UK government launches low-carbon fuel strategy consultation

Investing now in low-carbon fuels to reduce transport emissions will help to decarbonize existing fleets, says UKPIA’s director

The UK government has launched a call for ideas for the development of low-carbon fuel (LCF) use predominantly in transport while the country works hard to meet ambitious climate targets.

The aim of the consultation - launched Monday by the Department for Transport (DFT) and open until April 3 - is to build a common understanding of the opportunities and challenges ahead for LCFs and identify any regulatory gaps.

“This is to ensure we harness the opportunities of the expected transition while avoiding pitfalls such as stranded assets or technology lock-in,” the DFT said in the consultation paper. “Where possible, the strategy will also address specific uncertainties and risks.”

LCFs are expected to undergo “significant changes” in the transition from being used primarily in road fuels to feeding increasing demand from transport modes with more limited alternatives to liquid and gaseous fuels such as the aviation and maritime sectors, the DFT said in the paper.

Currently, LCFs are mainly blended into standard petrol and diesel sold at forecourts across the UK, which are incentivized through the Renewable Transport Fuel Obligation (RTFO).

But in the government’s move towards its target to ban the sale of new combustion engines in cars and vans by 2040 as per the advice of the Climate Change Committee (CCC), demand for petrol and diesel is set to fall.

“Demand may remain in place slightly longer for heavier vehicles, where there could also be opportunities to use a higher proportion of liquid and gaseous LCFs until zero-emission vehicles become available, maximizing savings from those existing vehicles,” the DFT said Monday.

In the longer term, reduced demand for renewable road fuels is likely to increase the availability of feedstocks for producing sustainable aviation fuel (SAF), the DFT said.

“This requires bringing forward conversion technologies that are commercially viable and scalable, and for substantial investments in plants and infrastructure to be made – both an opportunity and a challenge,” the DFT said, noting the presence of interdependencies, including the scale of the hydrogen economy.

The DFT will hold a series of workshops on specific topics for the strategy in the first half of the year, the content of which will be determined by the feedback received during the consultation.

It will also commission further research, including a project on feedstock availability early in 2022, while the final LCF strategy document is expected late this year.

The consultation has already been welcomed by the UK Petroleum Association (UKPIA), which came out in support of “the need for a comprehensive strategy on low carbon fuels that can give a clear, positive signal for investment in these fuels.”

“DFT, the Climate Change Committee and others have rightly acknowledged the necessity for the aviation sector to adopt low carbon fuels in the form of sustainable aviation fuels (SAFs) to decarbonize,” UKPIA director of downstream policy Andrew Roberts said.

“However, we believe that investing now in low carbon fuels is a no-regret option for policymakers looking to reduce emissions for all transport modes given their proven ability to decarbonize existing fleets,” Roberts added.

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