Examining the low carbon energy hierarchy of needs

As regular readers will know, we’ve been on a bit of a rollercoaster over recent weeks on the thorny subject of renewable fuels. Zemo’s lifecycle analysis report in January highlighted some significant greenhouse gas emission reductions on its per litre comparisons with diesel and since then, the RHA has called for the Chancellor to introduce an emissions-linked rebate on fuel duty on alternative fuels in his Spring statement.

So we might be forgiven for thinking the road freight sector can stop thinking of itself as one of the “hard to decarbonise” sectors; all it needs is a bit of a financial bung from HMRC and it’s good to go with some combination of biodiesel, biomethane and/or HVO in place of the diesel it’s currently hooked on. And while we are at it, there’s no need to bother with those scary new “zero emission” technologies (sorry ASA, we’re still going to call them that) for the sector to reduce its carbon footprint.

If only it were that simple…

Plenty of industry experts and commentators have been quick to point out the error of our ways. Yes, accelerating renewable fuels uptake could indeed make a greater and swifter contribution to full road freight decarbonisation than relying solely on increasing future sales of new zero-emission vehicles, they say. But, and there’s always a but, for reasons of sustainability and scalability, this can’t be rushed and can only be done alongside electrification, not instead of it.

Let’s try to summarise the key factors in the following few paragraphs.

First, the whole field (pardon the pun) of biofuels is the subject of huge debate and contention about sustainability, fundamentally around feedstocks and land use. It’s a bit of an over-simplification but essentially there are good biofuels – that come from waste-derived feedstocks and have no indirect land use change impacts – and there are bad biofuels – usually derived from crop-based feedstocks.

In the UK, it’s the Renewable Transport Fuel Obligation’s (RTFO’s) job to encourage as much use of the good fuels as possible, and to restrict use of the bad ones. There is only so much “waste” to go around, and principles of sustainability embedded in concepts, such as the waste hierarchy, of course want to further reduce its production. Increasing the production of waste-based fuels significantly beyond current levels is not going to be straightforward and may well not be feasible at all.

Second, if demand for renewable fuels increases too fast, and the industry can’t source enough waste-based feedstocks to meet that demand, then it will inevitably have to turn to the crop-based fuels. While the UK’s RTFO and Zemo’s own Renewable Fuel Assurance Scheme should help to ensure only the good fuels get through to UK hauliers, there have been multiple accusations of fraudulent activity elsewhere in Europe, particularly around feedstocks supplied as used cooking oil (a good fuel) being actually virgin plant oil (a bad one).

This is why the RTFO at present only mandates the supply of biofuels in the UK to account for less than 15% of all fuel use by 2032 (from a base of less than 10% now). To go too far beyond that volume would risk an influx of far less sustainable fuels (often not even truly low carbon) to the UK market. Even the industry’s own trade body, the Renewable Transport Fuels Association (RTFA), only called for the target to be increased to about 20% in its submission to the most recent government consultation on the RTFO.

Third, trucks aren’t the only road vehicles that use diesel. The overall supply volumes dictated by the RTFO are currently shared mostly amongst cars, vans, trucks and various other vehicle types and machinery. Herein lies the key opportunity for HGVs – using the biofuel volumes currently being supplied for diesel cars and vans in HGVs instead, is a win-win because there’s no need to increase overall supply volumes beyond the limits of sustainability.

How do we make that possible? By transitioning the legacy diesel car and van fleet to battery electric vehicles as quickly as possible. This is actually the key message from an earlier Zemo fuels report, published in November 2022 and titled “Decarbonising Heavy Duty Vehicles and Machinery: Proposals for a UK Renewable Diesel Incentive”.

That study found that as diesel cars and vans gradually disappear from the fleet over the next decade or so, by 2035 the existing overall volumes of renewable alternatives to diesel fuel could provide around 50-65% of all the fuel needed by diesel HGVs (and by that time the RTFO target could be increased to match).

But fourth and finally, that Zemo study also highlighted the crucial need and opportunity from working on the twin-track options of both rapid HGV fleet electrification and increasing renewable fuels use in the sector. The UK HGV fleet currently burns through about 8 billion litres of diesel per annum. The most optimistic scenarios for future renewable fuel availability come out at around 3 billion litres.

On this basis, sustainable renewable fuels could achieve something less than 40% fleet decarbonisation and that’s assuming (unrealistically) there’s no demand for such fuels from cars, vans, buses or the off-highway machinery sector. With rapid HGV fleet electrification, the residual demand for diesel alternatives in HGVs could be at or below 3 billion litres by 2040, meaning complete HGV fleet decarbonisation a full decade ahead of the net zero deadline.

Getting more renewable fuels into HGVs only becomes feasible and sustainable, at scale, if operators, manufacturers and policy makers all work together to achieve the 2035 and 2040 phase-out dates and the faster van and HGV fleet managers make the switch to electric ahead of those dates, the greater the contribution renewable fuels can make.

Now this is starting to sound an awful lot like a low carbon fuels strategy for transport. Oh, wait a minute…aren’t we expecting one of those from the Department for Transport.