Although the government says it ‘remains committed to introducing a Renewable Heat Incentive (RHI) scheme for householders,’ the scheme’s introduction has been further postponed.  It is now expected to be up and running in spring 2014.   Details about how the RHI scheme will work, together with tariff levels, will be published this summer with research into householder views on renewable heat helping to inform the scheme’s design. In the meantime, the Renewable Heat Premium Payment (RHPP) scheme, which offers money off biomass boilers, solar thermal panels and heat pumps, has been extended until the end of March 2014.   RHPP is targeted largely at those living off grid. An RHI scheme for industrial and commercial customers was launched in November 2011.   DECC plans to carry out a review of the tariffs under this scheme to drive forward further uptake.

As the Budget fast approaches, the Freight Transport Association (FTA) continues to press the case for a reduction in road fuel duty to ease the pressure on freight operators. In its pre Budget submission to George Osborne, FTA argues that the chancellor’s priorities must be to: • Ease cost pressure on domestic freight activity and stimulate economic growth through consumer demand by reducing road fuel duty by 3ppl with commensurate reductions in the duty rate for gas oil. • Stimulate investment in low-carbon fuelled vehicles by fixing fuel duty rates for natural gas and biomethane relative to diesel rates for at least 10 years. • Ensure that the introduction of the HGV Road User Levy will be tax neutral in practice by confirming: the rates of the levy that will apply; that Vehicle Excise Duty rates will not be subject to increase simply to allow that neutrality to be achieved; and that holders of Reduced Pollution Certificates will be compensated by replacement grants. www.fta.co.uk

From a standing start, Prax is achieving its sales targets in the Midlands and the north of England says sales and marketing director, Neil Robertson Well established to meet demand in the south of England from storage facilities on the Thames, Prax Petroleum is using Simon Storage’s Immingham West terminal as a strategic storage and distribution hub for market expansion. Simon Storage took the first deliveries of diesel and gas oil for Prax into Immingham West in September 2012. Securing a second terminal at Immingham allows Prax to meet growing demand for its commercial fuels on a wider national scale. Since then product throughput has risen and last month the contract with Prax was extended to include storage of biodiesel (B100) for intank blending to comply with the Government’s Renewable Transport Fuel Obligations. Under the contract at Immingham West, Simon is providing Prax with more than 18,000m3 of storage capacity, together with road loading facilities for onward delivery to customers. Neil Robertson, Prax’s sales and marketing director, says: “Immingham provides an optimal distribution point for supplying our customers in the Midlands and the north of England. From a standing start just a matter of months ago we are achieving our sales targets in these regions and increasing fuel supply security for all our customers.” In addition to strategically located UK terminals, Simon’s expertise in the storage, blending and distribution of green fuels makes it an ideal partner for Prax’s venture north.  Richard Sammons, Simon’s chief executive, comments: “Simon provides fuel storage and handling solutions for some of the world’s leading oil producers and distributors. We are able to offer fast-expanding fuel suppliers like Prax Petroleum a fully integrated package from receipt through to redelivery with intank or inline blending of biofuels with conventional hydrocarbons to meet RTFO regulations.”www.simonstorage.com        www.praxpetroleum.com

The recently published UK Renewable Energy Roadmap Update states that biofuels for heat, transport and electricity must offer genuine carbon savings and be cost effective in meeting climate change objectives. Following changes in 2011, incentives only reward biofuels which meet specific criteria, while double incentives are now available for biofuels derived from waste material and advance processes. The government is also proposing to expand the energy from waste criteria to include commercial and industrial waste, and to implement minimum air quality criteria as a condition of Renewable Heat Incentive (RHI) support. The update, which also includes plans to extend the non-domestic RHI to cover air source heat pumps and biomass, can be found at www.gov.uk/government/uploads/system/uploads/attachment_data/file/68637/7382-uk-renewable-energy-roadmap-update.pdf The Northern Ireland Executive’s target of 12% electricity consumption from renewable sources by 2012 was exceeded during the year, while in Scotland an update on plans in October included a new interim target to meet the equivalent of 50% of Scottish electricity demand from renewables by 2015. The government’s domestic RHI scheme is due to open to applicants in the summer.

The Task Force on fuel efficient, low emission HGV technologies has recommended a range of solutions to tackle efficiency improvements. Ricardo-AEA was commissioned by the Low Carbon Vehicle Partnership to conduct a high-profile study to identify the opportunities to overcome barriers to the uptake of low emission technologies and fuels for HGVs. The project was completed to a very tight timescale and the final report, which was presented to Stephen Hammond MP, minister for transport, has received very positive feedback. According to the recent report, three key areas with the greatest potential to reduce the CO2 emissions of fleets are switching to gas to replace diesel, improving aerodynamic efficiency and supporting the uptake of hybrid and pure electric vehicles. For both long haul and regional delivery vehicles, the optimum solutions presented were a dual fuel engine, using a combination of biomethane and CNG for vehicles used for regional deliveries, and a combination of biomethane, LNG and CNG for long haul use. The alternative is a dedicated natural gas engine, which would save less CO2 emissions but have a smaller payback period – between 3-6 years for regional vehicles compared to 5-10 years for a dual fuel engine, and 1-3 years for a long haul vehicle, compared to 2-4 years for dual fuel. After a series of interviews and online responses, key barriers to fleet efficiency were identified as concerns over upfront costs and uncertainty about the payback period, and a lack of trust in the technology provider’s fuel economy claims.

Teresa Sayers, Downstream Fuel Association After October’s Distributor Debate, Teresa Sayers of the Downstream Fuel Association has answered more questions received on the subject of biofuels. With the audience keen to ask questions at October’s Distributor Debate, time ran out before all the issues shaping today’s oil market could be discussed. Teresa has provided more comments on the introduction of E10 in the January issue of Fuel Oil News. With restrictions to the bio content from food crops, what future do you see for biodiesel? This is just a proposal at this stage and will be subject to intense lobbying and further political negotiations before becoming law in the UK.  We anticipate that the process could take over two years to be finalised and implemented in the UK. Earlier versions of the Indirect Land Use Change proposals indicated that crop based feedstocks used for the production of biodiesel would be given a significantly higher GHG default value than feedstocks used to produce bioethanol.  This clearly would have disadvantaged significantly the European biodiesel industry. UK biodiesel producers would have been affected to a lesser extent due to their focus on waste feedstocks. The current version, however, whilst maintaining a 5% limit by energy content on biofuels derived from land based feedstocks, has seen the default values as a means to calculate GHG emissions dropped from the proposal. One of the biggest risks for the biofuels industry is the lack of policy stability and a long term trajectory for the UK biofuel mandate.  This is needed to encourage R & D and investments and to develop supply chains for feedstocks  that use less land and save more carbon. Read Teresa’s comments on the introduction of E10 in the January issue of the magazine.

Jeremy Hawksley, OFTEC director general The proposed Renewable Heat Incentive (RHI) is unlikely to tackle the problem of carbon emissions from rural homes, according to OFTEC. In a written response to the RHI consultation, OFTEC stated support for the principle behind the tariff, but was concerned that the practical impact of RHI will be to increase, not decrease, CO2 emissions from rural homes, because the incentivised technologies will run on carbon-rich electricity. The statement also provided statistics which showed that the relevant technologies, including air and ground source heat pumps, could emit twice as much CO2 as B30K bioliquid fuel up to 2020-21. Other concerns include the cost of installing renewable technologies, when compared to converting an existing oil boiler for biofuels. OFTEC director general, Jeremy Hawksley said: “In its current form, the RHI strategy incentivises renewables such as biomass and air source heat pumps, which can have high carbon savings. However, this is only true if they run efficiently and the electricity they use is sourced from renewable sources. Our response demonstrates that bio-liquids would be more effective at reducing carbon emissions in off-gas areas, and much cheaper and simpler for homeowners to adopt. With the weather growing colder I’m reminded of the harsh winter of 2010/11 when heat pumps performed poorly, causing higher running costs w hile failing to keep homes warm. By contrast, oil heating is much more compatible with rural homes off the mains gas network.”

Around 300,000 households could face fuel poverty in the next few weeks thanks to the continued rise in energy prices. Fuel poverty has been defined as a household spending more than 10% of income on heating, and the Fuel Poverty Advisory Group’s tenth annual report predicts that this will apply to around nine million people by 2016. It also shows that energy prices rose by 7% in 2012, with the average energy bill at £1247. In the case of oil, at the start of December average prices are virtually unchanged from a year ago – see prices and margins 2012, page 6 of the January issue. The group calls for the government to use the carbon tax revenue for the benefit of low income households, and to provide a more coherent strategy to combat fuel poverty, including making homes more energy efficient. “With a cold winter, welfare reforms cutting incomes, and all at a time of austerity measures and other rising household costs, the plight of the fuel poor has never been more serious,” Derek Lickorish, chairman of the FPAG, told the BBC. “A toxic cocktail of rising wholesale prices, the high cost of energy reforms and cuts in incomes for many households means fuel poverty levels are set to sky rocket without radical action,” he added. Read the report

  Turriff Fuels and CPL Petroleum have implemented the Federation of Petroleum Suppliers (FPS) new fuel certification scheme. Developed in conjunction with tank hygiene specialists, OTS TankCare and Scarletts Systems, the scheme will enable FPS members to guarantee fuel standards, thereby safeguarding themselves against the potential risk and any claims resulting from post-delivery contamination. FPS chief executive, Mark Askew, said: “With the introduction of new biofuels and current FAME content up to 7%, better housekeeping is essential throughout the supply chain. The FPS scheme sets standards for fuel testing, cleansing and best practice for preventing contamination by water, particulates and microbial growth in storage tanks. “The scheme methodology has been fully evaluated and we can announce its implementation with two major FPS distributors – Turriff Fuels of Aberdeenshire and the CPL Petroleum network’s flagship depot in Thurrock, Essex. “By declaring their tanks have been certified to this scheme – to guarantee fuel quality standards – fuel distributors will be able to draw a line under any disputes concerning fuel quality.”    www.fpsfueltest.co.uk 

A Profitable Future in Renewables – Business Strategy Conference takes place at the British Museum in London on Wednesday 21st November. The energy market has undergone many changes, making it difficult for businesses to plan ahead and make informed decisions to benefit profitability. Many companies are looking to alternative energy forms, such as renewables. Organised by Renewable Energy Installer magazine, the event will address a range of topical business issues, brought to you by key industry experts, to benefit profitability. The conference is aimed at wholesalers, manufacturers, Green Deal providers and installers, while content will also be of interest to investors, training companies and those involved in the professional services sector. “There is currently no other event which offers the same level of expertise and insight into the renewables sector and how to maintain a successful business,” said REI editor, Lu Rahman. The aim is to help attendees understand the in-depth details behind Feed-in Tariffs, the Renewable Heat Incentive and the Green Deal. It will also offer expert opinion on how industry changes will impact on the market. The event boasts a first-class line up that will see DECC’s Alasdair Grainger discussing the current state of the Feed-in Tariff, Solarcentury’s Jeremy Leggett discussing ‘What’s happening to the PV market?’ and Southern Solar’s Howard Johns asking whether 22GW can be achieved by 2020. For those looking ahead to the Green Deal, PWC’s Paul Davies will be looking at ‘Financing the Green Deal and Access for Installer’. Paul Thompson, REA will be speaking on ‘3-4 Things to Consider for Your Business’, whilst Jonathan Porrit, Forum for the Future, will be giving the keynote address on ‘Making a Success of life’. Lu said: “With so many changes affecting all parts of the renewable energy market, it’s important to understand what the long-term business opportunities will be, and what needs to be done to stay successful.” www.reiconferences.co.uk

IFC bottom loading arms are assisting with loading at NuStar’s Clydebank terminal in Glasgow.  In an on-going programme, IFC has successfully supplied a second rack of loading arms to upgrade the bottom loading gantry facilities, and the third set is due to be supplied within the next month.  The IFC BLA445T bottom loading arm is completely operator orientated and is carbon steel in construction with PTFE seals, making it compatible with a large number of fuels and liquids. It has a compact, fully adjustable compression spring cylinder to allow easy operation of a fully flooded arm and hose assembly. The 4” nominal bore arm provides flow rates of up to 2500 litres per minute, and the three part swivel joints allow easy manoeuvrability and guarantee the API coupler lines up correctly. Nustar Clydebank & Grangemouth terminal engineer Neil Woodley said: “We needed a reliable and cost effective replacement for our first generation loading arms, along with good technical support from the supplier. With IFC we are happy we made the right choice on both accounts.” IFC operations director, Kiran Shaw, added: “Our loading arm offers engineering quality at low capital outlay combined with reduced on-going maintenance costs, which all goes to make our 445T one of the best value bottom loading arms available”.     www.inflow.co.uk

Plans to limit the use of food-based biofuels to 5% have been announced by the EU climate commissioner, Connie Hedegaard. The biodiesel industry has condemned the changes, which they see as a blow that could cost thousands of jobs. As reported in the Guardian, the proposed plans will cap the levels of biofuels to just above the current output of 4.5%. Biofuels produced from oil crops can give out more carbon emissions than diesel, and cause higher food prices. Connie Hedegaard told the Guardian: “We cannot morally afford to build a very big industry on something that is not good for the environment or for food prices. One of the biggest challenges of the 21st century is ensuring affordable food prices. “We are not closing down the existing [biodiesel] industry,” she said. “What they produce they can continue to produce.” Alain Brinon, president of Fediol, an industry body, said: “This represents a U-turn in EU policy-making and a blow to investors in the renewable energy supply chain.” Existing support for food-based biofuels will end in 2020, with greater support being given to second and third generation fuels produced from agricultural or urban waste.

Jeremy Hawksley, OFTEC director general According to OFTEC, the latest announcement by the government that bioliquids will not be included in the proposed Renewable Heat Incentive (RHI) means that homes in rural areas will have very little incentive to switch to renewable fuels, so will continue to have very large CO2 footprints. The U-turn comes after the government accepted B30K – a blend of biofuel and kerosene – as a potential candidate for RHI support in 2010 because it has the potential to reduce carbon emissions by 28%. But now ministers say they will only give RHI support to biomass boilers, air or ground source heat pumps and solar thermal technologies. OFTEC director general Jeremy Hawksley said: ‘”We’re very disappointed at this decision and will continue to argue forcefully during the consultation period for bioliquids to have RHI support. Whilst extensive field trials have demonstrated that B30K works fine in existing boilers, it seems odd that government policy wants to make rural oil users rip out those perfectly good systems when they could just be converted to run on bio-liquid. “In contrast, recent trials of heat pumps revealed the limitations of the technology in many homes, such as having to install oversized radiators to cope with the lower heat temperatures. The cost of running electricity driven heat pumps is similar to the running costs of an oil boiler, so it’s difficult to see the benefit to the consumer of changing their system. We hope that ministers will consider all these points during the consultation process.”

The Department of Energy and Climate Change has published consultation documents for the introduction of the domestic Renewable Heat Incentive. The new proposals all but rule out the inclusion of B30K Bioheating Oil, stating that “we do not believe that partially renewable solutions such as the B30K blend have a sufficient role to play in the transformation of the domestic heating sector to subsidise them through the RHI.” However, despite the likely exclusion of biofuels in the domestic RHI, there are suggestions that they will be an option for larger commercialproperties, with a proposed tariff of 4.1p/kWh – the same rate as for approved, solid biomass fuels. Although the expected timeframe for its introduction remains unchanged (summer 2013), proposed levels of financial support for included technologies are now known. Key proposals include:   

PetroIneos Fuels has awarded a two-year contract to Lewis Tankers to transport biofuel from its bulk storage tanks in Grangemouth Docks to its fuel terminal at the Grangemouth refinery. The Yorkshire-based haulier has an operating base in Grangemouth and will be utilising dedicated tanks for the contract. PetroIneos imports bulk quantities of bioethanol into Grangemouth in its natural form and denatures it by mixing it with 1% gasoline. As part of the contract, Lewis Tankers will also transfer the gasoline used in the denaturing process from PetroIneos’ terminal to the storage tanks at the docks. See the September issue of Fuel Oil News for more news from the Grangemouth refinery. http://www.lewistankers.co.uk/

With the RHI and Green Deal set to encourage a push towards alternative technologies, OFTEC has taken a look at the true costs of going green for rural homeowners. Using the Energy Saving Trust’s online ‘home energy generation selector’, costs and energy savings were calculated across a range of renewable technologies for a typical three-bedroom cottage in east Anglia, currently using oil for heating and hot water. If an existing oil-fired boiler was replaced with a biomass model then fuel bills would actually rise by £430 per year. Ground source and air source heat pumps did not fare much better – it would take between 31 and 200 years for any energy savings to make the installation costs worthwhile at today’s prices. In terms of carbon savings, the biomass boiler came out best, but at an increased running cost to the consumer. Users who switched from oil to an air source heat pump would actually be increasing their carbon emissions. The ground source heat pump represented the best option, with potential CO2 savings of 1150kg per annum.

Mabanaft UK managing director Raphael Hüttmann Mabanaft has announced that Raphael Hüttmann is to take over as UK managing director. The move forms part of a management restructure to provide increased support for development of the company’s UK business interests. Raphael, currently a board member and a former financial director of Mabanaft, will be taking over from Mark Rolph. He will be relocating to the UK with his family to take up the position. Going forward the company will continue to focus on traditional trading in physical petroleum products, focusing on the supply chain and biofuels blending. Raphael said: “I am delighted to be returning to the United Kingdom to lead Mabanaft and look forward to carrying on the excellent work which has been done to date. My remit will be, in spite of the challenging market conditions, to focus on the supply chain and the market opportunities that are continually presenting themselves to us now and in coming years.” Mark Rolph has taken up a new position as director of public affairs UK for Mabanaft’s parent company, Marquard & Bahls. He said: “It has been an exciting and fulfilling period over the last four years and I could not have managed this without the dedicated support of my team. I am now looking forward to my new role.” Mark will also continue as chairman of Downstream Fuel Association, where he works to represent the interests of the independent fuel wholesalers and leading retailers. www.mabanaft.com

 Leading oil equipment manufacturers have urged the government to include bioliquids in the Renewable Heat Incentive (RHI). In a letter to the right honourable Ed Davey MP, the secretary of state for energy and climate change, the chairman of OFTEC and MD of Riello Burners, Barry Gregory, said excluding bioliquids would encourage existing oil households to “do nothing” to make carbon savings. The campaign has the backing of a number of oil fired equipment manufacturers including Worcester Bosch, Warmflow, Grant, Watson Fuels, Firebird and Harlequin. The Federation of Petroleum Suppliers (FPS) has also pledged their support. OFTEC and the FPS have been working with the government since 2008, exploring ways in which a new liquid fuel could help de-carbonise heating. B30K, a new fuel specification with 28% less carbon content than kerosene, was developed as a “drop in” replacement for oil users. Although B30K was included in the original RHI consultation in February 2010, the fuel has been ignored in recent policy statements. In the letter Barry Gregory said: “Technologies which are included in the RHI will still be more expensive than conversion to B30K and in many cases cause severe disruption for homeowners. “We estimate that, if the RHI is granted, bioliquids could be installed in sufficient homes to save two million tonnes of CO2 per annum by 2020.”

Lewis Tankers has won a two-year contract from PetroIneos Fuels to transport biofuel (‘denatured’ bioethanol) by road from bulk storage tanks located in the Grangemouth Docks to the company’s fuel terminal at the Grangemouth refinery. To meet the UK government’s targets under the Renewable Transport Fuel Obligation, refiners are required to blend gasoline with a proportion of bioethanol, currently 5%.  PetroIneos imports bulk quantities of bioethanol into Grangemouth in its natural form and ‘denatures’ by mixing it with one per cent gasoline. As part of the contract, Lewis Tankers will also transfer the gasoline used in the ‘denaturing’ process from the PetroIneos terminal to the Docks storage tanks prior to each new shipment of bioethanol arriving. Transport is scheduled so that the tanks are empty prior to the gasoline being added to ensure accurate mixing.  PetroIneos Fuels markets and sells the fuels supplied by the refinery at Grangemouth. The business supplies in the region of 9 million litres of fuels per day.  In Northern England, the company owns a road distribution centre at Dalston, near Carlisle. Lewis Tankers currently operates a fleet of over 80 tankers from 9 operating bases within the UK.  With a string of safety awards and an exemplary operating record, Lewis Tankers serves a number of leading customers in the oils, chemicals and gases sectors, including Air BP, Scottish Fuels, Gulf Aviation, Brenntag, Univar, Stepan, Sasol, Scotia Gas Networks, Q8 and World Fuel Services.Return to emailshot

Crown Oil has won a HazardEx award for its environmental contribution to industry. The award follows a flawless operation – reported in Fuel Oil News – in which the company removed and recycled 6.4 million litres of gas oil from Derwent Power Station in Derbyshire. General manager, Mark Andrews, commented: “Transport and fuel oils are our core business. We strive to be responsible in the way we conduct the business and minimise our environmental impact in every way we can.  To win recognition for this is something of which all the team can be very proud.”  Crown Oil takes its environmental responsibilities seriously, says Mark. The company opened an environmentally friendly HQ just last year, and all fuel deliveries by the company are carbon offset.  Additionally, it offers red diesel users options to totally carbon offset their fuel.  For combined heat and power plants, Crown has a high grade biofuel, derived from 100% sustainable sources.  This enables users to collect maximum renewable obligation certificates to offset against other carbon producing activity. 

The UK’s sensitivity to oil and gas price shocks could be reduced by using low-carbon forms of electricity generation, claims energy secretary, Edward Davey. By 2050, the negative impact that global price spikes have on the UK could be reduced by more than 50%, as a result of climate change policies says an Oxford Economics report which was commissioned by the government. “Every step the UK takes towards building a low-carbon economy reduces our dependency on fossil fuels, and on volatile global energy prices,” added Davey. “Only last year, the impact of the Arab Spring on wholesale gas prices, pushed up UK household bills by 20%. “The more we can shift to alternative fuels, and use energy efficiently, the more we can ensure that our economy does not become hostage to far-flung events and to the volatility of market forces.” The government report shows that energy prices have been steadily increasing over the past decade and are becoming more and more volatile. However, once the UK fully changes to a low-carbon economy, mitigating against the volatility of fossil fuel prices – predicted to be around 2050 – many of the negative impacts of energy price volatility will be halved, it says.  www.oxfordeconomics.com Return to emailshot http://www.andpublishing.co.uk/fueloilnews.co.uk/email/index.php  

The Department for Transport and the Technology Strategy Board Industry have invested £9.5m to support the low carbon demonstration trial. Truck operators are being invited to bid for some of this funding, as part of a competition. Transport minister, Mike Penning said: “These trials will show us how low-carbon technologies perform day-to-day in the real world, providing vital data to build operator confidence in these green trucks and allowing us to make policy choices based on hard evidence.” Companies wishing to take advantage of the funding can bid for up to £750,000 by 20th June. To qualify, vehicles must deliver carbon savings of at least 15% compared with the equivalent conventional vehicle. Trials will run for two years and any data collected will be used by the government to form policy on low-carbon road freight.www.dft.gov.uk Return to emailshot http://www.andpublishing.co.uk/fueloilnews.co.uk/email/index.php