CNG Fuels has landed £80m in funding from Foresight Group to build 14 new refuelling stations for gas powered HGVs as part of wider plans to roll out a national network.
The joint venture deal will see the initial £80m of funding used to develop around 14 public access stations on major routes over the next two years.
The move will quadruple the company’s capacity and enable it to refuel 8,000 vehicles a day.
CNG Fuels is predicting that the demand for CNG fuelled trucks will double in 2021. The company opened its fifth public access station near Birmingham last week.
The company supplies compressed natural gas, known as Bio-CNG. Research shows that the fuel is 35%-40% cheaper than diesel and cuts vehicle greenhouse gas emissions by up to 85%.
CNG Fuels is already able to supply 2,000 vehicles a day from its five public access refuelling stations. It plans to open a sixth station at Knowsley, near Liverpool, in January.
Its newest station, close to the M6 at Erdington, east of Birmingham, can refuel up to 500 HGVs a day and will also use gas trailers to supply the John Lewis Partnership’s depot at Magna Park, near Milton Keynes.
The company has also secured a pipeline of development sites on major UK routes. Stations due to open next year will be located near Glasgow, Milton Keynes, Avonmouth and Wakefield.
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Baden Gowrie-Smith, chief financial officer at CNG Fuels, said: “We expect the number of CNG trucks on UK roads to double in 2021 as fleet operators take action to support the government’s Net Zero targets.
“This exciting partnership with Foresight demonstrates their enthusiasm for biomethane as a solution to decarbonise heavy transport at scale, and the near-term development of more stations will enable us to serve our customers even better by delivering carbon neutral Bio-CNG nationwide.
“We hope this will give even more brands the confidence to switch from diesel.”
Richard Morse, chairman of JLEN, Foresight Group’s listed environmental infrastructure fund, said: “We are pleased to make this investment into biomethane refuelling infrastructure, helping to decarbonise one of the most emission-intensive parts of the transport sector.
“We consider that the two pillars of better environmental performance and lower cost operations for customers combine to support our investment case and we look forward to supporting the growth of a national biomethane refuelling network.”
Matt Hammond, partner at Foresight Group, said: “Foresight is delighted to be supporting and working with CNG Fuels. It is very pleasing to see attractive investment opportunities right across the sustainable infrastructure sector and that our investments have real impact in the decarbonisation of the transport sector.
Bio-CNG is currently sourced from food waste but CNG Fuels is securing supplies of gas derived from manure to create a fuel that will be carbon neutral overall.
It expects to introduce carbon neutral biomethane across all sites in 2021 at the same price.
