Political barriers hampering onsite biodiesel production

EXCLUSIVE: Biomethane generated from food and drinks process residues is emerging as a viable low-carbon alternative to diesel used in commercial vehicles, but a lack of political clarity has left the food sector "scratching the surface" of a potential closed-loop, onsite fuel system.

That is the view of Wyke Farms’ managing director Richard Clothier, who revealed that onsite trials using biofuels derived from waste residues in dairy production to power tractors and milk tankers had hit technological and economic barriers.

Wyke farms has been operating a biogas anaerobic digestion (AD) plant in Bruton, Somerset since 2013. It was originally able to handle 75,000 tonnes of biodegradable waste materials from the farm and dairy process annually, and has since been expanded.

The plant was able to produce renewable energy, and has since been upgraded to account for combined heat and power (CHP) systems and has the ability to send gas back to the grid. Wyke Farms has been exploring the potential of using the generated biomethane to power its own commercial fleet from process residues produced onsite.

However, as Clothier explains, the potential for a self-sufficient fuel supply has been hindered by upfront capital costs and driving range issues; although incentivised policies could unlock a viable means to lower the UK’s transport emissions.

“For a business like ours that is already producing biomethane, there is a massive opportunity, if the Government policy is right, for us to be running our own biomethane trucks and fuelling biomethane trucks to business partners in the region,” Clothier told edie.

“It’s just about incentivising the right policies and it can happen quite quickly. But the trucks are more expensive, and we’d need capital investment. But I believe in this passionately, and there is a massive potential there, but we’re not even scratching the surface of this. When you look at the farming end, where hardly any of the organic waste is going through an AD plant, most of it is land-spread, then you realise there is a huge amount of potential for AD and for vehicle use.”

Clothier revealed that biogas trials had been conducted by tractors, but that range was still an issue. Wyke Farms has also explored the use of biomethane in its milk tankers, which return to the site numerous times in a day, meaning that mileage and refuelling is less of an issue.

However, current tanker models need to be modified to place the gas tanks in the right area of the heavy-duty vehicles (HGVs), which would incur more upfront costs.

Biofuel duty

Wyke Farms already supplies biogas to customers like Sainsbury’s, and Clothier believes there is potential to provide a similar service for company fleets. The issues arise in the current political climate, which places an excise duty tax on biodiesel use in vehicles at around 57p per litre.

For a biogas producer like Wyke Farms it is currently more economically viable to use its AD plant to generate gas for heating or energy rather than fuel, because using biodiesel as a heating fuel is not subject to a duty.

The high, upfront costs of buying or converting suitable HGVs, combined with the duty on biodiesel is outweighing the carbon offsetting potential of biomethane for transport, even including the certificates that can be claimed at sold through the Renewable Transport Fuel Obligation (RTFO).

But, with HGVs accounting for 21% of surface transport emissions, despite accounting for 1.5% of road vehicles, and contributing more than 4% of the UK’s carbon emissions, a low-carbon options is becoming a necessity.

Unlike passenger cars, plug-in and battery options aren’t viewed as a potential solution for HGVs. Biofuels remain the most attractive option and are beginning to find routes to market. For example, British retail chain Waitrose aims to have 50 100% biomethane gas-fuelled trucks operating in its fleet by the end of year.

Clear opportunities

In fact, a new report, released earlier this month, by Aker Associates for AD treatment specialists Clearfleau suggested that political, social and economic drivers were all starting to align to raise the profile of biomethane for use in transport.

The report found that more food manufacturers and distilleries were looking at onsite solutions to handle by-products and residues. However, the recent decline in Feed-in Tariff (FiT) and Renewable Heat Incentive (RHI) rates was making biomethane use as an alternative fuel a “more economic” option than heat or power.

Specifically, the report noted that key barriers such as vehicle price and availability were being addressed. Clearfleau’s marketing director Richard Gueterbock told edie that the biogas vehicle market could follow the trajectory of electric vehicles (EV), which are expected to accelerate by 2040 after an initial slow uptake.

“Vehicle fuel is a big issue for the food industry,” Gueterbock told edie. “Its why we decided to look at the suitability of gas as a vehicle fuel. The market is there, but a few things need to happen for it to take off. The EV market was slow to take off, there could be a similar trend in this market.

“Anything you do onsite to reduce your energy costs, and replace fuel with a low-carbon variant is good for the carbon footprint of the site. Instead of throwing the value of food residues away, there is a chance here to use it to generate energy and help run the factory.”

Gueterbock admitted that the Government should give the concept of onsite biogas generation “more attention”. However, with some onsite systems offering a return on investment of around 14% to 20%, he felt that businesses would soon start creating the demand for political incentives.

With the UK set to miss renewable heat and transport targets for 2020, more companies will look to onsite solutions to reduce the amount of waste they are sending offsite, and instead look to create value by using it as fuel or energy.

Matt Mace

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