Transition 20
After almost a year of delays, the UK Government has published the long-awaited Heat and Buildings Strategy outlining plans to decarbonise heat and buildings. With the sector contributing 21% of UK emissions, this landmark document and associated consultations will shape the future of the home heating industry.
Responding to the UK Government’s announcement on the selected carbon capture and storage ‘cluster’ projects to be taken forward for Track 1 negotiations for deployment in the mid-2020s, OGUK has underlined that the UK will need all of the proposed cluster projects – and more – if it is to achieve net zero carbon emissions by 2050.
Responding to the UK Government’s publication of its Net Zero Strategy, OGUK has said it is “a big day for net zero and how we produce cleaner energy”.
Logistics UK calls for increased funding from the government to recognise the vital role of the logistics industry in the post-pandemic economic recovery and the net zero transition. The call for additional investment was in response to the government’s Comprehensive Spending Review with the association also calling for a freeze on fuel duty to encourage uptake of alternative fuels options.
Crown Oil is celebrating after its commitment to reducing greenhouse gas emissions secured a top industry award. The Bury-based fuel supplier was crowned the winner of the UKIFDA prestigious Green Award for 2021 – an award that recognises and rewards those in the liquid fuel industry that are leading the way in sustainability and environmental performance.
Environmental risk reduction specialist, Adler and Allan, has launched several new services and strategies to reflect its mission to help clients reduce environmental risk and impact including a ‘first of kind’ tool to calculate project emissions.
With less than two months to go until the world’s governments gather for COP26 in Glasgow, six members of the Energy Institute’s Aberdeen Young Professionals Network (YPN) embarked on a tour across Scotland’s future energy landscape.
With funding support agreed by BEIS, Stanlow could be home to the UK’s first carbon-free hydrogen power plant contributing to decarbonisation as part of the transition to future fuels.
As part of the Prax Group’s ongoing commitment to sustainability, Prax Lindsey Oil Refinery has joined the V Net Zero Humber Cluster decarbonisation project.
Speaking at the launch of their annual Economic Report today, OGUK Chief Executive, Deirdre Michie OBE, has said that the UK oil and gas industry is key to delivering the country’s net zero ambitions and emphasised how different parties must work together if that goal is to be achieved.
Scotland has a critical role to play in supporting the UK’s net zero ambitions. Vast offshore renewable resource potential combined with a rich oil and gas legacy has created deep offshore engineering and subsurface expertise, extensive oil and gas infrastructure, and established a reputation for excellence in the global energy business.
A Scottish Enterprise report heralds Scotland as a world-leading producer of clean hydrogen within the next ten years and finds that the technologies and deployment will be paramount to the success of Scotland’s target of net zero by 2045
The IPCC’s latest report on changes in the global climate was today backed by OGUK for adding new impetus to the transition to low-carbon energy.
Essar has announced the appointment of Deepak Maheshwari as chief executive officer for Essar Oil (UK) Ltd (EOUK).
Deepak joins EOUK, an important asset in the energy portfolio of Essar Global Fund, at a transformative juncture as it accelerates its transition to a ‘Low Carbon Energy Provider’ of the future.
As CEO, Deepak will work closely with the EOUK Board on the delivery of a number of strategic energy transition projects aimed at making Stanlow a green refinery to meet the post-carbon needs of a progressive UK.
Amongst these are HyNet (a low carbon hydrogen energy and carbon capture project) which will transform the North West of England and North Wales into one of the world’s first low carbon industrial clusters, together with the building of a biofuels business which will include production of both renewable diesel and sustainable aviation fuel (SAF).
With more than 25 years’ senior leadership experience across the utilities, energy, and infrastructure sectors in Europe and Asia, Deepak will lead an experienced management team and further strengthen corporate governance within the ESG framework.
EOUK chairman, Prashant Ruia, said: “We are delighted to welcome Deepak to EOUK. His immense corporate experience will prove invaluable during such an important period of growth for the company, which is aiming to be a leading player in the transition towards a sustainable society by delivering cleaner energy solutions.”
Deepak commented: “I am delighted to be joining EOUK as chief executive officer and look forward to building on the impressive legacy that Essar colleagues have created. The UK’s green economy continues to develop and flourish, and the Board and I will work hard to ensure EOUK sits at the fulcrum of the UK’s sustainable, low carbon future.”
In a significant expansion of its future fuels capabilities, marine energy specialist KPI OceanConnect has announced the launch of its Alternative Fuels and Special Projects division led by Bill Wakeling, an expert in marine fuels. As pressure intensifies for the shipping industry to become more sustainable, the new division will capitalise on its experience and expertise to enable its clients to achieve net-zero emissions from their marine fuels.
Bill Wakeling will head up this new division of KPI OceanConnect, a leading global broker and trader in marine fuels for more than 50 years and will lead on all matters relating to alternative fuels and decarbonisation, as well as exploring opportunities for new ventures and projects. With his rich experience in marine fuels, Bill is well-positioned to lead this new function, and drive measurable environmental and sustainability change throughout the marine fuel supply chain.
Speaking on his appointment, Bill commented: “I’m honoured to lead KPI OceanConnect’s alternative fuels and sustainability operations at a time where the industry must accelerate its decarbonisation progress in line with the International Maritime Organization’s 2030 and 2050 targets.
“In the last 18 months, we’ve helped our partners successfully navigate through IMO 2020, and showcased our agility and innovation by completing one of the shipping industry’s first carbon offsets. However, there is no shortage of challenges for shipowners and operators as they seek to realise a more sustainable future, and we’ll be working with them side by side through our long-term partnership approach to help achieve their sustainability ambitions and regulatory compliance.”
Commenting on the announcement, KPI OceanConnect’s CEO, Søren Høll, said: “This new function signifies our commitment to advancing decarbonisation in the maritime industry, and Bill Wakeling is the ideal person to head it up; there are few people with his track record, marine fuels expertise, and commercial awareness.
Our clients have a growing and sustained need for innovative solutions that can enable them to fulfil their green objectives, and they’re going to be in very safe hands with Bill and his team.”
January 2020 saw a new limit on the sulphur content in the fuel oil used on board ships come into force, marking a significant milestone to improve air quality, preserve the environment and protect human health. Known as ‘IMO 2020’, the rule limits the sulphur in the fuel oil used on board ships operating outside designated emission control areas to 0.50% m/m (mass by mass) – a significant reduction from the previous limit of 3.5%.
The implementation of IMO 2020 represented the most dramatic change to ships’ propulsion since the end of coal bunkers, and the beginning of a transition to decarbonisation that will alter the marine fuels market, as we currently know it, beyond recognition. In conjunction with the logistical challenges of Covid-19, as well as the impact of the OPEC+ oil price, this has made fuel compatibility and quality as well as finance a more prominent issue for shipowners.
Given the impacts of the virus, lockdown, oil prices and environmental imperatives on the whole fuel market and the implications for strategic planning and buying relationships we speak with Brian Coyne, managing director of KPI OceanConnect, one of the most experienced independent marine energy service providers, to consider the very specific issues related to marine fuels in the light of IMO 2020 regulatory obligations as well as how owners and operators can deliver cost-effective marine energy procurement strategies in this new, complex market environment
Brian explains: “IMO 2020 presented numerous new challenges for shipowners to consider before purchasing bunkers. Concerns about compliance, compatibility, and availability of fuels dominated but they were far from the only challenges the industry faced.
A need for trusted partners
One of the biggest ones was the interlinked demands of credit and creditworthiness. This stressed some industry balance sheets after years of volatile freight rates, and the higher cost of IMO 2020 compliant fuels made it much more difficult for smaller firms to keep doing the same level of business with their existing credit lines. When Covid-19 arrived, risks across the supply chain increased and created headwinds for many maritime businesses. We saw some companies who did not have adequate risk management in place go into insolvency. Although, the pandemic suppressed demand and subsequently prices, the market is rising again as vaccines are rolled out and demand returns to pre-pandemic levels.
At a structural level, the shipping industry has also seen a decline in capital availability for all but the strongest players. This is due to many large banks, such as ABN AMRO, Rabobank, and BNP Paribas, pulling out of commodity trade financing. This has created additional costs, liquidity and transaction complexities for shipowners and bunkering companies. Forensic due diligence has become far more common and a perception of lenient corporate governance in some corners of the shipping industry further inhibited banks from lending to the sector.
Fundamentally, this new dynamic highlights the need for trusted partners, acting transparently and collaboratively with customers and stakeholders across the industry to implement robust risk management strategies. As a result, tightening lending criteria are locking some firms out of the market and creating daily liquidity struggles for others. The bigger, better run players’ ability to meet these rising standards through robust and stable capital reserves and advanced risk management tools has been readily apparent.
Regional Disparities
Elsewhere, the compound effects of Covid-19 and IMO 2020 had different impacts on the marine fuels market. For bunkering hubs in some oil export regions, such as Fujairah, the decline in the number of tankers arriving to load crude cargoes has had a noticeable impact on total sales. Whereas in Singapore and Rotterdam, total volumes were up considerably year-on-year.
In major markets there has – for the most part – been plenty of IMO 2020 compliant fuels. However, in smaller markets and some regional niches it remains a complex challenge to procure compliant product. When I spoke to clients last year, the feedback was almost always the same: suppliers without a resilient global network and staff with local expertise are finding it difficult to consistently source the bunkers their clients needed.
With a continuation of oil price volatility and a price trending upwards, we also expect increasing bunker prices. In previous years when the price per barrel of WTI/Brent has risen, there have been reports of unscrupulous suppliers or feedstock providers using cheaper blending components. Unfortunately, our experience suggests that the impact of these changes are often detrimental to vessel operations.
Looking to the future
The environmental benefits of IMO 2020 are apparent. There has been a 70% reduction in sulfur oxide emissions thanks to the global sulfur cap with compliance levels strong. IMO also has an action plan for further air quality improvements.
Moving forward, we expect to see more consolidation across the sector as the transition towards future fuels and alternative sources grows. Consolidation, such as our merger of KPI Bridge Oil and OceanConnect Marine to form KPI OceanConnect, demonstrates that we are at the front, driving the change needed in our industry.
Partnering with an organisation that delivers advanced marine energy solutions on a global scale, by leveraging enhanced synergies and adopting a consultative approach, adds value for shipowners, operators, and charterers. Today, we are in a strong position and fully prepared for the rebounding bunker volumes, which are gradually starting to increase in line with the Covid-19 vaccination rollout.
The marine energy supply chain will transform immensely in the years to come, and there will be challenges ahead for the entire bunkering sector, as old, purely transactional processes are replaced with comprehensive consulting services. Implementing a comprehensive bunker procurement strategy to manage risks is crucial as we continue to endure price volatility in the immediate, if not long term.
KPI OceanConnect is well positioned in the value chain to help the industry manage this new dynamic through its partnership approach, offering reliable and trusted expertise and real time market intelligence.
Crown Oil has partnered with Kao Data, specialist developer and operator of advanced, carrier neutral data centres for high performance colocation, as the company takes further steps towards its net zero ambitions by becoming the UK’s first data centre to transition all backup generators at its Harlow campus to HVO fuel. This pioneering move, made possible by the partnership, means Kao Data will eliminate up to 90% of net CO2 from their backup generators and significantly reduce nitrogen oxide, particulate matter and carbon monoxide emissions.
“HVO fuel is dramatically better for the environment compared to traditional, mineral diesels. It is 100% renewable, biodegradable, sustainable and non-toxic,” said Simon Lawford, technical sales manager, Crown Oil. “We’re proud to have worked with Kao Data to initiate a first-of-its kind project, which will be transformative for the data centre industry, and help point the way forward for significant reductions in industrial greenhouse gas emissions.”
Today, Kao Data delivers one of the UK’s most sustainable colocation data centre campuses. Its existing initiatives include using 100% renewable energy, utilising 100% refrigerant-free indirect evaporative cooling technologies, and incorporating hyperscale inspired design to deliver a market-leading PUE of <1.2, even at partial loads. In line with its commitments as a signatory of the Climate Neutral Data Centre Pact (CNDCP), the use of Crown Oil HVO fuel marks another significant step in the company’s plans to become a fully carbon neutral data centre operator by 2030. The company will replace an initial 45,000 litres of diesel and switch to an HVO provision of more than 750,000 litres when the campus is fully developed.
Using HVO also offers a number of additional benefits in respect of infrastructure reliability. It eliminates microbial growth, which generates sludge that can contaminate fuel lines and potentially lead to engine shut down. HVO requires no modification to existing infrastructure and can be used as a direct replacement for diesel. It has a storage life that is ten times that of standard diesel and offers resilient year-round performance in both low and high temperatures. It is also easier to maintain, free from aromatics, sulphur and metals, odourless and completely biodegradable.
“This pioneering approach to replace our generator’s diesel provision with HVO fuel, is a key step in the company’s efforts to become net zero, and a further demonstration of our leadership in the international data centre sustainability field,” said Gérard Thibault, chief technology officer at Kao Data. “This move effectively eliminates fossil fuels from our data centre operations and helps us reduce Scope 3 emissions in our customers’ supply chain, while delivering no degradation to the service they receive. Most importantly, it shows how our industry can take a simple and highly beneficial step forward for the good of the environment, ahead of COP26.”
Hydrogen is set to play a key role in decarbonising the global energy system and investment in the deployment of hydrogen production is accelerating, with national governments making increasingly ambitious commitments to the sector. As the world works to recover from the impact of coronavirus, the UK has a chance to build back better. We hear from Huw Bement, director of CompEx, the certification body that is already supporting the development of a competent workforce in a bid to make the UK a global leader in green technologies, to hear his thoughts on the challenge of developing tomorrow’s skills today.
During the Spring Budget 2021, Rishi Sunak announced that the government will provide £27m for the Aberdeen Energy Transition Zone, helping to support North East Scotland play a “leading role” in meeting the nation’s net-zero ambitions. In addition, the UK government said it would provide £4.8million of funding to support the development of a hydrogen hub in Holyhead, Wales, which will pilot the creation of hydrogen from renewable energy that will be used as a zero-emission fuel in HGVs.
A competent and skilled workforce is vital
With regard to the implications for future skill requirements Huw explains: “The characteristics of hydrogen are well understood and already covered within existing international standards in relation to explosive atmospheres. However, hydrogen does behave differently when compared to other conventional gas fuels
because of its molecular size and weight, which means that it is more prone to leakage and will rise and disperse quickly in open environments.
So, whilst existing knowledge and skills are directly applicable, it is still important to ensure that there is a flexible, multi-skilled and competent workforce ready to facilitate the transition to an increasingly decarbonised energy system.
“The UK has all of the ingredients to become a leading producer and exporter of
hydrogen,” Huw continues. “However, if we are to fulfil the ambitions set out in OGUK’s (the leading representative body for the UK offshore oil and gas industry) roadmap to 2035, then it is vital we have a competent and skilled workforce. Our relationship with industry is critical to ensure that we can continue to provide a certification scheme that reflects future occupational requirements. Changing
technology will shape the skills needed but also how we train and assess people.
“We’re already consulting with key stakeholders within industry as to what a
competent skilled workforce will look like for the future. Competency is more than knowing your subject, it’s about your ability to apply and synthesise it in different contexts. We are committed to help equip workers with the right skills and capabilities, as well as work closely with the UK government and the devolved
administrations to build a sustainable recovery and support a net-zero future.
“This isn’t about reinventing the wheel, either. Since its inception over 25 years ago, CompEx has evolved, and is ready to support the emerging hydrogen sector. We already provide competency validation across a range of sectors including food manufacturing, pharmaceutical and of course petrochemical. It is critical that we continue to update the scheme, for example we are developing a Maritime Fuels module in response to a major cruise line which is moving from heavy fuel
oil to liquid natural gas-powered vessels. By recognising the unique challenges that these different industrial applications require of competent individuals operating in a variety of hazardous areas, CompEx is well-placed to support on developing a competent workforce for a diverse range of sectors, including the transition to green energy.”
Huw Bement joined certification body, CompEx, as executive director in January 2021 and has already started looking at ways to guide the scheme through thenext phase of its journey. CompEx has an incredible legacy spanning nearly 30 years, so Huw is working to ensure that the needs of all its stakeholders are met for many more years to come. Huw aims to leverage CompEx’s technical expertise to increase the scheme’s reach and support improvements to standards and safety.
Commenting on the new Transport Decarbonisation Plan (TDP), Kevin Bell, transport and infrastructure partner at law firm Womble Bond Dickinson, comments: “The Government’s ground breaking and world first ‘greenprint’ launched today details plans to decarbonise all modes of domestic transport and sets out a pathway for the whole transport sector to reach net zero by 2050.
Part of the Prime Minister’s Ten Point Plan, the measures look to achieve cleaner air, healthier communities, and new ‘green’ jobs through:
Recycled vegetable oil is being used for the first time to heat a home in Scotland. The revolutionary renewable fuel has been identified as a key alternative clean energy source in the battle against climate change.
The Fuellers are very excited to be currently planning the second Earl of Wessex Conference, to be held on 15th November 2021, at the prestigious Royal College of Physicians, Regent’s Park.
Carrie Marsh, Master Elect of the Worshipful Company of Fuellers commented: “Our first conference, held in November 2019, provided an entertaining and informative day, and was very well received. It was one of the highlights of the year for the Fuellers and a great way for Fuellers to interact with both the wider industry and our charity partners. We are hoping to do even better this time around.”
Cornwall-based liquid fuel distributor for the South-West Mitchell & Webber has won the UKIFDA Innovation Award for being at the forefront of the sector’s Future Fuels campaign and for making a real difference in the industry’s drive to make renewable liquid fuel a viable alternative to heating oil for off the gas grid properties.
Sponsored by industry trade magazine Fuel Oil News, UKIFDA launched the Innovation Award in 2021 to find and commend the one thing that makes the industry stand out – and will always support the most innovative products, services, or initiatives.
Wrightbus, already leading the world with its pioneering hydrogen technology, today unveiled the latest addition to its zero-emission arsenal – a rapid-charge electric double-deck.
North West fuel supplier Crown Oil is now running its entire fleet on renewable diesel fuel as it commits to reduce its direct CO2 greenhouse gas emissions by 90 per cent.
The Greater Manchester business, part of the £420m-turnover Crown Oil family of companies, believes it is the first supplier in the UK to run all of its oil delivery vehicles on hydrotreated vegetable oil (HVO).
Crown Oil, based in Bury, has now called on the UK government to introduce tax relief on fuels such as HVO to encourage greater uptake.
The family-owned business predicts a saving of around 3,080 tonnes of CO2 in 12 months from running its 85 delivery vehicles on HVO compared to standard diesel. To put this into context, one tonne of carbon dioxide is the average emission of one passenger on a return flight between Paris and New York.
Crown’s fleet is made up of HGVs, pickups, trailers and vans which are all approved to run on HVO fuel without technical adjustments or any reduction in vehicle performance.
HVO offers a fast and simple step towards net zero without the need for electrification or vehicle modifications, reducing net CO2 emissions by 90 per cent and nitrogen oxide emissions by up to 27 per cent.
Managing director Matthew Greensmith said it was important for Crown Oil to set the standard as it aims to become the UK’s leading alternative fuels supplier. The move showcases the fuel’s ability to perform faultlessly as a diesel alternative, he said, and will enable the business to significantly reduce its direct greenhouse gas emissions.
Matthew said: “We can’t expect others to make a change without leading by example, and we’re proud to run our entire fleet on HVO.
“We believe we’re currently the first and only UK supplier to power our vehicles with the renewable diesel and we hope it encourages businesses to go green with their fleets too.”
Since heavily investing in HVO in 2018, Crown’s customers have saved 18,945 tonnes of CO2 by switching over to the renewable diesel. Crown HVO can be used in vehicles, commercial boilers (running on gas oil), tractors, generators, machinery and inland waterway vessels.
The oil supplier is pioneering change within the industry and has called on the UK government to follow the example of Sweden by introducing duty relief on fuels such as HVO to encourage uptake.
Matthew added: “When it comes to reducing greenhouse gas emissions, we hope the government will adopt a multi-point strategy to include the use of high-content renewable fuels in addition to the development of the electric vehicle market.
“In 2017, the Swedish government passed a bill that enabled biofuels to be subject to tax exemption, which led to a 124% increase in HVO sales in October 2017 compared with the previous year.
“The UK government is planning to scrap red diesel duty relief for many sectors from 1 April 2022 to encourage the use of cleaner alternatives and we are calling for duty relief on fuels such as HVO to help encourage uptake.”