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Measures included in the Budget provide a strong foundation for economic recovery, according to Logistics UK, one of the UK’s biggest business groups. But while there are many positive decisions – including a freeze in fuel duty and extension to the furloughing scheme – we need to see greater investment in training programmes to help fill the growing vacancies in the industry.
Alex Veitch, general manager of Public Policy at Logistics UK, comments: “Funding to train new entrants to the logistics sector is particularly welcome at a time when the industry is suffering significant skills gaps and the loss of EU workers, and a more flexible approach to apprenticeships will also assist the sector in recruiting the next generation of logistics employees.
“However, the industry needs new recruits now, and a more flexible method of providing direct support to those looking to retrain and reskill into vital operational roles like HGV drivers and transport managers would help that transition. The average cost for a 12-month apprenticeship training and license acquisition is £7,000 – Logistics UK would like to see more immediate government support, in the form of interest-free loans or grants, to be made available now to help switch those affected by the pandemic into the vacancies which are open now, and help with the economic recovery from COVID-19.”
On the announcement that fuel duty will be frozen, Mr Veitch comments: “As the economy starts to recover from the impact of the COVID-19 pandemic, Logistics UK and its member businesses are grateful for the news of a continued fuel duty freeze. At a time when many businesses are yet to open up fully, or to see the first signs of recovery, another charge to already fragile balance sheets could have been catastrophic for the organisations which are at the heart of every element of the economy.
“The continuation of the furloughing scheme is great news for businesses in the logistics industry which rely on sectors of the economy like retail and hospitality which are yet to reopen. Today’s announcement will provide reassurance for those employed across the sector, and ensure that logistics businesses can maintain their workforce, ready to go as soon as the economy reopens.”
Responding to the announcement of a rise in corporation tax in 2023, and the extension of the business rates holiday until June 2021 before a discounted rate is introduced, Mr Veitch adds: “Many logistics businesses are still to recover fully from the impact of COVID-19, with a large proportion of the industry still in limbo as a result of the continued closure of sectors such as entertainment and hospitality. It is vital that business is not penalised by additional taxation at this crucial time in the economic recovery, particularly as the logistics sector is the one which drives all other sectors, delivering the raw materials and finished goods needed to boost trade and competitiveness.”
On the news of the infrastructure bank launch, Mr Veitch comments: “Today’s commitment to a multibillion-pound investment into infrastructure is welcome news for the logistics industry. Efficient and effective transport infrastructure is vital for logistics to be able to support the needs of UK businesses; the importance of a strong and resilient network to economic recovery must not be underestimated.
“Logistics UK also welcomes the government’s commitment to a Freeport programme, with the confirmation of eight successful Freeport bids. We are confident these will support business and industry in these locations and urge the government considers expanding the programme.”
Green entrepreneur Jo Bamford said: “The PM has said the UK will be “putting a big bet on hydrogen” and the Budget’s green light for the Freeport East Hydrogen Hub is a major step towards delivering on these words. The Freeport East Hydrogen Hub will support the creation of thousands of green jobs and feature innovative uses in hydrogen for zero emissions buses, construction equipment, marine and agriculture. Crucially, these UK-made Net Zero technologies can be in use within 12 months and will place East Anglia at the forefront of the global hydrogen economy.”
George Kieffer, chairman, Freeport East Project Board, said: “We are delighted to have been chosen by the Chancellor as one of the first new Freeports in the UK for a number of years. Freeport East offers a unique opportunity to build a truly global trade hub at the same time as accelerating opportunities in green energy and helping level-up the economy. We look forward to working with Government to further develop our business plan and to realising the potential that this opportunity represents.”
Julia Pyke, financing director of Sizewell C, added: “This is a great step forward for the East of England. The Freeport East Hydrogen Hub will deliver on six parts of the PM’s Ten Point Plan for a Green Industrial Revolution. The Chancellor’s commitment to Freeport East will now turbo-charge private investment in Net Zero nuclear and hydrogen technology across East Anglia and support the development of one of the world’s most exciting and innovative decarbonisation projects.
“We will now develop our hydrogen offering in close cooperation with the port and with the Suffolk councils in order to get national competitive advantage by pursuing things at scale and speed.”
The March issue of Fuel Oil News looks in depth at the industry efforts to find future fuel solutions.
Names have been announced of the 26 sports clubs chosen to receive funding under the Texaco Support for Sport initiative launched last September by Valero Energy (Ireland) Limited – the company that markets fuel in Ireland under the Texaco brand.
Open to sports clubs across the 26-counties, irrespective of sporting discipline, size, membership, age, cultural appeal or gender, the initiative saw a fund of EUR130,000 being made available by Valero for distribution in equal amounts of EUR5,000 to successful applicants chosen on a county-by-county basis.
Close to 400 clubs submitted applications under the scheme. Of the clubs that will now receive funding, EUR55,000 will go to five Gaelic football, four hurling, one camogie and one handball club. Five soccer clubs will share EUR25,000, with the next highest amount of EUR10,000 divided between two basketball clubs. Additional disbursements amounting to EUR40,000 go to athletics, boxing, climbing, cricket, diving, hockey, rugby and swimming clubs, all receiving EUR5,000 each.
Overseeing the judging process was Texaco Support for Sport ambassador, acclaimed broadcaster and former Irish rugby international, Donncha O’Callaghan. Commenting, he said: “as adjudicator, the most uplifting aspect of the process was the desire expressed by even the smallest niche clubs to build on their value to communities, to expand membership by attracting new players and by providing a safe setting for young people.” “In most cases, finance to purchase materials and equipment required to accommodate more members was a key requirement,” he added.
Congratulating winners on their success, James Twohig, director of Ireland Operations, Valero Energy (Ireland) Limited said: “A feature evident in almost all applications was the pressure felt by clubs in the current circumstances to expand their role within their local communities with increased membership demands and the need for extra equipment and improved facilities.”
He added: “The purpose of our initiative is to help clubs to overcome these obstacles so that they can continue to remain active and at the very heart of their local communities. This is why we believe our initiative has been so warmly welcomed by sports clubs nationwide in its launch year.”
Responding to the 2021 Budget, OFTEC chief executive Paul Rose said: “The Chancellor didn’t hold back in outlining the financial toll the Covid-19 pandemic has taken on the UK economy, so it’s perhaps not surprising there were very few new green announcements, other than re-commitments to existing policies.
Derek Leith, EY’s global oil and gas tax leader comments on today’s Budget:
“It would be an unusual Budget if the Chancellor didn’t find some space for an oil and gas measure: oil and gas has only been absent from a UK Budget on two occasions in the past 25 years. Budget 2021 didn’t disappoint with a specific clarification on the detailed rules for oil and gas decommissioning relief. There are also some knock-on effects of the Chancellor’s announcements on the corporation tax rate, the super deduction for investment, and the extended loss carry-back.
“Papers accompanying today’s Budget included further changes to the corporation tax rules on the decommissioning of UK oil and gas assets. I’m sure clarification of the decommissioning tax rules will be welcomed by the sector as both industry and the Treasury are incentivised to see activities carried out efficiently and at the lowest cost.
“There will be an increase in the rate of corporation tax for businesses with taxable profits of over £250,000, from the current 19% rate to 25% from 1 April 2023. The rate of corporation tax for oil and gas companies active in the UK and UKCS remains at 30% with the supplementary charge an additional 10%. To the extent oil and gas companies have income that falls outside the upstream regime, such as interest arising from cash balances, they will be liable at the increased rate from 2023.
“The heavily trailed increase in corporation tax rate, quietly abandoning the current policy to have the lowest corporate tax rate in the G20 in favour of the lowest rate in the G7, is no surprise. Some of the sting is taken out by delaying the change for two years. The extended loss carry-back will be welcomed by smaller businesses where it will have a material impact. The super-deduction will also be welcome but unsurprisingly it is time-limited to the period up to 31 March 2023 so doesn’t apply when the tax rate increased from 19% to 25%.”
The UK oil and gas industry has welcomed some of the measures announced by the Chancellor in today’s Budget, adding that now close cooperation with the sector is essential to maximise its world-leading expertise and assure a successful green energy transition.
The leading representative body for the sector OGUK said the combination of taxation and investment measures offers a potentially strong route to transition energy and employment ahead of the much anticipated and crucial North Sea Transition Deal that we are negotiating with Government.
OGUK chief executive Deirdre Michie, said: “We welcome the measures around supporting green energy innovation set out by the Chancellor in his Budget Statement today.
“We look forward to engaging with his department on the review of Research & Development tax relief, which can be a key driver of success in the field of green technology.
“The investment towards the Aberdeen Energy Transition Zone, Global Underwater Hub and Hydrogen Hub in Anglesey are encouraging starts to this country’s journey to a low-carbon future that also supports climate goals, employment and energy security.
“Central to all of this is the North Sea Transition Deal reaffirmed by the Chancellor today. Having powered the country for over 50 years, the UK’s oil and gas sector’s energy expertise is crucial to developing the green innovation required to see the UK achieve net-zero emissions by 2050.
“Designed properly, the Deal should be an exciting blueprint to meeting that goal, whilst creating tens of thousands of high-quality jobs and attracting billions of pounds of investment into parts of the country that need it most. We look forward to successfully implementing it in partnership with the Government and making the UK a global hub for green energy technology.”
For the first time in Belgium, hydrogen will be used in a commercial scale cogeneration plant designed to generate electricity and heat from natural gas. The aim of the pilot project by INEOS and ENGIE is to replace natural gas with hydrogen used by the INEOS gas turbine. Initially 10% of the gas feed will be replaced by hydrogen. If this goes well the feed will be increased to 20%. The CHP plant at the INEOS Phenol site in Doel, one of the first to be built in Belgium, has the ideal profile to realise this test.
Hydrogen is expected to become an important link in the transition towards climate-neutral energy across society. One possible evolution in the coming decades is the gradual replacement of natural gas by hydrogen and in time ‘green hydrogen’ generated from renewable energy via electrolysis. This will gradually reduce the CO₂ emissions of current processes based on natural gas.
ENGIE is responsible for the design, installation and operation of the technology at the Antwerp site. INEOS Phenol has experience in handling hydrogen as a raw material for its production processes and also has the necessary permits for the hydrogen project. The commercial scale project plays a pioneering role in the energy transition of the chemical industry. This practical exploration by ENGIE and INEOS will provide both partners with valuable insights and data in the use of hydrogen in industrial facilities such as monitoring efficiency and measuring emissions during combustion, which is essential in the development of a next generation of burners.
ENGIE and INEOS are also joining forces on the Power-to-Methanol project in the Port of Antwerp. Both companies sit on the consortium with other partners to produce green methanol by reusing captured CO₂ in combination with sustainably generated hydrogen. INOVYN, an INEOS business, will operate this demonstration plant at the Lillo site.
The initiative is part of the roadmap that INEOS defined at the end of last year for its Antwerp sites to become climate neutral by 2050 and to reduce emissions by 55% by 2030 compared to 1990. The roadmap consists of a combination of measures such as the reuse of hydrogen and CO₂, further investments in electrification, the switch to recycled or bio-based raw materials where possible, and the use of ‘green heat’ and renewable energy. To this end, last year INEOS concluded two major contracts for the purchase of offshore wind energy, including the largest Belgian industrial contract ever with ENGIE.
Cedric Osterrieth, CEO ENGIE Generation Europe, said: “ENGIE believes in hydrogen as a key link to a carbon-neutral economy and wants to take a pioneering role with these industrial-scale tests, both in terms of research and practical implementation. We can again count on the expertise and support of INEOS, a key partner for ENGIE in the energy transition. This pilot project will give us better insights into the use of hydrogen to reduce carbon emissions, bringing us one step closer to a carbon-neutral future. It is a strong complement to our already ongoing projects across the country in which we are developing hydrogen solutions for industrial and mobility applications, starting from our expertise in renewable energy production, storage and infrastructure.”
Hans Casier, CEO INEOS Phenol: “This test is fully in line with INEOS’ strategy to avoid CO2 emissions at source. It marks a further step for INEOS Phenol in Doel, where 20% green steam is already being purchased via the connection to the Ecluse network. Today, INEOS already produces 300,000 tons of hydrogen on an annual basis as a ‘co-product’ of its chemical processes. This hydrogen is largely used as a low-carbon fuel and as a raw material in its own production processes so that fewer fossil raw materials have to be used. INEOS recently started a new business activity that focuses on the development of ‘clean hydrogen capacity’. For this, INEOS can rely on the expertise of INOVYN, which, as a chlorine and PVC producer within the group, specialises in electrolysis, an important technology for producing hydrogen.”
By upgrading from its previous Isuzu 7.5 tonne fuel oil tanker to a brand-new Isuzu 11 tonne tanker, Kinch Fuel Oils Ltd is benefiting from much greater additional payload using a truck that is compact enough to still access the many tight and restricted customer locations throughout Wiltshire and Gloucestershire.
The latest Isuzu F110.240 rigid truck to join the 12 strong tanker fleet at Kinch Fuel Oils is fitted with a 7000-litre tanker body, commissioned and built by Road Tankers Northern in Barnsley. With a three-compartment tanker body for even weight distribution, this Isuzu tanker will be carrying mainly kerosene and a range of domestic burning oils to customers local to the company’s Malmesbury base in Wiltshire.
“With the increase in fuel oil tank capacity available on the higher GVW Isuzu 11 tonner, we will now be able to cover up to 12 customer drops per day using this vehicle. Our previous Isuzu certainly gave us good service over many years but by moving up the weight range, this has allowed us to become more operationally efficient,” said Roy Kinch, director, Kinch Fuel Oils Ltd. Roy continues: “The drivers of this new Isuzu have already confirmed how easy it is to drive in both urban environments and country lanes, as well as it being really manoeuvrable on site, allowing them to access properties with quite limited access.”
Supplied by Bristol based Isuzu Truck dealer AK Commercials and supported by a seven-year R&M agreement, the Isuzu F110.240 tanker will be operational in the Kinch’s fleet for at least seven years, covering approximately 30,000 km per annum, on fuel oil distribution to customers in the Wiltshire and Gloucester areas.
“Throughout the whole new vehicle acquisition process, AK Commercials were excellent in terms of the service and support given to us. With Isuzu recently opening a new dealership in Swindon, Sparks Commercial Services Ltd, we will now be using them for ongoing service work as they are literally just up the road from us,” added Roy Kinch.
“Over the last few years, we have seen a significant increase in the number of Isuzu chassis being used for fuel oil distribution, especially those companies involved in delivering to domestic properties. With so many rural residences being located in areas with challenging road networks and narrow vehicle access, Isuzu trucks are the perfect vehicle for this type of distribution. It’s good to see a long-established company such as Kinch Fuel Oils continuing to benefit from having Isuzu in its fleet,” said Richard Waterworth, head of sales, Isuzu Truck UK.
Exolum is the new brand name chosen by the CLH Group, strengthening the identification of the company with its future aims, focused on adapting its business to decarbonisation and the energy transition, the digitalisation of activities and the fight against climate change.
This rebranding is due to the need to adapt to the new environment and to transform the company itself, which, in addition to carrying out oil product storage and transport activities in Spain, has embarked on an international growth process and is now present in 7 other countries. The group has expanded its activity to the storage, management and transportation of liquid products, especially chemical products, operating in new sectors, such as eco-fuels, the circular economy and the development of new energy vectors.
In recent years, the CLH Group has experienced a series of notable changes, mainly focused on sustainable diversification, both of the geographical areas where it operates and the services offered to customers, over and above hydrocarbon logistics. Therefore, it became necessary to renew the brand and align it with this new era of the company.
“We want these initiatives for diversification and adaptation of the company to be aligned with the new challenges of the sector with a change in our corporate identity that reflects our growth and leadership,” explains Jorge Lanza, CEO of Exolum. “This brand reflects the transformation process that we are going through internally, to align with the company’s new business models and transmit our company values. These values are innovation and trust, reflecting the open and flexible way that we face the future, promoting new business opportunities committed to the development and sustainability of the planet.”
The new name, simple but modern, shows a spirit where innovation is the key. The brand is easily recognised in any language and the company will use this one name for all its business, both in Spain and six other countries where it currently operates (UK, Ireland, Germany, Netherlands, Panama and Ecuador – in Oman, it will continue to operate with the joint venture OQ Logistics), thus reinforcing the global identity of the group and creating a great brand that is sound, international and unifying.
With Exolum, the company sets itself a challenge to maintain the same level of recognition, extending it to the public at large, adapted to meet the aim of the company: “We create innovative solutions to improve our world”.
The Prax Group, a leading independent oil refining, trading, storage, distribution and retail conglomerate dealing in petroleum products and bio-fuels, has announced that it has successfully completed the strategic acquisition of Lindsey Oil Refinery and its associated logistic assets in the United Kingdom, following the signing of an agreement in July 2020 to purchase the refinery from energy major Total.
Covering a 500-acre site and located five miles from the Humber Estuary in North Killingholme, North Lincolnshire, Lindsey Oil Refinery has an annual production capacity of 5.4 million tonnes. It is one of Europe’s most advanced refineries, processing over 20 different types of crude including, petrol, diesel, bitumen, fuel oil and aviation fuels, which are transported across the UK and abroad by sea, road, rail and pipelines.
With a strong track record of integrating acquisitions and managing assets in the oil value chain, the Prax Group is a long-standing and trusted partner of Total. The acquisition of the refinery will bring about new investment and underlines the Prax Group’s determination to support the local economy and the wider community, whilst continuing to explore new business opportunities as part of its long-term growth strategy.
Prax has also announced the appointment of Luc Smets as general manager of the refinery. Prior to his
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.