clerks, Hansard Reporters and Doorkeepers for overseeing proceedings. The Committee also benefited from the expertise of our witnesses and those who provided written evidence. As this is a hugely technical Bill and the world is watching us, I pay a massive tribute to the civil servants in my Department who worked on it. I thank all hon. Members who made this issue a manifesto commitment at the general election. I thank the Opposition for supporting the Bill and for their valuable contributions and insights. I thank the shadow Minister, the hon. Member for Mid Buckinghamshire, the Liberal Democrat spokesman, the hon. Member for Wimbledon, and all other Committee members. I thank them for their expertise and insight, and for the broadly positive, collaborative nature that they brought to the Committee. We all want the SAF industry in this country to grow and succeed so that we secure our world-class aviation sector’s future. I look forward to further engagement with hon. Members on the Bill.

I associate myself with the Minister’s thanks to everyone who has worked so hard on the Bill, particularly the civil servants; I welcomed the ability to discuss the Bill with them in a private briefing before Second Reading. I also thank the Doorkeepers, Hansard and the Clerks for ensuring that the Committee has run smoothly. It is quite a pleasant experience to engage with a Bill in opposition when there is fundamental agreement on the direction of travel. The other Bill Committee of this Parliament on which I was shadow Minister was for the Employment Rights Bill, where we did not enjoy quite the same level of consensus, but to meet the challenges of decarbonising our aviation industry it is important that this Bill progresses rapidly. However, I urge the Minister, who has been kind and engaged throughout the process, to continue to reflect on the points that I have raised in Committee and that the shadow Secretary of State, my hon. Friend the Member for Orpington (Gareth Bacon), raised on Second Reading, as well as the many worthy points that the Liberal Democrats have raised. If we can keep going in the spirit of cross-party working and reflect on some of the points about UK intellectual property—making this a UK success story, making the UK a world leader and ensuring that the technologies that emerge genuinely do what they say they will—then I think all of Parliament, not just the Government, can be proud to push the Bill through. Question put and agreed to. Bill, as amended, accordingly to be reported.

14:20:00

Written evidence reported to the House

SAFB 23 SASHA Coalition