Fuel cards could help develop alternative fuelled vehicles

Discounted fuel prices, vital management information, the ability to pay for extra services such as tolls and overnight accommodation – fuel cards already play an important part in many operators’ businesses. But there are also now hopes that the cards could be instrumental in expanding the use of alternative fuels as the pressure to decarbonise mounts, writes Simon Jack.

Some believe that as the infrastructure grows for supplying liquefied natural gas (LNG), compressed natural gas (CNG), biofuels and electric charging, so too will the use of cards. In turn, as the use of cards grows so could the appeal of using alternative fuels.

However, it is early days, and chief operating officer of fuel card supplier Fleetcor Paul Holland says vehicle operators need a solid commercial reason to migrate. “There will certainly be a tipping point at some stage, but in the truck market in the medium term diesel will be the predominant fuel,” he says.

“The key thing is that fuel cards will play an important role in any kind of alternative fuel solution. Drivers will need a method to refuel and companies will need a way to manage information.”

Trump card

Fleetcor supplies the Keyfuels card for commercial vehicle operators, the Allstar card for a wider range of companies and drivers and, under the Fuelcard Company brand, it also acts as reseller for a number of cards including those from Shell, Esso, Texaco, the RHA and FTA. The company is already in discussions with LNG and CNG suppliers about their plans for developing their networks in the future. “There is no technical or commercial reason why fuel cards cannot be used to purchase alternative fuels,” Holland says.

As the market changes, some operators may end up running fleets with vehicles powered in different ways. In this situation, fuel cards could help with efficiency. “It is clear that the world is becoming a more complicated place. Fuel cards could help bring things together in a more standardised way,” he believes.

However, some are more sceptical about using cards for buying alternative fuels at present. Radius Payment Solutions UK regional director Jonathan Haseler says there is little demand to use them for this purpose.

Challenges

The company supplies own-brand cards including those under the UK Fuels brand, and acts as a reseller of company cards including Shell, BP and Esso. These can be used to purchase diesel, petrol, liquefied petroleum gas (LPG), gas oil and exhaust additives such as AdBlue.

“Currently, biofuels don’t offer the same mileage as diesel, LNG tends to be expensive, and there is not an adequate network of CNG fuelling stations or even availability of vehicles. Similarly, the range of electric vehicles and speed of charging has yet to be perfected to inspire widespread adoption for commercial use,” Haseler says.

RHA technical director Paul Allera believes there are particular challenges for smaller hauliers moving to alternative fuels. Many would not want to lose the discounts they receive on fuel prices by using cards to buy diesel. They also might find it difficult to adjust their fleet.

“The take-up will be greater among larger firms that can keep fuel on-site. Smaller operators may not be able to afford the capital investment. Even if they are converting an existing truck for dual fuel they are not going to spend £20,000 on a vehicle whose value may have already been written down,” he says.

There is some progress being made towards adding alternative fuels to cards used in Europe. The AS24 card, owned by the Total group, can be used to buy CNG in France and LNG in Italy as well as more traditional fuels and additives like diesel and AdBlue.

A spokeswoman for the company says: “We are working to extend this offer to other European markets, including the UK.”

Shell says it aims to provide one card and one invoice for customers no matter what fuel they use. Electric vehicles can use its 75,000 public charge points across Europe using its subsidiary NewMotion’s roaming network which includes some Shell forecourts.

Alternative-fuel duty

Gas suppliers could play a crucial part in enabling fuel cards to be used. Gasrec chief executive officer Rob Wood believes that cards will inevitably be introduced in the future. There are discussions with other parties, but so far nothing has transpired.

“We haven’t seen it take shape yet, but it will happen in the future that we accept third-party cards,” he predicts.

Wood believes that the use of gas – and the likelihood of fuel cards being used to purchase it – will be stimulated by OEMs like Volvo, IVECO and Scania developing more gas models and by the government’s decision to set alternative-fuel duty at half of that for diesel until 2032.

“As soon as customers say fuel cards will make their lives easier and that not using one is reducing their appetite for gas, it will happen,” he adds.

At present most LNG and CNG users operate using a key fob that records how much fuel is being put into a vehicle. For health and safety reasons these are only given to drivers after training.

Some customers primarily use gas for trunking movements where the vehicles return to base each night and fill up from refuelling facilities at their distribution centres – the company recently built a refuelling station for Ocado at its Hatfield distribution centre.

However, there are some open access sites, open to all Gasrec customers, including one at DIRFT distribution park in Daventry and one in Bridgwater. In addition, some dedicated sites will already provide gas for other hauliers.

BOC uses key fobs in a similar way, as business manager for clean fuels Geraint Bruton explains. “The majority of our customers have refuelling facilities on their own sites. We therefore charge for the LNG as it is delivered to them in bulk,” he says.

Tipping point

However, he believes that fuel cards will be used in future, as does Calor sales manager for transportation Mark Gilks. In France, Calor’s sister company Prima Gas already allows customers to buy fuel using an Avia fuel card.

“Use of fuel cards could be a good way of moving the industry forward. The tipping point will be an increase in the number of vehicles looking to refuel en route, but that could be a couple of years away,” Gilks says.

In the UK, Calor customers, like others, at present use key fobs to draw off fuel at their own facilities or at one of six public sites.

Calor, which provides dual-fuel retrofits for existing fleets, LNG and bioLPG made from feedstocks, is looking to increase the number of public sites and, already, some dedicated sites can be used by other customers if the operator agrees.

“It depends on the location. If there are a number of hauliers nearby we will certainly have a conversation about a third-party agreement,” Gilks explains.

There are challenges to be overcome before alternative fuels grow enough to justify fuel cards but it is something that most believe the transport industry is moving towards.