Ampol to pilot carbon-neutral fuel offer

Ampol will offer business customers carbon-neutral petrol and diesel for the first time, with emissions to be offset through vegetation and other carbon projects in a pilot that it hopes to extend throughout its broader customer base.

Miners, road and rail transporters and government bodies will be among those targeted in the three-month trial, in which customers will pay extra for fuel in which all the emissions made during production, distribution and usage are offset.

The offer meets the short-term appetite among customers for ways to decarbonise their transport operations ahead of longer-term solutions such as battery or fuel cell electric vehicles, said Brent Merrick, Ampol executive general manager, commercial.

“Before those alternatives exist, they are looking for solutions that can be made available to them today to offset emissions,” Mr Merrick told The Australian Financial Review.

So far, McMillan Shakespeare Group, which provides salary packaging and car leasing services, and rail freight service provider One Rail Australia have signed up to participate in the trial. Ampol’s transport fleet will also take part while several other business customers are in discussions.

“We’re really looking at sectors of the economy that do have ambitions to decarbonise early ahead of alternate fuels coming in as an option,” Mr Merrick said.

The pilot is part of the decarbonisation initiative unveiled by Ampol in May, which includes plans to move into green hydrogen and batteries, and to roll out a network of electric vehicle refuelling sites.

The projects that will provide the carbon offsets for the trial include native forest protection and river ecosystem restoration ventures in NSW, Victoria and Western Australia.

Customers will also have an option to use offsets sourced from international ventures, which include a low-emissions coking stove venture in Malawi, a conservation venture in Guatemala and a landfill gas power generation project in Turkey.

Participants in the pilot program will be able to select from two alternative portfolios of offsets, a higher-priced one that sources offsets entirely from the Australian projects, and the other featuring 30 per cent Australian projects and the rest from international ventures.

“The 100 per cent Australian portfolio would be the more expensive option,” Mr Merrick said, declining to say how much of a premium customers will need to pay for carbon-neutral fuel.

“We will talk to customers to figure out that price point: that’s an important part of the study, to ensure understanding of. I guess you’d call it, willingness to pay.”

McMillan Shakespeare group executive, asset management, Adam Morrison, said that while the group already offsets its direct emissions related to its car fleet and electricity, the offer from Ampol would help offset the upstream carbon creation associated with the production and distribution of fuel.

“Importantly, Ampol’s carbon-neutral option will enable our customers to minimise their impact on the planet today, whilst also maximising the benefits created through investment in local projects to Australian vegetation, wildlife and communities,” Mr Morrison said.

The carbon-neutral offer has been certified by Climate Active, a federal government-backed program that provides external verification of programs aimed at tackling climate change.

Ampol said it had handpicked the offset projects for its program, pointing out that the nine Australian projects are proven to deliver social and environmental benefits to regional farmers and local communities. It worked with carbon markets investor GreenCollar to assess the projects against social and environmental standards, transparency and legal accountability criteria.

An opt-in model will allow customers to apply parts of their volume of offsets to meet sustainability targets.

Mr Merrick said he was optimistic that the carbon-neutral offer could become an ongoing part of Ampol’s offer to business customers even with a small uptake. It could also be extended to private motorists.

“There is complexity in setting up the operations in the background that enable good governance on this, so we are starting in B2B [business-to-business] but I can foresee a reason this could be made available to consumers,” he said.

Extracted from AFR

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