View of the fuel distribution sector.

We believe the liquid fuel distribution industry has a vital role to play in helping the Jersey government reach the right decisions on the best way forward for off grid energy solutions. We recognise the work of the government to meet carbon reduction targets, but a renewable liquid fuel such as HVO can be part of a phased solution for both transport and heat.

Any solution either towards carbon neutrality or net zero within any timescale in order to be successful has to have the following traits:

1. Provide the consumer with a choice. Imposed solutions rarely work.
2. The lowest cost possible
3. The least disruptive
4. Fair to all especially the fuel poor

The importance of the fuel distribution sector to Jersey

In 2018, petroleum products (such as road fuels and heating oil) accounted for three-fifths (60%) of Jersey’s FEC. Electricity accounted for over a third (36%) and manufactured gas the remainder (4%). When the home is viewed 45% of all energy consumed is from petroleum products.

Currently there are xx fuel distributors active in Jersey with a combined annual turnover of £xm and a direct employee count of xx. Looking wider at the UK and Ireland distributor members range from national companies down to small independent distributorships jointly employing almost 9,135 people with a combined turnover of £12bn.

Options

The Oxera (2020) report for the Jersey Government analysed the main policy options available to decarbonise the heating and transport sectors in Jersey under a 2030 Net Zero target. These main policy options were identified in Oxera (2019) report.

Oxera’s study found that six policy measures would be expected to make the biggest impact in terms of reducing carbon emissions in the heating and road transport sectors.

• facilitating the retrofitting of electric heating to all domestic and commercial properties currently utilising oil and LPG
• upgrading the insulation of the domestic housing stock to current energy efficiency standards
• substantially increasing existing fuel taxes to discourage the use of petrol and diesel vehicles
• imposing a ban on the registration of fossil fuel vehicles
• providing financial incentive(s) for the purchase of EVs, either in the form of an EV purchase grant, and/or in the form of a scrappage payment to owners of fossil fuel vehicles facilitating
• the use of second generation biodiesel, such as HVO for all diesel vehicles, subject to further technical due diligence of the feasibility of such a transition in Jersey

However, the report failed to look at renewable liquid fuels as potential options to replace oil central heating.

Field Trials

Using our own resources, the UK and Ireland fuel distribution industry of which certain Jersey suppliers are part of has been working with industry partners on a renewable liquid heating fuel field trial. 20 homes have been converted from Kerosene to HVO in the first quarter of 2021.

We are using Hydrotreated Vegetable Oil (HVO) as the renewable fuel. This fuel has been independently^[1] verified and certified to be sustainable and derived from waste streams and the Building Research Establishment (BRE) has established on a CO2e per kWh basis a near 90% reduction in carbon emissions compared to traditional heating oil.

We have been extremely pleased with the results to date. From a technical view we have used the fuel in several different appliances with no issues. In addition, we have also seen a fuel usage reduction compared to traditional heating oil following the conversion of a vaporising cooker. This is encouraging as it further benefits emissions reduction, running cost and signifies an attractive solution those users that face kitchen refits if their appliances have to be replaced with electric cookers.

Perhaps our biggest surprise has been the level of interest shown by our customers in the areas where the trials have been publicised. This will be very useful moving forward as we know resistance (for whatever reason) to change is a potential barrier.

This trial has confirmed that HVO can readily be used as a drop in replacement for Kerosene with minimal changes required to houses, reasonable cost and low disruption.

The next step for us is to broaden the trial geographically and the range of appliances being tested, which we hope to start planning for immediately.

Independent Studies

Both the Climate Change Committee (CCC) and the National Grid Future Energy Scenarios (FES) predict c900,000 of UK customers will require some form of renewable fuel to provide home heating by 2050 to help meet the UK’s net zero commitment.

We support these assertions as these homes tend to be rural and therefore difficult to reach for grid purposes and/or of an age and construction that make retrofitting for heat pump compliance difficult technically or economically.

65% of rural properties in the UK currently fall into the lowest EPC Bands E-G^[2]. These homes would need to undergo significant and expensive upgrades to make them suitable for efficient heat pump use, with BEIS statistics suggesting the cost could be, on average, around £12,000 to £18,000^[3] per property. This is on top of the cost to install a heat pump or biomass boiler.

While statistics on energy efficiency in Jersey are not as prevalent the age profile of homes in Jersey would suggest similar statistics.

The simple cost of conversion for many systems to a renewable fuel such as HVO will be approx. £500.  We therefore believe finding the right solution at the right cost with the least amount of disruption for each home is key and we are under no illusion that some homes currently heated by oil will be able to be converted to other solutions.

Fuel Poverty

Those using electricity as a main fuel for heating make up 7per cent of households in England in comparison to 87 per cent using mains gas, however they account for 12 per cent of all fuel poor households.

What Jersey can do

We are excited about the prospects of decarbonising the off-grid housing stock in Jersey who use heating oil. We have many advantages in terms of our local knowledge of the customer base and the proximity of our workforce to those customers.

The current cost of renewable liquid fuels is much higher than traditional heating oil and while the cost of conversion is much smaller than other solutions we see this as a potential barrier for our customers. We need to stimulate the supply of the fuel in order to reduce the cost.

Government(s) should work with us now, to actively promote the introduction of a renewable liquid fuel to many hard to treat homes currently heated by oil. This could be achievable in a timescale which would exceed expectations, enhance our workforce opportunities, and allow our customers and your constituents, to decarbonise at limited cost and disruption.

We are asking Government for the following help:

• Ensure renewable heating fuels are zero rated for all tax purposes to stimulate uptake
• Introduce a short lived incentive scheme (as has been the case in transport fuels) to stimulate the early adoption of the fuel and therefore supply
• Include renewable heating fuels in current government schemes
• To actively promote all decarbonisation solutions in a technology neutral way that reflects the individual nature of people’s homes and choices.

[1] iscc-system.org

[2] MCS Average costs of certified installations data 2019.

[3] BEIS Minister Written Answer, 29/10/2018 based on Analysis of National Housing Model input data, drawing from English Housing Survey 2014, Scottish Housing Condition Survey 2014, Welsh Housing Conditions Survey 2014.