Energy and Climate Change CommitteeWritten evidence submitted by Greenergy International Ltd (BIO18)
1. Introduction to Greenergy
1.1 Greenergy is a leading national provider of road fuel with significant infrastructure and service capability. During its financial year April 2012—April 2013 it supplied 13.5 billion litres of petrol, diesel and biofuel—more than one quarter of all the road fuel sold in Britain. Greenergy is a private company owned primarily by the Directors and is now Britain’s third largest private company.
1.2 Greenergy is a manufacturer of biofuel as well as a supplier. The company operates the UK’s largest biodiesel manufacturing facility at Immingham on the Humber estuary, producing 100,000 tonnes of biodiesel from waste materials every year.
1.3 Greenergy’s customers include the major oil companies and supermarkets, to which it supplies diesel and petrol for retail sale as well as biofuel for onward blending. The company also supplies diesel to major fleet users such as bus and logistics companies.
2. Greenergy’s Approach to Biofuel Usage
2.1 As a major road transport fuel provider, Greenergy sees biofuels as the only immediate, economically viable option to cut transport-related greenhouse gas emissions in the UK. In 2012
2.2 Greenergy appreciates that unsustainable land use change can negate any assumed carbon savings from biofuels, so it ensures that it only supplies biofuels that have not caused biocarbon loss and use the world’s resources responsibly. To do this it has a company-wide commitment to;
Ensuring that any crops used in our biofuels are produced in a sustainable way.
98.6% certified by EU recognised Voluntary Sustainability Schemes. The remainder have been independently verified against the EU criteria.
Using biofuels made from wastes wherever possible, to minimise the demands its biofuels place on the world’s resources.
100% utilisation of waste feedstocks in Greenergy’s biodiesel plant in 2012
Maximising the carbon savings from the biofuels it chooses, so the carbon footprint of its fuels is as low as possible.
69.75% average GHG emissions savings on all Greenergy volumes supplied in the UK during 2012–13, almost twice the 35% GHG emissions savings legally required by the EU RED.
Providing total transparency on the source and impact of its biofuels.
The independently verified sustainability characteristics of Greenergy’s biofuel supply is published every month on the company’s website, www.greenergy.com. Greenergy also use satellite data to assess environmental risk and disclose the origin of our biofuel producers on www.biocarbontracker.com. The company was recognised as Forest Footprint Disclosure Project Sector Leader 2010–2013.
3. Manufacturing Biofuel from Wastes in the UK
3.1 In 2005 Greenergy began construction of its first biodiesel manufacturing facility at Immingham on the east coast of England. This has been expanded over time and converted to process waste feedstocks. Between April 2012 and April 2013, all the biodiesel produced at the facility was made from waste vegetable oils and animal fats.
3.2 Vegetable oils which have completed their useful life are often discarded to block drains and sewerage systems. By creating a secondary life for used cooking oil, replacing diesel in our fuel, Greenergy has encouraged development of a waste recovery industry in the UK and in several other countries. Greenergy currently sources used cooking oil from the UK, Ireland and the USA where the product is abundant and easily collected.
3.3 Initially Greenergy’s biodiesel production facility was capable of processing used cooking oil with low levels of impurities and water, but with a relatively stable policy environment and a company commitment to processing wastes, Greenergy has recently made significant investment in technologies and process engineering to refine its manufacturing process to recover diesel specification biodiesel from heavily contaminated waste oil. Circa £60 million has been invested in its biodiesel manufacturing plant at Immingham to date.
3.4 Greenergy has also additionally invested in the development of technology and supply chains to recover useful oils and fats from municipal and retail organic waste. Known informally within the company as the “Pie Machine”, the technology yields 20–30% biodiesel feedstock from refuse waste at supermarkets, food manufacturers and waste collection companies. This technology is replicable and scalable, and can be deployed locally at small scale to process organic waste which is low value density and relatively homogenous with high fat content.
3.5 Industry experts estimate that 120,000mt of used cooking oil is already collected in the UK. However, oils from the municipal waste stream require more effort to recover and process and therefore stable policy and support is required to allow manufacturers to develop these technologies and supply chains. The resource potential of fats and oils is closely linked to the level and type of local food processing and consumption and as such is difficult to quantify. The USA, UK and Western Europe have greater yields of useful oils per capita but equally important scale exists in China and other areas with high population density and waste problems.
4. Use and Benefits of Biofuel Sustainability Schemes for Crop-Based Biofuels
4.1 Greenergy pioneered the first sustainability standard for biofuel made from sugar cane back in 2008, developing a standard that demonstrated compliance with the environmental and social standards of the UK RTFO. Since that time the company has been working with Brazilian ethanol producers who share its commitment to sustainability, transparency and continuous improvement, working with them to ensure conformance with environmental, health and safety and labour regulations and incentivising conservation, reforestation and community engagement.
4.2 In parallel Greenergy has also worked with international stakeholders in agriculture, conservation, biofuels and the fuel industry to develop similar roundtable sustainability standards that assure environmental protection at farms which supply biofuel feedstocks. These important criteria ensure that biofuels producers source biomass only from farms which uphold a strict code of environmental conservation, traceability and compliance.
4.3 2.75% of global sugarcane cover is now certified as compliant with either the Bonsucro or Greenergy Standard and over 2,500 international supply chain operators have had their systems and agricultural production areas checked and verified as compliant with the sustainability criteria of the EU Renewable Energy Directive. As only a small proportion of a certified area of sugarcane, rapeseed or soyabean is utilised for biofuel, a synergetic by-product is the certification of the food, feed and energy sectors.
4.4 Greenergy has observed the very real improvements to working conditions, health and safety, and management of conservation areas and boundaries as a result of biofuels regulation. In areas where deforestation, environmental degradation and informal or unregulated working conditions prevail, sustainability standards dictate continuous improvement of agriculture, processing and logistics. This can have a huge direct and indirect impact on people’s lives, and can consolidate efforts toward local and national attitudes to conservation and sustainable development.
4.5 Formalising the requirement to report and disclose creates transparency and therefore mandates continuous improvement on non-compliances and resolution of conflicts or complaints. Use of satellite data to monitor plantation areas also ensures total transparency, while internationally recognised carbon efficiency calculations ensure objective benchmarking across the sector.
5. Diversifying Toward a Sustainable Biomass Supply for Biofuel
5.1 Greenergy has diversified its potential supply base for low carbon, renewable petrol and diesel replacements to ensure its supply chain remains both economic and sustainable. Optionality shields processors and consumers from global fluctuations in specific commodity prices and reduces demand inflation.
5.2 It is therefore important that biofuels policy permits suppliers the option to deliver renewable energy targets by the best sustainable means possible. This requires free international trade and free choice on the type of sustainable biofuel used to meet a UK obligation. It also requires removal of market barriers between the UK and other EU member states, and specifically an increase in the limit of 7% ethanol in UK petrol compared to 10% in France and Germany. Proposals from the European Commission to limit the proportion of fuel from different feedstocks, despite its compliance with the sustainability criteria of the RED, would also be a market distorting factor. Research on the concept of indirect land use change is currently far from adequate to defend international barriers to trade. Allocating responsibility for pollution to an indirect contributor rather than the polluter could also be considered inappropriate.
5.3 Policy should not pick winners, but rather should incentivise suppliers to achieve carbon and sustainability targets by the most efficient means possible. In this context it is of concern that the European Commission has proposed double and quadruple incentives for technologies which are yet to prove their economic or environmental sustainability benefit.
5.4 Greenergy is keen to see ambitious implementation of the Fuel Quality Directive as an annual carbon obligation in the UK and believes incentives should proportionally reward carbon savings and energy yield per hectare.
5.5 By remaining open to any biofuel feedstock, technology or country of origin, and by preferentially buying wastes and higher GHG saving biofuels, Greenergy has incentivised suppliers toward its sustainability objectives. It has purchased ethanol from one supplier who has been able to utilise waste heat, biomass power, and carbon capture to achieve GHG savings of more than 90% per litre. By increasing the versatility of its biodiesel plant, Greenergy has also been able to trial “second generation” feedstocks such as algae which are not yet economic.
5.6 Greenergy has no doubt that advancements in biofuels will be delivered progressively in a stable regulatory environment, as producers focus on reducing energy and raw material costs and on meeting higher carbon reduction obligations. This is a more sustainable basis for the bioenergy economy.
April 2013