The Secretary of State may direct the designated counterparty (see section 4 ) to offer to enter into a revenue certainty contract with a producer of sustainable aviation fuel.
Explanatory notes to the Bill, prepared by the Department for Transport, have been ordered to be published as HL Bill 138—EN.
Lord Hendy of Richmond Hill has made the following statement under section 19(1)(a) of the Human Rights Act 1998:
In my view the provisions of the Sustainable Aviation Fuel Bill are compatible with the Convention rights.
Lord Hendy of Richmond Hill has made the following statements under section 20(2)(a) and (3) of the Environment Act 2021:
In my view—
(a) the Sustainable Aviation Fuel Bill contains provisions which, if enacted, would be environmental law, and
(b) the Bill will not have the effect of reducing the level of environmental protection provided for by any existing environmental law.
A
bill
to
Make provision about sustainable aviation fuel.
B e it enacted by the King’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
The Secretary of State may direct the designated counterparty (see section 4 ) to offer to enter into a revenue certainty contract with a producer of sustainable aviation fuel.
In this Act “revenue certainty contract” means a contract which provides for—
the designated counterparty to make payments to the producer in
respect of sustainable aviation fuel sold by the producer during a
period for which the strike price is higher than the market reference
price,
the producer to make payments to the designated counterparty in
respect of sustainable aviation fuel sold by the producer during a
period for which the market reference price is higher than the strike
price, and
the payments referred to in
paragraphs (a)
and
(b)
to be calculated
by reference to the difference between the strike price and the market
reference price.
In subsection (2) —
“
market reference price” means an amount that is determined in
accordance with the contract as the reference price for sustainable
aviation fuel sold during a period specified in, or determined under,
the contract;
“
strike price” means an amount that is determined in accordance with
the contract as the strike price for sustainable aviation fuel sold during
that period.
A direction under subsection (1) must be in writing and must specify—
the name of the producer to which the offer is to be made,
the period within which the designated counterparty must comply
with the direction,
the terms on which the offer is to be made, and
the period for which the offer is to be open for acceptance.
The Secretary of State may—
direct a relevant company to provide any assistance the Secretary of
State may require for the purpose of identifying producers in respect
of which to make a direction under subsection (1), and
make payments to the relevant company in respect of that assistance.
In subsection
(5)
“relevant company” means a company that is limited by
shares each of which is held by a Minister of the Crown.
No direction may be given under
subsection (1)
after the end of the period
of 10 years beginning with the day on which this Act is passed.
The Secretary of State may by regulations amend
subsection (7)
so as to extend
the period during which a direction may be given by up to 5 years at a time.
If a direction is revoked, any offer made in pursuance of the direction but
not yet accepted lapses.
The Secretary of State may make regulations requiring the designated
counterparty to—
maintain a register of information in relation to revenue certainty
contracts;
publish revenue certainty contracts or details about them.
the information to be contained in the register;
publication of the register.
The provision that may be made about the redaction of material in a revenue
certainty contract includes provision authorising or requiring redactions to
be made—
in accordance with a provision of the contract;
in accordance with a decision made by the Secretary of State.
The Secretary of State may designate a company as the counterparty for
revenue certainty contracts by giving it a notice under this subsection.
The company so designated is referred to in this Act as “the designated
counterparty”.
A company may be designated under this section only if—
it is limited by shares, and
each share in the company is held by a Minister of the Crown.
A company may be designated under this section only if it consents to the
designation.
The Secretary of State may revoke a designation under this section by giving
a notice to the company designated.
If the designated counterparty gives the Secretary of State written notice
withdrawing its consent to the designation, the Secretary of State must
designate a replacement (but it remains the designated counterparty until
replaced).
must specify when the designation or revocation takes effect, and
must be published by the Secretary of State.
The Secretary of State must ensure that, at all times after the first designation
under this section takes effect, there is a designation that has effect.
Where a company’s designation under
section 4
is revoked, the Secretary of
State may make one or more schemes for the transfer of the company’s
property, rights and liabilities to the new designated counterparty.
The things that may be transferred under a transfer scheme include—
rights and liabilities relating to a contract of employment;
property, rights and liabilities that could not otherwise be transferred;
property acquired, and rights and liabilities arising, after the making
of the scheme but before it takes effect.
A transfer scheme may—
create rights, or impose liabilities, in relation to property, rights or
liabilities transferred;
make provision about the continuing effect of things done by the
transferor in respect of anything transferred;
make provision about the continuation of things (including legal
proceedings) in the process of being done by, on behalf of or in relation
to the transferor in respect of anything transferred;
make provision for references to the transferor in an instrument or
other document in respect of anything transferred to be treated as
references to the transferee;
make provision for apportioning property, rights or liabilities;
make provision which is the same as or similar to the TUPE
regulations;
make other consequential, supplementary, incidental or transitional
provision.
In
subsection (3)
(f)
, “the TUPE regulations” means the
Transfer of
Undertakings (Protection of Employment) Regulations 2006
(S.I. 2006/246).
A transfer scheme may include provision for compensation by the Secretary
of State to any person whose interests are adversely affected by it.
The Secretary of State may modify a transfer scheme.
The Secretary of State may make regulations (“levy regulations”) requiring
relevant suppliers of aviation fuel to pay a levy to the designated counterparty
for the purpose of enabling the counterparty to meet—
the cost of payments under revenue certainty contracts, and
Levy regulations may include provision for the purpose of setting the levy
at a level that enables the designated counterparty to hold sums in reserve.
Levy regulations may require relevant suppliers of aviation fuel to pay
different amounts based on criteria relating to their relative market share (and
may include provision about how their market share is to be determined for
these purposes).
Levy regulations may create exemptions from the requirement to pay the
levy.
Levy regulations may—
require a person to make payments on account of any liability of the
person to pay the levy;
include provision about the repayment of sums paid on account.
Levy regulations may make provision about—
the method by which sums payable under the regulations are to be
determined;
the payment of interest on late payments.
Before making levy regulations the Secretary of State must consult any persons
the Secretary of State considers appropriate.
In this section “relevant supplier of aviation fuel” means a person who is or
becomes subject to a renewable transport fuel obligation by virtue of supplying
aviation fuel during the period specified in levy regulations.
In
subsection (8)
“renewable transport fuel obligation” has the meaning given
by
section 124
(1)
of the
Energy Act 2004
.
Levy regulations may require a person to provide financial collateral to the
designated counterparty (whether in cash, securities or any other form) in
respect of any liability of the person to pay the levy.
The provision that may be made under subsection
(1)
includes provision for
the designated counterparty to determine the form and terms of any financial
collateral.
Levy regulations may—
confer functions on the designated counterparty in connection with
the administration and enforcement of the levy;
require the Secretary of State to assist the designated counterparty in
connection with those functions by collecting information and
providing it to the designated counterparty.
Levy regulations may require a person to provide information to the
designated counterparty or the Secretary of State (on request or otherwise)
for purposes connected with the administration and enforcement of the levy.
Levy regulations may make provision about the resolution of disputes,
including provision about arbitration and appeals.
Levy regulations may provide for anything which is to be calculated or determined under the regulations to be calculated or determined—
by such persons,
in accordance with such procedure, and
by reference to such matters and to the opinion of such persons,
as may be specified in the regulations.
The Secretary of State may by regulations—
require a person who receives such a payment to ensure that its
customers receive such benefits from the payment as may be specified
in or determined in accordance with the regulations.
The regulations may, in particular, make provision about—
what amounts to a surplus, including provision about the method by
which the surplus is to be determined and the period by reference to
which it is to be determined whether there is a surplus;
the method by which the amount of a payment to a person is to be
determined.
The regulations may make provision for payments to be provided subject to
conditions as to repayment in the event that the recipient fails to comply with
a requirement imposed under
subsection (1)
(b)
.
Before making regulations under
this section
the Secretary of State must
consult—
the Welsh Ministers, if the regulations contain provision which would
be within the legislative competence of Senedd Cymru if contained
in an Act of the Senedd;
the Scottish Ministers, if the regulations contain provision which would
be within the legislative competence of the Scottish Parliament if
contained in an Act of the Scottish Parliament;
the Department for the Economy in Northern Ireland, if the regulations
contain provision which—
would be within the legislative competence of the Northern
Ireland Assembly if contained in an Act of the Assembly, and
would not, if it were contained in a Bill for an Act of the
Northern Ireland Assembly, result in the Bill requiring the
consent of the Secretary of State under
section 8
of the
Northern
Ireland Act 1998
;
any other persons the Secretary of State considers appropriate.
The Secretary of State may impose a financial penalty on a person other than
the designated counterparty if—
the Secretary of State is satisfied that the person has breached a
requirement imposed by levy regulations, and
the requirement was, at the time of the breach, specified in the levy
regulations as a requirement in respect of the breach of which a
financial penalty may be imposed.
The amount of the financial penalty imposed under this section must not
exceed the lesser of—
£100,000, and
an amount equal to 10% of turnover of the person on whom it is
imposed.
The Secretary of State may by regulations—
amend the amount specified in subsection (3) (a) in light of inflation;
make provision as to how a person’s turnover is to be determined for
the purposes of
subsection (3)
(b)
.
The Schedule
makes further provision about financial penalties under
this
section
.
The Secretary of State may give the designated counterparty directions as to
the exercise of any of the functions conferred on it under or by virtue of this
Act.
The Secretary of State must publish any direction given under subsection (1) .
The designated counterparty must comply with any requirement imposed by
the Secretary of State to provide the Secretary of State with information or
advice in connection with the exercise of the counterparty’s functions.
A requirement may include provision about how or when information or
advice is to be provided.
The Secretary of State may provide financial assistance to the designated
counterparty.
The financial assistance may be provided in any form and in particular may
be provided—
by way of grant, loan, guarantee or indemnity or the provision of
insurance, or
by incurring expenditure for the benefit of the designated counterparty.
Financial assistance under this section may be provided subject to such
conditions as the Secretary of State considers appropriate, which may include
conditions about repayment with or without interest or other return.
The power to provide financial assistance under this section is in addition to
(and does not limit or replace) any other power of a Minister of the Crown
to provide financial assistance.
A power to make regulations under any provision of this Act includes power
to make—
consequential, supplementary, incidental, transitional or saving
provision;
different provision for different purposes.
Regulations under this Act are to be made by statutory instrument.
A statutory instrument containing regulations under any of the following
provisions (whether alone or with other provision) may not be made unless
a draft of the instrument has been laid before and approved by a resolution
of each House of Parliament—
section 10 (payment of surpluses to levy payers);
section 11 (4) (a) (power to amend maximum financial penalty).
Any other statutory instrument containing regulations under this Act is subject
to annulment in pursuance of a resolution of either House of Parliament.
In this Act—
“
aviation fuel” means fuel for—
use in aircraft, or
use in testing engines for use in aircraft;
“
company” means a company registered under the Companies Act 2006;
“
liability” includes contingent liability;
“
Minister of the Crown” has the same meaning as in the
Ministers of
the Crown Act 1975
(see section 8(1) of that Act);
“
renewable transport fuel” means anything that is (or is treated as)
renewable transport fuel for the purposes of Chapter 5 of Part 2 of
the Energy Act 2004 (see sections 131D(2) and 132(1) of that Act);
“
sustainable aviation fuel” means aviation fuel that is renewable transport
fuel.
This Act extends to England and Wales, Scotland and Northern Ireland.
This Act, apart from section
1
, comes into force on the day on which it is
passed.
Section
1
comes into force at the end of the period of two months beginning
with the day on which this Act is passed.
This Act may be cited as the Sustainable Aviation Fuel Act 2025.
This Schedule makes further provision in connection with financial penalties
under section
11
.
The Secretary of State must, before imposing a financial penalty on a person,
give the person a written notice (a “notice of intent”) of the proposed
financial penalty.
A notice of intent must specify—
the amount of the proposed financial penalty,
the reasons for proposing to impose the penalty,
information about the right to make representations under
paragraph
3
, and
the date by which any representations must be made.
The date specified under
sub-paragraph (2)
(d)
must be a date more than
28 days after the day on which the notice of intent is given to the person.
The Secretary of State may at any time withdraw the notice of intent, or
amend it to reduce the amount of the proposed financial penalty, by giving
written notice to the person.
A person who is given a notice of intent under
paragraph 2
may make
written representations to the Secretary of State about the proposal to
impose a financial penalty.
Any representations must be made within the period (“the period for
representations”) ending with the date specified under
paragraph 2
(2)
(d)
.
After the end of the period for representations the Secretary of State must
decide whether to impose a financial penalty on the person.
If the Secretary of State decides to impose a financial penalty on the person,
the Secretary of State must give the person a written notice (a “final notice”)
imposing the penalty.
A final notice must specify—
the amount of the financial penalty (which may be less than the
amount specified in the notice of intent, but cannot be more);
the reasons for imposing the penalty,
the date by which the penalty must be paid,
information about the right of appeal under paragraph 5 , and
the consequences of failure to comply with the final notice.
The date specified under
sub-paragraph (3)
(c)
must be a date more than
28 days after the day on which the final notice is given to the person.
The Secretary of State may at any time withdraw a final notice, or amend
it to reduce the amount of the financial penalty, by giving written notice
to the person.
A final notice may not be given more than 28 days after the last day of the
period for representations.
A person on whom a financial penalty is imposed under section
11
may
appeal to the court against—
the decision to impose the penalty, or
the amount of the penalty.
An appeal under
this paragraph
must be brought before the end of the
period of 28 days beginning with the day after the day on which the final
notice is given to the person in accordance with
paragraph 4
.
On an appeal under
this paragraph
the court may confirm, reduce or cancel
the penalty.
If a person appeals under
this paragraph
, the final notice is suspended
until the appeal is finally determined, withdrawn or abandoned.
In this section “the court” means—
in England and Wales or Northern Ireland, the High Court;
in Scotland, the Court of Session.
This paragraph
applies if a person fails to pay the whole or part of a
financial penalty before the end of the period within which the person is
required to pay the penalty.
In England and Wales or Northern Ireland the unpaid amount is recoverable
by the Secretary of State as if it were payable under an order of the county
court.
In Scotland, the unpaid amount may be enforced in the same manner as
an extract registered decree arbitral bearing a warrant for execution issued
by the sheriff of any sheriffdom.
Any sums received in pursuance of final notices given under paragraph 4 must be paid into the Consolidated Fund.
A
bill
to
Make provision about sustainable aviation fuel.
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