Smart Transport

CNG Fuels attracts £80m investment for bio-fuel network

CNG Fuels has attracted £80 million of investment from Foresight Group to help fund the creation of a UK network of 14 biomethane fuel stations for HGV customers.

CNG Fuels opened its fifth refuelling station near Birmingham at the end of November and the extra funding will see the development of 14 public access stations on major routes over the next two years.

While still small, CNG Fuels said the 14 stations will quadruple the company’s capacity and enable it to refuel around 8,000 vehicles a day.

The company said the bio-CNG (compressed natural gas) it supplies is 35%-40% cheaper than diesel and cuts vehicle greenhouse gas emissions by up to 85%.

It will gradually become fully carbon neutral from 2021 as the biomethane is increasingly sourced from manure, a heavy emitter of greenhouse gas.

Richard Morse, Chairman of JLEN, Foresight Group’s listed environmental infrastructure fund, said: “We are pleased to make this investment into biomethane refuelling infrastructure, helping to decarbonise one of the most emission-intensive parts of the transport sector.

“We consider that the two pillars of better environmental performance and lower cost operations for customers combine to support our investment case and we look forward to supporting the growth of a national biomethane refuelling network.”

HGVs account for 4.5% of total UK greenhouse gases, so CNG Fuels said decarbonising the sector is essential to meet the UK’s goal of achieving Net Zero emissions by 2050.

Fuel duty on biomethane is lower than on diesel and the government has committed to maintain a clear advantage for gas-powered vehicles until 2032.

Baden Gowrie-Smith, chief financial officer of CNG Fuels, said: “We expect the number of CNG trucks on UK roads to double in 2021 as fleet operators take action to support the government’s Net Zero targets.

“The near-term development of more stations will enable us to serve our customers even better by delivering carbon neutral bio-CNG nationwide. We hope this will give even more brands the confidence to switch from diesel.”

CNG Fuels is already able to supply 2,000 vehicles a day from its five public access refuelling stations, and a sixth station at Knowsley, near Liverpool, is due to open in January.

Its newest station, close to the M6 at Erdington, east of Birmingham, can refuel up to 500 HGVs a day and will support a virtual pipeline, using gas trailers to supply the John Lewis Partnership’s depot at Magna Park, near Milton Keynes.

CNG Fuels has secured a pipeline of development sites on major trucking routes to serve fleet operators throughout Great Britain.

Stations due to open next year include major trucking hotspots such as Eurocentral, near Glasgow, Milton Keynes, Avonmouth and Wakefield.

All of the fuel supplied by CNG Fuels is renewable and sustainable biomethane, approved under the Department for Transport’s Renewable Transport Fuel Obligation (RTFO) scheme.

It is delivered to stations through the existing gas grid where it is compressed into fuel.

Bio-CNG is currently sourced from food waste but CNG Fuels is securing supplies of gas derived from manure to create a fuel that will be carbon neutral overall.

It expects to introduce carbon neutral biomethane across all sites in 2021 at the same price.

In addition to investing in CNG Fuels, Foresight has also invested an additional £20m over the next two to five years for a minority stake in five of the refuelling stations.

Watch now: Connecting Policy To Solutions Virtual Conference 2021

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