The transport sector is the largest source of carbon dioxide emissions in the UK, accounting for c. 34%. Heavy goods vehicles ("HGVs") produce 17% of road transport emissions. HGVs fuelled by biomethane generated by anaerobic digestion plants are the only commercially available at-scale solution to substantially reduce these emissions. The take-up of CNG offers fleet operators the opportunity to significantly lower their emissions, whilst also providing a cheaper whole-life alternative to comparable diesel vehicles.
About the portfolio
Assets include operating onshore wind farms in the UK.
Investment attractions
- Revenues earned from sale of biomethane under contract
- No exposure to underlying merchant gas prices
- Government commitment to gas-powered vehicles
- Attractive combination of predictable and reliable income and potential for capital growth
First investment
2020
Potential risks
- Ramp-up risk with lower than forecast vehicle numbers
- Competition from other sources of renewable fuels
Case study spotlight: CNG Fuels
In December 2020, FGEN acquired a minority stake in a portfolio of Compressed Natural Gas (“CNG”) refuelling stations for heavy goods vehicles, located in the UK. Since then, the portfolio has grown to sixteen stations operating under the brand CNG Fuels.
