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Airfares are expected to change by “less than the cost of a cup of coffee” as efforts are made to stabilize the price of the green fuel, a minister has said.
Keir Mather pledged that ticket prices “will be kept under constant review” after the Sustainable Aviation Fuels Bill is passed by both houses of Parliament. The draft legislation has cleared its third reading in the Commons and will now face further scrutiny in the Lords before becoming law.
This bill paves a new path Government A scheme to promote a “clear, predictable market price” for sustainable aviation fuel (SAFS) by paying producers if SAFS is sold under a guaranteed “strike price”.
Where SAIFs are sold at a price above that price, manufacturers will pay back into the scheme.
It will be initially funded through a levy on aviation fuel suppliers.
The Conservatives called for a legal duty on the scheme’s managers to report on its impact on passenger airfares.
Shadow Transport Minister greg smith Told the Commons: “This has been one of the most contentious areas around this Bill and indeed the Government’s whole approach to net zero – what harm does it actually do to real people?”
He added his proposed amendment to the Bill, which did not pass by 319 votes to 151, a majority of 168, “would give the Government the opportunity – which in principle they should gladly accept – of what they profess to believe, namely that the provisions of this Bill will have a plus or actually negative effect of £1.50 on air fares”.
At the Dispatch Box, Mr Mather said the government was “committed to delivering value for money” in the scheme “by controlling both the scale and number of contracts, and through the prices negotiated in each contract”.
He added: “The impact on airfares is likely to be as little or as much as the price of a cup of coffee.
“And the impact of the scheme on costs and ticket prices will be kept under constant review.
,passengers SAF producers should also benefit from lower prices resulting from lower project risk and lower costs of capital, so this bill and the measures it contains will not limit people’s ability to fly.