Rishi Sunak is under pressure from over 60 Tory MPs ito subsidise manufacturers of low-carbon aviation fuel in the UK to help the industry [allegedly] cut emissions. The MPs have signed an amendment to the government’s energy bill calling on ministers to introduce financial support to create a UK industry producing so-called “sustainable aviation fuels” (SAFs). The only possible hope the aviation industry has to cut its CO2 emissions in future, while growing as much as possible, is finding magical fuels that are considered low carbon. (Large hydrogen fuelled planes, or electric planes, are not realistic for decades, if ever). The amendment to the energy bill, tabled by former Conservative transport secretary Chris Grayling, calls on the government to step in to create a “price stability mechanism” to incentivise fuel companies to produce more SAFs. That is just what the sector wants. A subsidy from the public purse, for more flying. The government has pledged £165mn to encourage manufacturers to open at least five plants producing SAF, that they hope will start to be built by 2025. The extra subsidy would be even more.
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MPs call for subsidy of UK’s green aviation fuel producers
Mainly Tory group pushes for a ‘price stability mechanism’ to incentivise greater production. “Greener” fuels form the basis of the aviation industry’s pledge to reach net zero emissions by 2050
By Philip Georgiadis, Sylvia Pfeifer, Camilla Hodgson and Jim Pickard (FT)
JULY 28 2023
Prime Minister Rishi Sunak is under pressure from MPs in his ruling Conservative party to subsidise manufacturers of low-carbon aviation fuel in the UK to help the industry [allegedly] cut emissions.
More than 60 parliamentarians, most of them Tories, have signed an amendment to the government’s energy bill calling on ministers to introduce financial support to create a UK industry producing so-called sustainable aviation fuels or SAFs.
These greener fuels form the basis of the aviation industry’s pledge to reach net zero emissions by 2050, given the huge technological challenges in developing hydrogen-powered airliners or electric propulsion systems that would allow aircraft to be powered by greener forms of energy.
The pressure comes amid internal debates in the Conservative and main opposition Labour party over their green policies before next year’s general election.
The wrangling started after voters handed the Tories an unexpected by-election victory in London last week in protest against a plan by Sadiq Khan, the capital’s Labour mayor, to extend a charge on heavily polluting vehicles across the capital.
The amendment to the energy bill, tabled by former Conservative transport secretary Chris Grayling, calls on the government to step in to create a “price stability mechanism” to incentivise fuel companies to produce more SAFs. This would mean the state agrees to a set price underwritten by the government for fuel, similar to schemes used to underwrite nuclear and offshore wind projects.
Industry executives believe such a system is critical to building production of the fuels at scale and bring down the huge cost difference with conventional jet fuel.
John Holland-Kaye, chief executive of London’s Heathrow airport, said a price stability mechanism would be “hugely important” in encouraging banks to provide the “cash flow” to new UK fuel producers.
SAFs are made from materials ranging from used cooking oil and fats to household waste and non-food crops, and can reduce overall carbon emissions by up to 80% compared with conventional jet fuel, according to industry calculations. [Usual weasel words are “up to”. That can mean anything from 0% lifetime saving…. AW comment].
The government has said it will mandate airlines to hit a global aviation industry target of 10% use of SAFs by 2030, which would require 1.5bn litres of the fuels to be produced in the UK by the end of the decade.
Guillaume Faury, chief executive of the world’s biggest commercial aircraft maker Airbus, warned this week that the industry was “still falling short of that 10% target”, despite a “significant acceleration” in investment over the past two years.
But environmentalists are sceptical about whether SAFs can replace conventional fuel, given the availability and sustainability of suitable feedstocks.
The former chair of the Climate Change Committee, the government’s independent advisory body, this week questioned the decision by ministers to base the UK’s aviation policy on “unproven” SAFs. “We have to think about the distinction between technological breakthrough and actually delivering,” John Gummer, also known as Lord Deben, told the Financial Times.
The government said its SAFs programme was already “one of the most comprehensive in the world”. It has pledged £165mn in funding to encourage manufacturers to open at least five plants producing the new fuel and hopes they will be under construction by 2025.
A government-commissioned report earlier year found that “further intervention” was needed to help support the UK SAF industry, but added that this would require “only a limited call on public finances”.
See earlier:
Official UK report to call for green aviation fuel subsidies
Plans to boost support for low-carbon flights expected as Treasury haggles over scale of financing
By Jim Pickard, Philip Georgiadis and Peter Campbell (FT)
MARCH 28 2023
The UK government will on Thursday publish a report recommending state subsidies for the production of low-carbon aeroplane fuel made from household waste.
The Department for Transport will release the report as part of wider package of proposed policies but ministers are still haggling with Treasury over the scale of the subsidies, according to people close to the matter.
Rishi Sunak, prime minister, will on Thursday oversee a so-called government “energy security day”, with dozens of policy announcements and consultations running to about 1,000 pages.
Ministers have drawn up plans to fund a new nuclear body called Great British Nuclear; ease onshore wind development; and tweak the windfall tax on oil and gas companies, according to officials.
Grant Shapps, energy secretary, has signalled his intention to remove green levies from customers’ electricity bills and include them in general taxation, and to change the way that electricity prices are set.
The car industry is hoping for clarity over of a controversial electric vehicle sales mandate due to kick in next year.
Auto sector executives have warned that to allow manufacturers time to plan ahead they need certainty as soon as possible on new rules stipulating a certain proportion of sales must be of electric vehicles,
Officials have also been finalising an updated “green finance strategy” to encourage the uptake of products such as “green gilts” — bonds which finance projects that contribute to reducing carbon emissions.
However, some of these policies have been delayed until later this year, according to officials.
Last October, the DfT commissioned Philip New, former head of BP Biofuels, to lead an independent evaluation of how to build a “sustainable aviation fuel” (SAF) industry in the UK.
But while the DfT is expected to endorse the general findings of the report it has not yet had the go-ahead from the Treasury for extra subsidies, according to people familiar with the situation.
Aviation contributes around 8 per cent of the UK’s greenhouse gas emissions, and the industry’s net zero targets are heavily reliant on using sustainable aviation fuels to decarbonise flying.
Airlines believe some form of price stability mechanism, which would agree a set price for fuel underwritten by the government, is crucial to spur more investment.
The UK has announced £165mn in grants and a mandate that would require at least 10 per cent of jet fuel in the UK — an estimated 1.5bn litres — be made from “sustainable sources” by 2030.
But industry executives have expressed concern that the EU and the Biden administration in the US have gone further with incentives around sustainable fuels.
Shai Weiss, chief executive of airline Virgin Atlantic, told the FT in December that UK government support was “a drop in the ocean” compared with the money being spent in the US.
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Head of Boeing not optimistic that SAF will be cheap enough any time soon
Date added: 23 May, 2023
The head of Boeing has warned that biofuels will “never achieve the price of jet fuel”, expecting that this central pillar of the aviation sector’s strategy to slash emissions is not likely to be successful. Airlines say that so-called “sustainable aviation fuels” (SAF) — made from food wastes, agricultural and forestry waste, and domestic rubbish, could enable lower CO2 from the sector, by replacing the kerosene-type fuels, such as Jet A, used in aircraft today. But SAF currently accounts for less than 1% of global aviation consumption and its price is at least x2 or x3 that of kerosene fuel. If the fuel could be made in anything approaching the scale the aviation industry wants, and without other serious unintended agricultural and environmental impacts, it would still be expensive. The extra cost would have to mean more expensive flying, and thus fewer people flying – less future growth for the sector. “There are no cheap ways to do SAF — if there were, we would already be doing them.” Governments want to mandate use of SAF by airports, even though it is not available in large amounts.
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Royal Society report on novel aviation fuels – no option other than cutting demand for flying
Date added: 28 February, 2023
The UK government has been promoting the idea of “guilt-free flying” in a few years time. Now a report from the Royal Society says (as has been well known by anyone who properly investigated the issue!) that there is currently no single, clear alternative to traditional fuel. Switching to so-called “sustainable” fuel is key to the government’s aim to reach “jet zero” flying by 2050. Realistically, there will be no significant impact on reducing aviation CO2 from electric planes, or hydrogen. Small economies and efficiencies by airlines can only make a small dent, while demand for flights is expected to increase. The Royal Society looked at options for “greener” fuels to replace the 12.3m tonnes of jet fuel used annually in the UK. They conclude that to produce biofuels for UK aviation would require half of Britain’s farming land, putting severe pressure on food supplies and nature. There is not enough genuinely low carbon electricity to produce much “green” hydrogen. The Royal Society says research and development is required to understand and mitigate the non-CO2 climate impacts of all the alternative fuel options. But it stops short of the obvious solution to reducing aviation carbon emissions – reducing the demand for air travel, and not allowing it to grow.
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