Greg Smith MP: speeches 2025

Speeches

• 15 Jul 2025 · Sustainable Aviation Fuel Bill (Second sitting) · Hansard source

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  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.

• 15 Jul 2025 · Sustainable Aviation Fuel Bill (Second sitting) · Hansard source

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  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.

• 15 Jul 2025 · Sustainable Aviation Fuel Bill (Second sitting) · Hansard source

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  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.

• 15 Jul 2025 · Sustainable Aviation Fuel Bill (Second sitting) · Hansard source

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  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.

• 15 Jul 2025 · Sustainable Aviation Fuel Bill (Second sitting) · Hansard source

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  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.

• 15 Jul 2025 · Sustainable Aviation Fuel Bill (Second sitting) · Hansard source

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  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.

• 15 Jul 2025 · Sustainable Aviation Fuel Bill (Second sitting) · Hansard source

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  Q This is my final question before we get to go through the Bill in detail on Thursday and next Tuesday. Accepting the agnostic position, has anything you have heard today from the various companies who have given evidence, be that global giants such as Shell, UK-based innovators such as Zero Petroleum or the companies developing SAFs from waste, changed your thinking on whether there might be emerging winners and losers, given some of the challenges that we have heard about—not least the municipal waste challenges? Mike Kane: As the Minister leading on the Bill, I would say, “My kingdom for a chemistry degree.” Actually, Mark said something that I thought was very pertinent towards the end: we just have to allow the technology to emerge. That way, as we get to the power-to-liquids and the harder piece to do, in five, 10 or 15 years, there will be a market for it. The beauty of the Bill is that we can let contracts over five or 10 years. Personally, even though Exxon has reservations about this measure, the only emotion I would convey to Exxon is thanks for producing this fuel now, in this country. Exxon is happy about the SAF mandate; its issue is with the revenue certainty mechanism. That is an area where, once the market is established, the Government have an exit strategy; once the market begins to work, the then Secretary of State will have ways out of it, because Government will not need to be in it once we have established it.

• 15 Jul 2025 · Sustainable Aviation Fuel Bill (Second sitting) · Hansard source

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  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.

• 15 Jul 2025 · Sustainable Aviation Fuel Bill (Second sitting) · Hansard source

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  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.

• 15 Jul 2025 · Sustainable Aviation Fuel Bill (Second sitting) · Hansard source

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  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.

• 15 Jul 2025 · Sustainable Aviation Fuel Bill (Second sitting) · Hansard source

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  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.

• 15 Jul 2025 · Sustainable Aviation Fuel Bill (Second sitting) · Hansard source

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  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.

• 15 Jul 2025 · Sustainable Aviation Fuel Bill (First sitting) · Hansard source

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  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.

• 15 Jul 2025 · Sustainable Aviation Fuel Bill (First sitting) · Hansard source

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  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.

• 15 Jul 2025 · Sustainable Aviation Fuel Bill (First sitting) · Hansard source

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  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.

• 15 Jul 2025 · Sustainable Aviation Fuel Bill (First sitting) · Hansard source

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  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.

• 15 Jul 2025 · Sustainable Aviation Fuel Bill (First sitting) · Hansard source

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  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.

• 15 Jul 2025 · Sustainable Aviation Fuel Bill (First sitting) · Hansard source

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  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.

• 15 Jul 2025 · Sustainable Aviation Fuel Bill (First sitting) · Hansard source

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  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.

• 14 Jul 2025 · Financial Assistance to Industry · Hansard source

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  It is a pleasure to serve under your chairmanship, Sir Desmond. I begin by drawing the Committee’s attention to my entry in the Register of Members’ Financial Interests. I have spoken at length on this subject, in the last Parliament as a member of the Transport Committee and from the then Government Back Benches, and since the last general election as a shadow Minister. I begin with a simple concept: politicians should never ask someone to do something they are not willing to do themselves. I will put on the record that I am not willing to buy an electric car, and therefore anything that essentially uses taxpayers’ money to produce electric vehicles that so few people in the United Kingdom actually wish to buy—including, it seems from the weekend’s media, the Transport Secretary—is something that we cannot support. With fleet sales removed, new EV registrations prove that this is just not a technology that people trust, desire or are willing to spend their hard-earned money on. The Conservatives previously pushed the zero-emission vehicle mandate transition date back to 2035, but this Government have brought it forward to 2030. The need for this subsidy––let us call it what it is––is a clear indication that the Government are struggling to persuade consumers to switch to electric vehicles. That failure stems from two fundamental issues: the high cost of electric cars and their lack of reliability in terms of both range and charging infrastructure. The Government will say, I am sure, that we formerly had a subsidy scheme—and that is true: we did, but it was used to create an EV industry in Britain, supporting it to overcome the barriers of entry into the UK market. When that EV industry was created, we ended the subsidy. But now, to cover their mistakes and the unrealistic nature of their targets, Ministers have been forced into using taxpayers’ money to pay for EV adoption and to mask the consequences of their own policy failures. In effect, taxpayers’ money is being used to subsidise a transition that the public are not willing to make. We warned the Government that that would be the outcome. However, driven by an ideological approach to net zero, they ignored those warnings. This is yet another example of how the Government’s unrealistic climate targets are contributing to the rising cost of living for ordinary British families. Many other countries have opted for a 2035 target, recognising the economic and logistical challenges of any earlier deadline. In contrast, the UK’s 2030 mandate risks placing an undue financial burden on families here, forcing them to purchase more expensive vehicles while others abroad can wait and benefit from falling prices. We on the Opposition side believe in a demand-led transition to cleaner vehicles, one that respects consumer choice and understands the whole range of technologies available, following a genuine whole-system analysis—not just the tailpipe. Families should have the freedom to choose whether they want to drive petrol, diesel, hybrid, electric or other new technologies, and to make that transition when the market and infrastructure are ready, and when prices are more affordable. The Government’s approach has already had real-world consequences. We have seen the closure of Stellantis in Luton, in part due to insufficient demand for electric vehicles. That should serve as a warning.

• 14 Jul 2025 · Financial Assistance to Industry · Hansard source

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  My right hon. Friend is absolutely right. If we look at the marketplace out there for both private and commercial vehicles—particularly vans, heavy goods vehicles and larger vehicles—those who have to take a personal financial risk on them are not choosing to do so. Particularly in the HGV sector, they prefer to look at transitional fuels such as hydrotreated vegetable oil to keep their fleets on the road. That choice genuinely cleaner, but does not cost them two, three or maybe even four times the price for the same vehicle in an electric format—which, of course, comes with a lower payload, because the batteries are so heavy that it cannot legally take the same weight of goods. Those choices that real people in the real world are making should drive what the Government do to ensure that they get the transition to a greener form of transport right, rather than just flogging the dead horse of a failing technology that nobody seems willing to buy unless heavily bribed to do so with their own taxpayers’ money through fleet sales and the like—and, in this case, through this motion that seeks to spend even more of that taxpayers’ money on propping up a product that just does not have the consumer demand underneath it. It is for those reasons that the Conservatives will oppose this motion.

• 10 Jul 2025 · UK-France Nuclear Partnership · Hansard source

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  The two bedrocks of our national defence are our own sovereign capability and our membership of NATO. The United Kingdom and France are both members of NATO, but, as the shadow Secretary of State pointed out, the paradox is that we and every other NATO member bar one are members of the NATO nuclear planning group. Of course, that “bar one” is France. As part of these discussions, is France going to join the NATO nuclear planning group? If not, how on earth will this co-ordination work within that partnership?

• 9 Jul 2025 · Neighbourhood Plans: Planning Decisions · Hansard source

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  It is a pleasure to serve under your chairmanship, Ms McVey. I thank and congratulate my hon. Friend the Member for Hinckley and Bosworth (Dr Evans) on securing this debate, which is incredibly important to our whole country, and certainly to my constituency. Neighbourhood plans are a vital component of a fair, balanced and genuinely democratic planning system. They are a testament to the principle that local people should not simply be told how their community will look by central Government, but be empowered to shape the future of the places they call home. Neighbourhood plans should guarantee that development happens with the consent of those who live there, and is not forced on them by speculative developers or bureaucrats in Whitehall, who too often view our villages and market towns as blank canvases. In Buckinghamshire, a clear framework is taking shape. The new Buckinghamshire plan is being developed right now to set out how many homes we need in the county and, broadly, where they should go, building on the local plans of the legacy councils before we went unitary in 2021. However, it is our neighbourhood plans that give meaning to that strategy on the ground. They provide certainty to my constituents in Mid Buckinghamshire. They reflect the unique character, constraints and aspirations of each parish, village and town. They tell developers, planners and councillors alike where development is acceptable and, just as importantly, where it is not acceptable. In Mid Buckinghamshire, I have seen how the plans work when they are respected and, sadly, what happens when they are not. In Marsh Gibbon, for example, the parish’s neighbourhood plan, backed by a local referendum, capped the number of new homes in that small village at 25 until 2031, yet we now face an attempt by a speculative developer to push through 90 homes, all on farmland—nearly four times what the community had previously agreed to. Such proposals do not simply test the robustness of local policy; they erode trust in the entire planning system if they succeed. We see similar disregard for local issues elsewhere. In Waddesdon, a proposal has come forward for more than 500 homes and a solar installation—far beyond what local people had planned for. In Stoke Mandeville, a 650-home scheme threatens to overwhelm local roads, schools, drainage and other infrastructure. In Longwick, the parish council produced a neighbourhood plan with the clear backing of the local community, yet despite that plan, and despite the village having nearly doubled in size already, Longwick continues to receive speculative applications for yet more housing. Sometimes we simply have to say enough is enough. Labour’s stated aim to build, build, build, no matter the consequences or cumulative impact of development on our rural communities, in reality means destroy, destroy, destroy. Consent from constituents is crucial to protect the rural identity of communities throughout Mid Buckinghamshire and right across the country. Under the last Government, we rightly strengthened neighbourhood planning powers, because we recognised that development must be rooted in local consent. We wanted to see homes built where they were genuinely needed and wanted, while protecting the green fields, rural lanes and historic character that make our villages so special. We knew that communities are more likely to support plans when they have real control over scale and location, not when that is dictated from Westminster. I am proud that in my constituency so many parish councils and volunteers in the villages I have mentioned—Marsh Gibbon, Waddesdon, Stoke Mandeville, Longwick and beyond—have done the hard graft of surveys, consultations and draft policies. They have balanced the need for new homes with the reality of local infrastructure and the natural environment and beauty. They have played their part in delivering homes, but on terms that respect the countryside and the unique Buckinghamshire character that makes these places attractive and worth living in. Neighbourhood plans are not optional extras. They are not tick-box exercises. They carry legal weight and must be defended robustly by planning authorities, inspectors and Ministers, even if this Government have never quite grasped that concept or shown any interest in doing so. If we truly want to build the right homes in the right places, we must stand with our constituents, communities, hamlets, villages and towns. We must back local people, who have done the hard work of saying, “Yes, here, but not there.” If we do not, we risk not just bad development but a total breakdown in trust between residents and the system that is meant to serve them. That is what we in this place are meant to uphold. Although the current Labour Government, particularly with the Planning and Infrastructure Bill, want to ravage natural landscapes across our country, I will remain staunch in seeking to protect our neighbourhoods and my hamlets, villages and towns from this reckless agenda. I very much hope the Minister is able to give the Government’s commitment to neighbourhood plans and, as others have said, ensure that the funding can remain to produce them.

• 3 Jul 2025 · NHS 10-Year Plan · Hansard source

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  I look forward to studying the detail of this plan, but I welcome the Secretary of State’s commitment to neighbourhood health centres and likewise his commitment in a previous answer to rural communities. May I therefore offer him a golden opportunity? He will have heard me over many years in this House call for funding to build a new health centre in the village of Long Crendon, which lost its GP practice during the pandemic. They have the land, they have the planning permission and it will cost less than his lower number of £200 million to build. Will he convert words to delivery and commit to Long Crendon?

• 2 Jul 2025 · Whistleblowers · Hansard source

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  I am grateful for the hon. Lady’s correction. This House would be a far better place if everyone corrected their errors in a much timelier manner. We all make mistakes, and it is good when we stand up and admit to them. This same attitude is evident in the Government’s approach to transparency in the armed forces. Those on the Conservative Front Bench in the other place have been pressing the Government to include a whistleblowing function in the Armed Forces Commissioner Bill. The noble Baroness Goldie’s amendments would give armed forces personnel the ability to raise a whistleblowing complaint to the commissioner, with the commissioner required to investigate and ensure complete anonymity. The Government have repeatedly opposed adding a whistleblowing function to that Bill. Labour peers and MPs have voted against the noble Baroness Goldie’s amendments three times to date, arguing that they are unnecessary. The Government have claimed these amendments could make it less likely for someone to come forward purely by including the terms “whistleblower” and “whistleblowing”, yet that language is already widely used in such schemes. The NHS has a whistleblowing scheme known as the freedom to speak up policy, which directly uses the term “whistleblowing”. The Children’s Commissioner issues an annual whistleblowing report. To say that those terms would discourage people from raising issues is a fallacy and is not consistent with Government policy. If Labour was serious about this, it would have backed our amendment that would allow whistleblowers to come forward to the commissioner. We have also seen worrying reports that Labour’s planned overhaul of procurement oversight may remove mandatory reporting requirements that flag up the fraud or conflicts of interest that are often brought to light by whistleblowers working inside those systems. That is not the direction we should be travelling in. A Government who are truly confident in their integrity should not fear whistleblowers; they should welcome them. They are not saboteurs, and they are not disloyal—they are patriots who put principle before personal gain, and they deserve better. The Opposition remain committed to championing whistleblower protections. We believe in robust and enforceable safeguards. We believe in the need for an independent body to investigate whistleblower complaints and to protect those who speak up, and we will continue to hold the Government to account for any failure to protect those who protect the public interest.