Optimism Arrives With Spring

Written on: June 1, 2023 by Paul J. Nazzaro

The industries and fuels that power the world are changing, but it’s not too late to be on the leading edge of the low-carbon future.

Wouldn’t it be wonderful if, when we push our clocks forward with the arrival of spring, we could simultaneously advance our industry’s clock by accelerating our timeline to decarbonize the energy landscape we occupy?

Unfortunately, this is impossible. Advancing an industry that seeks to decarbonize takes time, patience, planning, communication and, beyond all else, a willingness to do so—the latter being the most important and desired, in my opinion.

Those pioneers who determined that leveraging a low-carbon liquid as an effective means to blend down the carbon intensity of fuel oil had, and continue to have, a great deal of patience and are committed to succeed. The individuals and leadership groups representing Industry that aligned with these pioneers brought with them discipline, energy, determination and a willingness to move beyond carbon-intensive, fossil-fuel oil through planning, execution and communication along every step of the road to a cleaner, more sustainable future.

What strategy is best to encourage fuel dealers to open communication with their wet-barrel suppliers in order to make plans for accessing the ratable, competitive biodiesel blends they wish to deliver to their customers? Often, when speaking with fuel dealers, I learn they have struggled to secure supply. What a tragic outcome.

To make a long story short, just ask for it, prepare for it and secure it—that’s the best definitive strategy I can offer you. Biodiesel is out there, but you need to be proactive to secure it, as it will not just come to you.

The equipment companies have risen to the challenge of preparing their offerings to accommodate biodiesel blends up to 100%. Work continues at the National Oilheat Research Alliance (NORA) and legacy equipment companies to share these upgrades downstream. Technology efforts to improve fuel quality and equipment performance are ongoing processes. We may have begun this journey two decades ago with biodiesel, but we’re not stopping there.

The obvious next area of growth to ensure adequate supply of low-carbon fuel would be the integration of renewable diesel. If the fuel can be introduced competitively throughout heating-fuel nation, then it will ultimately play a role as a Bioheat® blending component before potentially going directly to R100.

Currently, renewable diesel is most often shipped and consumed throughout the West Coast marketplace. California, Oregon and Washington have their own low-carbon fuel programs in place to offset the higher costs associated with renewable diesel.

Like biodiesel, renewable diesel has distinct advantages to blend into on-road, off-road and heating-oil middle-distillate fuels. The use of these low-carbon liquid renewable fuels is a logical and intelligent solution to meet the directives of Federal and State policymakers.

Both biodiesel and renewable diesel producers rely upon the same feedstocks to manufacture their finished products, and they are all staking their claim on supply of these important renewable raw materials as emerging markets outside of the Bioheat®-fuel nation are sharply demanding more.

Those States with incentives or mandates currently in place have established a solid defense to secure these barrels, and they show no sign of pulling back. In fact, they want more and more of this 21st-century fuel. Out west, it is not uncommon to see blends of renewable diesel and biodiesel, whether R95/B5 or R80/B20—no carbon liquids whatsoever. That, my friends, is progress.

Another emerging market demanding future inventories of hydrotreated biofuel is the aviation industry, which is soaking up every gallon it can find of so-called sustainable aviation fuel (SAF).

You need not look too far to witness the evolution of the carbon industry than some of Clean Fuels Alliance America’s valuable members, such as World Energy, Darling Ingredients and Chevron Renewable Energy Group. My good friend Gene Gebolys, the Founder & President of World Energy, has reshaped his company’s focus. On the homepage of its website, World Energy declares,

Together we’ll make net-zero real. We’re decarbonizing air, sea, rail and land, and scaling up the world’s most advanced low-carbon fuels network.

That’s a commitment, and the once-novel concept now has emerged as the most logical pathway to decarbonize our collective spaces.

On the end-user side of the field, I had the pleasure of moderating a panel of industry leaders representing the rail, marine, aviation and heating-fuel markets at the 2023 Clean Fuels Conference in Tampa, FL, this past January. Powerhouse companies like Amazon, Microsoft, FedEx, UPS, and countless airline carriers are now insisting the shipping industry serving rail, marine and aviation clean up its act. Airlines are navigating aggressive sustainability goals and SAF has become the most desired and effective pathway to decarbonize air travel.

Delivering clean fuels to operate diesel-powered platforms or home heating systems is no longer an option. If you think it is, and you feel you can continue simply delivering carbon-based heating oil or diesel fuel to your customers, then you really are rolling the dice. If the policies government officials are putting in place to accelerate decarbonization haven’t motivated you to transition your book of business to cleaner-burning biodiesel blends, then you’ll likely be competing against a progressive fuel jobber that has elected to do so. They, of course, have chosen to explain to your customer why clean fuels are an intelligent choice and whose use is in the best interests of both buyers and sellers. How you market and sell fuel from this day forward will never be the same. The evolution is now.

City after city and State after State, residents continue to face an onslaught of policies from their elected (and sometimes unelected) leaders. For example, Boston Mayor Michelle Wu filed an ordinance with the city council that would require new buildings reliant on fossil fuels to install solar panels and add wiring in anticipation of a future conversion to electrification, with the goal of most new buildings going all-electric. Several other communities in Massachusetts have embraced similar efforts. Closer to home—or better stated, closer to you, the home-heating oil dealer—stories like this are becoming the norm. As silly as it seems, it is all too real. Here is an example of what dropped in my email box from the town of Andover, MA, the day I penned this article:

“I need your help! We (me, a group of passionate community members and Weston and Sampson consultants) are developing a Climate Action & Sustainability Plan to achieve net-zero carbon emissions by 2050. Input is needed from the community including residents, students, businesses, and community groups. The plan will identify actions that can be taken to reduce greenhouse gas emissions and improve resilience to the impacts of climate change. It will consider costs, equity, and barriers for implementing the actions. The business and resident surveys should take about 10 minutes to complete. Please complete the survey by April 5th, 2023.”

What followed was an entire section speaking about converting combustion appliances into, you guessed it, air-source heat pumps. So, regardless of where we turn, we in the fuel oil industry are being factored out of contention to be a long-term player in the home-comfort market.

I am merely one guy dreaming about accelerating the journey to earn a permanent place in the home comfort energy marketplace. For those who wonder why I continue to bang the drum, it’s simple: I am fortunate to have been chosen to lead Clean Fuels’ market-development program throughout the heating-oil nation and other emerging sectors nationwide. That’s been my role for decades, and this will continue to be my charge until we part ways.

Additionally, I would like to point out that Clean Fuels represents the biodiesel, renewable diesel and SAF industries’ interests, and has for some time. We do not just represent farmers and soybean oil—although soybean growers have been vital to the development and growth of the organization over the past 30 years—it’s bigger and broader than that. It will take all available feedstocks and finished products to nourish the enormous appetite for low-carbon liquid renewable fuels and satiate the on- and off-road, heating oil, marine, rail and aviation markets, as each segment simultaneously pursues decarbonization of their respective spaces.

My responsibilities are to monitor emerging technologies and to assess how we can all work together to serve Industry in the most ratable, competitive and strategic way possible. If I do my job well and you do yours, we will maintain our spot in the home-comfort industry. My personal goal is to deliver a ratable and sustainable liquid fuel to this important energy sector for both buyers and sellers. This dream is not achievable without a total buy-in from those still waiting for things to be the same. Change is here to stay. Embrace it and prosper from that decision. ICM