CNG Fuels – The Green Drive
CNG Fuels, a company established only six years ago, is set to play a leading role in driving the heavy vehicle market towards the green operation.
CNG Fuels, the UK’s leading operator of Compressed Natural Gas (CNG) refuelling infrastructure, develops, owns, and operates CNG refuelling stations offering zero-carbon fuel for HGVs. 100% of the fuel supplied by CNG Fuels is a sustainable and renewable biomethane approved under the UK Department for Transport’s Renewable Transport Fuel Obligation (RTFO) scheme.
The gas is sourced from waste feedstocks such as food waste and is the most environmentally friendly and cost-effective alternative to diesel for HGVs. It cuts vehicle greenhouse gas (GHG) emissions by as much as 100% and is 35%-40% cheaper than diesel.
Building a new industry
Set up in 2014 by Philip Fjeld and Baden Gowrie-Smith, professionals with a background in the natural gas industry and investment management, the vision was clear from the beginning – to build a nationwide network of large public access biomethane filling stations in the UK, with all critical aspects of that process, i.e., design, construction and operation, accomplished in-house.
Six years on, the company is well on track towards that vision. “There were two critical milestones driving the business forward,” says Philip Fjeld. “The first one was the RTFO approval, a fundamental step for the development. The second was achieved in December 2020 by securing £80 million in backing from Foresight Group to speed up the rolling out of our stations.”
The company’s position is currently unique. Although there are other companies operating in the gas refuelling sector, these are typically focused on LNG fuel meaning that CNG Fuels currently has no real competitor. “It takes time to build up an industry. I’m sure there will be similar companies emerging soon but as of today, there is not much space for a lot of competition in this new sector,” Philip Fjeld reflects.
Speaking about the challenges that the business has encountered on its steep development journey, he admits that in the early years the biggest hindrance was the lack of suitable trucks which were still in development. Given recent market developments, that is no longer a bottleneck, but building a new large CNG station still has its challenges – the process of securing land, getting planning permission, completing ecological studies prior to construction takes a lot of time and planning.
Still, progress has been remarkable. “We now have 7 very large stations in operation and are aiming to have one in construction every six weeks,” says Philip Fjeld. “We are looking at a build rate of up to 10 stations per year. Unlike conventional filling stations, CNG stations are very large facilities that can routinely fuel 10-12 trucks simultaneously, up to 500 HGVs per day.”
Towards zero carbon
While elsewhere in Europe the CNG sector traditionally focuses on passenger cars and vans, CNG biomethane is designed for the commercial HGV market, which has been growing exponentially over the last few years as large hauliers strive to reduce greenhouse gas emissions.
“The heavy truck sector has been the hardest to decarbonise and that is where we now see a steep growth,” says Mr Fjeld. “That development is the very core of our business – to establish a network of large multi-user public access biomethane refuelling stations so that large hauliers can transition their fleet from diesel to renewable gas. There are some 130,000 so-called articulated trucks running in the UK and that is essentially our core market – the long-haul very heavy trucks on the roads.”
HGVs account for 4.5% of total UK greenhouse gases, so decarbonising the sector is essential to meet the UK’s goal of achieving Net Zero emissions by 2050. Bio-CNG is the leading commercially available solution at scale to reduce these emissions. Fuel duty on biomethane is lower than on diesel and the government has committed to maintaining a clear advantage for gas-powered vehicles until 2032.
As one truck uses the same amount of fuel as some 60-100 passenger vehicles, it is clear that the environmental impact would be huge and large hauliers are aware of that. The John Lewis Partnership plans to run its entire 600-strong HGV fleet on biomethane by 2028, while parcel company Hermes also plans to replace its 300-strong fleet of diesel trucks. Other customers adopting biomethane include ASDA, Argos, Royal Mail, DHL and Cadent.
“Every customer that we bring on-board that gets rid of one diesel vehicle is actually taking 50-100 passenger vehicles off the road. That is a massive impact and that is why the HGV sector is such an important market for us,” says Philip Fjeld.
The financial injection from Foresight Group will speed up station rollout and the business is set to complete its projected 8-10 stations per year. In terms of location, the company is focusing on those areas with a critical mass of trucks, i.e., on major trucking routes and at key logistics hubs. Mr Fjeld explains that some 100 stations spread along the busy lines would provide enough coverage in the UK to move the heavy-mileage part of the HGV sector completely off diesel.
“We have spent a lot of time developing the market, educating the decision-makers, working with the government. Now our focus is on execution. We are currently holding back our growth – we have a lot of customers who would have ordered more green trucks if there were more stations available. So, at this point in time, we are our own bottleneck. That is why the fundraising has been so critical, and why the focus on execution is so strong.”
“The ultimate aim is to decarbonise the long-haul, heavy-mileage HGV sector. We are decades away from hydrogen being mass-deployable but we need to do something today. There is enough biomethane available but what is lacking is the delivery device, the stations. And that’s where our focus is now – to turbocharge station rollout.”