Stepping stones towards a low carbon future
Trying to predict what will fuel the car of the future is a bit like the VHS/Betamax dilemma of the 80s, admits Kevin McPartlan of Fuels for Ireland.
Which do you go for – and which technology will stand the test of time? It’s a conundrum that will be facing any forecourt owner who is keeping an eye on the Net Zero pledges that are currently being made at government level and is trying to future proof their business.
For Kevin, it’s a matter of watching what’s happening in countries that are five to 10 years further down the net zero road – and keeping abreast of customer demand.
“I think it’s very possible that the liquid fuels that will be used for some transport and home heating in 2050 are not on the market yet – it’s moving that quickly,” he says.
“If you look at Norway it has service stations that have a large number of ultra fast EV chargers, and they will also have hydrogen pumps. They also have 100% biodiesel pumps and may also have CNG pumps- and the smaller number of diesel and petroleum pumps they have will be dispensing products with a far higher proportion of biofuels.”
State of flux
There’s no doubt that the industry is in a state of flux at the moment and will be for some time to come as businesses try to figure out where they are headed.
But the industry is ready to face the challenge, says Kevin, who points out that it was an important signal of intent when the Irish Petroleum Industry Association made the decision to change its name to Fuels for Ireland.
“That came after a reflective process for our members and a recognition of the fact that we won’t be in business in 2050 in the way that we are in business now,” he says.
“That kind of change of identity for the association was much more than just a rebranding exercise. It was born out of a real period of flux and was based on a comprehensive document that we published last year, Powering Today and Tomorrow, which set out our commitment to carbon neutrality by 2050 and began to discuss how we will achieve that and how we will help Ireland to achieve that.”
The association is the representative body of the companies that are engaged in the importation, distribution and marketing of petroleum products and low and no carbon liquid fuels, with members fuelling more than 50% of energy consumed in the Republic of Ireland.
And members are fully aware of where the industry needs to go and the magnitude of the challenge that faces it, says Kevin.
“The industry is in a state of flux, but the question is how long that state of flux is going to continue and the impacts that will be felt during it – because we are in a situation where for our industry it’s inevitable that we must radically change what we sell and how we sell it,” he says.
“That’s because we share the government’s commitment to achieve carbon neutrality by 2050 and that isn’t going to be achieved if we base our business on selling large quantities of gasoline, diesel and kerosene.”
Kevin admits there are still people in the industry who have yet to acknowledge how significant the changes that need to be made in the industry must be, but members have been unanimous in their support for the approach laid out in Powering Today and Tomorrow.
“The danger for any industry association or any group is that you descend to the lowest common denominator and you only do the thing that everybody is 100% happy with,” he says.
“But I am very fortunate that the Fuels for Ireland members recognised that everybody needs to be challenged and we need to be ambitious and determined to achieve our ambitions.
“The next challenge is to make sure that all the other people in the industry are also on board. If you think about the different sectors which make up our industry, we have some forecourts which are owned by our members, some which are owned by franchises, some have a large number of forecourts that they operate, some have one family business or are in the distribution sector for home heating oil. Some are massive: some are very small.
“So it’s about how do we get all of them on board? How do we get them working towards a solid future for the fuel business, during and after the transition to carbon neutrality?”
Kevin says it will be about cascading expertise down through the industry, and Fuels for Ireland members are leading the way.
“One major publication earlier in the year shows that EV charging is available on a greater proportion of Irish forecourts than any other EU member state, which shows the commitment of our sector to novel energy solutions for transport. So we’re ahead of the curve,” he says.
But there are a few concerns, he adds. The government needs to recognise that there needs to be stepping stones towards a zero carbon future.
“We believe that policy has to be technology-neutral. What I mean by that is that the government shouldn’t be saying we are going to have X number of electric vehicles – they should be talking about zero emissions vehicles,” he said.
“If you only talk about electric vehicles, you send a message to the market that there is no point in investing in other zero emissions technologies. We want to talk about advanced synthetic fuels and biofuels.
“We also have to recognise that there is not a binary situation – it’s not either stay as we are or immediately become zero emission. There needs to be stepping stones.”
Earlier this year, Bus Eireann announced that it would be replacing half its fleet with electric and hydrogen vehicles over the next nine years as part of a plan to cut carbon emissions.
While the company is targeting a 30% increase in passenger numbers over the same period, it insists it can handle growth while still reducing emissions.
However, Kevin says the company could start to cut its carbon emissions right away by switching to one of the new lower carbon fuels.
“Already on the market, there is a 20% biodiesel blend available, B20 diesel, which reduces emissions from diesel engines by 15% with no capital expenditure,” he says.
“If you think about the state fleets – for example, Bus Eireann and all of the diesel it uses – they have said we’ll have electric buses on the road. But we see how old some of the buses on the road are, so you would have to wait for the whole fleet to be replaced.
“Why not put them on biodiesel today and reduce the emissions by 15%? That to me is an example of what I describe as the impossible perfect being the enemy of the possible good.”
Some policymakers are only interested in electrifying everything instead of realising that the process could take 20 years and exploring other options in the meantime, he said.
“Let’s make those changes today and that in no way inhibits our capacity to make the changes that they are planning in the future, “ Mr McPartlan said.
You wouldn’t expect the petroleum industry to be thrilled about carbon tax, but, says Kevin, at least it applies to all carbon emitters.
But there are other challenges in the sector that members find extremely unfair – such as the controversial NORA levy.
Under this levy, which dates back to 2007, the Government is planning to divert income from a 2 cent-a-litre levy charged on home heating oil and petrol and diesel sold at the pumps for its Climate Action Fund.
And Fuels for Ireland are pushing back on this levy, saying it is unfair to rural dwellers.
“We have made a state aid complaint to the European Commission about the levying of the NORA levy and all of the income being used solely to fund the Climate Action Fund,” Kevin says.
“The reason we have such a problem with it is that for me, living close to the centre of Dublin city on the gas grid, a couple of 100 metres from the Luas line with bus lines and walking access to all the facilities I need… I can heat my home with gas, I don’t need to use a private car very much andI can pay nothing towards the Climate Action Fund which is resourced through the NORA levy which is applied to oil producers.
“But I compare that to my mother in rural north Cork who has no alternative but oil for home heating, no alternative but to use a private car to get around because there is no significant public transport provision and she’s not in a position to cycle.
“Rural Ireland is being whacked with this extra stealth tax which is being used through the Climate Action Fund to provide resources for projects which disproportionately benefit the urban dwellers. In our view it’s unfair and illegal.”
Kevin believes the tax will do little to reduce demand and says Eamonn Ryan is relentlessly loading more and more cost onto the sector which in turn has to be passed onto the customers: “It’s a cash grab.”
He’s also keen to see the government considering other zero emission fuels as well as EV charging, warning that more EV chargers will be difficult to deliver as the electricity network is so stretched.
“Commercially, it’s extremely challenging to make an argument for more EV charging, but people are doing it despite these challenges. But the electricity networks are just not up to the job at the moment,” he says.
“Different people in the industry will have different levels of confidence around hydrogen and there is debate around what particular biofuels offer the greatest chance of success. We’re in flux now and it’s all being worked out as we speak.
“It’s like VHS and Betamax – not everything will succeed. There will be particular technologies that will come and go over the next few years.
“But the people who operate forecourts are astute business people – you don’t last long if you’re not – and they will respond to consumer demand, and right now consumer demand is for petrol and diesel and increasing demand for EV. Consumer demand is changing and forecourt operators will meet that demand.
“Each forecourt is a hub for the local community and operators need to be talking to customers and local representatives about the role they can and will play during this transition to net zero and after that. And if they need any support in getting those messages across we are here for them,” he promises.
Read full article in Ireland’s Forecourt & Convenience Retailer magazine.