AF Future of Fuels Workshop:
How can we cut costs and carbon emissions?
Members and supplier experts were able to meet, share information and understand opportunities and barriers in the fuel market.
Fuel Forum Facts
In the room: 22 million litres of fuel buying power met at AF HQ, in the shape of 47 representatives of 32 Member businesses. The purpose was to hear from our supplier World Fuels about current and future fossil fuel markets, discuss sustainable low carbon fuels, understand the legislative framework, practicalities of carbon off-setting and hopes for hydrogen fuel.
Three Changemaker Members explained the different fuel challenges they have faced, and how they have started to overcome them.
What we learned about diesel
Matt Whitton of Watsons, part of World Fuels, explained the fossil fuel market has changed in recent years. Now there can be high levels of fluctuation over short time periods.
We also heard from Matt about developments in Renewable Diesel (RD), Hydrogenated Vegetable Oil (HVO).
- HVO is viable and clean replacement for DERV and red diesel.
- There are now 5 or 6 suppliers between domestic manufacturers and importers. This will help RD become more commoditised.
- RD has recently been between 30p and 60p per litre more than diesel, but:
- 90% reduction in CO2 emissions
- Improves engine performance
- You can forward fix the price for a set term.
AF Member Todd Baker of North Farm Livestock manages free range pig production across a very wide geographical area. Diesel is a major business input, as there is little direct operational energy requirement.
Todd explained his carbon reduction journey, managing 100 vehicles split between agricultural and road vehicles that use c500,000 litres of fuel annually.
He has benchmarked carbon emissions, and is in the process of plotting the best mix of carbon reduction and offsetting. Todd expressed a common concern that the RD market, supply reliability and pricing are so complex and changeable that he is reluctant to commit at this time.
How is Government helping?
In short, Thomas Cahill, Sustainable Fuels Advisor from World Fuels suggests, they could be doing better!
- The Renewable Transport Fuel Obligation (RTFO) means that by 2032 major fuel suppliers need to be supplying 14.6% of their volume as renewable
- The Department for Transport (DfT) has also been consulting on their Low Carbon Fuel Strategy (LCFS) due to be published any time now.
- As yet too little support through legislation, HMRC or funding and hopefully the LCFS will confirm decisive support.
Rob Ayton-Norfolk of Pilgrim Pride is an AF Member who runs a large transport fleet for the integrated pig and poultry producer.
Over the years Rob has tried different types of sustainable vehicles, including electric and gas, but the reliability and fragility of the filling/charging network for those fuels has been a barrier.
He has therefore committed to HVO as a better alternative, in no small part because Pilgrim have waste food oil and so are exploring the recycling of their own waste for fuel. As well as having their own raw material Rob likes that it is a drop-in fuel for any diesel engine, which is working for his fleet as the cost of alternative fuel vehicles is prohibitive.
Get set for off-set
Steve Randall of Watsons explained options for carbon off-setting:
- AF are able to offer two forms of carbon offsetting:
- Pay as you go offsetting is applied by the supplier via a pence per litre premium.
- Stand alone block of carbon offset, selecting from forestation projects around the globe.
- If you don’t have a renewable alternative but have an obligation or wish to cut carbon, off-setting is a very good short or long term option.
We heard compelling testimony from AF Member Alec Bird of Tru7 Group.
Tru7 specialise in van, truck and plant hire and are very large fuel users. They don’t see HVO or fuel alternatives as being financially viable in their market yet, but have been able to meet their customers carbon reduction demands by offsetting.
They bulk buy a carbon off-set annually to mitigate their measured carbon usage, which is calculated by using invoices and telematics to confirm and double check total fuel usage in litres, and then applying the government conversion factors. A link to these is here.
High hopes for hydrogen
Adrian Lloyd, Technical Director at Meld Energy summarise the current hydrogen market:
- Green Hydrogen is difficult and expensive to produce.
- The main opportunity is to harvest bioganic CO2 from biomass and AD plants, and combine with Green Hydrogen.
- This can be used to make e-methanol or green ammonia.
- Applications in shipping and construction.
This should be possible by 2029, and will have applications in shipping and construction.
Fuels for thought
Our Member representatives, our suppliers and our AF colleagues learned a huge amount in a few short hours, and we hope that this summary is stimulating for you too.
If you want more detail, or would like to have access to our recording of the event when it’s ready, please contact one of the fuel specialists at AF, and we can support you on your journey from fossil fuels to net zero carbon: firstname.lastname@example.org 01603 881 911.