Tom Collins is the Labour MP for Worcester.
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Although we have discussed decarbonisation a number of times in this debate, it has not been said yet that the Bill is about addressing the climate crisis. That incredibly important and urgent piece of work demands the utmost urgency and ambition. For that reason, I naturally support it and what it is trying to achieve. Similar mechanisms have been incredibly successful in developing the thriving renewables industry that we now see in the UK, which provides a lot of our energy.
It is worth while recognising that the Bill is part of a much longer journey to decarbonising aviation. I declare an interest early in my remarks: I am the chair of the all-party parliamentary group on hydrogen. In a very long timeframe, we can potentially see aviation using cryogenic hydrogen as a fuel source, so we should keep that in view.
It is important, as the amendments make clear, that the UK benefits from what we are doing in the Bill. I am passionate about seeing the whole UK low-carbon energy supply chain building and scaling rapidly. That includes electrons—the Government already have very ambitious goals around decarbonising electricity—as well as molecules and hydrogen. We are still awaiting the hydrogen strategy. I recently spoke to the Minister about that, and I understand that it is close. It is incredibly important that we have an ambitious and comprehensive strategy for the development of the hydrogen economy in the UK that does not just serve a small number of industrial clusters but underpins our decarbonisation of electricity, provides dispatchable power and provides an opportunity for industrial renewal as we move forward.
Hydrogen is an important feedstock for producing SAF by any route. We need a hydrogen economy, and for that we need a price. For a price, we need storage and transmission. As we fulfil our desires for SAF to be ambitious, bold and effective in decarbonising, we must also do the work as a Government to build a hydrogen economy to establish that anchoring price, as well as demand and production, so that we can see a thriving, decarbonising aviation sector, the renewal and regeneration of the whole UK industrial sector, and an absolute renaissance underpinned by low-carbon energy—both electrons and molecules.
Full debate: Sustainable Aviation Fuel Bill
The National Energy System Operator’s clean power 2030 plan relies on unabated gas power stations, without a clear plan for their decarbonisation after 2030. The forthcoming hydrogen strategy presents a natural opportunity to set long-term goals for the wider integrated energy system, including hydrogen-fired combined cycle gas turbine generation, and long-term salt cavern energy storage at scale. Will that strategy include a quantified pathway with delivery milestones for transitioning dispatchable power, and will NESO be required to incorporate that pathway into its planning?
Full debate: Gas-fired Power Stations
I chair the all-party parliamentary group on hydrogen, and I welcome the climate change levy changes in this Budget that support hydrogen production, an area that is ripe for growth and well suited to the UK’s strengths, both industrially and geographically. In recent years, we have led the world technologically in this space. It offers real opportunities for us, if we have an ambitious plan. UK industry is not confined to city regions and clusters; it is in every town and every region. The UK energy system is being reconceived for resilience and sustainability, but we need new energy storage at large scale, and we will need much higher levels of dispatchable power than we have today. An ambitious vision for hydrogen, in which the Government directly invest in hydrogen, and actively lead a strategic roll-out of its storage and transmission, is a prerequisite for an industrial renaissance that the UK could have and deserves to have, so I look forward to the publication of the upcoming hydrogen strategy.
We cannot ignore the major disruptions sweeping the world. The climate crisis is a global emergency that demands urgent and assertive action, but there is also digitalisation. I cannot overstate the impact that the digital revolution is having. Debate on the Budget now takes place not only in echo chambers of opinion, but in echo chambers of reality, and people have completely different understandings of what is happening in our world and how it works. This new digital world means that our children are unsafe, and that all of us are unsafe from harmful or traumatic images and narratives, from addictive user interfaces in apps or websites, from personified artificial intelligence that encourages attachment —we cannot imagine the harms that could cause—and from algorithms that curate news, views and the voices that we hear, which reinforce bias and present misinformation as fact. These represent a fundamental societal threat that we can and must address in the same way that we address the risks of physical products. The Budget rightly increases taxes on online gambling, but we must do much more.
Full debate: Budget Resolutions
I will speak to new clause 1. Context is important, as this Bill is a first step on a long pathway to decarbonising aviation. At the moment, SAF components are blended with existing fossil fuels to create usable aircraft fuel, as I will go on to discuss, but I think it is helpful for us to be aware of the context: the various generations of sustainable aviation fuel that will form a road map as we move into the future.
All of this is about having a strategic road map. The Bill is one step—one vastly enabling piece of legislation—and it follows a model that is well proven to help establish new technologies as part of a green and sustainable future. We have seen the similar progress in offshore wind, for example, where it has been utterly transformational beyond anybody’s expectations. This vehicle should be able to do similar things for the beginning of our journey on decarbonising aviation, but it needs a long-term plan. That is why there is a really important piece of work to be done in the secondary legislation enabled by the Bill. It is very important that that legislation takes account of all the factors being discussed through the various amendments that have been tabled.
Full debate: Sustainable Aviation Fuel Bill
This is of course a very important topic. We have faced an overly warm summer this year and we keep seeing the weather reminding us of the urgent need for change. The global energy system is also rapidly transitioning, and the UK needs to respond to that. With our ambitious mission for growth, looking to have the highest growth in the G7, it is vital that we are competitive and, indeed, that we lead in the energy space, as well as renew ourselves industrially. The UK has shown great leadership in hydrogen supply chain development and hydrogen technology development. We have been leaders, but we have also navigated and illustrated the technically complex, multi-sector, internationally charged difficulties in decarbonising our economy. It has been unclear which technologies will win, but although there is still some small uncertainty associated with how the mix of technologies will play out, the questions of how we will produce, transport and store energy at that macro scale are now finding firm answers, so we are at a turning point. The transition is no longer being led by technology, but by economics, and it is time for us to respond to that shift.
Full debate: Hydrogen Supply Chains
How we get to the future energy system is similar to how we got to this point: economics is overtaking technology as the driver for change. It is not about choosing technologies; it is about choosing these key energy vectors and then facilitating markets to grow around them. If we look more closely at that challenge and at the current UK energy system, we have seen electricity decarbonising, but if we look at electricity use in comparison with other vectors in the UK, it plays a relatively modest role. If we look at our energy use over the course of a year, our daily electricity consumption is pretty flat, but if we overlay on to that the amount of gas we use as a country—remember, gas is providing a vital part of our electricity production, and indeed the responsive part—and we see waves with peaks in the winter and troughs in the summer. The peaks of those waves are three times higher than our day-to-day electricity use. Gas is doing the lion’s share of moving energy around the UK and supporting our electricity system, and oil, which is primarily used for transport and is our main vector for transport, sits at about the same level as electricity. That is the picture of how energy is split across the UK energy system.
What we can learn from that is that UK energy demand is peaky. It varies very rapidly, seasonally and throughout the day, especially for heat applications. As we move into a renewable world, we need to recognise that renewable production is also subject to these synchronous peaks and troughs. The UK is a small enough country that one weather system can influence the production of all our renewables. We are therefore subject to fluctuations both in the supply of renewable energy and in demand. We also know that global prices for energy will continue to fluctuate, and part of our Government’s strategy to make the UK rightly more energy independent is informed by our vulnerability to variations in international energy prices.
Whatever our vector mix, and however we cut up the pie of our future energy system, we absolutely will need storage to navigate these variations. The transition has rightly been described as a chicken-and-egg problem: how do we build a new energy system out of an existing one? We are led by economics, which means that we need a price for the new system. We need a price that breaks the cycle by providing producers with a way to sell their energy and by providing people decarbonising at the end-use point with the ability to buy the energy they need for decarbonisation and to make long-term investments. That price enabler is made stable by storage. The crux, therefore, of building this future energy system is to build transmission and storage of the key vectors that we want to use in the future. Therefore, it would be very valuable for the UK to develop a plan to commission and build out a strategic national clean energy reserve. That can be left to markets, but the Government need to drive it with an extremely strong and firm grip and with a clear vision. I urge the Minister to look at the ways that we can build on our current work in storage, while expanding it with a very clear and ambitious vision.
We can also start blending. Blending is sometimes misunderstood. There are currently investigations into blending hydrogen into our natural gas supply. That has a small benefit for decarbonisation, but it has a huge benefit for allowing us to build out production of hydrogen, because it gives producers a large and available sink for their hydrogen to be produced and sold and it allows them to build large-scale production with the certainty of a market. Blending is therefore a key enabler not of decarbonisation but of building production for a future energy system with hydrogen playing a major role.
Full debate: Hydrogen Supply Chains
A longer-term road map for heavy transport and for heat would be very helpful. These are hard-to-abate sectors. I would like to see recognition that heat has proven one of the hardest areas of our economy to decarbonise. It is important that, while we have ambitious targets to electrify heat, we keep the door open to hydrogen providing that fallback, as gas does now for many electrified projects, to allow us to get there with confidence, rapidity and depth of decarbonisation.
Full debate: Hydrogen Supply Chains
Once again, I intervene only because I have painful personal experience of this situation. The Redcar trial was subject to a distinct, explicit and targeted campaign seeking to bring about its failure. It was extremely frustrating to experience, as the trial was testing both electrification of heat and conversion to 100% hydrogen—two key pathways for decarbonising heat that need to be validated. It was very frustrating to see that, and it was the result of a targeted campaign, but we have also seen that where the engineering is well explained and consumers are able to understand that this is just a different gas—in fact, a gas that already circulated in UK gas pipes prior to the conversion of the 1960s—these things can be done successfully. It is therefore important that we show positive ambition for hydrogen and help the public to feel secure about a problem where the engineering has been solved.
Full debate: Hydrogen Supply Chains
I again thank my hon. Friend the Member for Rushcliffe (James Naish) for securing this debate and for his continued championing of the energy sector and all our work in it. He is a strong and powerful proponent, and I am grateful to him for the opportunity he has given me today. The debate has reflected the huge opportunity that hydrogen presents for the UK in growing our economy and facing the challenges of decarbonisation and new energy systems. It has reflected the versatility of hydrogen, the importance of building a system where it is abundant, the need for us to support industry not just in classic industrial heartlands but in towns across our country, and therefore the need for us to transition the gas networks to hydrogen in the future as well.
The consensus that we have heard in the room today, for which I am very grateful—I am grateful for all Members’ fantastically knowledgeable contributions—shows that we are at the turning point where this transition is being led by economics rather than debates about technology. Electricity, hydrogen and ammonia form a pyramid of complementary energy vectors whereby we can provide sector coupling, flexibility and a dynamic future energy system that allows rapid and deep decarbonisation. I have had the opportunity to meet representatives of industry and hold workshops with a very diverse cross-section of industry, and the urge for the storage piece to be built urgently and in a decisive way, sponsored clearly by the state, is very clear, with that backed up by transition.
Full debate: Hydrogen Supply Chains
Noaman Al Adhami: In terms of standards, as I mentioned before, our route is approved as per the ASTM route. The rest of the standards—mainly on feedstock—are already there in the SAF mandate with all the details, and we are complying with that. I think one of the big advantages of SAF, compared with other means of decarbonising aviation, is that it is a drop-in fuel. It is a liquid fuel, very similar to the jet fuel kerosene, so it is easy to store and transport; you can use existing pipelines.
Full debate: Sustainable Aviation Fuel Bill (First sitting)
Q You have just mentioned that you are looking broadly at SAF production and how that is going to play out into the future. Compared with other northern European countries, the UK has excellent access to renewable energy, and we had a very early responding hydrogen industry. What do you see as the UK’s unique opportunities in SAF production?
Ruben van Grinsven: There are two elements. One is the fundamentals: affordable renewable energy, other feedstocks, then the cost of building plants, labour, and everything else. At the moment, in terms of the fundamentals of renewable electricity, the UK does not have a clear advantage because power prices are slightly more expensive, and most of the renewable power in the UK is intermittent. That is an important thing that needs to be overcome.
Full debate: Sustainable Aviation Fuel Bill (Second sitting)
I will make no party political points, but four or five years ago we were promised that by 2025 five plants would be up and running. If I were going there, I would not be starting from here, but we are getting on with doing this now. I think everyone on this Committee can be extraordinarily proud that this will be the moment that we stepped up and began to decarbonise the aviation industry.
Full debate: Sustainable Aviation Fuel Bill (Second sitting)
Electrification is inevitably going to be a go-to tool for decarbonising many parts of our economy, but it is equally clear that it cannot do everything. First, gas can do things that electricity cannot. Industry needs it: around half a million businesses in the UK currently rely on gas for their operations, and around 30% of those say that electrification is simply not feasible for them, technically or economically. Those businesses are spread across our nation, not just in clusters, so a national gas system is the only way for UK industry to not only survive but thrive.
Industry has already indicated that it will be ready, in four years, to make all its boilers 100% hydrogen-ready. It also indicated to a previous Secretary of State that it would provide price equivalence with the products in existence then. I recognise that the Climate Change Committee has tried to move us along by suggesting that there is no role for gas in the future of heat, but as someone who spent my entire career trying to decarbonise heat, I would humbly say that, although that guidance was well intended, it might be misguided.
Full debate: Future of the Gas Grid
I am pleased to see that we have some young people observing us today. Before coming to this place, I worked in research and development, leading a team of talented young engineers who were creating and realising new technologies to tackle the climate crisis. Some of those team members were apprentices, and some had been apprentices earlier in their careers. We faced many challenges, not least from a regulatory environment that struggled to move quickly in innovation and in finding relevant qualifications for new and emerging fields. Some of those challenges are inherent in doing something for the first time, but they were also the result of a UK engineering and industrial sector that had been neglected and, in some places, allowed to stagnate by political leaders who simply did not get it.
Full debate: Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill [Lords]
Many young people had chosen to show a contrast. On one side of the page was often a burning world—now painfully familiar from our news feeds, as our dear friends in California find their world set alight, and I am also reminded to remember our neighbours here in the UK still reeling from our recent floods. The children’s pictures were sadly a good predictor of the threat, but on the other side of the page, where they showed their hope for tomorrow, children often drew homes surrounded by trees with happy people playing outside in the sunshine. Without fail, on the rooftops of the houses in those pictures were solar panels. Our children understood that a bright and sustainable future depends on clean and sustainable energy.
Our Government’s mission to make the UK a clean energy superpower is a direct response to the climate crisis and a clear mission to make energy secure and affordable. Photovoltaics fit the bill perfectly—simple, reliable and effective, they are the purest form of renewable energy, converting photons directly into electrical power, and we can place that power directly in the hands of homeowners.
The need for us to embrace solar power as part of a suite of energy technologies for a sustainable future is clear. Alongside offshore wind and underpinned by storage using green hydrogen, solar photovoltaic is a key technology for the UK to decarbonise its electricity and all the sectors and use cases that we electrify. While the use of land for solar generation is rightly contended, we have a vast and perfectly designed, yet barely tapped, resource on our rooftops.
Full debate: New Homes (Solar Generation) Bill
My hon. Friend the Member for Sittingbourne and Sheppey (Kevin McKenna) talked about some of the challenges of retrofitting. We need to listen to the social science, harness new initiatives such as GB Energy and activate local authorities to empower ordinary people to retrofit solar. We must develop ways for people to easily access trusted partners to help them decarbonise their homes and save money as a result.
Full debate: New Homes (Solar Generation) Bill
Worcester is home to many small and independent businesses that contribute hugely to our distinctive culture —during the election, I visited Spin the Black Circle and Script Haven, to give just two examples—as well as to some larger companies that, in the same spirit, are expressing our nation’s creativity and shaping its future. I have been privileged to work with teams of talented people at Worcester Bosch, inventing the technologies of the future to grow and decarbonise our economy. If any Member would appreciate an in-depth discussion on heat pumps or hydrogen, I am always happy to indulge, being an enthusiastic engineer by background.
It is my belief that releasing innovation by investing in the talent, passion and skills of our emerging leaders, creators and problem solvers is key—key to our mission for growth, which is the guiding light of this Budget, and key to decarbonising our economy through industrial renewal, rebuilding our NHS, and putting people at the heart of all we do. Today, we are doing the vital work of fixing the foundations, because this kind of history-writing ambition is exactly what this place is for.
Informed by the past and informing the future, Worcester has taught me that the key is to put people first, dream big, and unleash the creativity of diverse teams to shape the future. I came to politics with a passion to tackle climate change, see an end to modern slavery, and put leadership and vision back at the heart of politics. Let us remember that throughout the long history of this place, we, like Worcester, have never lingered on the past. As the Budget empowers us to do, let us continue always to fix our gaze with ambition, clarity, and focus on the creation of a bright and prosperous future.
Full debate: Income tax (charge)