The Tank Storage Association (TSA) recognises the need for decarbonisation and the focus on road transport as a major contributor to this goal. “However, [The Road to Zero – Next steps towards cleaner road transport and delivering our Industrial Strategy] raises several significant concerns for the bulk liquid storage sector, and more widely for the downstream oil industry,” the association said in a statement.

Terminal Operations and Energy Security 

Recent reports have indicated that a global peak oil demand will not be expected until 2036, a failure to manage decarbonisation and any unintended consequences on the supply chain may have significant impacts on the ability of the sector to meet demand. 

Without careful consideration and planning regarding the impacts of decarbonisation, assets that are required to meet current and near-term demand may no longer be viable for owners and investors – impacting on energy security, as well as those businesses that rely on the import and export of bulk liquids in the chemical, agricultural and food markets. 

Alternative fuels 

“One of the fundamental policies in the strategy is Continuing to take a technology neutral approach to meeting our ambitions,” said the TSA. “However, the strategy predominantly focuses on electrification and the subsidies that will be made available.”

The association noted that emerging technologies should also be considered for example e-fuels and Power to Liquid (PtL), which are carbon neutral and can utilise existing infrastructure (and vehicles).

Replacement infrastructure 

Careful consideration must be given to the logistics for installing charging points on the existing retail network – the number of charging points and their nature (for example fast chargers) will have a significant impact on how and if these can be installed, noted the TSA.

Fuels Duty 

The duty paid on fuels, either as import duty or fuels duty paid by the consumer is a significant contributor to the UK economy. For all fuels this is estimated to be £28.2bn in the UK for 2018-20196, a large proportion of which will be for Petrol and Diesel sales. 

Duties paid on transport fuels imported to the UK will be much higher, estimated at between £40 – £60bn. 

No consideration has been given to how this deficit in duty will be addressed during the transition toward full decarbonisation. 

“We ask that the UK Government fully engages with all those businesses engaged in the supply of transport fuels to the UK market and provides appropriate opportunities for formal consultation as necessary,” urged the TSA.

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23rd July 2018