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2030 – a vision for heating systems

Grant UK, heating solutions provider in the off-gas heating sector, has outlined its vision for the future in a manifesto for change.

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Introducing E10 – ‘a welcome development’  

UKPIA has welcomed the Department for Transport’s recent announcement that they are consulting on proposals to introduce petrol blended with 10% bioethanol, otherwise known as E10. Whilst this is a recognition of the significant role that low-carbon liquid hydrocarbon fuels can play in combating carbon emissions, the downstream oil sector also urges the UK government to ensure that its introduction occurs in a pragmatic and consumer-focused way. “Introducing E10 into the UK has been under discussion for a long time, and it is a welcome development that the government are now consulting with industry on how best to implement this evolution to the fuel landscape,” said UKPIA director-general Stephen Marcos Jones.

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BP’s new ambition

Last month BP set out its new ambition to not only become net zero by 2050 or sooner, but also to help the world get to net zero.  The ambition is supported by ten aims:   FIVE AIMS TO GET BP TO NET ZERO:

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Logistics UK

After ten years with the Freight Transport Association (FTA) chief executive David Wells has revealed his ambitions for the association’s next decade which includes a name change on 1st June.

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Views on the government’s plans to abolish the red diesel subsidy

In next week’s budget, new chancellor, Rishi Sunak, is looking to abolish the 80% red diesel subsidy which presently carries 11.1p duty, compared to 57.7p for standard fuel. ‘At the moment people aren’t incentivised to make the change to lower consumption or alternative fuels. We need to fix that,’ reported a government official. As part of the government’s commitment to reach net zero by 2050, it is expected that taxes will be used to move fuel users away from fossil fuels. Removing the red diesel subsidy would raise around £2.4bn for government. UKIFDA, which has urged the chancellor to reconsider, pointed out that red diesel, which is used by the construction, farming and marine industries, accounts for 15% of all diesel sales in the UK. ‘Any increase in fuel duty will not only have a major impact on UKIFDA members and their customers but could also see significantly increasing costs to farmers and construction companies.’

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Ambitious low carbon investments

The UK Petroleum Industry Association (UKPIA) has welcomed the Department for Business, Energy and Industrial Strategy (BEIS) funding towards hydrogen projects at Essar’s Stanlow oil refinery and a renewable hydrogen Gigastack project which involves the Humber refinery. ESSAR Funding of £13 million has been awarded to the HyNet consortium, of which Essar Oil UK is a member.  Plans include the development of a Low Carbon Hydrogen Plant at the Stanlow refinery. This will produce 3TWh of low carbon hydrogen whilst also pioneering carbon capture storage (CCS) technology to capture and store over 95% of carbon used in the process. The funding will also support a front-end engineering design (FEED) study for a new hydrogen-fired combined heat and power (CHP) at Stanlow. “The HyNet project is one of the most ambitious low-carbon industrial cluster initiatives in Europe,” said Stephen Marcos Jones, UKPIA’s director-general. “As well as showing more broadly how the downstream oil sector is vital to the UK’s ambitions to reach ‘Net Zero’ emissions by 2050, this really demonstrates just how critical the refinery is to the success of these efforts to decarbonise the economy of the north west of England. PHILLIPS 66 Working in partnership with offshore wind company Ørsted, hydrogen producers ITM Power and with funding from BEIS, the Gigastack project will allow the Phillips 66 refinery site to utilise ‘green hydrogen’ produced from renewable energy in its operations and processes. “This project illustrates the potential outlined in UKPIA’s recently published ‘Future Vision’ report,” said Stephen Marcos Jones. “The project demonstrates the major role the UK’s downstream oil sector can play in the low-carbon energy transition. Working with renewable energy companies and in cooperation with government, this investment in ‘green hydrogen’ is an indication of how UK refineries can be world-leaders in decarbonising their manufacturing operations. “Downstream oil companies such as Essar Oil UK and Phillips 66 have the experience, engineering expertise and business acumen necessary to make the transition to a low-carbon future a reality for the benefit of both industry and wider society.” 

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2020 industry trends at StocExpo

StocExpo will release its first INDUSTRY TRENDS REPORT when the event returns to the Rotterdam Ahoy from 10 – 12 March 2020. According to the report, which surveyed the opinions of 171 key decision makers at businesses across the bulk liquid storage supply chain, 46% agree the skills shortage caused by ageing workforces and a lack of fresh young talent is the biggest challenge facing the industry today. Despite this, far more work is being done right now to maximise basic profit levers than to address upskilling and attracting the next generation of workers, leading the report to speculate that reducing costs and boosting capacity are relatively easy and short-term ways to salve the complex and abstract “people-problem”. The report also identifies and explores trends like the growth of LNG and hydrogen, which are on the diversification agenda for more than half of storage terminal respondents, but only 22% and 6% are storing LNG and hydrogen respectively at present. The research also highlights the rise of niche storage areas expected to grow over the next two years, including chemical and speciality chemical storage according to 48% and 43% of respondents respectively, as well as the storage of biodiesels (43%) and vegetable oils (28%). The research has directly informed the show’s conference programme, which will address all of the issues raised, such as sustainability, digitalisation, IMO 2020, skills and the rise of new storage areas, head on. “StocExpo has always focused on providing value to the bulk liquid storage industry,” said Mark Rimmer, StocExpo divisional director. “That’s why it’s the main event for the sector with our position naturally giving us a birds-eye-view of the industry and unique access to a huge number of bulk liquid storage’s best and brightest.  Something we’ve leveraged to deliver even more value this year in the form of an Industry Trends Report. “The report will offer intelligent insight into the commonalities among businesses in the supply chain and shine a light on the perceived challenges and opportunities.  That, coupled with our conference programme of expert speakers who will be talking on all the issues raised, will hopefully give the industry a sense of solidarity, direction and confidence equipping it as it faces down a somewhat demanding future.” The StocExpo Trends Report will be available for free to all delegates and exhibitors and will be made available to the wider public after the show. For more information visit www.stocexpo.com.  

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Industry engagement continues in quest to resolve FAME issues

UKIFDA, which continues to monitor and actively help resolve the issues some farmers and contractors have been experiencing with biodiesel, is ‘happy to report a significant decrease in reported issues since December last year’ with an improving picture on farming equipment 

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HOYER wins new business with Shell for retail fuels delivery across the UK

HOYER is growing its Petrolog business with Shell for the delivery of retail fuels in the UK. The new contract includes two additional loading locations at Kingsbury and Hythe that will make deliveries in the Midlands and Hampshire areas and the agreement sees the relationship between HOYER and Shell in the UK extend through to June 2025. “The retention of our existing business with Shell, as well as the winning of significant additional business, is a credit to our people who have contributed to a continuously improving safety and service performance over the past few years,” said Allan Davison, operations director for the Petrolog business of HOYER in the UK.

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New HGV refuelling bunker at the Port of Southampton

With work commencing on the construction of a new HGV refuelling bunker site, Certas Energy recently hosted a ground-breaking ceremony at the Port of Southampton. Working in partnership with Associated British Ports (ABP), the new facility will be the first of its kind inside the port.

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Greenergy – ‘greater control of our supply chain’

On Monday 10th February Greenergy announced it had entered into time-charter agreements for two bunkering vessels based in the Irish Sea and English Channel. This marks another step in Greenergy’s expansion in the marine fuels sector. The two bunkering vessels, the Bergen Troll and the Northern Skaggerrak, have the capability to bunker a variety of fuels, including marine gasoil, fuel oil for ships fitted with scrubbers, and IMO 2020 compliant 0.5% fuel oil. “This an extension of our existing bunkering operations, giving us the ability to supply more fuel grades to more marine fuel customers, explained Varun Chhabria, group head of marine fuels at Greenergy. “With two bunkering vessels at our disposal, we will have greater control of our supply chain, supporting the personalised service our customers have come to expect from us.” Greenergy entered the marine fuel market in 2018 to meet emerging demand for low sulphur marine fuels ahead of new limits on ship emissions, and has quickly established itself as a trusted supplier to the market. In addition to its bunkering operations, Greenergy provides national fuel supply, storing and suppling marine fuels by truck from Navigator Thames (south east of England), Tyne (north east of England), Eastham (north west of England), Grangemouth (Scotland), Cardiff (Wales) and in Ireland,  from Dublin and Foynes.

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A change in direction for Thomas Silvey

Following an extensive review of Mabanaft’s UK-based companies – Mabanaft Limited, BWOC and Thomas Silvey – the latter is now focusing on fleet solutions. This change sees the Mabanaft OnRoute fuel card division being merged into the existing Silvey Fleet business.

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Banning the internal combustion engine

Last week’s government announcement with respect to an earlier ban on the internal combustion engine met with a variety of responses. Whilst the majority support the government’s ambition to decarbonise, many concerns were raised. UKPIA “The government’s plans to bring forward an end to the sale of internal combustion engine (ICE) vehicles from 2040 to 2035 threatens the opportunity to pursue a low-carbon strategy in the UK that embraces all technologies,” said Stephen Marcos Jones, director-general of UKPIA “The UK government risks the progress we have made in reducing our emissions by ‘picking winners’, instead of allowing for consumer choice and technological development – including low-carbon liquid fuels in ICE and hybrid vehicles – to lead the way in decarbonising our society.” The Institution of Mechanical Engineers felt it was imperative to reinforce its findings on Accelerating Road Transport Decarbonisation which was published on 28th January 2020. “In our report, we demonstrate that all forms of propulsion technology, including renewable fuels, electricity and hydrogen could have a substantial impact on GHG emissions,” said Steve Sapsford, chair of the Institution of Mechanical Engineer’s powertrain systems and fuels group. “By insisting that there is only one solution, this government announcement side lines a significant complementary opportunity to reduce GHG emission associated with road transport. “There is not a ‘one-size-fits all’ solution. We are running the risk of assuming that all a vehicle’s GHG emissions are emitted at point of use. Whilst that might be where legislation has its current focus, we need to take a more holistic approach including the GHGs associated with vehicle production, use and disposal/recycling.  Such life-cycle analysis is a technique for quantifying the environmental and human health impacts of a product over its life span and can often be referred to as “cradle-to-grave analysis.” The Petrol Retailers Association PRA chairman Brian Madderson warned that ‘the Government has no basis for achieving such an ambitious target, and that focusing so heavily on EVs could mean better long-term solutions were overlooked’. Achieving the new target would not be possible without significant investment into petrol forecourts to provide retrofitted charging infrastructure, which the government has yet to address. He added that the policy change was largely uncosted, and over reliant on driveway charging points which many drivers will not be able to access. He warned the government was again ignoring the potential for hydrogen powered vehicles, which can be refuelled quicker than battery electric vehicles (BEV), have assured longer mileage range and can be more easily catered for within existing infrastructure at petrol filling stations. He urged the government to be technology neutral to avoid leading consumers down the wrong track, in the way it did with diesel vehicles. FairFuelUK “Nobody objects to clean engines,” said Howard Cox, founder of the FairFuelUK campaign. “No-one argues against improved efficiency which cuts emissions, but there are fairer and better ways to lower emissions. There is no need for cliff edge targets banning hard pressed motorists’ prized possessions. Emissions are falling because vehicle technology is improving; cleaner fuel technology will evolve organically without the government’s new extinction threat to the internal combustion engine.” Motoring journalist, Quentin Wilson “The UK, which is woefully underprepared for vehicle electrification, is broadly ignoring marine, aviation, industrial and domestic combustion, and needs to really incentivise consumers and industry to change their behaviours. The UK needs a consistent and well-crafted national air quality strategy that’s supported by world-class scientific research.” PriceWaterhouseCoopersUK “Our own research on electric vehicles has underlined that widespread EV adoption is contingent on ensuring the appropriate charging infrastructure is in place for all users – this is a vital piece of the net zero journey,” said   Steve Jennings, PwC’s UK head of energy, utilities & resources, “We believe the electrification of fleets, from company cars to field service vans, will also be a critical catalyst in transforming the transport sector. This a theme we shall be exploring in a forthcoming report.” Freight Transport Association (FTA) Looking at the van market in particular, Christopher Snelling, head of UK policy at the Freight Transport Association (FTA) said: “The 2035 target is very ambitious unless the government takes urgent action to solve the challenges around power supply and the availability of electric vehicles. Our Electric Vehicle Report shows that operators want to switch to electric – but we need to see urgent action from government to ensure the right infrastructure is in place and the market is ready.  FTA is calling on the government to share its strategy on how it plans to power the UK’s fleet of millions of vans. Until the issue of power supply is resolved, it is very unlikely – in the view of FTA – that 100% of new vans bought after 2035 will be electrically powered.”

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Diversifying into truckstops

In a deal completed on 31st January, Mabanaft Ltd has acquired Avon Lodge, one of the UK’s top-tier independent truckstops.  The transaction highlights Mabanaft’s strategic commitment to developing a network of truckstops across the country, offering drivers and companies good-value, high-quality truckstops outside of those owned by the oil companies and large group networks.

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Downstream chief executive Tufan Erginbilgic to leave BP

BP has announced that Tufan Erginbilgic, chief executive of BP’s Downstream segment, has decided to leave the company at the end of March 2020. Tufan Erginbilgic has been BP’s Downstream chief executive and a member of its executive team since 2014. In his time leading the segment – which includes BP’s global fuels, lubricants and petrochemicals businesses – it has delivered over $5 billion in underlying annual earnings growth and expanded in fast-growing markets, retail partnerships, electric vehicle charging and use of bioproducts. “Under Tufan’s leadership, BP’s Downstream has been at the heart of our return to growth; what he has achieved in this time is extraordinary,” said Bernard Looney, BP chief executive. “He has transformed the business, leading a team that has delivered impressive results time and again. I have always appreciated his strategic thinking, expertise and understanding of the business and will miss having him on the team.” “I am very proud of what we have achieved together in the Downstream,” added Tufan Erginbilgic. “We have gone through an incredible transformation, delivered against our clear strategy and built a strong platform for continued growth. I truly feel privileged to have led this business – we have talented, dedicated people with great capability throughout the organisation and I am confident they have what it will take to compete and lead through the energy transition.” An engineer by training, Erginbilgic joined Mobil in 1990, transferring to BP in 1997, and has held a wide variety of roles in refining and marketing in Turkey, various European countries and the UK. He became head of BP’s European fuels business in 2004 and of its global lubricants business in 2006, before moving to head the group chief executive’s office. From 2009 he was chief operating officer for the eastern hemisphere fuels value chains and lubricants businesses. Before his current role Erginbilgic had been chief operating officer of BP’s fuels business globally, accountable for all BP’s fuels, refining and marketing activities. Erginbilgic’s successor will be announced separately.

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OFTEC supports installer transition to decarbonised world

OFTEC, which has been a leading voice in the oil heating industry for more than 25 years, is helping to equip installers with the training, skills and qualifications needed to thrive in a net zero energy market.    

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Creating a Taskforce for Liquid Biofuels

Trade Associations OFTEC, TSA and UKIFDA have kicked off 2020 with the launch of a future vision for liquid fuels ‘Supply Chain Strategy for Liquid Fuels’, which details the steps to be taken towards a transition to 100% biofuel to replace heating oil in 1.5m homes across the UK and 686,000 homes across Ireland.   The three trade associations will be joined by other trade bodies and industry representatives in a new ‘Taskforce for Liquid Biofuels’, which will use the policy proposals contained in this future vision document to support a transformational effect on the UK’s off grid heating market and enable Government to maintain a technology-neutral approach, as well as encourage all industries to find solutions. UKIFDA “Liquid fuel, more specifically a bio product, can be part of the solution to achieve net zero,” said Guy Pulham CEO of UKIFDA. “Government talk about large scale electrification through the use of heat pumps, but we believe they need to look at alternatives as this is not feasible due to the high installation and running costs of heat pumps for off grid homeowners; the requirement for additional National Grid generation and infrastructure costs. Recognising the Government’s targets on reducing fuel poverty, it is important any regulation around heat policy takes this into account. We can’t stress enough that electrification through the widespread use of heat pumps is not the only conclusion, especially for vulnerable consumers who might be adversely impacted if they install solutions which reduce emissions and carbon targets but lead to higher bills.”  OFTEC “Our ‘Supply Chain Strategy for Liquid Fuels’ is a clarion call to Government to respond to the huge environmental challenges we face with practical and inspiring policies that could help the 2.2m oil heated homes in the UK and Ireland switch to a low carbon liquid fuel,” comments OFTEC chief executive Paul Rose. Following detailed independent research that suggests that the cost of decarbonising liquid fuel for heating gives the best value to the consumer when compared with other low carbon solutions, we need policies to be ambitious enough for net zero but which also reflect the practical challenges and financial constraints of many households. Low carbon liquid fuels offer the highest carbon reduction impact for the lowest cost (Based on existing SAP 10.1 figures). Analysis also shows that sustainable, low carbon liquid fuels could be produced in sufficient volume in the UK, with the additional benefit of generating investment opportunities and creating new green jobs.” TSA “Together, we have developed an ambitious and realistic pathway, one which reduces risk, achieves short- and medium-term reduction in carbon emissions, puts the needs of the consumer first and encourages business to plan ahead in order to meet those needs,” adds TSA’s chief executive, Peter Davidson. “The ‘Supply Chain Strategy for Liquid Fuels’ pathway sets five key challenges to the Government to:

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New CEO at Essar Oil UK

This week Essar Oil UK confirmed the appointment of Mark Wilson as chief executive officer (CEO).  He will be based at the Stanlow Manufacturing Complex and succeeds S. Thangapandian, who informed the board of his intention to return to India after almost three years in the UK.

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Argus Media – bunker fuels and a crude and products forum

Sales of IMO 2020-compliant bunker fuels began at key ports around the globe in December. The volumes are still small as the 0.5% market is in its infancy, but suppliers are confirming they have now sold bunker quantities of LSFO.

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JET strengthens its presence in the Scottish Highlands

JET has further strengthened its presence in the north of Scotland with West End Filling Station in Dingwall joining the fuel brand’s network. Having won the contract Highland Fuels is directly supplying Phillips 66 fuels to the 2.4 mlpa site, using the JET brand under licence from Phillips 66.

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The role of the bulk liquid storage sector in the energy transition

According to a brand-new report from the Tank Storage Association, the bulk liquid storage sector and associated logistics will have a key role to play in the energy transition and in supporting the achievement of the UK’s decarbonisation targets.

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Meeting customers’ needs

Harvest Energy, a member of the Prax Group of companies, has opened a new Morrisons Daily Store at its Sandringham service station in Leicester. Having bought this site along with 62 others just over a year ago, the company plans to convert a number of its forecourt convenience stores to Morrisons Daily Stores in the coming months.