UKPIA statistical review 2022

Statistical Review 2022

About us UKPIA represents eight oil refining and marketing companies that operate the six major oil refineries in the UK and source over 85% of the transport fuels used. UKPIA members also own around 1,250 of the UK’s 8,000+ filling stations in the UK. UKPIA’s associate members are made up of a wide range of companies - from heating fuel supply and Liquefied Natural Gas (LNG) imports, renewable and sustainable fuel producers, to terminals and pipelines - all providing a range of essential services across the industry.

Members

Associate members

Disclaimer: This report has been prepared by UKPIA by its own assessment and does not necessarily represent the views of its members, combined or otherwise. All data shown in tables and charts are UKPIA’s own data, except where otherwise stated and cited in footnotes and are copyright © of the UK Petroleum Industry Association. This report is the intellectual property of UKPIA and may not be published or distributed without prior written permission. The modelling and results presented here are based on information provided by third parties, upon which UKPIA has relied in producing its report and forecasts in good faith. Any subsequent revision or update of those data will affect the assessments and projections shown.

Contents Introduction

4 5 6 9

Statistical Analysis

Economics

Refining Products

19 13 24 42 48 53 59

Low Carbon Fuels Environment Health and Safety

Retail

Mobility Glossary

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Introduction I am delighted as new Chief Executive Officer of UKPIA to bring you the 2022 edition of the UKPIA Statistical Review - a comprehensive and quick reference on the latest available data from the downstream sector. The Review provides analysis for those working in industry, policymakers and all who wish to gain a quantitative understanding of the UK industry. We are now emerging from the Covid-19 pandemic but as the statistics here remind us, we have lived through extraordinary years for the world as governments took action to protect public health by locking down economies. With working from home restrictions in place to prevent the spread of the virus, demand for refinery products fell as did production across the sector. These historic challenges meant that members were not able to make a profit, instead seeing net losses in 2020 of £1.8 billion. Despite the challenge of Covid-19, the sector continued its efforts to achieve Net Zero and companies continued to invest heavily in projects to reduce the UK’s greenhouse gas emissions, with Fulcrum BioEnergy and Essar announcing plans for a waste-to-fuel plant in the North West of England and Shell signing an agreement with Uniper to produce blue hydrogen in the East of England being just two of many recent announcements in the past year. Another cause for optimism has come with large annual increases to the Government’s Renewable Transport Fuels Obligation (RTFO) that are helping to reduce emissions from the transport sector. Since the 1st September 2021, standard (or ‘premium’) grade petrol, known as E10, has contained a higher ethanol content in Great Britain with the change expected to reduce transport carbon dioxide emissions by the equivalent of taking up to 350,000 cars off our roads. Of course 2021 and 2022 have also come with other challenges. A spike in demand last autumn, extended protest activities targeting fuel supply chains and the repercussions of the war in Ukraine have all provided unique challenges for fuel suppliers but have also shown the importance of close working between governments and industry stakeholders that UKPIA is so passionate to promote. Those events and emerging trends will no doubt feature in future editions of this publication but as ever we in UKPIA welcome your questions and endeavour to provide the best information on the sector. I trust you will find the UKPIA Statistical Review 2022 a valuable resource. Elizabeth de Jong – Chief Executive Officer, UKPIA

Statistical Analysis The data, gathered and reviewed by a team of experts from across the downstream oil sector, provides readers with a high-level overview of key metrics from the sector.

Coronavirus: Due to the coronavirus pandemic and restrictions imposed to control the spread of the virus, demand for nearly all downstream oil sector products decreased substantially in both 2020 and 2021. The effects of the decreased demand, and therefore decreased production and sales, can be seen throughout this report. Environment: The environment remains an important factor in the UK downstream oil sector’s consideration, and the refining sector alone reduced its greenhouse gas emissions by 24% since 2000. In 2020, as was the case in 2019, the UK’s overall GHG emissions basket was below both the Kyoto Protocol and Third Carbon Budget targets. Low Carbon Fuels: The UK has the greatest number of operational downstream oil sector low carbon liquid fuel or technology projects in Europe – equal only to France (Fuels Europe 2022). A high renewable transport fuel blending target (9.75% in 2020, but increasing to 10.1% in 2021 and 10.4% in 2022) has supported the development of the UK low carbon fuels industry, with the share of domestically sourced carbon fuels increasing from 11% to 13% in 2020 over 2019. With greater opportunities for double-counting through the use of waste-derived fuels, biodiesel remains the primary low carbon fuel, accounting for 74% biofuel deliveries in 2020.

Refineries: By refining capacity, the UK has the 5th largest refining sector in Europe (Fuels Europe 2022). Proportionally, UK refineries are producing much less jet fuel than before the pandemic – 4% in 2020 and 2021 compared to 9% in 2019. Petrol and diesel production have both increased slightly as a proportion of total refinery output as a consequence of continued decreased jet fuel demand. Mobility: The composition of the UK’s car fleet has continued to change as sales of hybrid and other alternative propulsion cars continued to increase while sales of internal combustion propulsion cars fell or stagnated. In 2021, for the first time, sales of new battery-only and diesel cars represented the same proportion of overall new car registrations – 11.5% of sales – in Great Britain. However, ICE propulsion vehicles still make up 65% of new sales and 95% of all cars.

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Economics

The UK continues to be a net importer of petroleum products and remains active in the global import and export of both products and crude oil, although the contribution to the balance of trade remains negative. Like many sectors in the economy, and as a result of decreased demand due to coronavirus restrictions, the downstream sector was unable to maintain stable annual net profits in 2020.

£15.1 Billion

Downstream oil sector participated in £15.1 billion worth of trade in 2021

UK is net importer of petroleum products

Billion £ Profit Measurement of UKPIA Members Operating Costs Tax and Duty

Profit Measurement of UKPIA Members

As a result of decreased demand and facility closures due to coronavirus restrictions in 2020, both operating costs and gross sales for UKPIA members decreased substantially, by 37.2% and 35.2%, respectively. Tax and duty payments also decreased during the period but at a slower rate of 18.4% year-on-year with members paying over £17.4 billion. With the market challenges faced in 2020, members were not able to make a profit, instead seeing net costs (gross sales + operating costs) exceed gross sales for sector losses of £1.8 billion. Please note that for 2019 one company has reported for a period of 18 months. For 2020, another company has reported for a period of 14 months. As such, the data may not be directly comparable across the years. The negative efficiency of capital investment in the UK’s downstream sector for 2020 is driven by the negative profit achieved that year. While most sectors suffered significant decreases in capital investment efficiency, by 27.2% in manufacturing and 7.7% in upstream oil, the measure increased by 1.4% in the service sector. The 5- and 10-year average return on capital employed (ROCE) values are for the periods prior to 2020 (5- and 10-years ending in 2019). Also, note that refineries are included in ONS “manufacturing” sector statistics.

Gross Sales

80

70

60

50

40

30

20

10

0

2016

2017

2018

2019

2020

Source: UKPIA

Efficiency of Capital Investment

ROCE % Efficiency of Capital Investment

UKPIA Manufacturing Services Upstream Oil

10 15 20

0 5

2020

5-Yr Avg

10-Yr Avg

-25 -20 -15 -10 -5

Source: UKPIA

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GDP Growth and Demand of Oil Products

Percent Change GDP Growth and Demand for Oil Products GDP (CVM SA)

Following the lifting of lockdowns and loosening of coronavirus restrictions, demand and GDP both rebounded substantially in 2021, seeing growth of 4.1% (from 52.3 Mt in 2020 to 54.4 Mt in 2021) and 7.4%, respectively.

Demand

10%

5%

0%

-5%

-10%

-15%

-20%

-25%

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Source: ONS / BEIS

Contribution to UK Balance of Payments

Billion £ Contribution to UK Balance of Payments

In 2020, as a result of the global coronavirus pandemic, the UK downstream sector engaged in just £15.1 billion worth of trade, a 45% year-on-year decrease. While the UK remained a net importer of petroleum products, the net negative contribution to balance of payments decreased by 76.2% from £5.3 billion in 2019 to £1.3 billion in 2020.

6

4

2

0

-2

-4

-6

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: BEIS

Refining

In response to significantly lower demand in 2020 due to the coronavirus pandemic, refinery output and capacity utilisation rates were reduced. Despite falling utilisation rates, refinery fuel consumption remained steady as many of the efficiency improvements depend on higher utilisation rates.

Transport fuel represented 55% of UK refinery output in 2021

UK refineries produced 50 million tonnes of refined product

Less than 80% of refinery capacity was used in 2020

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bp: The Refining Marker Margin is a simplified regional margin indicator using regional crack spreads [UKPIA: the difference between a representative crude oil price and finished product price before tax, calculated by region] to calculate the margin. It does not include fuel and other variable costs and is only reflective of margins achieved on diesel and petrol. Phillips 66 Ltd.: The Realised Refining Margin is calculated as the difference between sales and operating revenues derived from the sale of petroleum products manufactured at P66 refineries, and the purchase costs of feedstocks used to produce those products. It is adjusted to include proportional shares of joint ventures’ margins and excludes items not representative of underlying operating performance. TotalEnergies: The European Refining Main Indicator (to 2017) represented the margin after variable costs for a hypothetical complex refinery located around Rotterdam that processes a mix of crude oil and other inputs commonly supplied there to produce and market the main refined products at prevailing regional prices. The Variable Cost Margin (from 2018) is the average margin, defined as the difference between sales of refined products and the crude purchases and other variable costs, divided by refinery throughput on variable costs realised by TotalEnergies’ European refining business. Shell: The Refining Market Average Industry Gross Margin is the gross profit margin, including variable costs, for the Rotterdam Complex. Designed as a GAAP-compliant measure.

$/boe European Refining Marker Margins European Refining Marker Margins

10 12 14 16 18

bp

Phillips 66 Ltd

0 2 4 6 8

TotalEnergies

Shell

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Source: BP / Phillips 66 / TotalEnergies / Shell Annual Reports

As demand rebounded following the coronavirus pandemic, crude prices stabilised through 2021 and refining margin indicators for most companies increased, largely returning to levels achieved pre-pandemic. Only one company’s indicator remained depressed in 2021, as output remained low throughout the year. The descriptions of each company’s refinery margin are shown to the right but may not be directly comparable.

UK Refinery Capacity Utilisation

UK Refining Capacity Utilisation

Crude processing did not see a dramatic recovery in 2021, only increasing by 1.1% while, similarly, refinery utilisation only increased by 2.8% due to continued low domestic demand as a result of enduring coronavirus restrictions and some seemingly longer-term changes to consumer behaviours such as working from home.

Million toe 0 10 20 30 40 50 60 70 80 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Crude Processed Utilisation Rate

Percent Usage

60% 65% 70% 75% 80% 85% 90% 95% 100%

Source: BEIS

UK Refinery Throughput and In-Refinery Fuel Use

Million toe 0 10 20 30 40 50 60 70 80 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Throughput Refinery Own Fuel Usage UK Refinery Throughput and In-Refinery Fuel Use

Despite lower refinery utilisation rates and feedstock throughputs, the percentage of the refinery’s own fuel use remained relatively steady, year-on-year, only increasing by 3.2% as units started back up following decreased 2020 output.

Percent Usage

0% 1% 2% 3% 4% 5% 6% 7% 8%

Source: BEIS

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UK Refinery Production

Million toe UK Refinery Production

Total UK refinery output remained depressed in 2021, falling by 1.2% from 50.5 Mt to 49.9 Mt, while relative product production remained steady from 2020 to 2021. Only two products saw an increase in production in 2021: petrol and gas oil, which saw increases of 9.1% and 2.3% to 14.3 Mt and 5.9 Mt, respectively. On the other hand, diesel and jet fuel production decreased by 4.4% and 5.6% to 11.9 Mt and 1.8 Mt, respectively, in 2021. Including 2021, UK refinery output has decreased by 32% since 2012, whereas to 2019, UK refinery output had only decreased by 17%. The 10-year average proportion of refined product production has not been significantly affected by the coronavirus pandemic. Although coronavirus restrictions had a more significant impact on petrol demand than diesel, petrol continues to make up more than a quarter of refined products produced due to the configuration of UK refineries. In 2021, jet fuel only made up 3.7% of refined products, compared to the 7% average.

Petrol DERV Gas Oil Jet Fuel Fuel Oils Petroleum Gases Heating oil Other

80

70

60

50

40

30

20

10

0

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Source: BEIS

10-Year Average Proportion of Refined Products Produced in the UK 10-Year Average Proportion of Refined Products Produced in the UK

Other 11%

Heating oil 4%

Petrol 27%

Petroleum Gases 10%

Fuel Oils 7%

Jet Fuel 7%

DERV 22%

Gas Oil 12%

Source: BEIS

Products

The downstream oil sector manufactures and delivers a range of refined products to the UK market. In 2021, while demand for transport fuels remained depressed, diesel and petrol remained the most in- demand products. During the 2020 pandemic year, crude used in UK refineries was primarily sourced from the United States and Turkey, unlike previous years when the North Sea dominated crude imports.

Motor and aviation spirit made up 22% of product exports

51 million tonnes of product were delivered for domestic consumption in 2021

30% of UK product exports were sent to the United States in 2020

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UK Inland Oil Products Deliveries 2021 Motor Spirit Diesel Million toe Inland Oil Product Deliveries Million toe Inland Oil Product Deliveries Heating (Burning) Oil Bitumen

Diesel Bitumen Million toe Inland Oil Product Deliveries Aviation Fuel Fuel Oil Aviation Fuel Fuel Oil Other Gas oil Aviation Fuel Diesel Bitumen Motor Spirit Other Gas oil Heating (Burning) Oil

Million toe Inland Oil Product Deliveries Motor Spirit Heating (Burning) Oil Motor Spirit Diesel Heating (Burning) Oil Bitumen 28 Heating (Burning) Oil Lubricants Motor Spirit Diesel Heating (Burning) Oil Bitumen 28 Motor Spirit Lubricants

Million toe Inland Oil Product Deliveries

Lubricants Million toe Inland Oil Product Deliveries 28

Aviation Fuel

Aviation Fuel

Fuel Oil Diesel

Aviation Fuel Oil Petroleu

Petroleum Gases Bitumen

Petroleum Gases Other Gas oil

Lubricants

Fuel Oil

Fuel Oil

Other Gas oil Petroleum Gases

Petroleum Gases

Lubricants

Lubricants

Other Gas oil

Other Gas oil

Petroleum Gases

28

28

28

24

24

24

24

24

24

20

20

20

20

20

20

16

16

16

16

16

16

12

12

12

12

12

12

8

8

8

8

8

8

4

4

4

4

4

4

0

0

0

2001

2001

2006

2006

2011

2011

2016

2016

2021

2021

0

0

0

2001

2006

2011

2016

2001

2006

2011

2016

2021

2001

2001

2006

2006

2011

2011

2016

2016

2021

2021

Source: BEIS

Source: BEIS

S

Source: BEIS

Source: BEIS

Source: BEIS

The impact of the coronavirus pandemic on transport fuels (motor spirit, diesel, and aviation fuel) has reversed in 2021, resulting in a 7.8% increase in deliveries of these products over 2020. Despite the overall year-on-year increase in transport fuel deliveries, jet fuel deliveries decreased by 7.7% in 2021 as UK air traffic remained as much as 65% below 2019 levels in 2021. Deliveries of other products, on the other hand, decreased by 9.6%, although deliveries of such products have been decreasing since 2018 – albeit by much smaller margins.

Inland Product Deliveries 2021

Inland Product Deliveries, 2020

Million toe

Aviation Fuel, 4.7

Petroleum Gases, 3.8

Motor Spirit, 10.2

Heating (Burning) Oil, 3.5

Bitumen, 1.8 Other petroleum gases, 0.9 i, 0.3 ii, 0.2

Butane and propane, 2.7

iii, 0. 2

Diesel, 21.7

Other Gas oil, 4.8

i: Lubricants, 0.3 million toe; ii: Fuel Oil, 0.2 million toe; iii: Naphtha, 0.2 million toe

Source: BEIS

As a result of continued air travel restrictions through 2021, aviation fuel deliveries remained the fourth highest refined petroleum product delivered. Compared to 17.8% of deliveries in 2019, aviation fuel only made up 8.5% of 2021 deliveries. Deliveries of petroleum gases also decreased significantly, by 26.3%. With increased economic activity gas oil use increased, resulting in a 12.6% year-on-year increase from 2020.

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Import-Export Balance of Oil Products Imports Exports Balance Import-Export Balance of Oil Products, 2020 Million toe

15

10

5

0

-5

-10

Motor / Aviation Spirit

Light Oils / Spirits

Petroleum Gases

Aviation Kerosene

Burning Oil

Gas Oil/ Diesel

Fuel Oils Lubricants Other

Source: BEIS

Year-on-year, the product trade balance for oil products has not seen any substantial change. Most inwards trade balances have decreased – from 7.6 Mt in 2019 to 4.5 Mt in 2020 for aviation kerosene and 10.3 Mt to 6.9 Mt for diesel and gas oil. Comparatively, the outward trade balance for fuel oil has increased substantially, from 0.84 Mt to 2.5 Mt.

Source Location of Oil Products, 2020 Source Location of Crude, 2020

Source Location of Crude, 2020 Source Location of Crude, 2020

Million toe Million toe

Million toe

UAE, 4.02

Turkey, 11.36

Turkey, 11.36

USA, 5.63

TUR, 2.19

United States, 11.76

United States, 11.76

Tunisia, 3.95

Tunisia, 3.95

Rest of World, 3.48

CHE, 1.55

SWE, 1.52

Trinidad and Tobago, 2.97

Trinidad and Tobago, 2.97

ESP, 1.24

SAU, 0.97

Saudi Arabia, 1.64

Saudi Arabia, 1.64

RUS, 0.92 UK, 8.30

Other Europe, 0.51

UK, 8.30

POL, 0.57

Russian Federation, 0.99

Russian Federation, 0.99

PRT, 0.70 QAT, 0.79

Source: BEIS

Source: BEIS

Source: BEIS

The contribution of North Sea-sourced crude decreased dramatically from 51% in 2019 (12.7% from the UK Continental Shelf) to just 24% in 2020 (18.1% from the UKCS). The decrease of North Sea crude proportion in UK refinery feedstock has been as a result of the decrease in share of Norwegian crude. Reversing previous trends, the share of US crude increased, from 20.9% in 2019 to 25.7% in 2020, while the share of Turkish crude increased dramatically from 1.4% in 2019 to 24.8% in 2020. As a result, US and Turkish crude made up half of crude used in UK refineries. The total amount of crude imported to the UK decreased by 21.2%, year-on-year, to 37.5 Mt. In addition to crude imports, the UK imported 24.4 Mt of refined petroleum products in 2020 – down 26.4% from 2019. Imports from the Netherlands decreased dramatically from 7.5 Mt in 2019 to 265 kt in 2020. Similarly, imports from Belgium, India, Finland, France, Kuwait, and Russia decreased by 99%, 95%, 92%, 88%, 89%, and 84%, respectively. Conversely, imports from Poland, Spain, Sweden, the UAE, and the USA have increased by 132%, 239%, 122%, 461%, and 202%, respectively.

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Export Destination of Refined Oil Products, 2020 Export Destination of Refined Oil Products, 2020 Destination and Use of Oil Products, 2020 Source Location of Crude, 2020

Destination and use of Oil Products, 2020 Destination and Use of Oil Products, 2020 Source Location of Crude, 2020 Million toe

Million toe

Million toe

Million toe

Million toe

Turkey, 3.04

Turkey, 11.36

Turkey, 11.36

United States, 5.61

Exports, 18.6

Exports, 18.6

United States, 11.76

United States, 11.76

Tunisia, 2.97

Tunisia, 3.95

Tunisia, 3.95

Domestic Deliveries, 29.0

Domestic Deliveries, 29.0

Rest of the World, 1.83

Switzerland, 1.99

Trinidad and Tobago, 2.97

Trinidad and Tobago, 2.97

Portugal, 0.28

Saudi Arabia, 1.64

Saudi Arabia, 1.64

UK, 8.30

UK, 8.30

Refinery Use, 3.0

Refinery Use, 3.0

Singapore, 0.47

Sweden, 1.05

Russian Federation, 0.99

Russian Federation, 0.99

Source: BEIS

South Africa, 0.61

Spain, 0.72

Source: BEIS

Source: BEIS

Source: BEIS

Source: BEIS

As a result of reduced demand, the total volume of refined oil products produced by UK refineries decreased by 20.4%, year-on-year in 2020. Due to significantly reduced domestic demand, the proportion of products consumed domestically decreased by 4% year-on-year. Further evidencing decreased trade with the Netherlands (which had been the UK’s biggest trading partner for products), and much of the share of EU products in total UK imports has decreased by at least 70%. In some cases - such as Belgium, the share decreased from 13% to zero in 2020. In 2020, only 15.6% of exported products went to the EU, down from 74% in 2019. As the shares of major EU trading partners decreased, the share from other countries increased dramatically, such as Switzerland (from less than 0.1% to 10% in 2020) and the USA (from 15% to 30% in 2020).

Low Carbon Fuels

Low Carbon Fuels, including Renewable Fuels, are an important way to reduce carbon emissions produced by the transport sector. The large annual increases to the Renewable Transport Fuels Obligation (RTFO) target have resulted in corresponding large increases in renewable fuel deliveries. With limited domestic production capacity, as the obligation levels increase, more renewable fuel will be sourced from abroad – in 2020 12% of Renewable Fuels delivered to UK markets were sourced domestically.

Biodiesel made up 69% of domestic low carbon fuel deliveries in 2020

73% of UK low carbon fuels are derived from waste- based feedstocks such as Used Cooking Oil and Tallow

GHG savings of 5.2 MtCO 2 e/year were achieved in 2020

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Despite an increased RTFO target in 2020, renewable fuel deliveries decreased in 2020 as a result of decreased overall fuel demand caused by coronavirus travel restrictions. In 2020, only biomethanol deliveries increased – by 42% from 33.6 MLeq to 47.7 MLeq. The combined effect of the increased RTFO target and decreased demand resulted in a slight change to the relative proportion of renewable fuel supplied – biodiesel, bioethanol, biopropane, and biomethanol now represent 70% (1576 Mleq), 25% (563 Mleq), 2.3% (51.3 Mleq), and 2.1% (47.7 Mleq) of supply, respectively in 2020. In 2020, 2,238 Mleq of renewable fuels were supplied to the domestic market. The RTFO target increased from 8.5% in 2019 to 9.75% in 2020. As in previous years, higher RTFO targets were primarily met by increasing the volume of double counted biodiesel in the UK transport fuel supply. In 2020, 90.6% of biodiesel was eligible to be double counted compared to 26.5% of bioethanol. The share of double-counting eligible bioethanol has increased by 125% over 2019. Although bioethanol and biodiesel are not the only renewable fuels blended, they dominate the mix. * Prior to 2018, RTFO reporting periods covered deliveries made between 15 April of one year and 14 April of the next. From 2019, the reporting period begins on 1 January and ends on 31 December. As such, 2018 is a shorter period (15 April 2018 to 31 December 2018)

Million Litres UK Renewable Fuel Deliveries

UK Renewable Fuel Deliveries

Biodiesel

Bioethanol

Biomethanol

Biopropane

1000 1200 1400 1600 1800

0 200 400 600 800

*

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018 2019 2020

Source: DfT

Renewable Fuel Content in UK Fuels, with Double Counting Renewable Fuel Content in UK Fuels, with Double Counting Percent of Total Fuel Volume

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018 2019 2020 Bioethanol Biodiesel RTFO Target

Source: HMRC / DfT *

Source Location of Renewable Fuels, 2020 Source Location of Renewable Fuel Feedstocks, 2020 Renewable Fuel Types, 2020

Renewable Fuel Types, 2020 Renewable Fuel Types, 2020

Million Litres

Million Litres

Million Litres

CHN, 625.67

GBR, 309.60

Bioethanol, 562.91

Bioethanol, 562.91

Off road biodiesel, 114.67

Off road biodiesel, 114.67

USA, 205.71

Rest of World, 405.76

Biopropane, 51.29 Biomethane, 60.49

Biopropane, 51.29 Biomethane, 60.49

Biodiesel FAME, 1,575.50

Biodiesel FAME, 1,575.50

MYS, 157.13

ESP, 124.29 Diesel (origin Bio), 38.15 Biomethanol, 47.74

Diesel (origin Bio), 38.15 Biomethanol, 47.74

BEL, 28.46 SWE, 28.74

FRA, 122.30

POL, 35.71

Biopetrol, 37.40 Biodiesel HVO, 37.82

DEU, 111.95 Biopetrol, 37.40 Biodiesel HVO, 37.82

RUS, 39.45

NLD, 48.68

Other, 9.81

Other, 9.81

IDN, 80.07

Source: DfT

Source: DfT

Source: DfT

ARG, 66.64 BRA, 69.18

UKR, 76.42

As described previously, biodiesel (FAME) and bioethanol remain the predominant forms of renewable fuel distributed in the UK. Although they are dominant, other types of renewable fuels are also blended into the fuel supply. For the most part, supply of biofuel products decreased in 2020 across major product types. Off road biodiesel, biomethanol, biopetrol, and biomethane supply increased by 22.5%, 172.5%, 40.1%, and 172.5%, respectively. The top three supplying countries of biofuel feedstocks to the UK market – China, the US, and the UK – have remained the same in 2020. While the UK has remained a top three supplier, the volume supplied decreased by 17.5% year-on-year. The most significant gain in the top 10 feedstock suppliers was Malaysia which increased its supply by 52% to 157 Mleq in 2020.

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Renewable Fuel Feedstocks

Renewable Fuel Feedstocks, 2020

As in previous years, used cooking oil is the main feedstock for renewable fuel used in the UK. Its proportional share of the total increased from 52.6% in 2019 to 54.7% in 2020. While corn-derived renewable fuels remain the second-highest type, the share has decreased from a total of 11.8% in 2019 to 7% in 2020. The introduction of the “development” fuel obligation and the issuing of the first dRTFCs in 2019 has led to the introduction of more diverse feedstocks.

Million Litres

Wheat, 100.95

Corn, 176.87

Tallow - category 1, 94.78

Sugar cane, 74.06

Other, 100.42

Oilseed rape, 60.22

Sugar beet, 57.64

Food waste, 96.70

Soy, 69.45

Starch slurry (waste), 95.59

iii, 44.38

iv, 42.56

ii, 54.68 i, 55.36

i: Vegetable oil waste pressings, 55.36 ML; ii: Sulphur-contaminated soapstock oil, 54.68 ML; iii: Municipal organic waste, 44.38 ML; iv: Palm, 42.56 ML; v: Palm oil mill effluent, 24.49 ML Used cooking oil, 1,387.64

v, 24.49

Source: DfT

Renewable Fuel Feedstock Sources Renewable Fuel Feedstock Sources

Due to the ability of double-counting waste-derived renewable fuels, the proportion of these feedstocks in the UK supply remains high – at 76%, an increase of 11% over 2019. As the overall volume of renewable fuel decreased, the volume of waste-derived renewable fuel has increased, by 5.4% in 2020. The total amount of renewable fuels that were awarded RTFCs or dRTFCs in 2020 was 2.536 million litres.

Million Litres

Waste Derived

Non-Waste Derived

2500

2000

1500

1000

500

0

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018 2019 2020

Source: DfT

GHG Savings from Renewable Fuels, 2020 GHG Savings from Renewable Fuels, 2020 Percent GHG Savings from Renewable Fuels, 2020 Percent

100%

100%

80%

80%

60%

60%

40%

40%

20%

20%

0%

0%

Source: DfT

Source: DfT

GHG savings are established by determining the difference between the carbon intensity of the renewable fuel (excluding ILUC) and the carbon intensity of the fossil fuel it displaces. The actual impact of a renewable fuel on overall GHG savings is dependent on the volume of that fuel delivered. For example, while renewable hydrogen may have 100% GHG savings, less than 2,807 litres equivalent were delivered for use in 2020, down 11.5% from 2019. Overall, the average renewable fuel savings and weighted average renewable fuel savings are similar values – in 2020 they were 80.9% and 81.8%, respectively. There is no relevant trend to be found in annual GHG savings as they are dependent on feedstock and source location of the renewable fuel which fluctuate annually. The RTFO rewards renewable fuels on a volumetric basis once the GHG savings threshold has been met. Whilst GHG savings are recorded, the policy does not award RTFCs based on the scale of the carbon intensity reduction.

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Environment

Emissions reductions achieved by the downstream sector demonstrate that the sector takes climate and air pollution seriously. As emissions from the energy, and other, sectors have decreased substantially over time, emissions from the transport sector have become the largest source of GHG emissions.

The 6th Carbon Budget sets a target of 178 MtCO 2 e/year by 2033 in 2020

Emissions reductions were made across all types and sectors in 2020

Refinery emissions continue to decrease

Greenhouse Gas Emissions and Commitments

Greenhouse Gas Emissions and Commitments

The UK’s overall basket of greenhouse gas emissions decreased by 9.5% in 2020, while the net CO 2 emissions decreased by 10.6% - the largest single drop seen in either measure to date. As the decrease was caused by coronavirus restrictions, it is unlikely to be representative of the trend. To 2020, the UK’s basket of GHG emissions had decreased by 49.7% and CO 2 emissions by 47% making carbon emissions 37% lower than the Third Carbon Budget target of 509.75 MtCO 2 e/year, at 321.09 MtCO 2 e/year. While energy sector emissions have shown the most significant long-term trend of decreasing emissions, in 2020, the transport sector saw the largest year-on-year emissions decrease at 19.2%. Despite this large decrease in emissions, the transport sector remains the UK’s largest sectoral source of GHG emissions.

MtCO 2 e

Net CO2 emissions Net CO 2 emissions

GHG Basket

100 200 300 400 500 600 700 800

Kyoto 1

Kyoto 2

Carbon Budget 1

Carbon Budget 2

Carbon Budget 3

Paris Agreement NDC

Carbon Budget 4

Carbon Budget 5

Carbon Budget 6

Net Zero

0

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Source: BEIS / EC / CCC

UK GHG Emissions, by Source

MtCO 2 e UK GHG Emissions, by Source Energy Transport

Business

Residential

Other

250

200

150

100

50

0

2000

2005

2010

2015

2020

Source: BEIS

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UK Carbon Dioxide (CO 2 ) Emissions MtCO 2 e UK Carbon Dioxide (CO 2 ) Emissions Energy Transport Energy Transport 2 e

Business Residential Business Residential

Other

Other

600

600

500

500

400

400

300

300

200

200

100

100

0

0

2000

2005

2010

2015

2020

2000

2005

2010

2015

2020

Source: BEIS Source: BEIS

Including 2020, overall UK CO 2 emissions have decreased by 60.4% since 2010. As CO 2 emissions make up the majority of UK emissions, the trends observed on page 24 are again visible here. Despite reduced transport usage as a result of the coronavirus restrictions, the transport sector remains the primary source of CO 2 emissions, accounting for a 30.4% of all CO 2 emissions. Residential sector emissions remained higher than business sector emissions for a second year.

Refinery CO 2 Emissions

Mt Refinery CO 2 Emissions

As a result of decreased demand in 2020, refinery CO 2 emissions saw a 15.4% year- on-year decrease. The most significant part of this decrease came from process unit emissions (each of which play a role in the overall process of converting crude oil into finished petroleum products) which decreased by 24.2% in 2020. Due to this large decrease in process unit emissions, the overall increase in such emissions from 2000 has fallen from 26.4% between 2000 and 2019 to just 0.4% from 2000 to 2020. Large combustion plant (LCP) emissions, which decreased by 8.6% in 2020 have decreased by 33.8% since 2000. Overall transport sector emissions decreased by 19.2% in 2020, resulting in an overall decrease of 25.4% since 2000 to 97.7 MtCO 2 . The vast majority of transport sector emissions continue to come from the road transport segment, although the largest year-on-year decrease in emissions, of 60.1% was seen in the aviation segment due to prolonged travel restrictions. Road, rail, and shipping CO 2 emissions decreased by 19.1%, 22.2%, and 12.8%, respectively, in 2020.

Large Combustion Plants

Process Units

12

10

8

6

4

2

0

2000

2005

2010

2015

2020

Source: UKPIA

Transport CO 2 Emissions

Transport CO 2 Emissions

MtCO 2 e

Road Shipping Aviation Railways Other mobile

100 120 140 160

0 20 40 60 80

2000

2005

2010

2015

2020

Source: BEIS

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MtCO 2 e UK Methane (CH 4 ) Emissions

UK Methane (CH 4 ) Emissions

Overall, UK methane emissions decreased by 3.9% to 51.3 MtCO 2 e in 2020. The most significant year-on-year change to UK methane emissions came from the transport sector, which saw a 21.3% decrease. Again, due to lower demand across the economy, methane emissions decreased in all sectors, including agriculture, which previously saw an annual average increase in emissions of 0.1% between 2010 and 2019. Despite increasing usage of natural gas for electricity generation, methane emissions from the energy sector have decreased by 69.5% since 2000. The transport sector is a minor contributor to UK methane emissions – accounting for only 0.15% (76.5 ktCO 2 e) of emissions. Of this small portion, 88% comes from the road segment, while shipping emits another 8.4%. Including the 21.5% decrease in road segment methane emissions in 2020, road methane emissions have decreased by 90% since 2000, largely as a result of turnover in the car fleet. Methane emissions from shipping have increased by 26% since 2000 (including an 11.4% decrease in 2020). Please note that these statistics are presented in ktCO 2 e.

Waste management

Agriculture Energy LULUCF Other

120

100

80

60

40

20

0

2000

2005

2010

2015

2020

Source: BEIS

ktCO 2 e Transport CH 4 Emissions

Transport CH 4 Emissions

Road Other

700

600

500

400

300

200

100

0

2000

2005

2010

2015

2020

Source: BEIS

Average Average Days of Air Pollution Exceeding “Low”, Urban Areas PM 10 PM 2.5 NO 2 SO 2 O 3 Average Days of Air Polution Exceeding “Low”, Urban Areas PM10 PM2.5 NO2 SO2

Average Days of Air Polution Exceeding “Low”, Rural Areas Average Days of Air Pollution Exceeding “Low”, Rural Areas PM 10 PM 2.5 NO 2 SO 2 O 3 Average PM10 PM2.5 NO2 SO2

Days

O3

Days

O3

30

10 12 14 16 18 20

25

20

15

0 2 4 6 8

10

5

0

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Source: DEFRA

Source: DEFRA

Continued reduced activity in 2021 as a result of reimposed coronavirus restrictions, have meant that the number of days on which pollution concentration of any type decreased year-on-year in both urban and rural area classes. Indeed, there were no days in 2021 on which NO 2 or SO 2 pollution was measured to exceed “low” concentrations in either urban or rural areas. With weather closer to “average” in 2021 – meaning cooler and cloudier than in 2020 (“Met Office: A Review of the UK’s Climate in 2021” 2022) – O 3 pollution decreased by 68% and 48% in urban and rural areas, year-on-year. “Low” is defined by the Daily Air Quality Index, which categorises air pollution (ozone, nitrogen dioxide, sulphur dioxide, and PM 2.5 and PM 10 particles) into four bands: low, moderate, high, and very high. The concentration of only one of these four must exceed “low” for a day to be captured above.

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30 | Statistical Review | 2022

UK Nitrogen Oxide (NO x ) Emissions kt UK Nitrogen Oxide (NO x ) Emissions kt

Energy Transport Energy Transport

Other

Other

2500

2500

2000

2000

1500

1500

1000

1000

500

500

0

0

2000

2005

2010

2015

2020

2000

2005

2010

2015

2020

Source: NAEI Source: NAEI

Despite the substantial decrease in transport sector NO x emissions, the relative proportions of emitting sectors have not changed: together the UK’s energy and transport sectors still account for 96.7% of the UK’s NO x emissions. Despite the impact of decreasing demand for products and services, energy sector NO x emissions only decreased by 3.9% year-on-year in 2020, compared to a 5.75% year-on-year decrease in 2019. Since 2000, energy and transport emissions have decreased by 61.5% and 57.5%, respectively. Overall since 2000 NO x emissions have fallen by 58.6% to 968 kt in 2020.

Refinery NO x Emissions

kt Refinery NO x Emissions kt

Since 2000, refinery NO x emissions have decreased by 49% to 10.6 ktCO 2 e. Most of these reductions have come about due to emissions reductions from LCP units, including investments made in low-NO x burners. Please note that this and the remaining graphs have units of kilotonnes.

Large Combustion Plants Large Combustion Plants

Process Units Process Units

16

12

8

4

0

2000

2005

2010

2015

2020

Source: UKPIA

Transport NO x Emissions

kt Transport NO x Emissions

Transport sector emissions have fallen by 57.5% since 2000 to 554.8 kt, including a 29.2% decrease in 2020. While all transport segments experienced large drops in emissions in 2020, the aviation segment saw a 59.4% decrease due to travel restrictions throughout the year. Shipping – which emits nearly half of UK transport NO x emissions – saw the smallest year- on-year decrease of emissions in 2020 at 13.6%.

Aviation Road Shipping Railway Other

1400

1200

1000

800

600

400

200

0

2000

2005

2010

2015

2020

Source: NAEI

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kt UK Sulphur Dioxide (SO 2 ) Emissions kt

UK Sulphur Dioxide (SO 2 ) Emissions

Energy Energy

Transport Transport

Industrial Industrial

Waste

Waste

1000 1200 1400 1600

1000 1200 1400 1600

0 200 400 600 800

0 200 400 600 800

2000

2005

2010

2015

2020

2000

2005

2010

2015

2020

Source: NAEI Source: NAEI

The energy sector remains the highest emitter of SO 2 emissions in the UK, accounting for 74.6% of emissions in 2020. Emissions from that sector decreased by just 8%, compared to the 60.5% year-on-year decrease in transport sector SO 2 emissions. Overall, UK SO 2 emissions have decreased by 88% since 2000, including a 27.6% year-on-year decrease in 2020.

Overall refinery SO 2 emissions have decreased by 69.3% (to 17.6 kt) since 2000, including an 87.2% decrease in LCP emissions and a 23.6% decrease in process unit SO 2 emissions.

kt Refinery SO 2 Emissions

Refinery SO 2 Emissions

Large Combustion Plants

Process Units

50

40

30

20

10

0

2000

2005

2010

2015

2020

Source: UKPIA

Transport SO 2 Emissions

kt Transport SO 2 Emissions

The transport sector is the second largest emitter of SO 2 emissions. Since 2000, transport sector emissions have decreased by 83.4%, including a 60.5% decrease in emissions in 2020, to 32 kt. In 2020, due to massive reductions in SO 2 emissions from other transport segments, the shipping segment represented 75% of transport SO 2 emissions. Travel restrictions resulted in a reduction in aviation SO 2 emissions by 60.6% in 2020. Road fuels have been “sulphur-free” since 2009 and therefore road transport represents only 0.6% of UK transport SO 2 emissions.

Shipping Road Aviation Railway Other

100 120 140 160 180 200 220

0 20 40 60 80

2000

2005

2010

2015

2020

Source: NAEI

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UK Carbon Monoxide (CO) Emissions

kt UK Carbon Monoxide (CO) Emissions

Energy

Transport

Waste

Industrial

5000

4000

3000

2000

1000

0

2000

2005

2010

2015

2020

Source: NAEI

Including a 9.1% year-on-year decrease in 2020, overall carbon monoxide emissions have decreased by 72.5% since 2000 to 1.3 Mt. While the largest decreases in CO emissions since 2000 have come from the transport sector, emissions from the energy sector have fluctuated since 2010, resulting in a 0.4% annual average increase in emissions to 2019. In 2020, only CO emissions from industrial sites increased – by 1.5% to 112.8 kt.

Refinery CO Emissions

kt Refinery CO Emissions

Overall CO emissions from refineries have decreased by 48.1% to 2.7 ktCO 2 e since 2000. However, as process unit emissions fluctuate widely, there is no clear emissions reductions pattern. To 2020, LCP and process unit emissions decreased by 10.7% and 0.9%, year-on-year.

Large Combustion Plants

Process Units

6

5

4

3

2

1

0

2000

2005

2010

2015

2020

Source: UKPIA

Transport CO Emissions

kt Transport CO Emissions

The majority of CO emissions from the transport sector originate in road transport (68.3%), followed by shipping (23%). Since 2000, emissions from road transport have fallen by 94.8% - including a 32.8% year-on- year decrease in 2020 – while emissions from aviation fell by 83.6% - including 64.2% in 2020.

Road Aviation Shipping Other

3000

2500

2000

1500

1000

500

0

2000

2005

2010

2015

2020

Source: NAEI

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36 | Statistical Review | 2022

UK Benzene (C 6 H 6 ) Emissions

Most UK benzene emissions originate in the energy sector, which accounts for 63.7% of the total, followed by transport at 25.6%. While benzene emissions in most sectors have decreased in 2020, emissions from the industrial sector increased slightly – by 0.7%.

kt UK Benzene (C 6 H 6 ) Emissions

Energy Transport

Waste Industrial

25

20

15

10

5

0

2000

2005

2010

2015

2020

Source: NAEI

Transport C 6 H 6 Emissions

kt Transport C 6 H 6 Emissions

Benzene emissions reductions in the transport sector have largely come from the road transport sector, which has seen emissions reductions of 96% since 2000. By contrast, shipping emissions – which made up 80% of transport benzene emissions in 2020 – have only decreased by 13.4% since 2000.

Road Shipping Other

14

12

10

8

6

4

2

0

2000

2005

2010

2015

2020

Source: NAEI

UK 1,3-Butadiene (C 4 H 6 ) Emissions

tonnes UK 1,3-Butadiene (C 4 H 6 ) Emissions

Overall UK 1,3-butadiene emissions have decreased by 82.2% to 1.1 kt since 2000 – primarily due to decreasing transport sector emissions, including a 13% decrease in overall emissions in 2020. While energy sector emissions had previously been increasing on an annual average of 1.5% between 2010 and 2019, those emissions fell by 7.3% in 2020.

Energy Transport

Industrial

7000

6000

5000

4000

3000

2000

1000

0

2000

2005

2010

2015

2020

Source: NAEI

Transport C 4 H 6 Emissions

tonnes Transport C 4 H 6 Emissions

The road segment accounts for 50% of 1,3-butadiene transport sector emissions, down from 96.3% of the 2000 total. By contrast, 1,3-butadiene emissions from the shipping segment have seen an average annual increase in emissions of 4.5% since 2000, seeing the first year-on-year decrease in emissions (by 11.9%) in 2020. Please note that the graphs on this page have units of tonnes.

Road Aviation Shipping Railway Other

1000 1500 2000 2500 3000 3500 4000 4500 5000

0 500

2000

2005

2010

2015

2020

Source: NAEI

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