The Global Challenge - Fuel Industry UK

UKPIA, now Fuels Industry UK, produced a paper called "The Global Challenge" - looking at the international aspect of the energy transition. Read it here.

Introduction

As the 2020 Annual Report of the UNFCCC states "We are in a race against the clock to reach Net Zero emissions and build resilience to climate change impacts."

The downstream industry, as a traditionally energy- and carbon- intensive industry that manufactures essential final products, is a sector that is changing, and changing rapidly.

There are signs of significant decarbonisation to come, with investments in a just transition using innovation technologies like hydrogen, renewable fuels, and carbon capture technology that can transform its processes and products.

The UK is already a global leader in decarbonising: reducing carbon emissions by 29% in the last decade while managing to grow the economy by 18%. More is possible, both in the UK and globally, and Fuels Industry UK believes that decarbonisation must start with an evolved regulatory framework to allow for innovation in a systems-based approach to decarbonisation at scale.

If this can be delivered, the lessons learnt can be exported around the world.

Industrial Decarbonisation

Foundation industries continue to be significant producers of CO2 as a by-product in the UK and abroad. Only with large investments in carbon abatement technologies will this challenge be overcome, as the products the downstream sector makes, heating oil, bitumen, plastics and even petroleum coke for electric vehicle batteries will be needed during the transition and beyond.

The downstream sector in the UK is involved in a range of low and zero carbon industrial cluster projects, from HyNet Northwest (pictured) to the South Wales Industrial Cluster and the Northern Endurance Partnership – all which will use different forms of hydrogen and carbon capture technology to decarbonise heavy industries.

Sustainable Aviation Fuels

Jet fuels can be made with lower lifecycle GHG emissions with Sustainable Aviation Fuels (SAFs) already being deployed in some markets and their use is expected to rapidly grow as the sector seeks to further decarbonise. SAFs are likely to the be only option for decarbonising flights longer than 2,000 nautical miles, and as such, investment in R&D and considerations of supply chain matters should begin now.

Two SAF production plants are planned, with the UK acting global leader in this space. The Altalto waste-to-fuels plant – a joint venture between British Airways and Velocys – is likely to be built in Immingham, North Lincolnshire, and Fulcrum BioEnergy also have announced new plant planned near the Stanlow refinery in the Northwest, which is expected to open in late 2025.

Transport Decarbonisation

Development of new and deployment of existing technologies can replace fossil fuel use in transport over time, but given how transport is used, each technology will have challenges to overcome, with some uses being better suited for certain technologies than others.

As well as a change of the energies powering mobility, there will need to be a significant improvement in how those energies are used. The world can continue to build on energy efficiency improvements in engines, motors, fuel cells and batteries, and support those efficiencies with behavioural and routing changes too. Such changes that improve the efficient use of energy in transport and, therefore, lower emissions include Mobility as a Service (MaaS), use of blockchain, Micro mobility, Platooning, Connected Autonomous Vehicles (CAV), and Hyper-proximity or planned cities.

A Just Transition

The Just Transition is crucial to meeting net zero – both in making the best use of today’s workforce, innovation and skills to develop clean industries across the globe and ensuring nobody is left behind by the energy transition.

Science, technology, engineering, and mathematics (STEM) are crucial to the modern economy and will be especially critical in the energy transition. Not only should emphasis be placed on school-aged students to consider a career in STEM, but the experienced fossil fuel energy workforce should be tapped for their skills to look to transition into new technologies, such as hydrogen which the downstream workforce has worked safely with for generations.

The UK can also be a global leader, looking for opportunities to export knowledge developed in the energy transition to the developing world, who are disproportionately affected by the impacts of climate change. This can be done jointly by government and industries, using international development programmes, investment in clean energy projects and support in financing local initiatives.

Read the full paper here.

Fixing the Carbon Leak

The Commission for Carbon Competitiveness

Fuels Industry UK welcomes the Commission’s recommendations on ambitious new carbon policies to create a level playing field with importers from countries with less stringent environmental standards. Without these changes, investment in refineries vital to achieve the UK’s net zero targets will go overseas.

A well-designed Carbon Border Adjustment Mechanism (CBAM) as a vital step to ensure importers face equivalent costs for carbon emissions as UK manufacturers.

Government also needs to introduce a package of financial support for decarbonisation projects that matches those offered to projects in the US, EU and other competitor countries. If not, we will see more imports of higher carbon fuels, which will increase overall global emissions. Failure to act would also lead to the loss of UK jobs and risk security of supply.

See the full report here: Fixing the Carbon Leak