Dzień dobry i witamy, I am Sebastian Hirsz and I am the Fuels Specialist for the trade association UKPIA.
I am delighted to be here in Warsaw and have the opportunity to speak to you – both of my parents are Polish, so Poland feels like a second home to me.
We’ve heard at this conference that we must reduce GHG emissions, and we have also heard that people want to move around more. This message is consistent with what we at UKPIA hear from policymakers and consumers.
At the more polar end, we also hear:
“You make fossil fuels and therefore are part of the problem.”
I know you have heard this too as I’ve heard many people at this conference already highlight the importance of explaining that we are part of the solution.
But to do that, we must first understand the problem.
For people to move, they require three things:
- Energy transferred;
- Energy stored;
- Energy converted into work.
You’ll hopefully have noticed that these three requirements do not apply exclusively to fossil fuels.
You’ll also hopefully have noticed that our sector is expert in all of these areas. With maybe some support from our automotive friends on energy conversion.
The fact is, these principles are still front and centre of the mobility transition, meaning it is not so much about whether high energy density, easy to move, easy to controllably combust liquid fuels have a future, but where their future is and how we decarbonise their future.
Today, I will talk to you about low carbon liquid fuels and attempt to declutter the landscape by explaining how these fuels could help countries, companies, and consumers meet the challenge of lowering emissions, while simultaneously making use of:
- existing infrastructure,
- significant fuels expertise,
- and new technologies to move the sector forward.
To do this, I’ll touch on some of the story of:
- the context and what consumers may be expecting of us;
- before heading on to look at some innovative fuel technologies that could help reduce carbon emissions to the same cradle-to-grave emissions levels as Electric Vehicles;
- then summarise where these technologies are and next steps.
But first I’d like to start by asking a question about existing fuels.
As you will all know, biofuels play a major role in our fuel as part of efforts to reduce emissions.
And in the UK we are currently debating when and how to introduce E10, which has already been rolled out in other parts of Europe.
So, here is a good time to test how far that biofuel mix has reached consumers.
As we know, climate is not a new issue.
The UK has had a Climate Change Act since 2008 that put into law a requirement on Government to reduce Greenhouse Gas Emissions.
As the graph here from NASA shows, carbon dioxide concentrations have been rising in the atmosphere consistently for many years.
The Paris Agreement also marked a step change in the ambition seen by countries from across the globe.
As well as getting parties to agree that efforts needed to be made, parties were asked to offer their Nationally Determined Contributions (NDCs) - how much they actually would reduce emissions by.
With regards to fuels, many of those NDCs looked at transport emissions – representing a third of emissions in the UK.
No wonder, then, that it is strongly felt that this is a vital area to reduce carbon emissions, with an expectation on governments that change will need to happen.
On to the present, and this year has seen growth in media coverage of the issues of ‘climate’.
Greta Thunberg and Extinction Rebellion are now globally recognised actors – going from obscurity to key voices on the global stage
Likewise, the media – even if not all politicians – will regularly quote that well over 97% of the scientific community accept that human activity has played a role in changes to our climate since the 1700s.
That squarely puts the emphasis on all forms of combustion as something that will need to be remedied if the human impact on carbon emissions is to be a positive one.
Which leads onto a second area of growing discussion of air quality – or more specifically air pollution.
In some ways this is a topic that – in the public’s mind – is more relevant to fuels.
Carbon emissions are long lasting and have built up over decades and longer, but aren’t quite as visible to the public as smog for example.
Of course, the sources of NOX, SOX and Particulate Matters are wide ranging as per the picture on the left of this slide:
- Dust from agriculture is a common one not thought about,
- Volcanic eruptions were in the news 10 years or so ago in Iceland (2010) but not often in Europe.
- And of course, combustion: in the power sector, in home heating and in internal combustion engines – they all have an effect.
However – due to recent events:
- most notably the diesel-gate scandal,
- as well as growing evidence about the damaging effects of a number of air pollutants,
the consumer now very strongly associates combustion of fuels with air quality.
These two issues are having a large impact now and may well have a big impact on the future of fuels.
And as we have discussed extensively at this conference already, growing environmental consciousness regarding plastics is also in the mix. This is something I will touch upon later.
While perceptions are changing then, it is interesting to note that in the UK – as is the case for much of Europe – carbon emissions and air pollutants have been reducing in recent years.
So there is a conflict about rising public awareness even as actual emissions have improved.
- Stringent emissions limits on cars
- Improved efficiency
- The use of nitrogen oxide emission reductions agents – more commonly known as Ad Blue®
- Cleaner fuels being provided (by removing lead or sulphur)
These have all been big ‘wins’ for public health and economies – all delivered by the experts - fuel (and vehicle) manufacturers.
Finally, to set the scene of the future of fuels we can consider the future of mobility.
We are likely to see an increasing number of trends:
- How consumers interact and use the energy produced by the downstream oil sector will likely undergo a fundamental shift.
- And the retail experience enjoyed by individuals, families and businesses that has stayed relatively static since the dawn of industry is set to change. Significantly change.
Electric and plug-in hybrid vehicles are most visible when it comes to the adoption of new vehicle types.
In recent years, thanks to tailpipe emissions standards, the sales of PHEVs and EVs has grown rapidly – 10 times more hybrids and EVs were sold in 2018 than in 2009.
But as of 2018, PHEVs and EVs still represent less than 0.5% of the total UK vehicle parc.
A second change is with Connected and Autonomous Vehicles or CAVs.
These vehicles could deliver more efficient driving patterns – minimising aerodynamic drag and avoiding unnecessary acceleration and braking – and also enable optimised engine operation and vehicle rightsizing.
There is uncertainty around when implementation of CAVs will occur, but it is likely that the earliest adoption will be for road freight transport, in the form of ‘platooning’ – when two or more HGVs maintain a set, close distance to minimise aerodynamic drag and improve efficiency.
A third change is with Mobility as a Service.
The tradition of personal car ownership is predicted to change fundamentally as well, with the increasing number of consumers using ride-sharing transport networks (such as Uber or Lyft).
Whilst this may reduce the number of vehicles on roads, it will simultaneously increase their utilisation.
And finally, we need to think about changing consumer interactions – the forecourt is key but is changing. For example, Downstream retailers are already beginning to offer payment via smartphone at existing forecourts.
As consumer expectations change, the trend of forecourts offering a greater range of products beyond fuel may also likely transform.
The convenience of simultaneously purchasing food is growing in popularity whilst in rural areas a forecourt may be the only shop in a community.
Over recent years we have seen e-commerce retailers strive to improve the efficiency of ‘the last mile’ – offering consumers greater flexibility while clustering delivery routes through initiatives such as Amazon Key and Locker.
And there will be other changes of course.
So, having considered some of the trends that could impact fuels in future, we can be more scientific in attempting to quantify what effects they might have.
In the UK we have looked at some well-known demand scenarios that meet the Paris agreement climate goals I mentioned earlier and were raised by Andrew yesterday:
The IEA sustainable development scenario is the one we have shown here, but we’ve also considered other scenarios that would deliver below 2 degrees, such as the Clockwork and Patchwork scenarios of the Energy Technologies Institute.
Next year we want to think about a net zero scenario.
But, crucially, regardless of which scenario we look at there will be liquid fuel demand.
That demand will mostly come from difficult to decarbonise sectors such as marine, aviation and even HGVs.
And it means that in all scenarios we need to deliver low carbon liquids regardless.
That is why it is important to note that if we deliver more low carbon liquids now then we can also deliver lifecycle emissions savings in existing vehicles – meaning no new build emissions and without the need for additional infrastructure.
As you can see in this slide, according to FuelsEurope’s Vision 2050 assessment, low carbon liquid fuels could deliver the same greenhouse gas emissions savings as a high EV deployment scenario.
In the coming slides are simplified outlines of what we think the sorts of technologies available are, as well as some of the considerations that producers, policymakers and the public may need or want to take into account in their development.
There are plenty of technologies around, however, as I only have a short time here today, we’ve tried to group what we see as 4 overarching types of technologies :
- Bio-based
- Waste–based
- Power-based and
- Fossil-based
All can be made with considerably lower emissions when assessed on a cradle-to-grave basis than what has fuelled economies for the past 100 years or so.
And, crucially, all of these fuels are already being produced.
This is new technology, but it does exist, and I’ll touch on a few examples.
The first group is bio-based fuels.
These may well be the first fuels that people think of when we talk about alternative liquid fuels full stop. And some of them are pretty common as in Europe we have had the Renewable Energy Directive for a number of years.
The RED has been pretty good at getting biofuels into the mix with most EU countries having somewhere between 4 and 10% of their road fuels being composed of a non-fossil fuel.
I should be specific and say that what we are talking about today are ‘advanced biofuels’:
‘Advanced biofuels’, as outlined in UKPIA’s Future Vision report, are those that are much more sustainable and will have a minimal if any impact on other biomaterials that we use for other important things – eating for example(!).
But of course, the Indirect Land Use Change (ILUC) also thinks about clearing of forests and other unsustainable practices that aren’t needed in this case.
Examples of such bio-based low carbon fuels include Total’s Le Mède biorefinery which opened in July of this year – (in fact it opened the same week that we in UKPIA published our own Vision for the downstream sector - I have some copies here).
La Mède’s feedstock will be made up of 60% to 70% crude vegetable oils (rapeseed, sunflower, soybean, palm oil, corn or new plants such as carinata) and 30% to 40% treated waste (animal fats, cooking oil, residues, etc.).
Total is taking an extra step by introducing strengthened control of sustainability and respect for human rights. For example, they have limited how much palm oil can be processed at La Mède even if it is certified as sustainable according to EU standards.
All of that put together means that Total – one of the majors of world oil and gas – will be producing large amounts of sustainable biofuels.
They are not the only ones.
BioMCN, based in the Netherlands, produce 2nd generation biomethanol. That is, methanol suitable for blending into petrol whose feedstock does not negatively impact food crops or land use.
The revised RED (RED II) requires that at least 3.5% of fuel is composed of fuels just like this – advanced biofuels – by 2030.
When considering all the fuel types looked at here, it is worth thinking briefly about some of the pros and cons of these new low carbon fuels.
This is not meant to be comprehensive, however – as the backlash on first generation biofuels based on some unforeseen consequences shows – it is worth thinking about the holistic impacts of fuels that could be deployed worldwide.
For advanced biofuels, some benefits certainly include the existing knowledge of how to handle them, how to blend them and how to account for them.
That all stems from the experience of the RED.
Photosynthesis is of course all about removing atmospheric carbon too which might be attractive for many.
However, those sustainability considerations need to be at the forefront of development, especially at scale.
Anything bio-based will likely also have some biological ‘friends’ out in the world, such as microbial life that might have an appetite for ethanol, which can lead to quality issues not often seen in fossil-based fuels.
Less well-known outside the industry, but of much discussion here, is the use of wastes in producing hydrocarbon liquids.
This might still include biological origin feedstocks such as food waste which many of us will collect separately at home, but perhaps of more interest thinking back to my earlier slides on the narrative around environmental issues, might be the recycling of waste plastics.
By way of example, OMV in Austria are using the ReOil plastics-to-crude process to create a synthetic crude.
Perhaps the pyrolysis of other waste products like tyres might be another route to delivery, and naturally that will apply to other rubbers and plastic-based materials.
Then there are the companies looking at recycling of municipal and household wastes that may well stem from a wide variety of waste sources.
In the UK it’s been announced that Velocys in Immingham are investing in such a waste to jet facility.
In terms of the pros and cons in waste to liquids:
The removal of wastes from landfill or incineration is certainly a positive for many, and finding alternatives and replacements for crude that result in less drilling will also be seen by some as positive.
In that uncertainties column we might wonder how much plastic waste will be left in the world if some of the nascent changes in recent years – banning plastic straws, moving to canned water rather than bottled – begin rolling out across the whole world.
And producers will also need to think about the wastes they are actually using and what the CO2 emissions would otherwise have been – aka, its End of Life fate.
The chemists and engineers in the room will also know that reforming plastics and others of these wastes can be hugely energy intensive – so mapping energy use right across the lifecycle is key.
Not to mention the difficulties of making clean fuels when the waste feedstocks chemical content might not always be obvious.
While cleanliness of wastes might be something for developers to grapple with, our next technology group – Power to Liquids – has a major advantage in that sense.
Power to liquids use renewable energy such as solar to synthesise hydrocarbons.
These fuels are ‘clean’, as the components of hydrocarbons will be formed together in a pretty ‘pure’ environment – or at least without too many ‘unknowns’ in the mix.
There are a few different chemical feeds that might form the base hydrocarbon, but all are pretty well known: in natural gas and hydrogen.
Again, there are operating examples here in Europe with Audi running an e-gas plant in Werlte as well as the Sunfire plant in Germany.
At Audi, they take surplus power and use methanation of CO2 from biomass to produce methane, which is fed back into the gas grid, which then can be stored as a ‘normal’ gas and considerably longer than is possible with existing electricity storage.
As the process on the slide shows, this process can also be used to produce low carbon liquid fuels, but might also be a means to reduce concerns about the intermittency of variable renewable energy too.
While I’ve already touched on some of the positives of power to liquids, it’s worth also mentioning that the availability of its feedstocks is not as limited as some we’ve discussed.
And there are certainly no land use issues as with bio-based solutions.
That said, electrolyser availability is unclear and there needs to be an assessment of the inputs and outputs in order to see what the trade-offs are along those lines.
It is vital that the power used to synthesise these hydrocarbons is from a zero-carbon source if we are to realise the maximum carbon reduction benefit.
So ideally it would not come from today’s grid, but we will also need to consider what this syngas is replacing and whether it is worthwhile – there may be better uses for the hydrogen that is being used in this process for example.
And finally, in the available technology types, we can look back to traditional fuels, or conventional fuels – those that are made from fossil sources.
They too can be made lower carbon on their lifecycle:
- The use of renewable sources of hydrogen can replace SMR hydrogen.
- Renewable power can also replace some of the energy requirement currently met by refinery fuel gases or liquid fuels in older refineries.
- And ultimately, the use of Carbon Capture could turn the dial on reducing refinery emissions and therefore reducing the lifecycle emissions in making conventional fuels.
And once we deliver those changes – the use of different feedstocks, some of the syn-crudes mentioned above maybe – we could get to low emissions even on fossil fuels.
A good example of an existing refinery that is already doing some of this is the Preem Lysekil refinery in Sweden.
Their CO2 emissions are already around 20% lower than the average across Europe – itself one of the better regions for carbon intensity.
But they are trying to go further than that and have done studies that indicate Carbon Capture on their hydrogen plant could further reduce emissions by a 1/3.
The feasibility study for this is ongoing.
The pros and cons of these fuels are that many of the processes are well known to refinery engineers.
The inputs – crude oils – are well known and understood too of course.
Yet a refinery will only be able to install Carbon Capture at scale if, as we have already discussed at this conference, they have a storage facility close by.
And the fact is that in most countries, there isn’t really the pay-off for that level of investment without any significant payoff beyond efficiency gains.
So, those are the new fuels that we think could be a major player in the future if given the chance.
The encouraging sign – as I’ve already highlighted – is that there are plenty of examples already operating across Europe.
But at present the scale is not there.
As the slide shows, there is a long way to go on all of these low-carbon fuel types and while there is some use of them, we don’t really think that the consumer has the tools they need to know the difference in what they are buying.
And if the consumer isn’t aware, then there simply isn’t likely to be the incentive to make these fuels at scale.
We think that the conflation of Electric vehicles meaning zero emission is not a helpful one as it doesn’t tell the whole story.
Indeed, thinking about the combination of:
- vehicle manufacture and disposal,
- fuel manufacture
- as well as the tailpipe emissions
is where society is going to have to start thinking in order to meet 2050 goals.
Refining, fuel, and powertrain technologies are tools at our disposal, today, but we need to apply them in the most fit for purpose ways for net GHG reductions.
I’ll finish with another Slido question for you all:
‘The decarbonisation of mobility may eventually cost the consumer money; do you think lifecycle-based (rather than tailpipe) regulation is readily understandable?’
Thank you very much for your attention this morning. I’d be happy to take a few questions if we have time.