Foresight funds have provided an initial funding line for a joint venture with CNG Fuels Limited, the UK’s leading developer and operator of CNG refuelling infrastructure. This injection of capital will be used to acquire existing refuelling sites enabling CNG Fuels to fund the construction of a further 14 stations on the UK’s major trucking routes. The investment forms part of a wider strategy to tackle the carbon intensity of the transport sector and is fully aligned with the UK’s 2050 net-zero target. The transport sector is the UK’s largest source of CO2 emissions. In 2019 it accounted for 34% of total UK greenhouse gases of which 4.5% were attributed to HGV operations specifically.
The five refuelling stations currently operated by CNG Fuels offer a low-carbon, low-cost alternative fuel source for HGV operators that are looking to make the switch from diesel. It will extend its strategic network with 14 new refuelling stations across the UK over the next two years, responding to a surge in demand for renewable fuel from major brands and facilitating a significant 80+% reduction in carbon emissions by operating fleets.
The fuel cuts vehicle greenhouse gas emissions by more than 80% compared with diesel and will gradually become fully carbon neutral from 2021 as the biomethane is increasingly sourced from manure, a heavy emitter of greenhouse gas.
While the Government has committed to maintain a clear advantage for gas powered vehicles until 2032, Bio-CNG will have a favourable fuel duty positioning compared to diesel vehicles. This offers fleet operators a financial incentive to make the switch to CNG, accessing fuel that is 35% - 40% cheaper.
The joint venture follows the launch of the UK Government’s Ten Point Plan, which included the proposal of a consultation on the phase out of new diesel HGVs to put the UK in the vanguard of zero emission freight.
Commenting on the investment, Matt Hammond, Partner at Foresight Group, said: “Foresight is delighted to be supporting and working with CNG Fuels. It is very pleasing to see attractive investment opportunities right across the sustainable infrastructure sector and that our investments have real impact in the decarbonisation of the transport sector.”
Baden Gowrie-Smith, Chief Financial Officer of CNG Fuels, added: “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. This exciting partnership with Foresight demonstrates their enthusiasm for biomethane as a solution to decarbonise heavy transport at scale, and 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.”
Source: Foresight Group