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UK-based biofuels storage provider Stanlow Terminals on Monday said it will develop the country’s largest biofuels storage hub, citing raised blending mandates for road biofuels and the development of aviation biofuel production in north-western England as just two of the reasons for the investment.
Stanlow Terminals, which is a subsidiary of Indian-owned refiner Essar, said the new facilities at the Port of Liverpool would allow customers to store, blend and distribute biofuels for the road, aviation and marine sectors.
“The major investment is a key pillar in Stanlow Terminals’ strategic objective to become the UK’s largest bulk liquid storage and energy infrastructure solutions provider. It will deliver 300,000 cubic meters of capacity to support customers in delivering the UK’s net-zero transition,” the company said in a statement.
The cost of the investment wasn’t disclosed.
Stanlow Terminals said the “customer-led investment” announced on Monday would support the growth of initiatives such as a planned biojet facility being developed with US producer Fulcrum, as well as hydrotreated vegetable oil (HVO) production in the region and waste-based feedstock import facilities.
The investment will also include blending and capacity expansion for existing bio-ethanol and bio-methanol storage sites, with demand for both these renewable fuels expected to increase in 2022 from this year’s levels, which will be the first full year of the E10 mandate.
“The market for energy from renewable sources in the UK is expanding rapidly, driven by legislative obligations to encourage lower-carbon fuels,” the Stanlow Terminals statement added.
The company added that it is conducting feasibility studies for additional storage investment opportunities for low carbon energy products, such as e-fuels, bio-LPG, bio-methane, hydrogen and ammonia.
As well as responding to consumer demand, companies in the UK fuels and refining sector are coming under increasing pressure from shareholders and lenders to invest more in low carbon fuels and energy transition technologies such as hydrogen and advanced biofuels.
Next year, the overall blending mandate in the UK will rise 1.5 percentage points from the current 9.6% threshold, putting more pressure on compliance parties to physically blend or buy RTFC bio-tickets to cover their obligations.
The cost of RTFCs has risen around a third this year while the price of ethanol and waste-based biodiesel almost doubled between January and early November, but have shed some of those gains in recent weeks amid fears about falling fuel demand because of rising Covid-19 infections.
Having more storage available is viewed as crucial to provide greater flexibility in terms of blending and compliance with the Renewable Transport Fuel Obligation.
One particular refiner has been said by traders in the past few weeks to be offering RTFCs despite the absence of other sellers in the market and a lack of willing buyers, probably because it wants to monetize the bio-tickets it has on its books.