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ON THE MOVE DOWNSTREAM • THE TRANSITION TO A CARBON-NEUTRAL SOCIETY LEAVES PLENTY OF SCOPE FOR OIL REFINERS AND DISTRIBUTORS TO MAKE A CONTRIBUTION, UKPIA SAYS THE UK PETROLEUM Industry Association (UKPIA) has released a new report, Transition, Transformation, and Innovation: Our role in the Net-Zero Challenge, that looks closely at the role the UK downstream oil sector can play – and is already playing - in meeting societal targets for decarbonisation. The report looks at some credible scenarios and proposes an illustrative pathway for the sector to help achieve government-mandated net-zero targets; it also offers some practical policy solutions to help industry overcome the challenges that those targets present. The report provides three key findings: 1. Low-carbon liquid fuels can play a key role in the UK’s decarbonisation process and are already beginning to do so. 2. Hydrogen is a critical component of meeting
net-zero targets. The downstream sector is the largest producer of hydrogen in the world and can maintain and grow its role in producing and delivering zero-carbon emitting hydrogen. 3. A systems-based approach and enabling policy framework are required to produce low carbon and eventually net-zero liquid fuels. As part of this, bespoke approaches must be considered for sectors such as aviation that have limited decarbonisation options. “This is an exciting yet challenging period of evolution for the downstream oil sector,” says Stephen Marcos Jones, director-general of UKPIA. “We are committed to action on climate change and this report shows that, within the right policy framework, this sector can transform and deliver Net-Zero.
“Only with industry and government working hand-in-hand in a systems-based approach will the task of Net-Zero be achieved in the UK. As such, this report urges ongoing and rigorous dialogue to ensure optimal results. We want to work now across government to make this report a reality.” LIQUIDS WILL LAST The report is based on the assumption that liquid fuels – albeit of a low-carbon variety – will remain the fuel of choice for transport purposes. In this regard, the report seeks to persuade decision-makers that the UK’s oil refining, distribution and marketing sector still has a role to play in a net-zero world and is, in effect, a plea for the sector’s continued existence. That assumption is not so outrageous: the rate of uptake of electric and hybrid vehicles is not fast enough to generate the level of emissions reduction that is required and, in any case, the supply infrastructure is still lacking. Liquid fuels, even of a bio- or e-variety, can use the existing supply network. As the UKPIA report says: “The downstream oil sector continues to evolve and is already contributing significant emissions reductions whether it be through delivery of biofuels or by reducing emissions in the manufacturing process. Multiple technological means exist to reduce manufacturing processes’ emissions to zero and deliver liquid fuels that have significantly lower carbon emissions across their lifecycle, which could be delivered at scale under the right economic framework.” As well as being able to deliver low-carbon liquid fuels to help decarbonise the transport sector, UKPIA’s members, the Association says, have the potential to play a role in decarbonising other sectors, through industrial clustering, making better use of waste heat, and contributing its extensive experience of managing hydrogen to help in the development of the UK’s nascent hydrogen economy. To do this, UKPISA says, there is a need for ‘joined-up government’ and collaboration between government and the industry, in order to deliver the policy framework that will enable businesses to undertake the necessary transformation. “The downstream sector is
HCB MONTHLY | NOVEMBER 2020
