Shell boss says Reeves is wrong to count on green fuel offsetting Heathrow expansion – who is right?

An energy chief has rebuked the chancellor for claiming sustainable fuel will balance the impact of expanded airport runways. Sean O’Grady looks at who is right

Rachel Reeves, no stranger to political turbulence, has been rebuked by Wael Sawan, the chief executive of Shell, for asserting that “green” aviation fuel will reduce the emissions impact of an expanded Heathrow and other UK airports.

The chancellor last week claimed, while fielding questions about why the government was pressing ahead with aviation expansion, that sustainable air fuel (SAF) would prove “a game-changer in the way that we fly and the carbon emissions”.

But Sawan said: “The reality is that SAF is more expensive and therefore unless there are mandates – obligations on either customers or airlines – it is difficult to see a penetration that is going to be massive.”

Can both things be true?

Yes. As Sawan suggests, SAF can be a “game-changer” and help transform the impact of flying on climate change but will require someone, somewhere to bear the cost, often said to be about three times the cost of conventional fossil jet fuel. If the government were to subsidise it, the cost would be borne by taxpayers, which hardly seems fair or politically feasible. If airlines, airports and aircraft manufacturers were forced to use it, the substantial extra burden would be passed on to consumers and shareholders. So the “game-changing” effect of SAF is not automatic.

Why is SAF so expensive?

It can be made cheaply from vegetable oils, as “biodiesel” used to be (and as one-tenth of our petrol is now) but that wouldn’t be as green as when made as a synthetic version of conventional fuel. That means using green sustainable power (eg wind, solar) to generate the electricity that will split water into its components of hydrogen and oxygen, and then combining the hydrogen with carbon monoxide from the air to make a chemical identical to jet fuel from the oil refinery. (A similar process is used to propel zero-emission cars with hydrogen fuel cells on board; and for premium synthetic petrol for premium sports cars).

Did Rachel Reeves get it wrong?

Arguably, and it does rather take some of the high-tech glamour off her announcement. It also erodes her credibility, though nowhere near as much as most of her other, controversial, decisions on the winter fuel allowance, the tractor tax and employers’ national insurance contributions and hiking bus fares.

Will it change anything?

No. The government is so determined to boost growth and get major airports growing that no planning or environmental considerations will be allowed to get in the way. Laws will be changed if necessary. The far greater obstacle will be the shortage of skilled labour to build the new infrastructure, at the same time as constructing 1.5 million new homes, improving hospitals and laying new rail lines across the south Midlands. Where are all the electricians, engineers, bricklayers, plumbers, labourers and architects going to come from? Immigration, perhaps?

Will it help the government win a second term?

On balance, yes.

Expanded airports will be nowhere near ready by the likely next polling date in 2028-2029, and thus far from reaching their full economic potential. In the meantime, there will be huge disruption and much trepidation in the many marginal constituencies around Heathrow, Gatwick, Stansted and the regional airports about noise and pollution, which undoubtedly will cost some votes.

However, construction work will have boosted local demand, and the very sight of Britain’s economy “moving” and completing major projects should improve confidence in the future. For as long as she’s chancellor, Reeves should be donning her hard hat and hi-viz jacket for the photo calls as often as possible.