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Duncan Clark, Renovare Fuels: The Role of Renewables in Meeting GHG Targets

Nick Ferengi's picture
Founder and Editor CAGR Value

Nick is the editor of CAGRValue, a finance blog focused on growth investing, At CAGRValue, we explore the most exciting markets, industries and economies in terms of growth and try to pick out...

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  • Oct 15, 2020
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In January 2021, UK fuel suppliers will be compelled to increase the percentage of renewable fuels included in their total sales to adhere to recent Renewable Transport Fuel Obligation (RTFO) updates.

The UK Government introduced the measure as part of ongoing efforts to reduce Greenhouse Gas (GHG) emissions. The RTFO scheme mandates the inclusion of renewables for non-road mobile machinery, road vehicles, and aircraft.

UK transport produces more pollution than any other industrial sector, accounting for 28% of UK pollution in 2019. Implemented to drive sustainability across the transport sector by reducing GHG emissions, the RTFO applies to all transport fuel suppliers that sell 450,000 liters or more of diesel, gas oil, or petrol. Under the scheme, fuel suppliers who meet the criteria must include a percentage of renewable fuels within their total sales or pay a per-liter percentage to ‘buy out’ of the RTFO scheme.

Year on year, the RTFO is reviewed, with the percentage of renewables fuel companies must include in their sales increased as part of efforts to reduce carbon emissions throughout the sector. The transition to renewables is integral to the UK meeting its target of net-zero GHG emissions by the year 2050. In 2021, fuel companies will be required to incorporate 10.68% of development or renewable fuels within total supply levels to meet targets imposed by the RTFO.

Introduced in the mid-1980s, standard renewable fuels such as biodiesel and bioethanol are typically generated from ‘feedstocks’. Feedstocks are a type of biomass that is either grown specifically to generate fuel or created as a byproduct of agriculture or food production.

Burning biodiesel produces similar levels of CO2 emissions to those created by burning fossil fuels. However, as it grows, the feedstock absorbs CO2 from the atmosphere, offsetting CO2 emissions created when biodiesel is burned.

The RTFO included advanced development fuels in its criteria in 2019, inviting fuel suppliers to incorporate next-generation biofuels in their products alongside standard renewables.

Development fuels are generated from the residual feedstock or sustainable waste, with the exception of segregated fats and oils and renewable fuels of non-biological origin (RFNBOs). For a development fuel to meet the criteria of the RTFO scheme, the GHG saving must be at least 60% more than that offset by fossil fuels. In addition, renewable diesel must be blendable with conventional diesel at a rate of at least 25%, as well as meeting the EN590 fuel specification.

In recognition of their superior carbon offsetting credentials, fuels that meet the RTFO standards receive double the amount of Renewable Transport Fuel Certificates (RTFCs) per kilogram or liter sold in comparison with standard renewables.

As Matthew Stone – Renovare Fuels’ Chairman – points out, the development and advancement of biofuels could overcome many first-generation biofuel limitations. Presided over by a management team that includes Business Development Manager Duncan Clark, Renovare Fuels’ revolutionary new biofuel is chemically and physically similar to fossil fuels in terms of quality of the final product and its performance, despite the fact that it creates just three grams of CO2 per megajoule of biomass throughout its production, equating to just 3% of that produced by fossil fuels.

There are limitations to the impact of standard biofuels in meeting GHG reduction targets, primarily due to the type of feedstock used and inferior fuel quality. In contrast, since development fuels are formulated to eliminate emissions throughout the production process, radically reducing emissions generated when used as an end fuel, experts predict that development fuels could unlock the true potential of biofuels, serving as a significant boost to the UK’s ambitious GHG reduction targets.

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