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Northern Powerhouse European Union
Leadership & Mentoring

Shifting to low carbon products: In Conversation with Prema Energy

We catch up with James Taylor, General Manager of specialist oil supplier Prema Energy in Stockport, to discuss how and why they are pivoting the business towards low carbon products and services.


Founded in 2013, Prema Energy imports, blends and supplies specialist fuel oils, focusing predominantly on heating oils for energy users off the gas grid and diesel alternatives.

Despite working in a traditionally high-carbon industry, Prema wanted to look at ways it could provide cleaner and greener products to new and existing customers. Having developed a low carbon heating oil and cleaner alternative to diesel, Prema has been working with the Hub’s Green Technologies and Services team to better understand the UK’s transition to net zero and the opportunities opening up for alternative fuels.

Thanks to the Hub’s Switched On masterclasses, digital and innovation support, General Manager James Taylor (pictured below) now has the systems and processes in place to promote Prema’s low carbon offering directly to end users. The company is also busy exploring options for additional low carbon products and services in future.

 

(James Taylor, General Manager at Prema Energy)

 

We went to an industry event on the low carbon future hosted by GC Business Growth Hub which made us realise that they could really help us to grow in that direction – and it absolutely has done.

James Taylor, General Manager

What prompted your move towards low carbon products?

We supply some of the biggest whisky distillery groups in Scotland, who have ambitious sustainability plans. They were looking to reduce their emissions and a big part of that involves swapping out fossil fuel heating oils with low carbon alternatives. We’ve been working with them on this for the last three or four years, and they now use 100% renewable bio-oil in two of their flagship distilleries, as well as low carbon heating oil blends at other sites.

This has spurred us on to start supplying these products to other companies wanting to reduce their emissions. From there it was a natural step to also start supplying cleaner alternatives to diesel, such as HVO – hydrotreated waste vegetable oil. Our HVO performs better than diesel and provides emissions savings of 90 per cent. We’ve seen the demand for this really start to pick up, especially since the pandemic.

What’s driving this increased demand?

Much of it is being driven at the national level. We feel it’s imminent that there will soon be a real cost placed on emitting carbon in industry. Larger emitters like the whisky distilleries already have to pay for each tonne of carbon they emit through the EU (now UK) Emissions Trading Scheme, but if you look at the UK’s net zero plan there’s a very strong argument to say there has to be a price on carbon across the economy sooner rather than later. So for us, being able to offer significant emissions reduction is very much the direction we want to go in.

We’ve also noticed that demand has really picked up during the pandemic. I think there’s been a big change in the way we think as individuals – people increasingly want to do the right thing to fight climate change and have cleaner air. It just seems like we all stopped and began to think about what we were really doing.

Are you seeing increasing demand from smaller companies as well?

Absolutely. There are a lot of smaller SMEs who want to do the right thing. Using low carbon fuels as part of their environmental plan can help them to win work from the bigger companies who are looking to reduce their Scope 3 emissions and work with greener suppliers. People are even messaging me on LinkedIn in the evenings about these fuels because they’re so interested in them, which is great to see.

What effect will the net zero agenda have on your business model in the long-term?

Low carbon liquid fuels are a sensible next step in the transition to clean energy. In the long-run, industry may one day come off liquid fuels altogether and we’re thinking about that a lot now. We want to be a company that helps others to reduce their emissions, which opens up an exciting future for us. This starts with the fuels, but in future we’d like to be a position to offer other related low carbon products and services as well, particularly to SMEs who may need more help and guidance. We could have gone in the other direction by doubling down on fossil fuels, but this just feels like the right thing for us to do, and it’s what we will enjoy doing as well.

How has the Hub’s support helped?

We went to an industry event on the low carbon future hosted by GC Business Growth Hub which made us realise that they could really help us to grow in that direction – and it absolutely has done. Myself and my colleague have been to so many of the Hub’s courses that it’s becoming a bit of an ongoing joke between us!

On the business development side, the support has helped to gear us up for the energy transition and partner with the right people on R&D for new products and services. As a busy small business it can be hard to get a good forward look into the future, but the Hub has given us the confidence to pump innovation into the company in a way that doesn’t take too much of our time on a day-to-day basis.

The Hub has also been brilliant on the sales and marketing front. We originally developed as a wholesaler, but we wanted to start marketing directly to end users. We’ve now installed digital marketing and sales functions into the business and also put an excellent management system in place so we can grow in a controlled manner.

When you take away the lessons from GC Business Growth Hub and put all these great systems and processes into practice, it removes the stresses and challenges of controlling growth as a small business. I’m so glad we invested the time into it because it’s all now coming to fruition.

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