Supplying Fuel To Industry

UKIFDA Members don’t just supply heating oil for domestic users. They also supply fuel for a variety of industries including heating oil for rural industrial estates and schools, gasoil for farmers and back-up generators in hospitals and data centres, petrol for retail sites and diesel for commercial and industrial use. As the trade association for the liquid fuels distribution industry across the UK and Ireland, our Members provide an efficient, reliable, and friendly service, keeping machinery running and projects moving no matter the weather.

What Is UKIFDA Doing To Help Meeting Decarbonisation Targets?

We acknowledge the continued use of fossil fuels cannot be sustained if the UK and the Republic of Ireland are to meet their decarbonisation targets by 2050. A combination of renewable technologies is likely to be adopted across UK industry as we progress towards the UK government’s target of net zero emissions by 2050. Governments should be technology neutral and should not discourage any possible solutions including liquid biofuels and set timelines for change so that industry can innovate and invest to meet those new goals.

Fuel customers in the agriculture, retail, commercial and industrial sectors want to be able to make the right choice at the right time, evaluating the pros and cons of many solutions to find the one that is cost effective and efficient for their needs rather than being forced to accept an electrical or gas solution that adds capital and operating cost, limits supply or charging points or forces some organisations to move out of a particular area thereby reducing end consumer choice.

There are at present many low-carbon alternatives to replace traditional liquid fuels such as gasoil or diesel – and many more are being developed and improved for future use. UKIFDA has pledged its support to finding a low-carbon liquid fuel that works for every industry and off-grid home.

UKIFDA Members will continue to provide the liquid fuel for industry – the fuel of today, the transitional liquid fuel of tomorrow, and the biofuels of the future.

To find your nearest UKIFDA supplier in the UK or the Republic of Ireland visit https://ukifda.org/find-a-distributor/

Let’s look in detail at some of the options in each product sector:

Red/Green Diesel or Gasoil

UKIFDA Members supply gasoil (known as red diesel in the UK and green diesel in the Republic of Ireland) for a variety of industries including fuel for back-up generators in hospitals and data centres, to both the farming and construction industries, as well as the refrigeration and marine industries – helping to ensure the day-to-day needs of these sectors are met and supported no matter the weather. Red and green diesel is the low-tax version of white diesel and can be used in untaxed off-road vehicles and home heating only. It is particularly beneficial to certain sectors that rely on this fuel for business as the tax rebate means it can be used on vast farms or for large-scale construction projects without high running costs.

Since 1961, gasoil has needed to be marked with a red dye in the UK and green dye in the Republic of Ireland – hence it’s more common name of red diesel and green diesel – to prevent its misuse in road vehicles. There is a type of biofuel called green diesel, which is different to the red and green diesel used in untaxed off-road vehicles and home heating – and is a low-carbon alternative energy fuel.

The UK government has announced plans to remove the entitlement of red diesel use for many sectors from 1 April 2022 in a bid to encourage users to switch to more sustainable, low-carbon alternative fuels. By removing the entitlement for all sectors other than agriculture, rail and non-commercial heating, many businesses will need to use fuel that is taxed at the standard rate for white diesel – supposedly encouraging them to find a greener alternative.

UKIFDA is always supportive of tackling climate change and finding ways to meet the UK’s Net Zero targets but understands this needs to be done with every sector, business, and consumer in mind. Whilst UKIFDA is pleased agriculture will maintain the current entitlement, the impact to the construction, transport, power generation and other industries could be devastating due to the huge increase in costs.

We are urging government to take a phased approach to limit the adverse impact the April 2022 deadline will likely have on organisations that rely on red diesel.

There are many low-carbon alternatives to replace traditional liquid fuels such as gasoil or red diesel – and many more are being developed and improved for future use. We acknowledge that the continued use of red and green diesel cannot be sustained if the UK and the Republic of Ireland are to meet their decarbonisation targets by 2050. However, UKIFDA has pledged our support to finding a low-carbon liquid fuel that works for every industry and off-grid home. Already many contractors in the construction industry are already using low carbon fuel such as HVO and GTL and this is set to increase.

We strongly believe alternative low-carbon fuels such as biofuels and HVO can and should replace gasoil to cut carbon emissions, and in a way that enables a straightforward and low-cost transition for many sectors, including the farming and construction sectors. We will continue to support the ongoing investment and development by our industry of low-carbon, sustainable alternative fuels that can be used as a direct replacement to red and green diesel.

Diesel

Biodiesel (made from a blend of mineral diesel and renewable bioproducts from various feedstocks) is currently the most widely adopted alternative fuel on the market today. However, to achieve long-term carbon reduction targets higher blend biofuels (B20 and above) would need to be implemented on a larger scale.

At present, modifying vehicles and infrastructure to take high blends of biodiesel poses a significant cost to the end user, therefore drop-in alternatives may present a more attractive solution. HVO is by far the cleanest burning alternative fuel (other than hydrogen) and acts as a like-for-like replacement in diesel-powered vehicles without causing performance issues and invalidating vehicle warranty. Neste claims the direct carbon emission reduction compared to fossil diesel can be up to 90%, making HVO the cleanest burning alternative fuel available on the UK market. However, indirect emissions vary dependent on feedstock – a minimum reduction of 26% for palm oil to a maximum of 62% for sunflower oil. Well-to-tank emission reductions are lower where HVO production relies upon virgin feedstock i.e., unused oils made from crops grown for fuel production, hence the lower reduction compared to a waste product such as UCOME. However, HVO holds a significant premium above standard biodiesel products that is currently unsustainable for many operators, exacerbated by the fact that diesel prices are very low at present – a trend set to continue until oil demand increases as the world recovers from Covid-19.

GTL is also therefore, at present, an attractive drop-in solution due to the lower premium above standard biodiesel, even though the carbon emission reduction is lower than that of HVO. GTL diesel offers a reduction in direct tailpipe emissions compared to mineral diesel, with a carbon saving of up to 37%. However, indirect emissions are high due to the primary feedstock being natural gas which is a non-renewable fossil fuel – in addition to higher well-to-tank emissions, this also deters potential future investment due to environmental implications. B20 biodiesel (which requires potential vehicle and infrastructure modifications) offers a 20% carbon emission reduction, almost half the reduction delivered by GTL which requires no changes to fleet operations.

In terms of other alternatives, LPG is currently the most widely accepted alternative to diesel products. However, there is a significant cost in overhauling infrastructure and vehicle fleets, which could discourage a wider adoption.

UKIFDA will continue to lobby for alternate liquid biofuels for both transport and non-transport use building on the exciting possibilities of products like HVO and GTL.

Petrol

The UK government has announced plans to introduce E10 blended petrol before the end of 2021 in a bid to reduce greenhouse gas emissions from road transport and overall carbon dioxide from petrol cars. By increasing the renewable element, the Government believes E10 will take 350,000 cars off the road per year, helping further with the UK net zero targets. Further biofuel blend options may be limited by current vehicle engines and the invalidation of warranties which means that manufacturers also need to engage in the process and adapt technology to use higher than 10% blended petrol and/or new fuels.

At almost all petrol stations in the UK, standard 95 octane petrol will be blended up to 10% although some small/remote may continue to only sell E5.  Filling stations that stock two petrol grades will need to ensure that E5 petrol is still available in their higher octane “super grade”.  Using E10 petrol can slightly reduce fuel economy but only by around 1% – unlikely to be noticeable in everyday driving.  However, E10 petrol is better for air quality. There is a difference between emissions that contribute to climate change (greenhouse gases like carbon dioxide) and those that are a concern for air quality and public health (particulates, NOx and hydrocarbons). Renewable fuels, like E10 petrol, are generally introduced to reduce overall carbon dioxide emissions and have little impact on air quality.

Whilst UKIFDA understands and supports any emission target to improve climate change, air quality or public health, industry would be concerned about the impact these changes may have to the community, including increased costs to many retail stations post COVID-19.

Whilst electric solutions seem to be the preferred option for many in government, there are known issues surrounding vehicle range anxiety, the number of charging stations and the future demands on the electricity grid as charging infrastructure is installed in homes (those with a drive anyway!). UKIFDA suggests that there is also merit in better exploring the potential use of hydrogen and encouraging higher blend walls with manufacturers and will continue to lobby on these points. Hydrogen fuel is a highly efficient and clean-burning alternative fuel that does not produce any amount of harmful direct emissions upon combustion. Certain UK cities already make use of hydrogen buses for inner-city routes, while the possibility of powering both passenger and goods transport are being explored.


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