BP Snaps Up 30 Per Cent Stake In Green Biofuels Ltd
The title of this post, is the same as that of this article on Business Green.
So why would BP take a stake in Green Biofuels?
This paragraph in the Wikipedia entry for BP, outlines the company’s future philosophy.
From 1988 to 2015, BP was responsible for 1.53% of global industrial greenhouse gas emissions. BP has set a goal to cut its greenhouse gas emissions to net-zero by 2050. BP plans to increase its investments in renewables 10 times and reduce oil production by 40% from current levels by 2030.
BP is doing things like developing wind and solar farms to achieve these aims.
BP also seems to be investing in both blue and green hydrogen.
But possibly, the two hardest products to decarbonise are diesel for heavy transport and aviation fuel.
Looking at Green Biofuels web site, the Wikipedia entry for Hydrotreated Vegetable Oil (HVO) and other sources, Green Biofuels product; GD+ seems to make a good fist of reducing carbon emissions and pollution, if it replaces diesel.
DB Cargo UK and HVO
DB Cargo UK have a fleet of nearly two hundred large diesel locomotives in the UK.
DB Cargo UK have been experimenting with HVO, as I wrote about in Powered By HVO.
The company has issued a press release on these trials of HVO, from which this is an extract.
DB Cargo UK’s Head of Asset Management and Maintenance Steve Wilkinson said the company was collaborating with one of the UK’s leading suppliers of HVO fuel which already worked with high-profile brands like Caterpillar, John Deere, Volvo and Mercedes-Benz.
“We are very pleased with the initial performance of the HVO fuel which we could use instead of or alongside traditional red diesel. The fact it is compatible with our existing diesel means investment in new storage and fuelling facilities would also be kept to a minimum,” he added.
“On top of that, it performs well at low temperatures, has a longer lifespan and is biodegradable,” he added.
DB Cargo UK currently operates 228 diesel and electric locomotives that transport in the region of 37 million tonnes of freight each year across the UK and into Europe.
It uses approximately 45 million litres of red diesel a year.
Was one of the UK’s leading suppliers of HVO fuel, a company called Green Biofuels?
Note that DB Cargo UK’s spokesman makes these points about the fuel.
- They are very pleased with initial performance.
- It is a straight swap for red diesel and it appears locomotives can run on either. He doesn’t say it but can it run on one fuel contaminated with the other? I suspect it’s a possibility.
- Current storage can be used for HVO.
- I get the impression that swapping from red diesel to HVO wouldn’t be the most challenging of operations.
- It performs well at low temperatures. One train-driver told me, that one of the worse parts of the job, is picking up a train from a depot high in the Pennines on a cold day in the winter. That must apply to locomotives.
- It has a longer lifespan.
- It is biodegradable. I haven’t walked through an engine shed, since I used to bunk them as a child to get engine numbers, but they were filthy places, with oil and diesel all over the floor.
That sounds to me, like DB Cargo UK have decided that HVO is an excellent fuel and for them to swap to HVO, would be no more difficult than to swap between red diesel from BP to red diesel from Shell.
This is an extract from the Business Green article.
Founded in 2013, Green Biofuels is the UK’s largest provider of HVO, having delivered over 55 million litres of HVO products to the UK market over the past two years.
If DB Cargo UK wanted to swap from red diesel to HVO, they would need nearly all of Green Biofuels current production.
So have Green Biofuels run to BP and said can you help us out?
Red Diesel Replacement
This document on the Government web site is entitled Reform Of Red Diesel And Other Rebated Fuels Entitlement.
There is a section, which is entitled Policy Objective, where this is said.
In June 2019, the UK became the first major economy in the world to pass laws guaranteeing an end to its contribution to global warming by 2050. The target will require the UK to bring all greenhouse gas emissions to net zero by 2050, compared with the previous target of at least an 80% reduction from 1990 levels. The government also launched in 2019 an ambitious new strategy to clean up the air and save lives, given air pollution is one of the biggest continuing threats to public health in the UK.
Red diesel is diesel used mainly for off-road purposes, such as to power bulldozers and cranes used in the construction industry, or to power drills for oil extraction. It accounts for around 15% of all the diesel used in the UK and is responsible for the production of nearly 14 million tonnes of carbon dioxide a year. Red diesel used in the construction and infrastructure building sectors was also estimated to have caused 7% of nitrogen oxide emissions and 8% of PM10 emissions (a type of particulate matter) in London in 2018.
At Budget 2020, the government therefore announced that it would remove the entitlement to use red diesel and rebated biodiesel from most sectors from April 2022 to help meet its climate change and air quality targets. The tax changes will ensure that most users of red diesel use fuel taxed at the standard rate for diesel from April 2022, like motorists, which more fairly reflects the harmful impact of the emissions they produce. Removing most red diesel entitlements will also help to ensure that the tax system incentivises users of polluting fuels like diesel to improve the energy efficiency of their vehicles and machinery, invest in cleaner alternatives, or just use less fuel.
It doesn’t say, but I have found references to the fact that HVO pays the same tax rate as diesel, despite the evidence, that it appears to be more environmentally friendly.
If I was the Chancellor, I would certainly adjust the tax system, so that red diesel users who changed to HVO and other fuels, paid tax in proportion to the emissions and pollution they caused.
So have BP decided that Green Biofuels is the best interim solution to reduce emissions from diesel fuel and taking a stake, is the best way to get the required access to the product?
Could BP be thinking about replacing red diesel with a better green diesel?
- Red diesel and GD+ could be acceptable to all diesel vehicles and equipment. So farmers for rxample, could run tractors and combines on the same fuel as their truck or Range Rover.
- Businesses, like farmers, who often have tanks for both red diesel and normal diesel, would only need one tank.
- Businesses with a green profile, would surely like it for their vehicles.
- Organic farmers would like it for their tractors.
- The availability of a green diesel would enable red diesel users to change to hydrogen or battery operation, at the optimal time.
I can see Prince Charles handing out green stars all round.
The Anonymous Widower 