Future Fuel 10
Any consultation arising from the Government’s long anticipated Heat in Buildings strategy must allow a genuine discussion on all the options to decarbonise rural homes, otherwise thousands of households could suffer severe financial consequences, warns OFTEC.
Up until now, government has given out mixed messages on its approach to cutting emissions from off grid heat, using the term ‘technology neutral’ whilst only supporting a narrow choice of technology options, primarily heat pumps and biomass boilers.
These solutions work well in some settings and heat pumps, in particular, will play an important role in the UK’s transition to net zero. But they are expensive to install and not the right option for all properties, including many energy inefficient off-grid homes without very costly and disruptive insulation improvements.
OFTEC says it’s crucial government recognises the unique challenge decarbonising rural homes presents and that any future consultation fully explores the best ways to achieve this.
Head of public affairs at OFTEC, Malcolm Farrow, comments:
“What we don’t want to see – and what rural consumers can’t afford to happen – is that the Buildings and Heat consultation, through its line of questioning, makes it impossible to bring the full range of low carbon heating options into the discussion.
“If the Government is serious about making rapid – and socially fair – progress, it must widen its perspective and adopt a truly technology neutral approach. This is the only way to encourage competition, improve consumer choice and ensure practical options are available for all housing types and incomes.
“Failing to achieve this could be disastrous for rural households as many will face a completely unaffordable financial burden. As well as causing great social harm, it could also rapidly erode support for decarbonisation and will further delay progress.”
Over 45 key players in the off-grid heating industry have already written to the Minister of State for Business, Energy and Industrial Strategy (BEIS) underlining their readiness to deliver a renewable liquid fuel alternative to kerosene which offers a cheaper, more practical solution for oil heated homes than the current options supported. Yet so far, government has shown little interest in this solution.
Malcolm Farrow continues:
“Renewable liquid fuels must be given a fair hearing in any consultation. If government continues to ignore the potential of this solution, it is turning its back on the opportunity to save rural households and the Treasury, millions of pounds. This makes no sense.
“Government needs to learn from the experience of the last six years which has shown that even with considerable incentivisation through the domestic Renewable Heat Incentive, the take up of heat pumps by rural households has remained disappointingly low.
“Now is the time to set aside any preconceived ideas around the ‘best’ solutions for off-grid households, genuinely listen to all the options on the table and trust industry to deliver.”
As COVID-19 has stopped the APEA from being able to host its annual ‘APEA Live’ national exhibitions and conference, as well as their regular regional brand meetings, a new and exciting event will be held via a free zoom webinar.
The free webinar is taking place on Thursday 3rd December and is open to members and non-members alike.
Taking place between 14:00 – 16:00 GMT, the webinar topics include:
Regulator Update – Clare Scawthorne, London Fire Brigade
This will include the outcome of the Petroleum (Consolidation) Regulations 2014 review, what this means for enforcing authorities and new guidance in place.
Standards Update – Jamie Thompson, Chairman of the APEA Technical Committee
A short presentation and it will cover standards update, with info on Brexit and what it means regarding regs and CE markings.
HVO Fuel – Simon Lawford, Crown Oils
This session will ask the questions – ‘What exactly is HVO?’, ‘Why should it play an important part of the future fuel mix?’ and ‘Can it actually be greener than battery-electric power when it comes to total CO2 emissions?’
This session will explain all about this new green direct diesel substitute and why the government is being lobbied to introduce incentives for its use.
HVO – Challenges in the Swedish market – regulations, policies and technical issues – Magdalena Streijffert, & Quentin Gauthie, Neste Sweden
This talk will cover some of the challenges with regulatory matters and policy, along with technical issues regarding tanks, preparations of etc.
Petrol dispensing vs Diesel dispensing – Andrew Olive, Pumptronics
This session will cover iDiesel & petrol hazardous zones, hybrid commercial vehicles, stage 2 vapour recovery principle and requirements, typical application on a commercial refuelling installation. This will then lead onto the Vectec presentation by Bert Fowler discussing a recent commercial installation for a major home delivery network
EV Battery Fires – Lessons learned from around the globe – Dylan Evans, London Fire Brigade
This session will cover electric vehicles, fire safety considerations for lithium ion battery vehicles & infrastructure.
Find out more about this event here.
UM Terminals’ Client Central Services team can provide customers with a wealth of important information including real-time data to make critical business decisions.
Based out of its Regent Road Terminal in Liverpool, the new service integrates all weighbridge and administration from across UM’s 8 terminals.
A dedicated portal gives clients instant access to essential weighbridge documentation and current stock levels for each tank. They also have a secure log-in and can access their data 24/7, 365 days a year via a desktop, tablet or mobile device.
Lynn McCoy, UM Terminals’ Client Central Services manager, said: “We looked at all of the administration going on across our UK sites and started to think about how we could streamline and bring it all together.
“The key was not just about centralising the service but ensuring that we maintained the same quality of personal service that customers were used to.
“Our weighbridge in particular had previously depended upon a lot of manual reporting, but which has now been moved online. Whereas before, there would have been lots of paper trails, we have now moved to a paperless solution in which information is stored electronically. The upshot is clearer, more accurate and faster information.”
The central control room at the Regent Road Terminal is filled with banks of screens giving Lynn and her team visibility of the different weighbridges along with immediate access to all customer information, such as current stock levels, via the client portal.
Lynn said: “We are one important link in the supply chain. Our job is to look after our customers’ products and their movement in and out of our terminals.
“Sometimes we don’t know until the last minute when they are going to be coming in. Operational planning and flexibility are key in a fast-moving environment like UM Terminals. At terminals like Portbury in Bristol and Gladstone in Birkenhead we can regularly be handling over 40 vehicles a day.”
Bryan Davies, managing director of UM Terminals, said: “We want to add value to the service we provide our clients and we believe the Client Central Services function has been a game-changer in providing customers with real-time data when they need it to assist their decision-making.
Lynn added: “While we have had a really positive response from customers to the centralised service, we know there is even more potential in the future to develop the client portal and the kind of reporting we can offer our customers. Ultimately, our job is to listen to and meet the needs of our clients.”
UM Terminals currently has a capacity of over 300,000 cubic metres of bulk liquid storage across 280 tanks of varying sizes. The plan is to grow this to over 400,000 cubic metres.
Product solutions include vegetable oils, industrial, food and feed, chemical, fertiliser, fuels, biofuels and base oils.
Services include blowing, blending, heating, processing and sampling among others.
The company, which employs 63 people, recently rebranded from UM Storage to UM Terminals to better reflect the range of services the company offers its clients. It is part of the UM Group which has a distinguished history stretching back almost 100 years.
Paul Rose, CEO of OFTEC, responds to the Government plan for ‘Green Industrial Revolution’:
Decarbonising heat from UK homes is a national priority that must be urgently addressed. However, we are concerned about the high costs rural households are likely to face under current government proposals to achieve this.
The Prime Minister’s plan announced today for a ‘Green Industrial Revolution’ suggests it’s likely that rural households will soon be prevented from replacing their existing oil boilers and will instead be forced to switch to expensive electric heat pumps – the government’s preferred low carbon solution for rural homes.
Heat pumps are an excellent technology but they are expensive, costing on average £10,900 to install, and need to be fitted in well insulated homes to avoid high running costs and ensure comfort. However, oil heated homes are some of the least energy efficient in the UK, with almost two thirds (65%) in EPC bands E-G, equating to 765,000 properties².
BEIS estimates that bringing EPC Band E homes heated by oil up to an acceptable Band C, would cost on average £12,300. For properties in EPC Bands F or G, the cost would be £18,900³.
This means the total bill to decarbonise all 765,000 properties will be around £19.85 billion – equivalent to an average of almost £26,000 per home – and for some, the figure will be considerably higher.
Given the current economic climate and the fact that disposable incomes in rural areas are already lower and fuel poverty levels deeper, rural households are unlikely to have the capacity to make this level of investment. It is also unlikely that government will be able to support such high costs through grants or other support mechanisms.
Even those that can afford to act may face weeks without heating due to the length of time heat pump installations and the accompanying retrofit work can take to complete.
Recently, 47 OFTEC member companies, including leading household names such as Worcester Bosch, Kingspan and Grant Engineering, wrote to Minister of State for BEIS, highlighting their readiness and commitment to introduce a far cheaper, more practical solution in the form of a renewable liquid fuel to replace heating oil.
This option offers a near ‘drop-in’ solution for existing oil-heated homes, greatly reducing capital costs. It could also deliver rapid progress towards net zero if supported though appropriate policies, potentially saving rural households and government millions of pounds. Yet to date, BEIS has shown no appetite to support this solution.
At this critical time when BEIS is soon to publish its consultation to reduce carbon emissions from heat in buildings, we are urging all rural MPs and other interested members of the House to contact the Minister and press the urgent need to support renewable liquid fuels as a more affordable way forward for rural homes.
With almost the entire global fleet still running on fossil fuels tough calls need to be made.
In LQM’s recent webinar – Analysing Future Fuels: The Road to Decarbonisation – whilst 71 percent of respondents strongly agreed that shipping must accelerate decarbonisation, as part of international efforts across all industries to reduce green house gas emissions, just 20 per cent of guests indicated there are currently enough financial incentives to decarbonise.
Future fuels will become the hot maritime topic in 2021 as the clock ticks on reducing carbon intensity by 40 per cent. The need to comply with IMO 2030 will soon loom large for ship owners.
LQM chief executive Daniel Rose, explained:
“99.2 per cent of vessels on the water are fossil-fuel based and there is currently no silver bullet or financial incentive. But what’s fascinating is the desire for change is clearly there.
“Does shipping realistically have a chance to reach the 2030 milestone? The answer is probably yes, but the path is not straight forward.
“IMO 2030 compliance can probably be achieved by using a combination of operational efficiency improvements, greener fuels – especially LNG and Biofuels. Policy will play a major role as well, but unfortunately this is likely to be based around punitive measures, instead of genuine financial incentives for the actors in the shipping sector looking to decarbonise.
“Post-2030, Ammonia and Hydrogen are probably viable solutions, albeit with different pros and cons. Regardless, the results of our recent survey make it quite clear that the economics need to shift for widespread future fuel adoption.
“At LQM we’re totally focused on helping the industry with the practical implications of compliance by 2030.”
You can watch the full webinar and subscribe to others here.
Working together to deliver a decarbonised, net zero future will form the theme and direction for SPE Offshore Europe 2021 being held in Aberdeen, Scotland, 7-10 September 2021.
The UK could see more than £3 billion invested in the emerging hydrogen sector as more businesses step forward to pledge funding – but only if PM Boris Johnson backs the low-carbon fuel in his forthcoming Net Zero speech expected this week.
Members of Hydrogen Strategy Now, which combined employs around 100,000 people and has a value of £100bn in the UK, said their shovel-ready projects would create thousands of jobs across the country, helping to kick start a post-Covid green recovery.
The group has welcomed the recent appointment of Andrew Griffith, MP for Arundel and the South Downs, as the Government’s Net Zero Business Tsar, as a positive step in the right direction from Parliament. But its members have warned that unless the sector receives load and clear backing from the Government, the UK risks being left behind the rest of the globe.
Attracting cross-party support, the Hydrogen Strategy Now collective wants to see a clear, strategic plan to help unlock significant private funding in hydrogen technologies and manufacturing across the country, driving growth and generating hundreds of thousands of green jobs.
A letter from the group to Chancellor Rishi Sunak earlier this year stated;
“As you look to design a post-COVID recovery, we encourage you to focus on creating high-skilled, green jobs, in sectors that will be critical to the future economy, such as low-carbon energy, transport and heavy industry.
“These measures would be wholly complimentary to the Government’s levelling-up agenda and long-term decarbonisation goals. For example, the Committee for Climate Change has made it clear that the UK will not meet its Net Zero targets without significant investment in the hydrogen economy.
“The global hydrogen economy is estimated to be worth $2.5 trillion by 2050, supporting 30 million jobs. Other nations, such as Australia, Japan, South Korea, Canada, and China have already set ambitious strategies for growing their hydrogen economies. Just last week, Germany joined this list with their own €9 billion hydrogen strategy. The European Commission is also creating an EU hydrogen strategy, which includes plans for multi-billion euro investment in hydrogen projects, and schemes to boost sales of hydrogen electric vehicles.
“It is now clear that hydrogen is going to play an essential role in the world’s future, low-carbon economy. The increasingly bold steps being taken by other nations underlines the need for the UK to bring forward urgent measures to establish a hydrogen strategy and unlock investment and innovation. We should not risk falling behind other nations in developing our hydrogen industry.”
Baroness Brown, vice-chair of the influential Committee on Climate Change, said;
“The UK missed the boat on wind technology and missed the boat on batteries. We can’t afford to miss the boat on hydrogen.
“I strongly agree that the UK urgently needs a hydrogen strategy, as there are too many small, piecemeal funds and projects. We need some serious private and public funding, and a coordinated effort between government and industry, to kickstart and grow a green-job-creating hydrogen economy across the country”.
The Future Fuels & Hydrogen Economy Virtual Conference is taking place 9 – 10 November 2020. Explore the fundamentals around future fuels on the market from the industry’s leading experts.
With plans to reduce shipping emissions by at least 50% by 2050, the use of e-fuels will play an important role in decarbonising the shipping and transportation industry. The conference will cover how to stay at the forefront of the IMO’s 2030 and 2050 GHG reduction targets as expert speakers dig deep into the regulations and technicalities of fuel innovations that will help you on your way to meet the imposed targets and kick start bringing these fuel options to market.
Key agenda themes:
• Macroeconomic view of trade and global economies in times of COVID-19
Assess national economies, the global supply chain and what the future holds for shipping and energy sectors moving forward.
• Bringing hydrogen forward in energy market
Understand the benefits of using hydrogen within your business and the environment, bringing the fuel to market and its current stage of development.
• Overcoming barriers in the alternative fuels market: Policy and regulatory landscape
Discover the policies, legal guidelines, IMO targets, technologies and more behind the use of alternative fuels.
Save 10% by quoting FKT3723ER at the checkout. Book online today.
A recent report released by UKPIA claims that the UK downstream oil sector is already playing a significant role in meeting societal targets for decarbonisation and is capable and willing to do more to reach net zero.
The ground-breaking report, titled “Transition, Transformation, and Innovation: Our role in the Net-Zero Challenge”, looks at credible scenarios and proposes an illustrative pathway for the UK downstream sector to achieve government mandated net zero targets, with practical policy solutions to help overcome this challenge.
Transition, Transformation, and Innovation makes three key findings:
This year’s influential annual energy outlook from BP, published at the start of BP Energy Week, suggests peak oil demand may have already been reached last year. This marks a dramatic shift from last year when the base case expected consumption to grow over the next decade reaching a peak in the 2030s.
The new report sees oil being replaced by clean electricity from windfarms, solar panels and hydropower plants as renewable energy emerges as the fastest-growing energy source on record.
Bernard Looney, who became chief executive in February, said the report was “instrumental” in developing BP’s strategy for the energy transition, although the company stressed that the scenarios are not predictions.
He commented that ‘it was very difficult to know’ how the oil market trajectory will bear out, but it was possible that demand had hit its maximum level. “Could it have happened? It could have,” he said.
The central theme of this influential report is that the combination of the pandemic and increasing climate action may have hastened ‘peak oil’ which could, potentially, see absolute demand falling for the first time in an industry that has enjoyed sustained growth for more than 100 years.
Looking at likely energy demand over the next 30 years, two of the three scenarios considered by BP suggest that demand reached a peak in 2019 and is already into the start of a decades-long decline. The third scenario, based on no acceleration in climate action, suggests that demand will plateau at the 2019 level for several years before declining from around 2035.
While oil demand is not expected to collapse, a plateau or decline in consumption would fundamentally alter the outlook for investment in the industry and the willingness of shareholders to keep funding new projects.
Looney, said he was “more convinced than ever” that BP must embrace a low-carbon future and that the findings would help the company to “better understand the changing energy landscape” and be instrumental in helping it develop its plans to become a net zero energy company by 2050.
Whilst this appears to offer a gloomy outlook for the fossil fuel industry, it can also be viewed as a further opportunity for those involved to embrace transformation. Following the publication of the outlook, Looney has shared a blog, ‘10 reasons to be positive about the energy transition’, and commented;
“Anyone who knows me will probably accept I am not one for outrage. I’d rather find solutions than take positions. But I certainly find hope in optimism. And the belief that we can do good in this world.”
OGUK has hailed the grit and resilience of the thousands of people working for the critical sector as it opened nominations for its annual awards today.
Throughout the coronavirus pandemic, key workers both on and offshore continued to safely operate installations around the UK Continental Shelf, supporting the UK’s security of energy supply. While seeking to deal with the economic fall-out of the low oil and gas prices brought about by the pandemic, the industry continued with its work on Roadmap 2035, making major commitments to halve emissions from the production of oil and gas in the next decade as well as progressing its plans to support carbon cutting solutions including carbon capture usage and storage and hydrogen.
The awards, sponsored by Shell, will be held on 10 December this year, with hopes that its virtual format will make it more accessible not only to the industry workforce, but to family, friends and anyone with an interest in how the sector is shaping up as part of a low carbon future.
Commenting as nominations open, OGUK chief executive Deirdre Michie said;
“This has been extraordinary year in which our industry, only just beginning to recover from the last downturn, finds itself facing more dark days ahead. Yet, in spite of the personal and professional challenges the coronavirus pandemic brought on all industries, companies and people, our key workers ensured our critical industry never stopped operating.
“This is the North Sea spirit and grit we are known for, working in tough circumstances to provide affordable energy to millions across the UK. It is this same resilience which should give confidence that our changing industry is and will continue to step forward by cutting its emissions and in using its skills and expertise to develop the solutions needed to meet our country’s climate ambitions. We remain on track to deliver our ambitious plan to realise the full potential of our sector through the energy transition, Roadmap 2035.
“With a new virtual format, OGUK’s annual awards are an opportunity to tell our positive story to more people than ever before. Whether it’s family, friends, or you want to know more about how our industry is changing and about the people who make this sector the amazing industry that it is, we hope everyone will enjoy taking part in acknowledging and celebrating inspirational and impressive contributions.”
Nominations close on 2 October and companies are being encouraged to champion talent and innovation, with nine awards up for grabs this year.
Shell UK upstream vice president Steve Phimister said;
“2020 has thrown down challenge after challenge for the sector. But our people have stepped up and met it, maintaining the critical energy supplies that the UK relies on, as well as starting to address the all-important subject of Energy Transition. We can all be proud of our huge efforts right across the industry, and I look forward to seeing our most important asset – our people – celebrated at these awards.”
Updates to the Renewable Transport Fuel Obligation (RTFO) in January 2021 will see fuel suppliers required to increase the amount of renewable fuel they use to comply with the scheme. Introduced in 2008 by the UK Government to drive greenhouse gas emission (GHG) reductions in the transport sector, the scheme mandates the adoption of renewable fuels for road vehicles, non-road mobile machinery and — as of 2018 — aircraft.
Transport is the UK’s biggest industry polluter, generating 28 per cent of the UK-wide total in 2019. The RTFO is proving to be a robust scheme for driving sustainability in the transport industry by reducing GHG emissions. All transport fuel suppliers who provide 450,000 litres or more of petrol, diesel or gas oil must include a percentage of renewable fuels as part of their overall supply or pay per litre to buy out of the scheme.
Each year the RTFO increases the amount of renewable fuel suppliers must include in order to generate bigger carbon savings year on year across the transport industry. These percentage increases play a vital role in enabling the UK is to meet its targets to bring all GHG emissions to net zero by 2050.
In 2021, fuel suppliers will need to increase the amount of renewable or development fuel in its supplies to 10.68 per cent of their total supply levels.
In January 2019, the RTFO added advanced development fuels into the mix, giving fuel suppliers the choice to integrate next generation biofuels into its supplies alongside standard renewables. Development fuels are made from sustainable waste or residual feedstock, with the exclusion of segregated oils and fats and renewable fuels of non-biological origin (RFNBOs). For a development fuel to qualify under the RTFO scheme the GHG saving must be at least 60 per cent more than that offset by fossil fuels. The renewable diesel must also be capable of being blended at a rate of at least 25 per cent with conventional diesel and still be able to meet the EN590 fuel specification. As a result of its superior carbon crunching credentials, fuels that meet the development fuel criteria receive double the amount of Renewable Transport Fuel Certificates (RTFCs) per litre or kilogram supplied compared with standard renewables.
“Development and advanced biofuels overcome many of the limitations of first-generation biofuels,” explained Matthew Stone, chairman of Renovare Fuels. “As an example, our fuel is physically and chemically closer to conventional fossil fuels in the way it performs and in the quality of the end product, but produces only three grams of carbon dioxide equivalent per megajoule of biomass; only three per cent of that produced by fossil fuels.
“There is a ceiling to the impact that standard biofuels can make in achieving GHG emission reductions, because of the type of feedstock they use and the low fuel quality.
“In contrast, there’s no limit at all with development fuels. They are designed specifically to eliminate any emissions in the production process and radically reduce those generated when used as an end fuel. Development fuels unlock the true potential of biofuels, and therefore have the potential to play a vital role in the UK hitting its GHG targets.”
Renovare’s development fuel is one of the first to be approved for use in the UK by the Department of Transport. The company will develop a new production facility in early 2021 at a site based in England.
The development of biofuels for the aviation sector is considered in greater depth in the October issue of Fuel Oil News.
Further underlining its commitment to reducing the carbon intensity of the fuels it produces, a huge processing unit rolls into the Phillips 66 Humber Refinery.
A UK leader in low carbon liquid fuel development and processing, Phillips 66 Limited’s Humber Refinery, based in Northern Lincolnshire has a proven history of developing new low carbon fuels, being the first in the UK to process used cooking oil. The refinery converts UK & International waste streams to finished bio road fuels.
In a significant investment that expands the refinery’s capability to process used cooking oil (UCO), it recently took delivery of a new processing module, developed by the refinery’s project group to facilitate this. The unit was transported from ENGIE Fabricom in Immingham where it was built arriving on a self-propelled modular transporter (SPMT).
Darren Cunningham, Humber Refinery general manager/UK director, said; “We are pleased to take delivery of our new UCO module at our Humber Refinery. I would like to congratulate all the teams that have been working so hard on this project through such a turbulent time, delivering the project safely. This investment further highlights the refinery’s commitment and investment to further expand our production of bio fuels and reinforces our reputation as the Refinery of the Future.”
Jeff Noble, head of UK operations, ENGIE Fabricom, also commented; “We are delighted to be partnering with Phillips 66 in successfully delivering the UCO Project. This includes off site PAU manufacture and assembly which was achieved on time, within budget and executed without incident. P66 are a valued customer and this project has provided ENGIE Fabricom with the opportunity to develop our relationship by demonstrating our full suite of capabilities. We look forward to supporting P66 with the remainder of this project and to provide long term sustainability for the refinery.”
“Our team at ENGIE Fabricom’s Immingham manufacturing facility, are proud to have worked closely with P66 in the safe delivery of this project, adapting brilliantly with the unique challenges faced by all in 2020’s unprecedented circumstances. With both companies also motivated by the environmental benefits from such innovative Bio-Fuel ventures.” Said Mark Astwood, manufacturing facility manager, ENGIE Fabricom Immingham.
This Humber Refinery expansion project enabling increased bio-fuels capacity further supports UK downstream low carbon fuels contributing to a net zero future for the UK.
Last week UKIFDA announced, through social media, that it has begun the search for a new CEO.
Posting on LinkedIn, UKIFDA outlined the high-profile role and its desire to find an inspiring leader to drive a culture of collaboration and engagement, whilst continuing to deliver UKIFDA’s strategy and future vision to steer the transition to renewable fuels in future energy policy in the UK and Ireland.
Having taken on the role in February 2018, and worked tirelessly, in support of the membership, to keep liquid fuels on the future energy agenda, current CEO Guy Pulham commented; “I look forward to handing over to my successor. Someone with renewables experience who can help ensure that bio liquid fuels are included in consumers’ decarbonisation choices in the UK and Ireland.”
A spokesperson for UKIFDA said; “In order to fulfil this role, we are seeking to appoint a dynamic candidate. Whether a serving CEO, or you are looking for a career step, the ideal candidate will have experience or a strong working knowledge within the renewable sector and a good understanding of the UK fuel distribution industry, operating and influencing at government level with established industry and government contacts and relationships”.
The closing date for applications is August 28.
UKIFDA has submitted its views on the government’s latest consultation which is looking at ending sales of petrol diesel and hybrid cars by 2035.
The association believes that petrol/diesel and hybrid vehicles should still be allowed on sale after the 2035 proposal as the “virtually zero carbon by 2050” target will be met more quickly by encouraging a competitive market in cleaner vehicles.
UKIFDA chief executive Guy Pulham comments; “The government are again focusing on one technology as they are in their heat policies. We believe 2035 is too soon and should not be suggested at this stage due to the exclusion of possible technologies, supply/demand imbalances and infrastructure issues.
“While UKIFDA supports the aims of the Paris Agreement and wants to help the UK government achieve its ambitions of net zero carbon emissions by 2050, the current consultation to ban the sales of petrol diesel and hybrid vehicles after 2035 is flawed.
“Governments need to be technology neutral in their legislation rather than set one technology above others. To reduce CO2 emissions in the long term, a sensible move would be to design the regulatory framework such that technologies such as synthetic fuel, biofuel blends and hydrogen for internal combustion engine vehicles (ICEVs) are promoted on an equal footing as battery electric vehicles (BEVs) account the full life cycle.”
Following a record $6.7bn quarterly loss, BP has halved its shareholder dividend after the coronavirus pandemic hit global demand for oil.
UKIFDA has submitted its views on the government’s ‘Future Support for Low Carbon Heat’ and ‘Energy Efficiency in Existing Homes’ consultations.
Leading oil and gas professionals Hamish Wilson, Bill Senior, Tony Smith, Martin Dru and Sarah Milne have launched BluEnergy, committed to enabling oil and gas companies to leverage their existing asset base to create low carbon energy streams, generating value whilst reducing carbon intensity. The team is made up of former oil & gas company professionals that bring a unique combination of low carbon and oil and gas industry expertise, as well as business transformation experience.
Hamish Wilson, co-founder of BluEnergy, says; “Our focus is to identify low carbon investment opportunities where companies already have a competitive advantage through in-country relationships and capital project capability. These can bring commercial advantage when deploying the following established low carbon technologies through early entry in emerging markets such as Solar and Wind”.
The challenge facing oil and gas companies has been thrown into sharp relief by the recent Covid-19 crisis, with companies fighting for survival, seeing cash flow, investor returns, supply chain, and the fundamental value proposition under threat with a highly volatile earnings stream and borrowing base. In contrast, companies with high proportions of renewable energy in their portfolios not only suffered less during the crash but have quickly returned to pre Covid-19 levels. The founders of BluEnergy, along with many other experienced industry professionals, feel that companies that do not embrace the opportunities presented by the energy transition and grow broader asset portfolios, may not survive long term. They do, however, believe that oil and gas companies are ideally placed to lead the transition, and that It’s time to move on from simply discussing the energy transition to actively design and implement strategies that protect and sustain both industry and the wider world.
“We are passionate about the energy transition and we know that oil & gas companies have the global reach, scale and skills to lead the energy transition” says Tony Smith, co-founder. “We recognise the cultural challenges in embracing this strategic move that starts the journey to the long-term transformation of the energy sector. BluEnergy is focused on delivering tangible low-carbon projects, and we believe we are well-positioned to support the oil and gas industry in moving towards a lower carbon intensity future and a more resilient share price”.
A FuelsEurope pathway describing how low-carbon liquid fuels could enable the transport sector to contribute to EU’s climate neutrality objective by 2050, has been welcomed by UKPIA. The ‘Clean Fuels for All’ pathway also shows that intermediate CO2 reductions of 100 million tonnes (Mt) are achievable by 2035.
John Cooper, director general of FuelsEurope, commented; “Today we are setting out an ambitious pathway for enabling transport to contribute to EU’s climate neutrality ambition by 2050, based on scale up of low-carbon-liquid fuels (LCLF) supply and use, across several transport sectors. With a clear societal and scientific case for far reaching climate action and taking into account the economic and social impacts of the coronavirus crisis, we respect that there will be no return to business as usual for the fuels industries.“
Partnerships for policy discussions
“With the focus increasingly turning to recovery and new investments, we believe now is the time to start policy discussions with EU and national policy makers, and customer stakeholders to design the enabling policy framework for the deployment of these essential low-carbon fuels.”
Low-carbon liquid fuels have a strategic role to play in the transition to a climate-neutral economy by 2050, particularly in sectors such as aviation, maritime and heavy-duty transport where no equivalent technological alternatives currently exist. These sustainable fuels are from non-petroleum origin with no or very limited, CO2 emissions during their production and use. First blended with conventional fuels, these low-carbon fuels will progressively replace fossil-based fuels.
John Cooper stressed; “Complementary to electrification and hydrogen technologies, low carbon liquid fuels will be essential throughout the energy transition and beyond 2050, ensuring security of supply, providing consumer choice and also building Europe’s industrial leadership.” He added; “We have worked very closely with our member companies over the last 3 years on the low carbon pathways for liquid fuels. This thinking has been the starting point for development of an extensive technology set by our industry which now has potential to be deployed across Europe to deliver low-carbon liquid fuels at substantial scale.”
A pathway aligned with the UKPIA vision
UKPIA voiced support for the FuelsEurope pathway which, it says, aligns closely with its own Future Vision Report, released in July 2019. The report outlined a belief that the downstream oil sector can be a force for positive change that can help all users of our products to reduce their carbon footprint.
‘Clean Fuels for All’ is the latest publication on the role of the downstream oil sector in a lower carbon world. The pathway follows on from FuelsEurope’s 2050 Vision and UKPIA’s own Future Vision, which sets out a potential blueprint for how proven and emerging technologies make the UK downstream oil sector a vital part of economic growth, while continuing to meet government net-zero ambitions.
UKPIA director general Stephen Marcos Jones, said; “Achieving the enormously challenging targets of reducing emissions to net-zero by 2050, will require a significant transformation of the UK and EU energy systems but the downstream oil sector and low carbon fuels can have a large part to play. FuelsEurope’s latest publication “Clean Fuels for All” and UKPIA’s Future Vision, continue to show the positive role in decarbonisation that our sector can have. However, it will require pragmatic and supportive policymaking to unlock this potential.”
Ambitious but achievable
The pathway could enable reducing emissions from transport in 2035 by up to 100Mt CO2/y and contributing to EU’s climate neutrality ambition by 2050 as John Cooper further outlined; “Evaluation of scenarios by Concawe describes first new plants to produce up to 30 MToe of low-carbon fuels by 2030, with an investment cost estimated at €30- €40 Billion. This would include several first-of-a-kind plants at industrial size for the newest technologies.
“By 2050, depending on the scenario and technology cost evolution, up to 150MToe of fuels could be produced with the cumulated investments in the range €400-€650 Billion.
“In the most ambitious scenario, climate neutrality could be achieved for all remaining liquid fuel in road transport, with a 50% reduction in carbon intensity for EU’s aviation and maritime sectors. All of these achievements would be fully consistent with the Clean Planet for All scenario.”
FuelsEurope is outlining a set of policy principles, which it believes is central to delivering the industry’s climate-neutral ambition, with these points serving as a start for discussion with policymakers, supply chain partners and customer groups.
John Cooper concluded; “This pathway is ambitious, but achievable with multi-stakeholder collaboration. These new technologies are exciting but capital-intensive and their development at scale will require investor confidence and political vision. Everyone must be on board. We call on EU policymakers to establish a high-level dialogue with all relevant stakeholders as soon as possible. For the fuels industry’s part, we are ready to take the lead.”
Click here to subscribe to Fuel Oil News, which next month features an in-depth analysis of the roles of alternative liquid fuels and hydrogen in relation to the UK government’s decarbonisation ambition.
The trade association, UKIFDA, whose members supply not only heating oil for homes and businesses but also fuel for agriculture, construction, road transport, marine fuels and importantly fuel for back-up generators for hospitals, schools, care homes and data centres across Ireland, congratulates Fianna Fáil, Fine Gael and the Green Party on being elected to form the new government with Leo Varadkar and Micheál Martin sharing the Taoiseach over the 5 year period but urge consideration of alternative home heating solutions in the future energy plan.
UKIFDA chief executive Guy Pulham comments; “We want to work with ministers within government and newly elected Taoiseach Micheál Martin, who will hold the post until 2022 when Leo Varadkar takes over, in developing a pathway for off-grid heating in rural communities to help to achieve ambitions for a net-zero carbon economy. We are though, disappointed that there is not much detail in the published ‘Programme For Government – Our Shared Future’ with no specifics on numbers behind all the objectives. They say they are developing a new area-based and one-stop-shop approach to retrofitting, to upgrade at least 500,000 homes to a B2 by 2030 and provide €5 billion to part fund a socially progressive national retrofitting programme, targeting all homes but with a particular emphasis on the Midlands region and on social and low-income tenancies, but with the effects of COVID 19 on the economy how is this being done?”
Financial disadvantages must be avoided
“We will be emphasising to the government that we must not put the 686,000 oil heated homes across Ireland at a disadvantage. Our supply chain, for domestic liquid fuels (used for home heating and hot water) accepts the urgent need to decarbonise heating. Liquid fuel, more specifically a bio product, can be part of the solution to achieve net zero. We believe large scale electrification through the use of heat pumps is not the answer and government need to look at alternatives as this is not feasible, due to high installation and running costs of installing heat pumps for off grid homeowners.
“Importantly though, we are hopeful that statements such as – “As we set our society on a trajectory towards net zero emissions by 2050, it is vital that there is adequate time and effort devoted to working with communities and sectors in designing and delivering the pathway to achieve the goal in a fair way.” means the government are open to talking to our industry about biofuels.”
Centre Tank Services Ltd (CTS) has added another reputable, quality, and well-known brand to its list of distributorships with the announcement that it is the new agent of GoldenRod fuel tank filters for the UK and Ireland.
Goldenrod has been a leading filter brand, particularly popular in the agricultural market thanks to their compatibility with gravity systems, for many years. Their range of filters, designed for the removal of either particles or water content from diesel, petrol, kerosene and biofuels, includes the 495 Fuel Tank Filter, 496 Water Block Fuel Tank Filter and 497 BIO-FLO Fuel Tank Filter.
GoldenRod filters from US based Dutton-Lainson group, are widely recognised in the fuel industry thanks to their distinctive amber coloured bowl. Dutton Lainson were established in 1886 and have gone from a manufacturer of agricultural goods, to a leading manufacturer of quality products for the agricultural, marine, industrial, and automotive markets all over the world. This includes their market leading GoldenRod fuel tank filter range, making them a perfect addition to the distributorships held by Centre Tank Services.
As the new agent for the UK and Ireland, CTS has heavily invested in stock levels to remain a reliable source to its network of distributors.
Buyers or resellers should contact CTS for trade and quantity-based pricing.
The man behind plans for 3,000 hydrogen buses across the UK says a report by think-tank Policy Exchange, calling for more capital investment in hydrogen, is exactly the kind of action the UK government should be taking.
BP has announced plans to cut 10,000 jobs worldwide following the global slump in demand for oil. Having paused redundancies during the peak of the pandemic the CEO of the oil giant told staff at the start of this week that the company is responding to the economic fallout of the Covid-19 pandemic.
Chief executive Bernard Looney laid the blame squarely at the door of the drop in oil prices and the global collapse in demand for oil owing to the coronavirus pandemic as he told staff; “You are already aware that, beyond the clear human tragedy, there has been widespread economic fallout, along with consequences for our industry and our company.
“The oil price has plunged well below the level we need to turn a profit. We are spending much, much more than we make – I am talking millions of dollars, every day. And as a result, our net debt rose by $6bn in the first quarter.”
An industry reducing costs
The job losses represent about 15% of the oil group’s 70,000 staff worldwide with the jobs due to go by the end of the year. The London-headquartered group has not said how many jobs will be lost in the UK but it is thought the figure could be close to 2,000. BP employs around 15,000 people in the UK with the firm’s office-based workers expected to bear the brunt of the redundancies which will not affect any of its retail staff.
The changes are expected to significantly impact its senior ranks, cutting the number of group leaders by a third with the company saying it will make the senior structure flatter. The CEO emphasised that BP must reinvent itself and emerge from the crisis a “leaner, faster-moving and lower carbon company”.
Looney, who took over as chief executive of 111-year-old BP in February, said: “We will now begin a process that will see close to 10,000 people leaving BP – most by the end of this year. The majority of people affected will be in office-based jobs. We are protecting the frontline of the company and, as always, prioritising safe and reliable operations.”
The Brent crude oil price started the year at about $64 (£50) a barrel but plunged as low as $19 in April as the pandemic took hold. It has since recovered to about $35 a barrel but the drop has taken its toll on the industry.
Professor David Elmes, energy expert from Warwick Business School, said; “The job losses at BP are symptomatic of the wider challenges facing the industry.
“Coronavirus has reduced oil demand and the price per barrel has plummeted, but that has happened in a wider context of short-term and long-term decline.”
“All firms in the sector will all be looking at how they can cut costs, shift their activities to the lowest cost field, trim investment, and thinking hard about what dividend they can pay.”
The latest addition to the Crown Oil tanker fleet is ready to deliver HVO across the UK.
The 8-wheeler DAF tanker joined Crown Oil’s fleet last week, and with the registration number BIO HVO, it is no secret as to what it will be carrying across the country.
A spokesperson for Bury based Crown Oil, said; “We’re excited to announce a brand new edition to our fleet! Our green tanker is ready to deliver our green diesel across the UK.”
Speedy Fuels and Lubricants, a member of the Crown Group established in 2012 to serve the London region, also added a 6-wheeler DAF tanker to its own fleet in March this year. The company, which has gone from strength to strength and now deliver to customers nationwide also uses its new tanker to transport HVO.
Find out more about Crown Oil’s journey into low carbon fuels in the next issue of Fuel Oil News out in July.
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