Lord Harper (Con)

My Lords, I rise to speak briefly to this group of amendments. I strongly agree on the importance of having a proper framework for these contracts and a competitive process. The lesson from the energy market is that that competitive process is important to make sure that we achieve the policy objective, which is the production of the fuel, but at the lowest possible cost, which in the end will be passed on to consumers, so having some sort of competitive process is very important. Two amendments in this group are potentially conflicting. I understand the argument in favour of allowing a longer contract period, particularly for nuclear-derived power-to-liquid fuel, as the noble Lord said, but equally, I would not want that to be the automatic default for all these contracts. I was struck by the amendment from my noble friend Lord Moylan about making sure that it is possible for the Government to exit from these contracts. From my point of view, the attraction here is just to make sure that we learn one of the lessons from the energy market. There is a balance to strike here. We want long-term contracts to give the certainty to the investors and those going into first-to-market plants in the UK to produce this, but we do not want to lock in contracts longer than necessary but potentially at a point where the market price is lower and we are effectively holding the price higher than it needs to be. We have learned some lessons from how that works in the energy market. The amendments on the paper may not be the right way of doing that. The Minister referred in his speech at Second Reading to the contracts for difference models from the energy market. When he winds up this group, I would be interested to hear what the Government have learned. What detailed work has been done about getting these contracts right at the outset but also enabling them to be flexed as the circumstances change, so that we get the right level of price protection which is necessary to get the initial investment and produce investor certainty but do not keep it going past the point at which investors are making returns above what was necessary to get them to invest? Obviously, you cannot change those rules retrospectively, so it is about getting the right level of certainty. I will be interested to hear what the Minister has to say there. I am supportive of the thrust of the noble Lord’s Amendment 6 on power-to-liquid fuels. The only thing I would quibble with is that it has a “must” in it; I do not know the likelihood of this, but I would not want to force the Government to enter into revenue certainty contracts that were not necessary to produce. If we had producers producing enough of that third-generation sustainable aviation fuel, I would not want to force the Government into having to enter into unnecessary revenue certainty contracts. Therefore, I support the thrust of the noble Lord’s argument, which is to make sure that enough of the third-generation SAF is produced to meet the requirements in the mandate, but I would not want the Government to be forced to do that. So the wording in the amendment just needs something which says that they only have to do that if not doing so would not allow that level of fuel to be produced for the market.