“In use, bio LPG is identical to conventional LPG and therefore has the benefit of being able to be blended and used by all existing appliances.”
123 years. That is how long family-owned multinational organisation SHV Energy has been established for. The Netherlands-headquarted company has recently reiterated its strong corporate commitment to its “bold ambition” that 100% of its energy products will be renewably sourced by 2040. The company specialises in providing its customers with a downstream distribution product called liquid petroleum gas (LPG).
Here, in a special joint ‘5 Minutes With.. interview’, Liz Gyekye, senior content manager for Bio-Based World News, catches up with SHV Energy CEO Bram Gräber and SHV Energy Global Innovation Director Rebecca Groen.
Liz Gyekye (LG): Welcome to 5 Minutes With. Can you begin with a description about SHV Energy and what it is the organisation does?
Bram Gräber (BG): SHV Energy is a leading supplier of LPG around the world and is also an investor in renewable energy solutions. We provide energy, like LPG and liquified natural gas (LNG), to customers who are not connected to a gas grid. This is an extensive business, which makes around €7bn worth of revenue across the globe. And, we have 16,000 employees that make this happen for our customers. LPG is used for applications like heating, which includes domestic and industrial heating, cooking and transport.
Rebecca Groen (RG): You can be forgiven for never having heard of us because SHV Energy is the overall group’s name. In each of the countries we are active in, we operate under brands that resonate with our customers. For instance, in the UK we operate under the name of Calor. We have been going for 123 years and we have been involved with LPG for the last 40 to 50 years.
LG: What’s your role in renewable energy solutions?
BG: We play a role on three levels. First, we help customers to make the switch from high density fossils like oil and coal to low-carbon fossil fuels like LPG. Second, in 2018, we were the first in the industry to introduce bio LPG to Europe. This bio LPG is made from non-fossil fuel sources, mainly sourced from waste products from the renewable diesel production process (the HVO or hydrotreated vegetable oil process). In use, bio LPG is identical to conventional LPG and therefore has the benefit of being able to be blended and used by all existing appliances. Third, we also invest in renewables. For instance, we have a biomass company called Balcas based in Ireland and Great Britain.
We offer our bio LPG in several (eight) European markets. We have teamed up with our partner Neste Oil @NesteGlobal, a Finnish biofuels specialist, to produce this bio LPG at its Rotterdam refinery.
RG: There are great environmental advantages in switching away from heating oil to bio LPG. In the UK, 75% of off-gas grid customers use heating oil. Switching from heating oil to bio LPG creates a significant carbon footprint saving and helps with air quality improvements. If you switch from heating oil to bio LPG, you get down to an incredible minus 80% in terms of carbon footprint savings. That’s offering people an opportunity to decarbonise with little additional investment required. In many older, remote properties, you can’t really use solar panels and heat pumps and be certain you can have the same level of comfort as you would have had with the existing infrastructure. In contrast, with bio LPG you can – and at a much lower cost than you would have if you had gone for solar not to mention that you can create less of an inconvenience for the customer. In addition to this, it offers a real opportunity for our customers who live off grid.
LG: Do you feel that your customers are demanding more of this bio LPG?
BG: It is really inspiring. We are recycling waste and using it as a clean energy source. Yes, we introduced this product last April and we are distributing it across Europe. Demand is far higher than anybody would have expected. Both domestic and industrial customers highly appreciate it. We do not have the dilemma of finding more customers. Instead, we have the dilemma of making sure that we have enough supply.
RG: That is one of the reasons we set up a global innovation programme. This programme looks at other ways of converting biomass waste and municipal waste, and potential feedstocks like seaweed and algae into bio LPG and bio LNG. The main aim for us is to help us continue to expand the amount of bio products that we can offer to our customers. We are committed to doing this and have increased our activities in this area because we have an ambition to source 100% of our energy products from renewable resources by 2040.
BG: It is clear that there is an awful lot of work to do to get to this point. There still needs to be a lot of infrastructure built in order to produce bio LPG. Hence, that will be the focus for us in the coming years.
LG: Before going into your current roles, what did you used to do?
RG: Before joining SHV, I was working for the Dutch Renewable Energy Lab ECN, part of TNO. Whilst working there, I was looking at long-term solutions for the low-carbon energy transition in the business unit Biomass and Industrial Energy Efficiency.
BG: I spent time working in fossil energy for a few years with a marine services company, which included me working with heavy marine transport and subsea services. Prior to that, I spent a long time working in the airline industry. I worked for a company that was one of the early pioneers in developing biokerosene around ten years ago.
The momentum we see in the market from our customers and the momentum we see from our volumes, make us believe that now is the time for us to put our full weight behind low-carbon solutions.
LG: What’s been the biggest challenge in growing SHV?
RG: It’s basically getting the awareness out there that bio LPG is relatively easy to make and is a very effective drop-in solution. Essentially, more people should be going out there and making this for us. It’s basically finding the supply. That is what we are working hard on at the moment. We are looking for new ways to get increasing large quantities so that we can continue to help our customers to decarbonise.
BG: The dilemma that we have is that the traditional suppliers of LPG, like oil companies, have not got dedicated infrastructure towards creating biofuels, including bio LPG. So, you almost have to be either a new player or put a completely separate infrastructure in place from your existing one. New infrastructure has to be developed to make this possible for large-scale production.
BG: Developing existing infrastructure can just be as expensive as developing new ones.
RG: Several oil companies, for example Total have made recent announcements to commit to developing biorefineries. It issued a recent press release which said that it would be re-engineering its La Mede South of France facility to turn it into a biorefinery. However, these things cost a lot of money and quite some time. Nevertheless, it is a good step and we expect to see a lot of other traditional producers make this step in the next few years.
The biorefinery world is expanding and this is helped by the drive to use renewable fuels for transport on roads, air, and sea. Our role is to get the awareness out there, so when you are producing those products you also co-produce bio LPG. We will happily take this product so that we can use it for our customers who will mainly use it to help them to decarbonise their heating requirements in Europe and in other parts of the world.
LG: Who is mainly using this product?
BG: The lion share is taken by our industrial customers and to a certain extent our domestic customers.
LG: What are your main drivers?
BG: We have a very clear sense of purpose. Advancing Energy together is our motto. Yes, this means that we are an existing LPG business, but in the long run we have to do our part in making energy more sustainable. All our colleagues understand that this is a long-term development and not something to fix in a year. That’s something we believe in. We are a family company and this long-term view suits us very well.
LG: Are you seeing strong differences in a variety of markets across the world?
BG: In Europe, the developments in bio LPG are quite strong and particular, especially in France and Germany. This is what customers and policymakers are expecting from us. In other markets like Brazil this is not prominently yet on their agenda, but I think they will get there eventually. In contrast, bio LPG is really hot in Europe at the moment. Eventually, we will start expanding in other markets like China and India.
LG: What’s coming up next?
RG: We are committed to expanding in this area. We are involved in a lot of interesting projects and discussions with all manner of stakeholders throughout the value chain.
LG: What’s your favourite sustainable/bio-based product?
RG: I am big fan of Rothy’s shoes made out of recycled plastic.
BG: If I fly, I am happy to use an airline that is thinking along the same lines as us and using a sustainable aviation fuel.
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