Lord Hendy of Richmond Hill (Lab)

My Lords, I thank all noble Lords who have taken part in this debate. Amendment 3, tabled by the noble Lord, Lord Moylan, seeks to prevent the revenue certainty mechanism supporting power-to-liquid sustainable aviation fuel projects. However, as the noble Earl, Lord Russell, noted, Amendment 7 from the noble Lord, Lord Ravensdale, produces the reverse, in that it would require the Secretary of State to enter into at least one revenue certainty contract with a SAF producer that is using power-to-liquid technology. We believe that there is value in potentially supporting power-to-liquid fuels because they have a high greenhouse gas emissions reduction potential, lower competition for their feedstocks and lower risk of wider environmental issues such as land use change. Adopting either of these amendments would limit the Government’s negotiation flexibility by setting criteria in advance, which could ultimately reduce overall value for money in the contracts agreed. The Government will establish a fair and transparent contract allocation process to assess each project’s costs, benefits and risks. It is important that government retains the flexibility to support a range of technologies if they can deliver cost-effective greenhouse emissions reductions and support the SAF mandate obligations—and, to address the point made by the noble Lord, Lord Moylan, whenever they are able to do so. He cannot predict the future any more than I can, and in any event, there is a sunset clause to the Bill which means that it can be extended in five-yearly increments. We are currently developing our approach to allocation, and we will publish an allocation strategy which outlines our approach to different SAF technologies and how the revenue certainty mechanism will support mandate targets. On Amendments 14, 15 and 16, our intention is for HEFA technology and feedstocks to be excluded from RCM contracts because HEFA SAF—I am sorry about all these acronyms—has already overcome many of the barriers to investment that the revenue certainty mechanism seeks to address. However, the SAF market is at an early stage and uncertain, so the legislation needs to remain flexible to allow for potential future changes in the market to which the revenue certainty mechanism may need to respond.