Showing every spoken contribution, including 5,750 under 12 words. Hide short remarks

1. 15 Jul 2025·Parliament·Helen Whately

   Welfare Spending

   I will first make a little progress, but then I will be happy to give way to the hon. Lady. Last week’s welfare fiasco saw a Bill that was meant to save money become a Bill that will cost money. We have also seen the fiasco of the winter fuel payments cut, with the Government having to row back on their tough talk because taking money from low-income pensioners is not, in fact, the way to make savings. And now we are debating the future of the two-child limit, which Cabinet Ministers, including the Prime Minister, have indicated is the next tough choice that they are not going to make.

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2. 15 Jul 2025·Parliament·Helen Whately

   Welfare Spending

   My hon. Friend makes an important and thoughtful point. Many families, whether they are living off benefits or in work, would like to have more children but have to make these difficult choices about what they can afford. This is a point about fairness. I know that many Labour Members passionately believe that the limit should go, and they will make arguments today about child poverty as if they were the only ones who care about it—[Interruption.] For the avoidance of doubt, that is not true. Our difference of opinion is about what to do about it. I think all of us are at a loss to know what the Prime Minister believes in. By contrast, we know what we believe in and we know why we are here. That is why we have brought forward this debate on the two-child limit, because somebody has to make the case for fiscal responsibility, for living within our means, for fairness, for ensuring that work pays and for keeping the two-child cap. I want to be clear that all of us—including those of us on the Opposition Benches—want children to have the best possible start in life. Let us also be clear about what the two-child limit actually is, because I note that some Members from other parties are confused. The two-child limit restricts the amount of additional universal credit that families receive for having children to the first two children only, with some sensible exceptions, such as for twins or non-consensual conception. The cap does not apply to child benefit, which is available to all families with incomes of up to £80,000 for every child, regardless of the number of children in a family.

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3. 15 Jul 2025·Parliament·Helen Whately

   Welfare Spending

   I could not put it better than my right hon. Friend. We know that bringing up children is expensive and important. When working couples have to make tough decisions about whether they can afford to start a family in the first place, they should not be made to pay more in taxes to fund their neighbour to have a third, fourth or fifth child. Someone in a job does not get paid more just because they have another child. If we are worried about people getting caught in a benefits trap where it pays more to be on welfare than in work, how much worse would it be with neither the two-child benefit nor the benefits cap? It would mean benefits increased by thousands. When I say thousands, the House of Commons Library has told me that a family with five children would get more than £10,000 extra a year and a family with eight children would get more than £20,000 extra a year. That is more than the after-tax income of someone working full time on the minimum wage.

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4. 15 Jul 2025·Parliament·Helen Whately

   Welfare Spending

   If I could take the hon. Lady back a bit, she might remember when we came into office in 2010, and we had to bring down the deficit year after year to get the country’s finances under control. Giving children the best start in life is not as simple as handing out more money. It is about giving parents the community support they need as they encounter the challenges of bringing up a child, which is why we launched the family hubs. It is about education, but school teachers around the country are being let go. It is about growing up in a household with someone in work, but across the country people are being made redundant because of the Chancellor’s jobs tax. I know that I will not win over everyone here with my argument. For instance, I do not expect to convince the four remaining Reform MPs, because their leader has said that he would remove the two-child limit—the hon. Member for Clacton (Nigel Farage) believes that is the right thing to do and said that he is not finished yet on benefit giveaways. But asking the taxpayer for ever more in taxes to pay for their neighbour’s benefits is not the right thing to do. The country, taxpayers and future generations cannot afford this. The Prime Minister, the Chancellor and Cabinet Ministers have been unable to rule out more tax rises this autumn. Businesses, working people, pensioners, savers, homeowners—whose pocket will be picked next? Last week, the Office for Budget Responsibility warned that the UK’s finances are in a very “vulnerable position”. Now more than ever we need the Government to take the tough decisions—but will they? I know Labour Back Benchers are itching to vote to scrap the limit, but where are the Government on this? Will they take the position of the Prime Minister in 2020, in 2024 or now, or will they have to abstain because the Government just do not know? Soon we will see. Only the Conservatives understand the importance of personal responsibility, fairness and living within our means. Labour, the Lib Dems, the SNP, the Greens and Reform all voted last week for more welfare spending. Will they do the same today, or will they vote with us to back the people getting up every morning, going out to work, doing the hard yards, making the hard choices and working hard to build our country?

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5. 15 Jul 2025·Parliament·Harriet Cross

   Taxes

   On pretending, it seems to me that Labour likes to pretend that the covid pandemic never happened and that the £400 billion that the previous Government spent to protect the country and protect jobs, which Labour supported and asked us to go further on, never happened. Will the hon. Gentleman reflect on that and at least acknowledge what happened in the recent past?

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6. 15 Jul 2025·Parliament·Harriet Cross

   Taxes

   In his speech, the Chief Secretary to the Treasury said that working people are people who go out to work. Do farmers go out to work?

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7. 15 Jul 2025·Parliament·Gregory Stafford

   SEND Provision: South-east England

   It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate the hon. Member for Tunbridge Wells (Mike Martin) on securing the debate. I rise today not just as a constituency MP, but as vice-chairman of the all-party parliamentary group for special educational needs and disabilities and as someone alarmed by what I see every day: a system stretched to the point of failure, with vulnerable children paying the price. In my first year as an MP I have taken up 98 SEND cases, but I accept that that is just the tip of the iceberg in my constituency. Those cases include a family whose son’s autism assessment is so delayed that he will finish school before he gets the help he needs. Another family is spending over £10,000 on tribunal proceedings. This is not a system; it is a fight, and families are losing. Across both Surrey and Hampshire, 3% of pupils in state-funded schools have an EHCP and a further 13% receive SEND support, but behind the numbers are children waiting years for basic support, parents forced into legal battles just to access what their children are entitled to and councils collapsing under the sheer volume of demand, without the necessary support that this requires from national Government. The crisis is compounded by serious concerns about legality and quality. I have heard credible reports of educational psychologist assessments being drafted by trainees and rubber-stamped without proper oversight—a process designed to evade scrutiny, not deliver support. Meanwhile, the cost of failure is spiralling. In Surrey alone, more than £13 million a year is spent on taxis to bring more than 500 children to school. Nationally, the average cost of special school placements is now over £61,000 per child per year, and councils are staring down a projected £5 billion SEND deficit by 2026. All of that is worsened by the Government’s ideological attack on independent schools. Schools like More House and Undershaw school offer bespoke, life-changing provision, often in partnership with local authorities, for children who cannot cope in mainstream education. However, tax changes and policy hostility are forcing closures, reducing places and driving up costs. The result is fewer options for children and more pressure on already overwhelmed state schools. I pay tribute to Councillor Jonathan Hulley, who has just taken over as the new cabinet member in Surrey and is trying his best to grapple with this problem. As we have heard across the Chamber, this is not a Surrey or Hampshire problem; it is country-wide, and the Government need to step up. Will the Minister ringfence capital funding to expand specialist places in high-need areas? Will she publish guidance and support to reduce the cost and overuse of solo SEND transport, which is neither sustainable nor in the child’s best interest? Will she protect alternative and independent providers that deliver high-quality specialty education?

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8. 15 Jul 2025·Parliament·Gregory Stafford

   SEND Provision: South-east England

   I respect the hon. Lady deeply, but I must say that I entirely disagree. Pitting the state sector against the independent sector, and vice versa, is entirely the wrong way to go about it—it would damage education. I am very happy to take her around More House or Undershaw in my constituency to show her the amazing work that those two schools do; she may change her tune once she has seen that. The key thing is this: will the Government step up and make the national changes and reforms to make this system fair, equitable and sustainable across the country? SEND families are asking not for special treatment but for lawful, timely and compassionate support. No child should feel hopeless in the very system meant to help them, and no family should be forced to break themselves to secure basic rights. Let us fix this, and mean what we say when we talk about inclusion.

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9. 15 Jul 2025·Parliament·Gregory Stafford

   Taxes

   This Labour Government have begun a full-scale assault on the British economy. In just one year they have presided over a shambles that has punished workers, hammered businesses and betrayed every promise they made on tax to my constituents in Farnham, Bordon, Haslemere, Liphook and the surrounding villages. Let us look at the facts. National insurance is up, with a 1.2% rise that the IFS confirms will fall largely on working people. Agricultural property relief has been slashed, which the National Farmers Union warns threatens family farms and food security. In my constituency, farming is not just a way of life; it underpins our local economy and communities. When I visited Bob Milton of Kilnside farm, he told me that his business now faces laying off staff and selling land just to meet Labour’s new tax burden. That is not policy; it is economic sabotage. On the changes to business property relief, a small business owner now faces a tax penalty simply for owning their own premises and hoping to pass their business on. These changes punish success and threaten continuity for family firms across the country. And what is the result of all this? Inflation is stuck at 3.4%, well above the Bank of England’s target of 2%; unemployment is up to 4.6%, the highest in four years; borrowing was at £17.7 billion in May; and public debt is forecast to hit 96.1% of GDP, with annual debt interests soaring to £130 billion, by 2029-30. The tax burden is heading to an historic high—the highest on record, in fact—yet Labour still refuses to rule out new taxes on homes, pensions or savings. Their Chancellor will not even say whether small business owners are working people, and the Prime Minister dodged the question altogether. In Farnham, shop vacancies have risen from 9% to 10.5% in just one quarter—that is, 16 more shuttered high street shops. In Haslemere and Bordon, employers tell me they are freezing and cutting hours. The Shooting Star children’s hospice that serves my constituency will have to spend £90,000 in new NIC costs—enough to hire three nurses. That is now going straight to the Treasury.

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10. 15 Jul 2025·Parliament·Gregory Stafford

    Taxes

    I will not give way. That is not just wrong; it is unconscionable. Meanwhile, Labour’s VAT raid on education has pushed more than 13,000 pupils out of the independent sector—10,000 more than the Government predicted. That means more pressure on already overstretched state schools, more crowded classrooms, more exhausted teachers and more children falling behind. Labour promised competence. Instead, they have delivered confusion, contradictions and chaos. They have broken their promises on national insurance, council tax, farms and education, and now they are breaking Britain’s economic future. This is not stewardship; it is self-harm. This is not change; it is collapse. This is not what the British people voted for, and they deserve better.

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11. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (First sitting)

    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.

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12. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (First sitting)

    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?” Rob Griggs: Our starting position as UK airlines is that we recognise that the Bill is principally an enabling Bill. Of the issues that we really care about, the revenue certainty mechanism is really important. We fully support the RCM: it is a critical way to drive the investment that we think we will need in the UK sustainable aviation fuel sector to support the advanced SAF industry in particular and that part of the mandate, which starts to become considerable by 2030. We need to get the RCM right. The design matters to make sure that we get the most from it and deliver the most cost-competitive, efficient decarbonisation of the sector while supporting and protecting UK consumers as well as fliers. We think that we can do that with a well-designed RCM. We know that many of the design elements will come through in secondary legislation and further consultation after this point, so we do not see anything in the Bill that is particularly problematic. At this point, we would not proactively suggest that any amendments are necessary. We recognise some of the important elements. We know that the levy will be on fuel suppliers, but we think it is really important that there is accountability in what happens to the money. In all likelihood, the costs of the levy will be passed through to airlines and ultimately to consumers and to the UK public, so there needs to be accountability about the levy and the funding mechanism. The Bill does not prevent that, but it will be important to get it right in future.

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13. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (First sitting)

    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? Rob Griggs: We recognise the £1.50, and we absolutely welcome the commitment through the mandate that if there were price spikes as a result of SAF policy, steps would be taken to address that. For us, it is probably a little too early to say definitively what the price impact of the RCM will be. A lot of it depends on its ultimate scope and design, as well as the costs in the 2G market and the strike price. We have to bear in mind that ultimately it is the market price of SAF that will drive the biggest impact on ticket prices and the costs borne by the sector. With the RCM, the costs relate essentially either to paying the difference between the cost of SAF and production or to the fact that money can come back the other way. Relatively speaking, although the RCM costs are very important and we need to do everything we can to make sure that they are kept as low and as efficient as possible, they are part of a bigger picture. There are a number of factors that will determine the cost of SAF for the UK. We need to get everything right; the RCM is just one part. You asked whether the Bill will support the advanced 2G SAFs. The UK has taken a fairly unique route with SAF and the mandate. We have the sub-mandate for advanced SAF, which is about 300,000 tonnes by 2030. We think that it could be a pretty smart move for the UK to do that, because at some point 1G SAF will become feedstock-constrained. That could happen sooner rather than later. We could put ourselves in a really good position by having a domestic advanced SAF industry producing the scalable SAFs that will play an increasingly big role. The Bill, as written, is technology-neutral. There a number of ways in which you can do advanced SAF. When we come to the design and how projects are chosen, allocated and prioritised, we think it will be really important that this RCM supports projects that are quickly deliverable, scalable and commercially viable to help us to meet the volumes that we will need come 2030. There is nothing in the Bill that says that that cannot happen, but the design stage and how we get into the detail will matter. Gaynor Hartnell: I agree that no amendments are necessary for the Bill. It has a fairly discrete job, which is basically to get the counterparty established and engaged and to get the levy in place. All the detail on how the revenue certainty mechanism works will come through in secondary legislation. We are very engaged with the thinking and the development on that, as we have been in the lead-up to the RCM becoming a policy of both the former Government and this Government. It is important to get the design right. Broadly, we are happy with this. The fuel producers are agnostic as to who pays the levy. It is good to hear you note that the cost is going to be small; indeed, it could go either way. There is quite a bit of confusion between the costs of the mandate and the costs of the revenue certainty mechanism. We are keen to make sure that the differences are understood. Paul Greenwood: I fear I may be a slightly dissenting voice, after you have just heard some comments about how everybody is very supportive. I will start with our perspective at FIUK; I will talk very much as ExxonMobil, but please feel free to challenge me on how there may be some differences in view across the members of FIUK. Let me start by saying that ExxonMobil owns and runs a very large refinery and petrochemical complex, the Fawley refinery in Southampton, which is actually the largest producer of jet fuel in the UK. We supply about 13% of the UK’s jet market and have recently invested $300 million in a new larger pipeline from Southampton to London. I say that just to highlight the fact that we take the aviation business and the supply of jet fuel very seriously. One thing is absolutely clear: this is very well-intentioned. We all wish to decarbonise, but I think we have to call out some fundamental flaws in the Bill. I do so with the aim of saying, “Let’s make sure that we can be really clear about what this is doing and what some of the potential unintended consequences are.” First, I think it is important to say—this might sound slightly controversial, but I do not wish it to be—that this is not a step that will decarbonise. It is a step that will increase the production of sustainable aviation fuel. The way you decarbonise is effectively by incentivising consumption of sustainable aviation fuel, which we already do through the SAF mandate. The SAF mandate is a reasonably well-developed tool that sets a volume threshold and a buy-out price. That is a major lever that you pull as a Government to incentivise consumption. Let us be clear that this is around incentivising production. My question is not necessarily whether the Bill is right or wrong; I just do not think it is necessary. What you want is a market that functions and sends a signal, and then production will meet that demand signal and the sustainable aviation fuel will be supplied. My question is whether the Bill is necessary. Let us look at some of the unintended consequences. The first is that there will potentially be an incremental cost, which will be put on the fuel supplier and then, in theory, passed over to the consumer. It is important to say that although that has been put under the principle of the polluter pays, the fuel supplier in this scenario is not the polluter; it is clearly the passenger on the aeroplane or the person who is booking freight on a cargo plane. They are the ones who are causing the flight to happen and creating the consumption. Our principle should therefore be that the cost of the levy goes directly to those entities, but the way we look at it now, it is structured in such a way that it is based on the market share of the fuel supplier. That gives us two issues. First, it is not really on the polluter; it is on the fuel supplier. Secondly, we are very concerned about whether we will have the absolute transparency necessary to be able to pass 100% of the cost through to the ultimate consumer: either the passenger on the plane or the person who books the freight. We strongly urge you to look at that mechanism and perhaps look at something like the contracts for difference supplier obligation levy that exists in the electricity sector. That is one way of asking, “What are the actual costs? What are we going to impose as a levy?” It is published, it is transparent, the supplier knows what we are going to charge, and what we charge the supplier is 100% passed through. There are a lot of mechanics I think we really need to be clear on. It is also worth saying clearly that if we have a mechanism that we do not believe is necessary, but which is going to incur incremental costs, we will be passing incremental costs to British consumers and to an area in the UK that is clearly a global market. Having a potentially higher jet fuel cost because of the levy will have some unintended consequences. First, it makes the UK less competitive. Secondly, planes can tanker in fuel, as we all know, so if fuel is more expensive in the UK than elsewhere, people will fill up with more fuel in France, for example, before they fly into the UK, thereby decreasing demand in the UK, decreasing revenues and ironically increasing consumption because more jet fuel is being hauled around the world. I think that those are important unintended consequences that we need to take into account.

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14. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (First sitting)

    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? Jonathon Counsell: We are huge supporters of the Bill. As Luke has said, SAF is critical to decarbonising aviation. There is no silver bullet, but this gets pretty close. We think that by 2050, 70% of our fuel will be SAF. There are three types of SAF: first, second and third generation. Quite clearly, the first generation is all that you can buy today, and 95% of it is from hydroprocessed esters and fatty acids—used cooking oil. However, that will hit feedstock constraints in the early 2030s, so we are going to start to cap out on the amount of 1G SAF we can produce. That is why 2G and 3G are critical if we are to meet long-term decarbonisation targets. We expect that by 2050, 90% of SAF will be 2G and 3G, so it is critical that we have a policy mechanism that incentivises 2G SAF. That is why I disagree with some of the comments from the oil company representative in the previous witness panel, who said that we do not need this policy intervention. We absolutely do, because without it we will not get 2G SAF on the mandate alone. That was shown in the work done by Philip New, the chief executive officer of BP renewables. He knows a lot about this market, and he wrote an extensive paper for the Government, which said that we will not get these SAFs without the revenue certainty mechanism. For that reason, we support it. I will come on to the impacts shortly. We have no amendments to suggest at this stage, but we think that there are two points that could make it better in the next phase. One is that it has to be targeted. Not all 2G projects will need the revenue certainty mechanism; some of them will get funding without it, so it has to be targeted at the early-stage, first-of-a-kind projects that need it. That is how we can contain the total cost of the scheme. Then, as mentioned during the previous panel, there is the funding question. We in the industry support polluter pays; we are part of the emissions trading scheme, and we have a global carbon offset scheme. Of course, the airlines will be paying for SAF from the 2030s onwards, and that is by far the biggest element of the cost. We talk about a figure of £1.50; to us, that seems a conservative number, but anyway, that is only for the RCM mechanism. By far the biggest cost is actually paying for the SAF. Let me give some top line numbers: 10% by 2030 is 1.2 million tonnes; a conservative premium for the SAF is about £2,000 per tonne, so you are looking at over £2 billion of SAF premium that the airlines will be paying. We are paying for the SAF and also for our carbon emissions. The issue is that we know the levy on the fuel suppliers will come straight back to the airlines. I used to work for the oil industry—for Exxon, in fact—and I know how this works. That will come back quicker than you can imagine. Our view is that will result in double payment by the airlines. We are paying for the SAF and for emissions trading. We should not be paying for RCM as well. Our view is that if that money is passed back through to the airlines we should be compensated through the money that aviation puts in the UK emissions trading scheme, to avoid double payment.

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15. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (First sitting)

    Q If I can probe that a little more, you say £1.50 is a conservative estimate. Does IAG have its own estimate? Jonathon Counsell: No. We have not at this stage managed to fully analyse that number. We think there are potentially some elements that have not been included in that calculation, but £1.50 per passenger feels quite low when you think the costs of the SAF itself will be nearer to £10. We can take a close look at that, but I think the key principle is we should not be paying for that plus the SAF, hence we need to net that off against the UK emissions trading scheme costs. Luke Ervine: I fully support Jonathon’s comments. We are fully supportive of the RCM, as we have been for the mandate. The mandate drives demand and the RCM drives the supply, and we do see a massive shortage in the 2G that we need. It is interesting from an oil producer’s perspective to state that the polluter must pay. Well, the oil companies are also part of that problem and must pay. We believe that our consumers will pay the price of SAF but we do not believe we should pay to underwrite the logistics and the production facilities. That is why there should be differentiation between paying for SAF and paying for the RCM. We as a company have fully supported some of the potential producers in the UK and they are the ones saying to us, “We need an RCM; we need a level playing field to attract investment into producing 2G SAF in the UK.” When we say, “Let the market do what it wants to do,” we are hearing from the market and from producers, some of which do not want an RCM but some of which definitely do. In creating this Bill, you are allowing that opportunity for those that do need it. I do not think we need 100% of SAF covered by RCM for 2G production. We do need imports and to make sure that SAF in the UK remains competitive. That means balancing that need for investing in first of a kind 2G plants that require the investment certainty with the ability to create a competitive market and allow imports into the UK as well. Lahiru Ranasinghe: From a strategic perspective, there are three things we are trying to do as an airline. We want to grow, to do so sustainably while decarbonising at the same time, and to keep fares affordable for consumers. For us to be able to do that, we need a functioning SAF market to develop over time, so that supply and demand are balanced and the market is working under its own steam. Right now, the 2G and 3G SAF technology has been developed but there is a key transition period it needs to go through, to get from technology demonstrations to commercial scale. That is where the market failure is which is being addressed by the RCM. Like my colleagues, we are supportive of the RCM. It is clear to us that the eyes of the world are on the UK to see how we make this work. To answer directly the question about the cost impact on consumers, let me split that into two things. First, there is the cost of SAF, full stop, and secondly, the potential cost of the levy. Fuel costs are about a third of our cost base. The cost of jet fuel today is about $750 a tonne. You are looking at upwards of $2,500 dollars a tonne for first generation SAF. When you go all the way to 3G or power to liquid SAF, estimates right now range from $7,000 to $8,000 in Europe. That is a massive increase in cost, which goes into the cost base. To keep flying affordable in the long run, we have to manage that carefully, because it risks the industry adding significantly to what goes through. The cost of the levy is additional to what we would be paying for SAF, which is something that we do by fulfilling the mandate. A scenario that we are absolutely trying to avoid at any cost is one in which we cannot meet the mandate and therefore are paying buy-out prices with no SAF. In that case, those costs will be going through without any environmental benefit. A step down from that, there is a not quite as bad, but still bad, scenario in which the market is short on supply, so there is little incentive for suppliers to charge significantly below the buy-out price. You would end up in a situation where the cost that being passed through to airlines, and therefore to consumers, is disproportionate to the decarbonisation that happens. Finally, putting our ability to absorb those costs into context, easyJet’s profit margin is £6 per passenger—roughly 1.5 coffees in the vicinity of this building—and that is once we have paid several billion for new, more efficient aircraft, invested in the operation and paid for 18,500 employees. We have very little margin to work with without having to pass the cost on to the consumer. If an excessive cost gets passed on, the risk is that that disadvantages the consumer, but economically it would also mean that aviation cannot play the role that we intend to play in the UK’s growth.

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16. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (First sitting)

    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? Noaman Al Adhami: Maybe I can answer this question. This comes with scale. The technologies that we are implementing currently have been implemented in other sectors, so they are not necessarily new, but with the scale, in terms of logistics and feedstock availability, it will take time. We think that when we potentially scale up production, we can recycle engineering and we can utilise other services to push the price down further. However, in our case, because we are using the FT-SPK route, biogenic CO2 is produced in the process. If I capture that CO2 and connect to Net Zero Teesside, I will be able to generate more carbon certificates—actually, it is triple. For example, if I produced 100 carbon certificates without carbon capture, with carbon capture I can produce 300. By this process, we can reduce the cost of SAF to the offtaker or to the consumer, because then I will divide the capex with the overall cost; instead of dividing it by 100, I will divide it by 300. In our case and for our route, it is key to be connected to the carbon cluster in Teesside, because then I will be able to provide a lower cost for these carbon certificates, if we get the RCM potential. Sophia Haywood: Just to build on that, scalability is absolutely key. We are looking at a global suite of different projects all across the world. With that, each time we are learning and improving, and becoming more efficient. For example, we built a demonstrator project in the US of our ethanol-to-jet process. From that, we have been able to learn and to become more efficient in spaces, so that when we then develop in Teesside with Project Speedbird, we are able to improve consistently on that basis. The other thing I would add is that scalability takes you to one level, but I do not think that scalability alone will become completely identical with a market that has had years and years of operation and cheap access to crude oil, for example, to convert into jet. As for the idea that we will immediately be able to become competitive, that is where there can be another role for policy. The RCM is one of those tools. Another example that we have seen in Europe is that they have been looking at things such as ETS allowances. These allowances basically help airlines to minimise that uplift in terms of the price of SAF. At the moment, that is time limited until 2030, but for biofuels you are able to take 75% of the cost difference between fossil jet and biofuel. For e-fuels, you are able to take 95% of the price difference. This could potentially be explored in the UK long term, again to help airlines to minimise the impact of SAF price increases. I think there is a role for scalability and time, but equally, in the short to medium term, there is still a role for policy in being able to support that.

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17. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (First sitting)

    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? Sophia Haywood: At the moment, we are not allowed to use the bioethanol produced in the UK, because the majority of it is technically first generation, whereby it is produced from crops. The bioethanol here is particularly produced from crops such as wheat. I am not sure about the exact proportion that is grown here and then converted into bioethanol here. I think that SAF is a great opportunity for the challenge that the bioethanol sector is currently facing. If we were allowed to use in SAF the bioethanol that is currently allowed to be used in the road transportation sector, we would be able to take that and convert that into jet fuel at our facility Speedbird. I did some quick statistics—quick maths—looking at the total capacity that we have for bioethanol production in the UK today. If we took that additional capacity—not counting our current project, which is 2G or second generation—we would be able to build three and a half more Project Speedbirds in the UK, just taking that potential capacity, if that was all theoretically to come to us. We see SAF as a great opportunity to fix the current issue that the bioethanol sector is facing. Certainly, we see it as complementary also to the scale-up of 2G, because for us it means that we can reduce the overall cost of project development and we could still transition to 2G over time, or indeed have blends of first generation and 2G together to increase roll-out. For our technology, as long as it is sustainable ethanol that is coming in, we are producing sustainable jet on the other side.

    Hansard source
18. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    Q29 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? Doug McKiernan: On the first part of the question, given my knowledge of the sector as an engineer, I do not believe that there is a long-term solution other than power to liquid. At the moment, in the ASTM fuel standards, there are a lot of bio-based, sugar-based and food-waste solutions. In my view, those are not truly scalable, and their cost will only ever go up, because of the shortage of land and so on. The power-to-liquid side is truly scalable. The feedstock is air, water and renewable energy. It is extremely clean, and it gives the industry the opportunity—in, say, 10 or 15 years’ time—to move to fuels that are even more performant than current fossil-based fuels. We are very supportive of the Bill, and we think it will be useful for us if it goes through. It will give confidence to the sector and bring investment, which then helps to bring capability to the UK. It is a great way to kickstart the e-fuels industry, which is the medium to long-term solution, not a short-term solution. We have been working in this sector for only five years. Because of our education system, we probably have some of the best talent in this sector globally, and we are able to recruit that. We have already made significant inroads into the quality of the fuel, which is over and above anything else that is now available—and when I say that, I mean globally available. This little company that we have—and it is little—has been able to outperform some of the bigger competitors in the field. Towards the end of this year, we will submit our product to the ASTM governing body to get it certified. The intellectual property that we are generating is key to the UK. We need to make sure that the IP is generated here in the UK and kept here because I believe that in five years from now all the big decisions around e-fuels—all the important ones—and the freedom to operate will have been worked out, and we do not want that to be worked out anywhere other than in the UK. It will enable us to kickstart the energy generation within the UK so that we have a sovereign capability for energy generation. I hope that answers your question.

    Hansard source
19. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    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.

    Hansard source
20. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    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? Ruben van Grinsven: That is a really good question. We are looking globally at various opportunities to build SAF production plants. The second and third generations especially are more challenging than the first generation. To make the investment case robust, we need to solve a whole number of challenges—some are around ensuring that we can make the technology work, and some are around financing. But a lot of it has to do with the value of the product that we make, and the certainty around the value of the product. The revenue certainty mechanism being discussed in the Bill is very compelling. There is always a combination of different factors. It is partially fundamentals about whether we can get the right feedstocks, but part of it is also about the certainty we have about the price we are going to get for our products. The revenue certainty mechanism is absolutely very helpful.

    Hansard source
21. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    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? Ruben van Grinsven: There are two elements. One is whether we can invest in a UK plant. That is hard to tell at this point in time for two reasons. We do not fully understand all the details associated with the Bill. I think the principles are very promising, but there are many things that need to be detailed out, which, at the end of the day, will decide how appealing the investment is going to be. There is a lot of that. Can UK-produced SAF be competitive in a global market? I think that depends a little bit on the type of technology, but it is also very timebound. At this point in time, this is not the cheapest place to make e-SAF, just because power is more expensive than other places in the world. But if we continue to build out the renewables, as I have seen in plans before, I think there are going to be more affordable electrons around that can then be converted into e-SAF. In the longer term, e-SAF can be competitive. For other technologies, I think things are less location dependent. Ethanol to jet, for instance, is very feedstock dependent, and I think that the UK can be as competitive as other places. Again, the fundamental competitiveness is one element. The other element is whether the whole investment case makes sense, and part of that is financing —and part of the financing is driven by revenue certainty. It is not just the fundamentals but the whole package that determines the attractiveness of the investment.

    Hansard source
22. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    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.

    Hansard source
23. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    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? Ruben van Grinsven: The principle makes sense: at the end of the day, additional cost will find its way to the end user. We do not have enough information at this point in time to calculate what the cost is going to be because a lot of the details of the Bill are unknown. We would like to better understand how this is going to work, what the volumes are, what the timing is going to be, and how we will organise the contracts between the supplier and the off-taker. There are a lot of things that we do not know at this point, and therefore it is difficult to model what the final cost of the levy is going to be for the end consumer. I do not know; it is difficult to answer. On top of that, I think it is going to change over time. Over time, if the market is short and the prices are high, money might flow towards the levy, so it would be like a negative levy but then it might turn into a positive levy. It is very difficult to assess that and put a number on it.

    Hansard source
24. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    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? Matt Gorman: Let me start by saying that we take this issue very seriously, for the reasons you have outlined. It is central to our business. SAF is key to delivering the industry’s net zero transition plan: it is about 40% of the solution. I do not think that anyone can forecast the future costs and prices with exact certainty, but I will say that we test all our demand forecasts for Heathrow against a range of different carbon price scenarios, from low to high—“high” being the Department for Energy Security and Net Zero’s high scenarios. We do that because it is important for us to understand and our investors to understand, and because climate disclosure legislation now requires us to share that information in our annual report. We have concluded that demand for flying from Heathrow remains robust even in high carbon price scenarios in future. We are confident about that. The Government have shared their analysis on the revenue certainty mechanism and the reasons behind it. That is one of the carbon costs that consumers will bear—there are clearly others—but I come back to the point that all our forecasts have shown that demand is robust.

    Hansard source
25. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    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? Matt Gorman: It is a good question. We welcome the Bill. As SAF is so important, the sector and Heathrow have advocated over a number of years both the mandate, which was passed as legislation at the beginning of the year, and the revenue certainty mechanism. It has benefits for energy security, green jobs, growth and decarbonisation. That has been one of the drivers for the sector to support it. The decarbonisation benefits are clear. On jobs and growth, earlier witnesses talked about the industry studies showing up to £10 billion of GVA and 60,000 jobs by 2050. Energy security is one of those reasons. As SAF is a key part of the industry transition plan around the world, there will be global trading of SAF. Kerosene is a global commodity today; SAF will be in future. We think we will import some. However, the sector is supportive of domestic production, which is why we are so supportive of the Bill. I should say that Heathrow is not directly in the fuel value chain—we do not buy, make or sell fuel—but we are very involved in the debate, because it is so significant. All the fuel producers and investors we talk to say that the revenue certainty mechanism will help to unlock investment decisions in the UK. I am not sure whether the Bill could be improved to do that even more. I do not have a view on that.

    Hansard source
26. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    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? Josh Garton: I think that the revenue certainty mechanism that is being proposed is a really good start to getting finance into the sector. Undoubtedly it will not be the only thing that is required: there are other risks that need to be addressed. The revenue certainty mechanism addresses price risk, as it is designed to, but other challenges remain for the second and third-generation fuels, and they may need to be addressed as well. I think that it is the best solution for addressing price risk. As other witnesses have described, when we speak to our colleagues in Europe and elsewhere, they see the package of regulation that the UK is proposing as some of the most promising in the world. The UK will become a very promising place to invest in SAF. On your question about the price for the end consumer, it is very hard to forecast what that will be. There are a lot of forecasts out there. It obviously depends on the cost of production, the blending of the fuel and many other factors, but the most important thing is that the mechanism for transferring the cost to the consumer be done in a very equitable way, so that you remove any competitive advantages or disadvantages resulting from airlines and other players in the industry potentially gaming the system. I would say that that is a more critical element to consider.

    Hansard source
27. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    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? Josh Garton: I think that imports will definitely play a role, particularly for the first-generation fuels. The structure of the mandate provides space for second-generation fuels, which are quite novel with the sustainability requirements attached to them, so the UK will be a good place for producing them. The technical design of the mechanism, which is not set out in the Bill, will be what is most critical to ensuring that the mechanism is adequate for facilitating investment.

    Hansard source
28. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    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? Josh Garton: To go there? Are you talking about the first-generation fuels?

    Hansard source
29. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    Well, first and second, until we get to third. Josh Garton: It is certainly a consideration, but I think most investors are very cognisant of the fact that the third-generation fuel, while absolutely necessary in the long term, has some way to go to evolve to that point. There is a lot of space still for the first and second-generation fuels to develop, but there will be some consideration about not building overcapacity in those sectors.

    Hansard source
30. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    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? Josh Garton: Certainly, the technologies are at that point. There are still commercial challenges; they have been proven at demonstration scale but not at the commercial scale. In the UK, we have a mandate that provides space for second-generation fuels. While that mandate remains intact, there will be a lot of space for that fuel over the long term. In the EU they have a different structure, where they do not have that same space for second-generation fuels.

    Hansard source
31. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    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? Philip New: The main conclusions from the report that I did were, first, that the SAF mandate as laid out—it was at a slightly more formative stage then than it is now—was a really smart way of trying to define the market mechanisms, the targets and the obligations framing a new market. The question then was what other mechanisms would need to be in place, having got the demand side largely mapped by the mandate, to enable supply to occur. My first thought when I saw the RCM was that there was very little that was needed: if you believe that the market will be short of SAF, as many people do, with a buy-out price and a target, you would expect the product to price close to the buy-out price—that which is available. That sends a very strong price signal to investors. I was unfortunately thinking of that from my historical perspective as a strategic investor and had underestimated the conservatism of the banking community. It was clear to me that they were pushing very hard—perhaps because they had grown very comfortable with the idea of a CFD in other parts of the green transition—and they were really enthused and insistent on the idea of a revenue certainty mechanism. The way that the RCM has emerged so far is very highly aligned with the proposals that emerged in that original report. From that point of view I would say, “So far, so good.” The mandate is evolving well and the RCM feels pretty much where it needs to be. The questions that are still out there, as I think Josh Garton was referring to, are specific to very first-of-a-kind technologies. Part of the issue with the second-generation products is that, while the feedstocks are already wastes, they are often already being used in other sectors. There needs to be, I think, some greater degree of comfort to enable some of those wastes to be bid away without wrecking the project economics of the SAF developer. A good example is black bin waste. The prospect is that by having more competition for black bin waste, we reduce costs for local authorities. It is really nice if we can get there, but for now, while these technologies are so uncertain and regarded as such a risk, it is difficult for local authorities to commit to them with enthusiasm, because they are afraid that they will end up paying landfill fees if they do not manage to do it. That is one example suggesting that there should be some more comfort around feedstocks. The rest of the answer are the mechanisms that could be put in place to smooth some of the risk around the very first projects. The risks there are around integrating new technologies for the first time and then getting through some of the operating teething problems, because everyone involved will be coming across those issues for the first time. It took me about four years to get a much simpler plant up and running to a point of satisfactory operation. We should not underestimate the challenges of getting those initial assets over that first set of hurdles, but the RCM is an absolutely necessary part of the mix that needs to be put in place.

    Hansard source
32. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    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? Philip New: When I first engaged with this, I had exactly the same thought. However, a few things are starting to emerge that sit on the more optimistic side of the balance of risk here. First of all, over time there will be more and more pressure for the energy from waste manufacturers to access carbon capture and storage. It is not at all the cleanest way of generating an electron in this day and age. It would be reasonable to expect that over the next 15 years, we will see a number of those assets get to a point where the contracts are expiring. They will then need to contemplate refinancing, and if they do, whether or not they have access to carbon capture and storage will become important. Not all of them will be able to either afford or justify it, because they are too distant from where the carbon sinks are. There is a probability that enough capacity will start to come off stream for it to be picked up. On top of that, the imposition of the emissions trading tax will start to free up some of the very difficult to recycle plastics, which could be used to make SAF. There is also an interesting stream of waste wood that will become available, particularly as some of the rocks start to fall away, which will start to happen in a couple of years’ time—and assets that at the moment are making renewable electricity out of waste wood will lose their rocks. We also need to remember that it is the local authority that is paying the energy from waste company to move it away. I have recently been involved with some economic analysis. We assumed that for the first wave of sites there would be a 100% discount. In other words, rather than the local authority paying, it would get rid of the waste for free. The developer would not pay for it themselves, but the local authority would still save the money. We thought that would be necessary to give local authorities the comfort to take on the exposure. Later on, there might be scope for it to become a little more competitive, because people will get more comfortable and there will be more confidence in the technology. I do not think that we simply have to bail them out. I think there might be something around a guarantee of some description that simply says to a local authority, “Look, if you give a contract to one of these companies and it fails—if it can’t live up to that contract—and you have to put it into landfill and pay the landfill tax, there could be some kind of keep-whole mechanism,” just to encourage them over the line. The other thing that you could consider is looking at the waste hierarchy. Simply moving this from being recovery to recovery-plus would send a very strong signal to local authorities that putting it into SAF is a better use of their waste than simply incinerating it and turning it into electrons.

    Hansard source
33. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    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? Geoff Maynard: I think the short answer is yes. It meets that requirement because, unless there are some incentives for SAF—which will cost more than the kerosene that would otherwise be used—there is no incentive for the aviation industry to use it. That presents a problem because there is then no environmental benefit, which we desperately and quickly need. The Bill is a good way forward, as we see it.

    Hansard source
34. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    Q But it is the mandate that tells them they have to use it. The Bill is about domestic SAF production. Geoff Maynard: But production is important. You could have a situation in which there is a mandate but nobody can acquire the fuel, except at a totally extortionate price. There would then be pressure on the Government to revise the mandate. That is how we see it.

    Hansard source
35. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    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? Geoff Maynard: It depends on where you are within the mandate. If you are looking at low mandates, up to about 10%, then the £1.50 figure is probably correct, but as we move further on, it seems unlikely that it will be quite as low as that.

    Hansard source
36. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    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? Geoff Maynard: On the face of it, you would expect the cost to fall, but the problem is that there is only a limited amount of raw materials for the generation 1 and 2 fuels to proceed. You will have to move forward to meet the requirements; you will have to move to power-to-liquid fuels, and they are going to be more expensive to produce. Therefore, at some point, as they kick in, to meet the overall figures, the cost base will rise. That is why we believe that, in the longer term, it will be slightly more expensive because there are not the cheaper feedstocks that are currently available.

    Hansard source
37. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    Q 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. From 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? Professor Maslin: We take the very large view that the only way to make the international aviation industry net zero is by SAFs. Electric short haul—possible in the next 20 to 30 years. Hydrogen—forget it; it is never going to work and any pilot will tell you, “Not a chance.” That is just so we have that laid out there. We need SAFs both UK-wide and globally, and we are talking, as an academic institution, with very large airlines that want to produce SAFs in their own country. As academics, my colleagues and I would not pick one technology. What you need to do is what you are doing, which is having a levy that says, “If you produce SAFs, you will then have this benefit.” Then, you will work out which technology comes to the fore, whether that happens to be alcohol production or waste. You should stay agnostic to the successful SAFs output.

    Hansard source
38. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    Q 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 on that? Professor Maslin: Our analysis is slightly different because it is looking at the industry as a whole. On the airline side, there is a worry that these costs will literally be shoved on to the airlines. Many of us do not realise that the difference between this industry and others is that it is a very narrow margin industry. If there is any change in geopolitics, companies can go bust—for example, Finnair. Airlines are worried about this levy system, not necessarily because of the extra cost, but because they are not reassured that when there is a surplus, which goes back to the actual producers, it will be then be passed back to the airline. Again, they are happy with the up and down mechanism, but there seems to be no way of shunting that back to airlines to say, “Okay, you have done well, so you can get some money back.” That is more the concern. Adding £1 or £2 to the price of a flight does not concern the airlines from the passenger point of view—it will not put passengers off. What will put them off is when the airlines suddenly realise that if you multiply that by 550, which is the number of people in an A380, you suddenly start to bankroll quite a lot of extra money that has to be found. I am hedging my bets, so I will not tell you that it will be higher or lower than £1.50. That is a very small amount per individual, but for the companies that are trying to make aviation work and are positive about trying to move to net zero, this is the perfect time to push, as they have suddenly woken up to the fact that they are laggards.

    Hansard source
39. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    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? Mike Kane: As the Minister, may I start by thanking all Committee members and witnesses for their time today? I think it is a great question. We have a world-class aviation sector and, if we want to stay world class, it is absolutely essential that we pass this Bill. It is part of our manifesto commitment. We introduced the mandate on 1 January for 2% on the demand side, and this now begins to give investment to the supply side. You are absolutely right; we have to remain competitive in the aviation market if we are going to remain the third largest on the planet, and one of the most advanced. The figure we have from the departmental analysis teams is that it is plus or minus £1.50 of the price of a ticket over a year. That is less than my Bee Network bus fare, where Andy Burnham keeps the cost below £2. That is what we are looking at. You ask how we are going to look at this. To answer in all seriousness, we are going to continue to monitor and control by managing the scale of the number of contracts we let. This gives the Secretary of State—whoever it is, from whichever party it is in the future—the power to look at what is happening and scale up or down if the market is badly distorted. We feel that there is no big impact on consumers taking their annual holiday to the south of Spain once a year. They will continue to do that unaffected.

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40. 15 Jul 2025·Parliament·Greg Smith

    Sustainable Aviation Fuel Bill (Second sitting)

    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? Mike Kane: As we said, we are agnostic to the technology. As we let the contracts, that is where the innovation will come. There is a wider question across Government and UK security about intellectual property, and of course we will keep in contact with our colleagues at the Department for Business and Trade who look at that. The world is looking to us at the moment, as Lahiru from EasyJet said this morning, because we are the first doing this. We want to maintain the intellectual property by being first in the world to do this and then, as the companies come forward with the innovative technology, we want to properly IP that and maintain the competitive advantage in the UK.

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