Lisa Archbold on decarbonising diesel reliant industries

Good afternoon, everyone. I’d like to start by paying my respects to the traditional owners of the land we meet on today - the Ngunnawal  and Ngambri peoples  - as well as pay my respect to the elders, past and present, of all Australia’s Indigenous peoples.

I’m Lisa Archbold and I lead bp Australia’s regions, corporates & solutions team. My team is focused on providing regions and corporates innovative, integrated ‎and decarbonized energy solutions at scale. 

So it’s fantastic to be here, at Australian Renewable Fuels Week, engaging across industry – with government, our peers, partners and of course, customers.The conversation about sustainable aviation fuel so far has kicked the conference off with a flying start, and now I’m excited to take it to ground with this session on decarbonising diesel reliant industries.

I recognise that I stand here this afternoon speaking to you about the energy transition as a representative of a company with over 100 years of history in oil and gas. 

In fact, in Australia, bp;

• supplies fuel at over 1,200 service stations across the country,
• provides around two billion litres of diesel a year to our mining customers 
• and fuels, on average, around 45 flights per hour.

All of this helps keep Australia moving now. All of this means we can play a key role in helping the country and our customers decarbonise for the future. Like the rest of the world, we are committed to transitioning to net zero. 

Through leveraging our many years of experience and expertise, we can help hit fast forward on developing an Australian renewable fuels industry. And we know that pace is critical.  bp’s 2023 Energy Outlook suggests that with the global actions taken to date, the trajectory we are currently on does not get us to the climate commitments made in Paris. 

Australia is not an exception. For the country to be on track to meet our net zero ambition, we’re targeting emission levels of 43% below 2005 levels by 2030. 

As Minister Bowen shared in his address to parliament following the Annual Climate Change Statement  - “While I am pleased with our progress, I am not yet satisfied. The job is far from done.” 

I couldn’t agree more. While there is progress being made, we all still have a lot more work to do. We need policies in place today to help transform tomorrow’s energy mix.

• Today around 95% of medium- and heavy-duty trucks are fuelled by diesel.
• More than 99% of flights are fuelled using traditional jet fuel. 
• The current marine fleet relies almost entirely on oil products

And these hard to abate industries are set to grow. The aviation industry, for example, is expected to double to over 8 billion passengers by 2050. 

The rapid decarbonisation of our energy system isn’t the only priority. As the world is showing us time and time again, we also need a secure energy system.

Energy diversity is intrinsically linked to energy security. 

Developing a homegrown renewable fuels industry could enhance Australia's liquid fuel supply chain and strengthen the critical industries that they serve. So we need to act. Making changes to the way we power these industries. 

It will take a mix of technologies, electrification, as well as low carbon fuels like renewable diesel, sustainable aviation fuel and hydrogen. There isn’t one single solution.

At bp we can see a pathway for all of them, with the best option dependent on end-use and changing over time. 

The key here is timing. In the short to medium term, renewable fuels are the most viable decarbonisation solution for the mining, heavy transport and aviation sectors. 

According to the modelling in our Energy Outlook, the production of biofuels roughly triples in the Accelerated and Net Zero scenarios by 2050. 

Why? Because renewable fuels have a distinct advantage. Not much needs to change.

The vehicles remain the same. The refineries and infrastructure can be repurposed. The supply chains already exist. And they offer emissions savings of up to 90% for renewable diesel and up to 80% for sustainable aviation fuel compared to traditional fuels. 

We know that this drop-in solution works. Last year bp partnered with a major mining company to trial the supply of renewable diesel for their operations in the Pilbara.  

By using diesel blended with hydrogenated vegetable oil (or HVO) they successfully reduced their carbon footprint during the trial. No change to equipment or process was needed. 

The use of renewable diesel in mining operations highlights the advantage it currently has over other decarbonisation pathways. 

Conversely, getting green electrons to a remote mine site has many variables that we haven’t solved yet. 

There’s the challenge around transmission, not to mention the cost of investment, particularly in the current market. 

So while electrification does have a role to play in the future, renewable fuels are here, now. 

As I mentioned earlier, the requirement of energy goes beyond lowering emissions intensity. 

Through developing a thriving homegrown renewable fuels industry, Australia can benefit from enhanced energy security. 

Australia’s agricultural sector is already a major feedstock provider for foreign biofuels markets, exporting volumes equivalent to between one and three billion litres of fuel a year. 

That’s substantial in the context of Australia’s overall liquid fuel demand. 

Directing this feedstock and the potential for expansion toward Australia’s fuel supply could have a material impact on our fuel security.

Furthermore, the development of technology and growth for renewable fuels results in additional opportunities for Australia’s economy. 

As an advantaged producer of bio feedstocks, ARENA estimates that an Australian biofuels industry could contribute around $10 billion in extra GDP per annum by 2030 and lead to an additional 26,000 jobs.

In particular, regional areas of Australia have an important role to play in feedstock production and collection. These areas will be critical to construct and manage supporting infrastructure, supply chains and fuel production. This activity could provide high value jobs and enhance development in regional Australia.

At bp, we’re progressing plans to transform our former oil refinery at Kwinana – located about 40km south of Perth - into an integrated energy hub that produces and supplies renewable fuels and energy products. 

The planned biorefinery is expected to produce around 15 million litres of renewable fuels per day - including sustainable aviation fuel, renewable diesel and bio-naphtha - making it the largest project of its type in Australia. 

Kwinana Renewable Fuels leverages the existing infrastructure and integration with wharfage, tankage, pipelines and terminal operations – including into Perth Airport. Plus, Kwinana is in one of the biggest, most active industrial areas in Australia, with customers at the Hub’s doorstep. 

Our Kwinana project therefore is well positioned to support the transition low carbon fuels. However, like other projects transforming our energy system, it’s complex. It requires major investment. And renewable fuels have a green premium compared to its fossil alternatives.

To drive the uptake of renewable fuels at the pace and scale required, frameworks and policies are needed to close the gap. Let me elaborate a little more…

• Existing policies, in particular the National Greenhouse and Energy Reporting scheme and SafeGuard Mechanism could be leveraged to unlock immediate offtake for these fuels and help reduce direct emissions. 
• As could integrating renewable fuels into the Fuel Quality Act.

But we could go further:

• An Australian sustainability standard and certification system with a regulatory framework and government administration would add credibility and confidence for customers and therefore investors.
• The introduction of dedicated funding to underwrite supply and support further development, would compliment existing concessional finance in supporting the rise of a renewable fuels domestic industry
• And finally, a low carbon fuel standard or similar incentive would  help close the cost differential of renewable fuels thereby supporting demand

With these settings to underpin investment, develop and scale the industry, Australia can unlock its renewable fuels superpower. 

As we’re hearing today, producers and customers are aligned on the crucial role renewable fuels have to play in decarbonising hard to abate sectors and are ready to grow its use. The time is now to secure Australia’s renewable fuels future. 

I would like to draw your attention to the slide on screen. A digger out in the red dirt of the Pilbara. A passenger jet flying overhead. Other than the fuel in the tank, nothing changes.

But together we’ve reduced Australia’s emissions, boosted the economy and enhanced energy security. 

Thank you for your time and I’m looking forward to the discussion.