The Federation of Petroleum Suppliers (FPS)* has unveiled its vision for cutting carbon through the development of biofuels for the 1.5 million homes in the UK and 686,000 homes in Ireland which currently rely on liquid fuels for their heating. “Having always supported the principle of decarbonisation, clean growth and clear air, our Clean Growth Future Vision brochure sets out all we are aiming to achieve in both in the near and far future, as well as highlighting the opportunities for the industry as a whole,” said chief executive Guy Pulham.

The industry’s key trade associations – the Federation of Petroleum Suppliers (FPS) and OFTEC – were quick to respond to the Net Zero report published by the Committee on Climate Change (CCC).

Speaking about its submission to the Republic of Ireland’s National Energy and Climate Change Plan (NECP) 2021-2030, FPS Irish representative Nick Hayes said: “Whilst the government’s plan is ultimately good news for everyone committed to cutting carbon in Ireland, our members currently deliver heating oil to 686,000 households, mainly in rural and off-grid locations where a great deal of consideration must be given to the impact that current proposed measures will have on those areas.

OFTEC’s CEO, Paul Rose was quick to raise concerns following the publication of the Committee on Climate Change (CCC) report UK housing: fit for the future? “With the threat of climate change being without doubt the most urgent global issue we face, the CCC is right to highlight the issue of carbon emissions from buildings and to raise its concerns about the energy efficiency of UK housing stock,” commented Paul Rose.

Guy Pulham, FPS (left) and Paul Rose (OFTEC) Below, the Federation of Petroleum Suppliers (FPS) chief executive, Guy Pulham and OFTEC CEO Paul Rose comment: “A wide range of responses to government’s call for evidence were received but the conclusions drawn in the document highlighted BEIS’ continued focus on the electrification of heat using heat pumps.  “We believe this approach will not provide a complete solution and does not consider several recent developments in Europe which highlight how liquid fuels, whether that is a bio fuel or an efuel, can be part of the solution. There is aneed for a mix of low-emission energy sources and technologies to be deployed to meet the requirements of different buildings, dependent on their potential thermal efficiency. “The Call for Evidence ended in June 2018 and since then the FPS has, in partnership with OFTEC and other trade associations in the UK and Europe, been working together to promote the introduction of a renewable, low carbon liquid fuel for off grid households, which would not require a complete change of infrastructure. “We believe this should play a major role in meeting the future heating needs of off grid homes and it is a mistake to focus so much on electric solutions which offer high cost/low efficiency solutions for the 1.5m households off grid households currently using oil in the UK.  Several demonstration projects with heating systems running on partly renewable liquid fuels are already in place across Europe, achieving substantial levels of emissions reduction. So, it is disappointing that this potential is not more positively promoted in the government’s response. “The social implications for an over dependence on one technology are also important and should not be understated.  Government’s response was published just after the publication of the Committee on Fuel Poverty’s (CFP) Third Annual Report which showed the number of fuel poor households in England alone has risen by 210,000 to 2.55 million. “The report highlighted how financial assistance would be needed by the 116,000 fuel poor households who use heating oil in England, if government focuses on heat pumps or electricity as the preferred solutions to meeting future heating needs. “Importantly, the CFP said in its report that on a pence-per-kilowatt-hour basis, it needs to be recognised that oil heating is significantly lower cost than heating by electricity. This is supported by recent figures released by Sutherland Tables, a recognised independent source of comparative domestic heating prices, which show the average annual cost of heating a three-bedroom home in Great Britain with heating oil is £1178 per year – nearly half the cost of electric storage heaters at £2069 per annum. Oil is also far cheaper than any renewable heating options; including air source heat pumps (with radiators) at £1,805 per year or with underfloor heating at £1380, and biomass (wood pellets) at £1,548 per annum. “We were particularly concerned by the statement made in the response by government which said most off-grid homes are suitable for heat pump deployment, quoting their own study undertaken by Delta Energy and Environment (Delta EE) which estimates “that around 15% of off gas grid dwellings are currently not suitable for electric heating”. “Unfortunately, the study is based on a tiny number of homes and appears at odds with a statement made by BEIS minister Claire Perry in the House of Commons in October 2018, in which she stated only 3% of oil-heated homes in Great Britain were in EPC band A-C which in previous studies has shown is the rating compatible with heat pumps. “Furthermore, Delta EE also says “Heating for rural off-gas grid dwellings tends to rely on higher carbon and higher cost fossil fuel sources such as oil ….” Both the CFP and Sutherland Tables clearly show that oil heating is cheaper than electric and renewable forms such as heat pumps and has been for more than five years. Again, it is concerning that misleading statements and studies such as Delta EE’s are being used by BEIS to formulate future policy and strategy around decarbonisation of rural off-gas grid dwellings. “In its response, BEIS stated they are implementing various studies into viable solutions and we urge BEIS to work closely with the liquid fuels industry to develop a roadmap to carbon reduction with a bio/efuel transition as part of the overall picture for off grid households. “FPS actively supports the Industry Contact Group set up by OFTEC and BEIS and will continue to contribute to this discussion group. We believe the group can play an important part in helping BEIS shape strategy by bringing together the whole of the supply chain including the UK petroleum industry association (UKPIA) and the Tank Storage Association (TSA), whilst achieving the carbon reduction goals of 2050 and protect the cost (and choice) of heating systems available to the consumer. “We will be looking to government for policies that unlock further development into a liquid bio or efuel. It is at least reassuring that, so far, nothing has been ruled out and that BEIS is seeking more evidence before making any decisions. It is also pleasing that BEIS has agreed with three key principles that were identified by respondents in respect to any future regulation:

“We must focus on solutions that will address the unique issues associated with hard to treat rural properties,” says OFTEC’s CEO Paul Rose As a new report shows the number of fuel poor households in England has risen to over 2.5 million.  OFTEC says recent revisions to the Energy Company Obligation (ECO) scheme don’t go far enough in ensuring that low income homes do not suffer at the expense of the government’s Clean Growth agenda.  Despite government introducing the Fuel Poverty Strategy 2015, the number of households unable to afford to adequately heat their homes has risen by 210,000 to 2.55 million. 

“The FPS strongly believes that a liquid fuel – a greener version of existing heating oil – can and should play a big part in how the future needs of off-grid homeowners are met,” says Guy Pulham, FPS CEO As an alternative to heating oil, the Federation of Petroleum Suppliers (FPS) has reiterated its ongoing commitment to a carbon neutral liquid fuel or e-fuel. Giving evidence to an inquiry on technologies to meet Clean Growth emission reduction targets last month, the FPS called on government to invest in and encourage the development of e-fuels. “The FPS strongly believes that a liquid fuel – a greener version of existing heating oil – can and should play a big part in how the future needs of off-grid homeowners are met,” said FPS CEO Guy Pulham. “We believe Clean Growth emission reduction targets can be met – and met in such a way that doesn’t cause rural households a huge expense or inconvenience. “Whilst we understand the investment in electric solutions, we’re concerned that for heating rural homes switching to an electric heating system from an oil boiler and tank system is not straightforward or cheap. “It makes sense to enjoy the benefits of a liquid fuel which would allow homeowners to cut their carbon footprint, without a big upfront charge and in a relatively easy way with just a few modifications.  Plans are already in place to begin testing various bio fuels in the real world in both the UK and Europe. “We believe that government needs to create the same drive for development in the UK as we’re seeing in Europe. The government states in its Clean Growth Strategy that the UK should lead the way in innovation, we believe funding research into e-fuels is a perfect opportunity. “Short-term steps can also be taken to reduce emissions, including replacing old boilers with oil-fired condensing boilers, using smart meters and smart controls to maximise the energy efficiency, and installing better insulation to keep more heat in and use less fuel. “We will continue to work in partnership with other trade associations in the UK and Europe to develop alternative, greener liquid fuel technology,” concluded Guy.www.fpsonline.co.uk

Credit: MrJub With mid-October witnessing the first Green GB Week to promote action on climate change, OFTEC has received further evidence that its work to develop a low carbon liquid fuel to replace kerosene could provide the answer to reducing carbon emissions from heating rural homes. Earlier this year, OFTEC commissioned a series of independent reports into the viability of liquid biofuels to meet the future needs of the 2.2 million homes across the UK and Republic of Ireland which currently rely on oil. The initial findings offer positive reading. The reports outline the growing demand for biofuels from the UK and EU and the willingness of major suppliers to meet this, as well as their interest in new markets such as domestic heating. Biodiesel from waste blends, primarily Used Cooking Oil Methyl Ester (UCOME) and Tallow Methyl Ester (TME), would provide the most likely solution in the short term, moving to blends from other waste streams in the medium to longer term. The reports recognise current concerns over sustainability of supply but suggest that this will be addressed as the biofuel market develops further and demand grows, technologies advance and other sources of raw material become more readily available. Speaking during Green GB Week, OFTEC CEO Paul Rose said: “We firmly believe the answer lies in biofuels and these latest reports add further credence to our thinking.  The IPCC report starkly outlines the urgent need to ramp up action on climate change now. We are continuing our calls to government to support our work in transferring oil heated homes to a low carbon future in the most cost-effective way and will continue to channel our resources into making this happen. “A liquid biofuel would offer these households an almost drop-in replacement for kerosene.  We are working closely with the Department for Business, Energy and Industrial Strategy alongside wider industry, to ensure that oil heated homes are provided with the right, future proof low carbon solution for their needs.”www.oftec.org

Brian Worrall, the new UPEI president looks forward to ‘engaging more deeply on the role that independent fuel suppliers can play in the energy transition’ At its general meeting held in Bonn on 18-19 October, the UPEI membership elected Brian Worrall as president of the presiding board, taking over from acting president Thierry De Meulder.  Director of corporate affairs for DCC/Certas Energy UK, Brian Worrall has held the office of vice president of UPEI since January 2018 with Mathias Ploetzke (MEW – Mit­tel­stän­di­sche Ener­gie­wirt­schaft Deut­sch­land) elected to Brian’s former position. “I am delighted to take up the position of UPEI president and thank the membership for its confidence and support in this respect,” said Brian. “I look forward to taking UPEI forward and engaging more deeply on the role that independent fuel suppliers can play in the energy transition, as well as the potential and benefits of liquid fuels in this context. “I would like to pay tribute to my predecessors Thomas Johannsen and Thierry De Meulder and thank them for their commitment and hard work.” 

Working hard to highlight the potential impact on the industry of the government’s strategy to reduce emissions from road transport and red diesel consultation, the FPS has put forward its members’ views by submitting evidence to HM Treasury with respect to The Road to Zero strategy.

Removing oil boilers from the ECO3 scheme would unfairly discriminate against rural households and could lead to even higher levels of fuel poverty said OFTEC CEO Paul Rose OFTEC has welcomed last week’s announcement from the Department of Business, Energy and Industrial Strategy (BEIS) that oil boilers will not be excluded from the next phase of the Energy Company Obligation scheme (ECO3) as initially proposed. The decision follows responses by OFTEC and other stakeholders to the ECO3 consultation that underlined that removing oil boilers from the scheme would unfairly discriminate against rural households and could lead to even higher levels of fuel poverty. The new ECO3 legislation, which comes into force on 1 October 2018, will allow limited oil boiler delivery to take place within the broken heating system cap and will also allow the repair of broken oil boilers within the 5% cap for all boiler repairs. This limit only applies to broken boilers not First Time Central Heating (FTCH). Oil boilers will not be allowed under first time central heating (FTCH), district heating, solid walled homes minimum, rural minimum, inefficient heating system replacements or innovation measures. “This is an important win for low income and vulnerable off-grid households,” commented OFTEC CEO Paul Rose. “As the key objective of ECO is to provide affordable warmth and help address fuel poverty, it would have been completely contradictory to exclude the repair or replacement of broken oil appliances when oil heating continues to be the cheapest form of heating available to off-grid households. “We fully support the Clean Growth Strategy vision to phase out carbon intensive fuels from 2020 and believe the best way to achieve this for off-grid homes is the introduction of a low carbon liquid fuel alternative to oil which initial testing indicates, could run on existing oil boilers without modification.”www.oftec.org.uk

When it comes to heating their off-grid homes, “cost will remain the most crucial consideration for homeowners who want quick, affordable solutions” says Paul Rose In decarbonising heat from rural homes, OFTEC has highlighted ‘a strong case’ for the use of low carbon liquid fuels.  The case was put forward in response to a call from BEIS for evidence as to the Future Framework for Heat in Buildings. OFTEC’s submission focused on the introduction of reduced carbon liquid fuels as the most affordable and practical decarbonisation route for the 850,000 oil using homes in England and Wales. “It is premature for government to consider regulating against oil heating when all liquid fuel boilers could be run on a low carbon alternative fuel before 2035,” said OFTEC CEO Paul Rose. OFTEC’s response also highlights the harsh realities of decarbonising off-grid housing stock -over 70% of rural properties have unfilled cavity or solid walls (English Housing Survey 2015) making them difficult to treat without significant investment. OFTEC’s stepped pathway to achieving zero emissions by 2050 includes:

The key theme of OFTEC’s 2018 annual conference was liquid fuel heating’s future. OFTEC CEO Paul Rose updated members and guests on the key steps achieved since the trade association’s two-stage strategy to decarbonise off-grid homes was launched last year. OFTEC plans focus on an incentivised programme to upgrade the 400,000 old, inefficient oil boilers still in use across England and Wales, providing immediate carbon reduction wins of up to 20% per household and paving the way for roll out of a low carbon liquid fuel as soon as it becomes available. Over the last year, OFTEC has carried out extensive lobbying activity to explain the practical difficulties and potential cost to rural consumers of government proposals outlined in the Clean Growth Strategy to phase out high carbon fossil fuel heating, whilst emphasising the viability of low carbon liquid fuels as a practical and cost-effective solution for off-grid homes. From these discussions, a Department of Business, Energy and Industrial Strategy (BEIS) and OFTEC working group has been established to co-ordinate discussion and action on the future of the off-grid heating sector, with the first meeting held on 3rd May. In partnership with leading manufacturers, OFTEC has also begun performance tests on various low carbon liquid fuel blends and a 100% biofuel, with highly positive results. “The climate change challenge is one we all need to work towards addressing,” said Paul Rose. “OFTEC has been working hard to progress a low carbon liquid fuel solution which offers a realistic, practical alternative to the current options on the table for off-grid homes which are not fit for purpose. “Now is the time for our industry to unite, step up and act collectively to meet the significant opportunity decarbonisation brings. This means everyone from installers and manufacturers to fuel suppliers and refiners playing their part. Much progress has been made to date, and against an undeniably challenging backdrop, but we need to keep this positive momentum going and deliver a futureproof solution that works for consumers and government alike.”

“Oil is the cheapest option for off grid homes and has been since October 2014,” says FPS chief executive Guy Pulham. The FPS is urging all those using oil to have their say and ‘make a big difference to the future of heating oil’ “It’s vital that everyone who uses heating oil has a say on A Future Framework For Heat In Buildings – and seizes the opportunity to voice their opinion to make a difference to this most critical government consultation,” says FPS chief executive, Guy Pulham. “The current government’s policy seems to be encouraging moving rural households and businesses – currently using oil heating – to electrically driven heat pumps to cut carbon emissions, reports Guy. “We’re concerned that this may place a large financial burden on many rural communities whose housing stock will need additional costly insulation to make the investment in heat pumps provide competitive energy bills.” “According to the latest quarterly data released on 30th April 2018 by Sutherland Tables, running an oil condensing boiler currently remains far cheaper than any renewable heating options. The average annual cost of heating a three-bedroom home in Great Britain with an oil condensing boiler is £1143 per annum compared to an air source heat pump radiator system at £1685 per annum and electricity is £1913 per annum.  For homes using an LPG condensing boiler the cost is £1567 and wood pellets is £1532. “Oil is the cheapest option for off grid homes and has been since October 2014.”

Burner manufacturer and distributor EOGB Energy Products has announced its backing for OFTEC’s proposals to decarbonise the UK’s 1.5 million off-grid homes by converting them to a low-carbon bio-oil, a goal that supports the government’s Clean Growth Strategy ambitions.

“For too long now Government has recognised the interlinked issues of fuel poverty and excess winter deaths, yet the policy to address the problem remains painfully inadequate,” said OFTEC CEO Paul RosePhoto by ©Andrew Higgins 2017 Vulnerable rural households need improved energy efficiency to help safeguard against the unacceptable number of additional deaths that occur during the winter months, says OFTEC. Unsurprisingly, the elderly are most affected with more than a third of deaths, as detailed in the latest Office for National Statistics (ONS) data, caused by health conditions such as respiratory illnesses which are made worse by cold temperatures. The problem is further exacerbated in rural areas where a higher proportion of people live in fuel poverty and so cannot afford to adequately heat their homes to stay warm and well.

Brexit puts the UK’s current frictionless trade in energy with the EU at risk. This is amongst the findings from the House of Lords’ EU Energy and Environment Sub-Committee’s report Brexit: energy security, published yesterday.

In the run-up to last month’s Budget, the Federation of Petroleum Suppliers (FPS) had been lobbying the government on various fronts for the off-grid heating oil industry.  Writing to Mr Hammond to better recognise the fuel and oil distribution sector, the FPS asked the chancellor to do more to assist both homeowners and members. “Although the Budget did produce some good news for households, it was not very exciting and it didn’t deliver any great help for many small business owners many of whom are our members,” said FPS president Jodie Allan. “The FPS represents 80% of heating oil distributors across the UK and our members operate at very low margins and so not raising fuel duty or vehicle excise duty rates for hauliers will assist our members,” added Jodie. “However, reducing fuel duty would have helped members further, and we also wanted to see additional measures to help the customers of our members – the 1.25 million mainly rural homeowners who are off grid. “Nothing was mentioned in the budget about a boiler scrappage scheme or help for off-grid homeowners. “We would like to see a boiler scrappage scheme for off-grid homes as there are efficient condensing boilers which can be installed either as a replacement or as first-time central heating for customers – and both options would reduce the carbon footprint of the home. “We’re disappointed that the BEIS has not included a strategy for oil boilers within the Clean Growth Strategy’s Boiler Plus; it deems the level of replacement oil boilers too low compared to that of gas. “On behalf of members, we will continue to lobby government to introduce a nationwide boiler replacement programme.  In comparison to decarbonising the gas network, decarbonising the oil heating sector should be relatively easy as it’s far smaller. “As a sign of how seriously we take this matter, the industry is already looking at the type of fuel that may replace oil one day as a low carbon option. www.fpsonline.co.uk

Heavy industries like steel still require a heat intensity that cannot come from electricity alone As the move to renewable power and electric cars gains momentum, Shell’s CEO Ben Van Beurden told an audience at the World Petroleum Congress that the company is planning to spend up to $1 billion a year on its New Energies division “In some parts of the world we’re beginning to see battery electric cars starting to gain consumer acceptance while wind and solar costs are falling fast – all of this is good news for the world and must accelerate.” In areas of transport where batteries are not adequate, Shell sees opportunities in hydrogen fuel-cells, liquefied natural gas and next-generation biofuels for air travel, shipping and heavy freight. And, with the intermittent nature of wind and solar energy Shell also sees natural gas-fired power plants having a long-term role.Putting more focus on the fast-growing developing world AdAAsWith tWithAs the shift to clean energy accelerates questions about the long-term business models of the fossil fuel companies were raised at the event. Whilst Russian energy minister Alexander Novak and Amin Nassar, the boss of the Saudi Arabian Oil Company see oil and gas being dominant for decades to come, Ben Van Beurden highlighted the potential for some of the fastest-growing nations to leapfrog straight to a cleaner energy mix. “When you consider the areas of the world where energy demand is still to expand, like Asia and sub-Saharan Africa, there is a huge opportunity. These countries will still require fossil fuels to develop industries such as steel, cement and chemicals because they need a heat intensity that cannot come from electricity alone. “These are areas that are not, on the whole, locked into a coal-driven system. There is the potential for them to shift more directly onto a less energy-intensive pathway to development.” Van Buerden believes that there is ‘too much focus on energy-transition policies in Europe and North America instead of the fast-growing developing world’. “What happens in England is important, but what happens in Ethiopia is at least as important. From Denmark to the DRC, from the U.S. to Uganda, to India, to China, there is a lot of work to do.”www.shell.co.uk

Small and medium-sized businesses make up almost three quarters of the 35 suppliers on Crown Commercial Service’s (CCS) new National Fuels Framework, which is expected to be worth around £850 million over four years. Winners include Angus Biofuels, Certas Energy, Crown Oil, Forest Fuels, Highland Fuels and Wessex Petroleum. The framework supports central government and the wider public sector to procure heating oil and fuel for motor vehicles as well as marine and aviation fuel, liquid petroleum gas, solid fuel, biomass and lubricants and greases. It is expected to save public sector bodies around £5.3 million over four years. In 2016/17, more than 200 million litres of fuel worth £169 million was procured through the previous Liquid Fuels Framework. CCS says the new agreement has a wider scope with more fuel types and extra, supporting services on offer for the first time. “CCS is excited to announce a new framework for the whole UK public sector that aligns policy and delivery and truly delivers value,” said Sam Ulyatt, strategic category commercial director. www.gov.uk/ccs