- Two Foresight investment funds have partnered with CNG Fuels to acquire and grow a strategic network of biomethane HGV refuelling stations across the UK
- CNG Fuels is the UK’s dominant supplier of renewable biomethane compressed natural gas for the UK’s truck sector
- Transport sector emissions accounted for 34% of UK emissions in 2019
- Biomethane-refuelling technologies reduce carbon emissions by 80+% and lower operating costs and improve air quality.
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LONDON, 04 December 2020: Foresight Group LLP (“Foresight”) is pleased to announce an £80 million investment by two of its funds into a portfolio of five biomethane Compressed Natural Gas (“Bio-CNG”) refuelling stations for HGVs, which will enable fleets to switch from diesel to carbon-neutral fuel.
Foresight Inheritance Tax Fund and JLEN Environmental Assets Group (“JLEN”) have provided an initial funding line for a joint venture (“JV”) with CNG Fuels Limited (“CNG Fuels”), 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 carbon dioxide 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 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.
All the Bio-CNG supplied by CNG Fuels is approved under the Department for Transport’s Renewable Transport Fuel Obligation (RTFO) scheme as renewable and sustainable. It is currently the leading commercially available solution at scale to reduce HGV transport industry emissions and contribute to cleaner air. 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.
This is Foresight’s first sustainable transport investment extending its sustainable infrastructure portfolio beyond its diverse energy portfolio and further aligns its activities with national decarbonisation efforts, which include recent investments in sustainable forestry and sustainable heat.
Ernst & Young LLP acted as financial adviser to CNG Fuels in connection with the transaction and the structuring of the investment from Foresight.
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.”
Richard Morse, Chairman of JLEN, added: “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.”
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About Foresight Group (“Foresight”)
Foresight is a leading independent infrastructure and private equity investment manager which has been managing investment funds on behalf of institutions and retail clients for more than 36 years.
Foresight has over £6.5 billion of Assets Under Management, of which £3.8 billion relates to renewable energy infrastructure. It currently manages more than 290 renewable generation assets globally, with a total generating capacity of 2.7GW.
Foresight manages more than 160 solar plants around the world generating over 1.5GW of solar power. Foresight has more than 800MW of wind generation assets across the UK, France, Spain, Germany and Sweden of which 665MW are operational.
Foresight manages more than 40 bioenergy and waste projects processing some 1.8 million tonnes of waste every year, having mobilised more than £1 billion of capital investment into the sector. In addition, Foresight manages 210MW of Reserve Power assets and three utility scale Battery Storage projects providing 46MW of Enhanced Frequency Response services to National Grid.
Foresight is headquartered in London with regional offices in Manchester, Nottingham, Edinburgh, Cambridge, Milton Keynes, Leicester and Guernsey and international offices in Sydney, Rome, Madrid and Luxembourg.
About CNG Fuels Limited (“CNG Fuels”)
CNG Fuels was established in 2014 and is today the UK market leader for the supply of Bio-CNG (renewable and sustainable biomethane fuel) for commercial vehicles. Its gas is sourced entirely from renewable and sustainable biomethane, which is cheaper and emits much less carbon overall (well to wheel) than any other HGV fuel. The biomethane is made from waste feedstock, approved under the Renewable Transport Fuel Obligation RTFO), and generates Renewable Transport Fuel Certificates (RTFC).
From late 2021, the company will supply increasing amounts of carbon neutral biomethane derived from manure at the same price as the renewable biomethane fuel it currently supplies. It is also consulting on how its network of refuelling stations can best accommodate low-carbon hydrogen and battery electric technologies for HGVs, so that it can support customers when these become commercially viable.
CNG Fuels is also the country’s only dedicated provider of public access Bio-CNG refuelling infrastructure. It operates the UK’s five highest capacity CNG stations at Warrington, Northampton, Leyland (Lancashire), Crewe (Cheshire) and Erdington, near Birmingham. It is developing a nationwide refuelling network. For more information on CNG Fuels, visit www.cngfuels.com.
 BEIS “2019 greenhouse gas emissions, provisional figures” (26 March 2020)