Greg Smith MP: speeches

Speeches

• 17 Jul 2025 · Sustainable Aviation Fuel Bill (Third sitting) · Hansard source

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  Rasping?

• 17 Jul 2025 · Sustainable Aviation Fuel Bill (Third sitting) · Hansard source

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  I will make one or two brief comments on the new clauses that have been tabled by the Liberal Democrat members of the Committee. The official Opposition have some sympathy with new clause 2. It is always sensible with any new legislation to ensure, within a reasonable timeframe, that it is doing what it was meant to do. We can all debate things when they are a new idea in Committee and in the House, and on paper they might seem as though they are going to be all fine and rosy, but of course we can never predict that with 100% certainty. The review that new clause 2 would bake into the Bill—we can all do the parliamentary arithmetic; it will become an Act at some point in the near future—seems fundamentally sensible. I understand where the Liberal Democrat spokesman, the hon. Member for Wimbledon, is coming from with new clause 6, because of course by definition aviation is a global industry. By practicality, the vast majority of flights leaving these shores are going to other countries. I therefore understand why the hon. Gentleman would seek a degree of co-operation on the fuel that airlines leaving UK airports and landing in other countries will have to refuel with. Those airlines will have to use the fuel that is available in France, the United States of America, Australia, India or anywhere else. That level of co-operation is important. I would merely push back a little in arguing that we need to keep a careful eye on not just the European area; it needs to go much further than that. An enormous number of UK aircraft will be refuelling in countries all over the world. It is about trying to get that certainty of supply of a level of fuel that aligns with what we are setting down as our values—the blends that we, as the United Kingdom of Great Britain and Northern Ireland, have baked into the SAF mandate. The other side of the coin to the Bill is that we should seek to use our influence abroad to achieve things in other countries. We will probably be unable to do so in many of them, but it does not hurt to have that overview and ambition to be the world leaders on sustainable aviation fuel, and to see whether we can encourage others to follow our lead.

• 17 Jul 2025 · Sustainable Aviation Fuel Bill (Third sitting) · Hansard source

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  I beg to move amendment 3, in clause 1, page 2, line 4, at end insert— “(4A) The terms under subsection (1)(c) must include a requirement for the producer to consider the longevity of supply and relative environmental impact when prioritising between organic and synthetic derived sustainable aviation fuel solutions.”

• 17 Jul 2025 · Sustainable Aviation Fuel Bill (Third sitting) · Hansard source

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  I spoke to amendment 5—I apologise.

• 17 Jul 2025 · Sustainable Aviation Fuel Bill (Third sitting) · Hansard source

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  I absolutely understand and appreciate where the hon. Gentleman is coming from with this new clause. This topic came up in the oral evidence sessions and on Second Reading. It is of great concern that the slightly lower tariffs deal done with the United States of America has clearly and materially threatened UK production of bioethanol, which of course has many uses. Many of us on the petrol station forecourt will have seen the curious E5 and E10 labels on the petrol pumps, which is about the ethanol blended with the regular fossil fuel. Our consumption of it as a country is particularly high. As we are debating the potential future of bioethanol in sustainable aviation fuel production, it is incumbent upon the Government to reflect, within the scope of the Bill, on how much domestic supply there can be. So much of the Bill is underpinned by sovereign capability and fuel security—a point on which the Opposition and I think the Liberal Democrats are equally aligned on; it is so important—and so surely this new clause must also be important to the Government. I ask the Minister to reflect on that when he responds.

• 17 Jul 2025 · Sustainable Aviation Fuel Bill (Third sitting) · Hansard source

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  I am grateful to the hon. Gentleman for that point; I do not think that we are misaligned on that argument. Yes, we need to move to sustainable aviation fuel, preferably at the better end of that technology. It is this very Bill that will ensure that we can, as a country, move faster towards that aim with—I have used the phrase before—the other side of the coin of the Bill, which is the SAF mandate. When the Conservatives were in government, we were heading towards that, but I fully acknowledge that it is the new Government who have introduced it to the House. I totally agree with the hon. Gentleman that there is a cost to doing nothing, but it is incumbent on all of us on behalf of our constituents, and the businesses that operate within our constituencies and require the use of air freight, to ensure that we are not legislating for something that will put an undue additional financial burden on them. The point of the amendment is to embrace the Minister’s commitments at the Dispatch Box on Second Reading, and in the briefings beforehand—which, I repeat, I was grateful to him for putting on—and to ensure that as the Committee potentially allows the Bill to go on to Report, and further through the parliamentary process, we are confident in those numbers, and about the impact that we, collectively, as a Committee and ultimately as Members of Parliament, are putting on the statute book. It is in that spirit that the amendment has been put forward. I ask the Minister to ensure that the projections he has reported from the Dispatch Box come to fruition, so we do not end up looking back in probably a few years’ time, as opposed to a few months’ time, and discovering that the plus or minus £1.50 was much worse than that, as some of the witnesses we heard from on Tuesday suggested.

• 16 Jul 2025 · Blue Badge Eligibility · Hansard source

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  It is a pleasure to serve under your chairmanship, Sir Christopher. I congratulate my hon. Friend the Member for Maidstone and Malling (Helen Grant) on not just securing the debate and championing her constituents so well in her speech, but bravely telling her own story as part of it, just as the hon. Member for Chatham and Aylesford (Tristan Osborne) did. I am grateful for the opportunity to respond for His Majesty’s Opposition on an issue that cuts to the heart of how we treat some of the most vulnerable people in our society, not least those facing the life-changing impact of cancer treatment. The blue badge scheme has long been a vital way in which we support people with severe and permanent mobility difficulties to live independent lives, to stay connected to work, community and family, and to access essential goods and services. Under the Disabled Persons (Badges for Motor Vehicles) (England) Regulations 2000, local authorities are tasked with issuing badges in line with clear national eligibility rules. Those rules, rightly, focus on the practical impact of a person’s condition on their day-to-day mobility, not simply on their diagnosis. The principle is sound, but in practice, there is, as we have heard, a glaring gap. People undergoing aggressive cancer treatment, for example, can suffer debilitating side effects that severely restrict mobility. Nerve damage, fatigue, pain and weakness can make walking even short distances impossible, yet because those impacts are deemed to be temporary, the people involved often do not qualify for a blue badge, as the impediments might not last three years. This is not a small oversight. It means that people who are in the fight of their life are too often forced to fight an additional battle just to park near a hospital, their local shops or community services. Under the Road Traffic Regulation Act 1984, local councils have powers to create local traffic regulation orders that allow temporary parking concessions for residents with short-term impairments. However, we know, and I am confident the Government must know, that in practice that is patchy and inconsistent. Some councils offer short-term medical parking permits; many do not. Some cancer patients are fortunate enough to find clear guidance and a fair process; too many others are left to navigate an opaque local system at the very moment when they are least able to cope with yet more paperwork, forms and stress. It is simply wrong that whether a cancer patient can access parking support depends on where they live and whether their local council happens to operate a discretionary scheme or chooses not to. The previous Government rightly reminded local authorities of their powers to provide the concessions, but that was never intended to be the long-term answer. We need a fair, unified solution that does not depend on a postcode lottery of local good will. I hope that the Minister will correct this impression when she responds to the debate, but under this Government there seems to be no commitment to update the outdated 2000 regulations in order to recognise the reality facing thousands of cancer patients and others every single year. Nor is there any progress on national guidance to make short-term exemptions consistent, automatic and easy to access. It is not good enough to say, as the Government still seem to say, that councils can just sort it out locally. The evidence is clear: the local patchwork approach has failed. Cancer does not care about council boundaries. We need a simple, nationally recognised exemption for cancer patients whose treatment has a severe short-term impact, or potentially long-term impact, on their mobility. That could mean a standardised temporary permit supported by NHS trusts, so that patients do not have to fight for evidence or explain themselves twice. This is not about changing the core principle of the blue badge scheme. It is about bringing it up to date with the real-world experience of people who urgently need that help. It is about accommodating patients living with cancer, which the Government already classify as a disability from diagnosis and as long as people live with its effects. I urge the Minister and this Government to listen to charities, to NHS professionals and to patients themselves. My hon. Friend the Member for Maidstone and Malling gave the powerful examples of Sandy Burr and Bev Evans, constituents living with severe, agonising mobility challenges because of this disease and because of injury, yet still falling outside the national blue badge criteria. Now is the time to work on a cross-party basis to close the gap once and for all. Our country prides itself on compassion. It is now time for the Government to show that in practice. That can happen by ensuring that nobody in the fight of their life is forced to fight for a parking space too.

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

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  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.

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

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  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.

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

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  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.

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

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  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.

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

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  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.

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

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  Q 29 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.

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

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  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.

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

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  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.

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

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  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.

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

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  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.

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

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  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?

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

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  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.

• 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.