Today’s announcement that the UK Government will mandate the introduction of E10 fuel – petrol containing up to 10% of sustainable bioethanol, from September this year – has been welcomed by the industry with open arms.
Ken Cronin CEO of the UK and Ireland Fuel Distributors Association (UKIFDA) comments:
“Today’s announcement that E10 petrol is to be introduced from September 2021 is a major step towards the decarbonisation of existing cars in the UK, on the way to our 2050 net zero target.
UKPIA welcomes the UK Government announcement today that mandates higher ethanol content petrol – E10 – following consultation and will continue to seek close government-industry partnership on the rollout of the policy to enable a seamless transition for all consumers.
This transition to lower carbon petrol is fully supported by the downstream oil sector as a practical measure to further reduce transport carbon emissions – the equivalent of taking up to 350,000 cars off our roads – with minimal impact on drivers, filling station operators or the wider community.
E10 is petrol containing up to 10% ethanol – with the remainder made up of hydrocarbons. Currently, standard (or ‘premium’) petrol contains up to 5% ethanol.* Ethanol from renewable feedstocks is added to petrol to reduce the fuel’s carbon emissions.
The introduction of E10 is a practical step that increases renewable fuel use in the UK now and UKPIA looks forward to the UK Government’s consultation on updating the Renewable Transport Fuel Obligation to take further steps to deploy renewable fuels.
Today’s policy announcement is an important step in the UK’s broader energy transition journey. Updated renewable transport fuels policies are essential in reducing the emissions of the light road vehicle sector and, in time, such policies should help reduce emissions in more difficult to decarbonise transport sectors – such as aviation and HGVs – whereas part of a range of technologies, low carbon liquid fuels and hydrogen will have an important role to play.
UKPIA director-general, Stephen Marcos Jones, comments:
“The downstream oil sector is clear on the need for action on climate change and supports this step towards a higher uptake of low carbon fuels.
“UKPIA has been calling for a mandated introduction to E10 since 2018 and we are pleased government has made this announcement today.
“With E10 grade fuel to power cars in the UK from September 2021, carbon emissions should continue to reduce in the transport sector, an important means for meeting the Net-Zero commitment.
“As UKPIA has set out in its Transition, Transformation, and Innovation Report, with the right policies, the UK could become a trailblazer in the development of low carbon liquid fuels and electric vehicle technologies, as well as maintaining its leading role as a hub for sustainable aviation fuels. We look forward to working with government to progress these opportunities further.”
The January issue of Fuel Oil News magazine looked at the evolution of tanker design and production. Here, we look ahead and consider the future of the tanker and how it may change to reflect the changing face of fuel.
Southampton-based fuel supplier WP Group is fuelling change for a cleaner greener future by moving its own fleet over to the more sustainable Esso Diesel Efficient™ fuel, as it has shown to be not only more efficient than standard diesel fuel, but also more cost-effective and improves the carbon footprint of the vehicles that use it.
The WP Group’s Fuelling Change strategy demonstrates its commitment to more sustainable and efficient fuelling solutions that provide practical benefits, both commercially and environmentally.
The innovative company provides a range of fuel management solutions which improve operational efficiencies to UK customers in the fields of construction, traffic and fleet, airports, port and marine, agriculture, energy and power.
The Esso Diesel Efficient™ fuel delivers lower CO2 emissions, resulting in cleaner air quality. Compared to standard Esso™ diesel, the Esso Diesel Efficient™ fuel helps to reduce Nitrogen Oxide emissions by an average of 10 per cent and carbon dioxide emissions by an average of 2.8 per cent.
Independent tests on Esso Diesel Efficient™ fuel also showed a reduction in fuel use of 2.8%, amounting to 28 litres of fuel saved for every 1000 litres purchased and a saving on the business fuel bill.
Mark Clouter, business development sales manager at WP Group, said:
“We’ve seen the benefits that this additised fuel can deliver and have switched our own fleet to run on Esso Diesel Efficient™ fuel to support our company’s sustainability in the future.
“We recognise that our position as a supplier of diesel products, in today’s market, requires continual business evolution and this allows us to support the increasingly demanding requirements our customers are faced with when working to achieve their business objectives.
“We offer a comprehensive selection of fuelling solutions, from ISO standard diesel to HVO, a fossil-free, low carbon drop-in diesel replacement. And, importantly, we work with our customers to ensure, whichever fuel they use, it is used in the most efficient way possible.
“Our own switch to using Esso Diesel Efficient™ fuel in our fleet is a small step but a logical and significant one towards fuelling change.”
Tests at Millbrook Proving Ground, one of the most comprehensive test facilities in the world for conducting independent fuels testing, conducted with heavy-duty vehicles over a five-month period of normal daily on-road operations found that Esso Diesel Efficient™ fuel helped to reduce emissions; 10% NOx, 22% PM and 2.8% CO2, and improve fuel consumption by an average of 2.8% when compared to unadditised diesel.
Vehicle type, engine type, driving behaviour, and other factors also impact fuel and vehicle performance, emissions, and fuel economy. You can find out more about Esso Diesel Efficient™ fuel and the independent tests performed at Millbrook Proving Ground Ltd at www.thewp-group.co.uk/esso-diesel-efficient.
A new facility, which will convert non-recyclable household waste into sustainable aviation fuel (SAF) for use by airlines operating at UK airports, has been created in a joint venture between Essar Oil (UK) Limited (Essar), Fulcrum BioEnergy Limited (Fulcrum) and Essar’s subsidiary company Stanlow Terminals Limited.
This innovative bio-refinery will convert several hundred thousand tonnes of pre-processed waste, which would have otherwise been destined for incineration or landfill, into approximately 100 million litres of low carbon SAF annually.
The project, which will see an investment of approximately £600m, will use Fulcrum’s proven waste-to-fuel process, which is already being deployed at its pioneering facility outside of Reno, Nevada in the United States, where operations are due to begin later this year.
Fulcrum will construct, own and operate the plant within Essar’s Stanlow manufacturing complex in the North West of England and Essar will assist with the blending and supply the new SAF to airlines, with Stanlow Terminals Limited providing product storage and logistics solutions for the project under a long-term agreement.
UKPIA director-general, Stephen Marcos Jones, commented:
“Today’s announcement demonstrates how critical Essar’s Stanlow Refinery is to the success of these efforts to decarbonise the economy of the North West, as well as showing more broadly how the downstream oil sector is an ally in the UK’s ambitions to reach ‘Net Zero’ emissions by 2050, as outlined in UKPIA’s Transition, Transformation and Innovation report.
“Aviation is going to be one of the hardest sectors to decarbonise, so this investment by Essar and Fulcrum to build a biorefinery in the UK is paramount to meeting the Net-Zero commitment.”
The project, named Fulcrum NorthPoint, will create 800 direct and indirect jobs during the design, build and commissioning process and over 100 permanent jobs during its operation. Plans for Fulcrum NorthPoint are expected to be complete at the end of this year and subject to planning consent, will be operational in late 2025.
The Oil Market Journal (OMJ) has launched a series of new dashboards which provide full details on oil tankers en-route, in port and at anchor in ports around the United Kingdom and Ireland.
The service updates in real-time and details any tanker in the world which has set its destination to a port in the UK and Ireland.
The service provides full details on the gross tonnage of the cargo and other data including estimated time of arrival, last destination and status.
Within the OMJ Port Report Dashboards clients can click on a tanker report and a pop-up will provide a map detailing the current location of the tanker along with details on other tankers in dock or heading to other ports listed on the Dashboard tile.
In addition, clients can edit the service to their own individual requirements including the country, port, type of tankers and/or tanker status.
Advantages
The service enables oil distributors to ascertain when a tanker is en-route to a port and is especially useful during periods of “tight supply” when product is on allocation.
The data shows users when the tanker has arrived and as a result, users will know that product will soon be available again at the oil terminal.
Pre-built Dashboards
OMJ Port Report Dashboards are available for all the key oil ports in the United Kingdom and Ireland and is part of the “OMJ Professional Subscription.”
Free trials are available via OMJ’s support team.
Commenting on Shell’s pledge made on 11th February, to accelerate the drive for net zero emissions, OGUK sustainability director Mike Tholen said:
“It is an exciting time for the country’s oil and gas industry as we see companies including Shell demonstrate how our sector is transforming to meet the clean energy challenge, putting their expertise to work, as other companies are also doing, to help achieve our climate goals here in the UK.
“Now is the time to develop a sustainable future. By reducing the carbon impact of oil and gas as we invest in low carbon technologies, we can unlock a homegrown move towards net zero which maintains consumer affordability, promotes our world class supply chain and protects jobs and the energy communities we support.
“Everyday we see more examples of how this industry is changing. As we continue to face the challenges brought about by the pandemic, the UK economy should build on its strengths. The North Sea Transition Deal proposed in the Energy White Paper will be essential to accelerating investment and creating employment opportunities in new technologies while reducing emissions from production.”
The Chartered Institute of Logistics and Transport (CILT) believes that “we can achieve net-zero by 2050” through a range of measures recommended to government and others in its latest report, Routes to Net-Zero 2050: 2020 Year End Summary. The report includes 21 recommendations for action covering all transport modes and activities.
At the end of a year of study, debate and events, CILT has published its year-end report summarising its work on Routes to Net Zero 2050 and looking ahead to the work to be done in 2021.
Kevin Richardson, chief executive, CILT(UK), says: “Transport accounts for 28% of UK carbon emissions and, despite the downturn caused by the coronavirus pandemic, transport emissions will grow with recovery unless action is taken. Government is clearly the key player, but industry, organisations and individuals are also urged to take action, and we believe there is plenty to be achieved, starting today.”
Recommendations for government include:
UKIFDA, one of the largest training providers for tanker drivers in the UK, has now been approved as a remote training centre by all the appropriate driver training bodies. This new centre will allow UKIFDA to continue to provide their complete ‘one stop shop’ tanker driver training in a remote environment.
UKIFDA chief executive Ken Cronin comments:
“The DfT/DVSA have recently announced that, due to the current pandemic, driver training should take place remotely whenever possible. The speedy action taken by UKIFDA to implement remote training means this will not impact our members training requirements.
“Through the new remote training, delivered via Zoom, UKIFDA are now able to offer UKIFDA members ADR – initial and refresher courses, CPC – all modules and PDP – annual refresher classroom driver training courses. The courses are all industry specific and tailored to the individual’s needs.
“Examinations cannot be conducted remotely but arrangements can be made for these to take place at UKIFDA members’ approved sites in adherence to COVID-19 restrictions and UKIFDA will assist members in organising this.”
Low costs – high standards
Oil services companies can no longer delay making a choice on their future direction according to the latest report from PwC Strategy&, called ‘Time to Choose’. The options are to stick with their hydrocarbon heritage; becoming ultra-efficient and digitally enabled or pivot towards low carbon growth opportunities such as offshore wind or carbon capture, using hydrocarbons as the cash generating engine to fund this transition.
‘Time to Choose’ states that a perfect storm of COVID-19, increasing public scrutiny and the growing momentum of Environmental, Social and Governance (ESG) factors influencing investor and buying decisions, has accelerated the pace and impact of energy transition in many regions.
According to the report’s respondents, many oil services companies already recognise the need to transform in order to better align with their customers, with some helping to set the pace of decarbonisation alongside major players.
Transformation influences
Low carbon credentials could become an area of significant competitive advantage. The report highlights how oil services companies can increasingly showcase their decarbonisation credentials as a means of securing tenders. Some respondents also mentioned increasing pressure being brought to bear by some majors who are keen for supply chain decarbonisation credentials to help support their own strategic direction and licence to operate.
Where firms operate can also influence the pace of transformation. As governments around the world respond to the pandemic, fiscal stimulus packages have been developed with many countries looking to use this pivotal moment in time to stimulate a green recovery to ‘build back better’. For those companies with a major footprint or head office in Europe, energy transition and ESG themes are likely to be much higher up the corporate agenda than other regions, such as the Middle East, which will see hydrocarbons retain their importance as a focal point.
Drew Stevenson, PwC’s Energy, Utilities and Resources leader, commented:
“We believe the oil services sector has a significant contribution to make in the UK’s energy transition journey.
“From engineering expertise and innovation to project management and global operational scale, these businesses have a golden opportunity to not only channel this capability into market leading credentials that will be in-demand globally, but to play a role in shifting the conversation about how this industry fuels and sustains energy and employment into the future.”
Decarbonisation driven by digital technology, deals and diversifying skills
In many ways COVID-19 has accelerated the need to adopt and deploy digital solutions. Given the physical impact of coronavirus on the workforce, companies in the oil and gas sector have been forced to increase automation and use of digital technologies, such as remote controlled vessels and robots to inspect underwater pipe networks and conduct maintenance scans of industrial complexes.
Needless to say, while digital offers great potential for efficiency gains in the oil services segment, in the short term at least, it will be balanced against tight cost control. As a strategic imperative, investment in digital solutions cannot be cut off.
M&A is another means by which energy transition could be accelerated, with complimentary skills, technologies and credentials likely to be highly sought after as entry points into new markets. Premium valuations are already evident for renewable-facing businesses. The availability of finance will probably also be a driver of this transition.
As for the transferability of skills between oil and gas and low carbon, this is not always easy or evident. All oil services companies have core capabilities in particular areas – some may have skills that are transferable while others may struggle.
Have you selected a strategic pathway that will allow you to flourish in an increasingly volatile trading environment? Let us know.
