Charging ahead: Circle K’s Jonathan Diver on leading the way in alternative fuels

Leading the charge in alternative fuels, Circle K will have their entire truck fleet transitioned to HVO by the end of April. Senior Director of Fuel at Circle K, Jonathan Diver explains how sustainability is the driving force for the company.

The move from fossil fuels to alternative fuels is continuing at pace, although challenges remain for expanding availability as easily as many companies would like. This has not stopped Circle K from making an unprecedented move to having its fleet of delivery vehicles fuelled exclusively by milesBIO HVO100.

EMBRACING THE FUTURE

Last year Ireland’s leading forecourt and convenience retailer announced that it would be the first fuel retailer in Ireland to use Hydrotreated Vegetable Oil (HVO) renewable diesel in its fleet of delivery vehicles, which is the equivalent of over 2,000 cars removed from the road, once the rollout is complete.

Jonathan Diver said that this rollout is on track and will be completed by the end of April.

“We have product available in our Dublin Port location for our core fleet with works ongoing in Cork and Galway to get our southern and western fleets transitioned. Our entire delivery fleet will be running on milesBIO HVO100 by the end of our financial year in April,” he said.

“This move is us trying to make a difference in our own environmental footprint and as a result, hoping others will follow. We hope that others in transport and logistics embrace the turn away from fossil fuels. The transition to electrification will happen, but it will take time.

“HVO can be used in the vast majority of diesel vehicles. Yes, there is a cost factor, but government regulation can help with that.”

“With HVO we want to get this product out to the market and get some form of government engagement so we can encourage others to use it and other alternative fuel products, such as compressed natural gas or hydrogen. We have locations that provide compressed natural gas (CNG) which is a good alternative for HGVs. Low-carbon fuels will provide real alternatives in the shorter term.”

SUSTAINABILITY

This drive towards sustainability is just one of four key areas for Circle K, as the company looks towards the longer-term future.

The company has charging facilities at 37 of their locations, with several sites ready to go live in the coming months, as Jonathan explained that “significant investment has been put in by Circle K to this area”.

“EV (electric vehicles) is the centre point of government policy when it comes to low carbon transport for the future” he said.

“There are factors which need to be developed to ensure we are making our customers’ lives a little easier, such as our infrastructure, having the right charging facilities available, and in the right locations.

“EV is a key and fascinating space in many ways. Circle K Norway is well ahead of Ireland in terms of its overall EV offering, with multiple sites offering EV chargers as the primary refuelling option for customers, so access to shared learnings and best practices from colleagues in an advanced EV marketplace is a great resource.

“There are a small number of EV cars on the road in Ireland, when compared to traditional fuel cars, but it is increasing, and at an increased rate. Consumers are looking for more charging points, and it is our responsibility to provide this service as efficiently as possible.

“Government policy in Northern Ireland and the Republic of Ireland suggests we need to do more to speed up the transition, and we have committed very sizeable investment to this space, however, it’s quite challenging to roll out more EV chargers. We are finding it very difficult to secure the required electrical output in some of our service stations to feed high speed chargers.

“The infrastructure is not there in some of the in-demand locations we have identified. To make matters worse, the speed at which installations are happening is not quick enough. We need a change in how the whole process happens, as there is just too much red tape.

“We are a provider of fossil fuels; sustainability is probably our highest priority and EV is a big, big part of that. This red tape is holding us back from getting more done sooner and that’s the challenge really.

“It is still early days for EV, and there is still a lot to learn, even for EV drivers themselves. There are even some EV drivers who leave their cars sitting at the charging point all day and blocking other EV drivers from using it, so there are behaviours we need to understand, and take the learning.”

Whilst EVs are the most widely known and acknowledged amongst businesspeople and consumers alike as to where sustainability is headed, it is not the only option available, and there are shorter term actions using biofuels which can reduce carbon emissions sooner.

“Another key area for us is E10, the 10% ethanol blend into unleaded fuels. We sell a lot of fossil fuel and the more BIO we put into that, the more we can reduce carbon emissions. We will continue to work with government agencies to push the government to do more in this area, so that the industry can in turn do more to reduce our collective carbon footprint.”

Veering away from the reliance on fossil fuels was brought to the fore last year, following Russia’s invasion of Ukraine, although Circle K’s fuel supply in Ireland was minimally impacted by this.

“The positives from being part of a global organisation is that the supply of fuel was not as big an issue as it could have been,” said Jonathan.

“We didn’t really have those challenges; it was never a substantive issue for us. Ireland didn’t have a huge reliance directly on Russian fuel, but there were those supply chain issues in other parts of Europe and of course, the biggest impact was on price which was an issue across the globe.

“You will have seen that prices at the pump have come down significantly and a lot of that has to do with the supply of fuel, where it comes from has normalised somewhat. There are further sanctions on fuel sourced in Russia coming next month, and there will continue to be some volatility on fuel pricing, but unlikely to be to the same extreme as last year.”

HIGH STREET AMBITION

In a change of direction for the forecourt leader, Circle K moved onto the high street in 2021 with the acquisition of 10 Griffin Group convenience stores across Dublin, most of which were in coveted city centre locations. While it was described as an “unexpected step” by some, Jonathan said the move to the high street was an ambition of the company.

“The move to city centre locations makes sense, as the customer offering is very similar to what we do well in our forecourts. Impulse items, food on the go, coffee, are all areas where we provide a strong offering.”

On the success of Circle K’s standalone convenience sites in Dublin, Jonathan added: “Twelve months on and the sites are doing well. We are looking at other opportunities in this space and I do not think it would matter if it was in Northern Ireland or the Republic of Ireland. Where we find opportunities that will fit the brief, we will look at them.

“It’s given us an opportunity to work with other partners that we had not worked with before, like Subway, so there are those benefits as well.”

On the recovery of sales post-Covid, Jonathan said: “There has definitely been a change in consumer behaviour. There are some businesses where staff still work from home for part of their working week, and in other cases there are businesses that are back to business as usual, so there are certain locations that are back to 2019 levels and there are some that are still shy of that.”

NORTHERN IRELAND EXPANSION

Circle K’s expansion plans have also seen them further establish themselves in Northern Ireland, currently they have 48 locations with “more sites coming on board all the time”.

“We have two sites coming on in the next few weeks, one in Dungiven and one on the Stewartstown Road, so we are continuing to expand our offering in Northern Ireland. Retailers can see that we provide strong support to their businesses, so as a consequence we continue to expand our business in Ireland,” said Jonathan.

Asked about the differences between the markets in Northern Ireland and the Republic of Ireland, he added: “The two markets are quite similar in many regards. There are different regulatory environments but outside of that, they are quite similar.

“The Northern Ireland forecourts and retail offering is exceptionally strong, as is the Republic’s. The difference from an operations point of view is we have our company-owned network of 160 sites, but from a trading perspective the challenges and opportunities are similar.”

“One key difference on the fuel front is E10, as Northern Ireland brought this in last September following on from the rest of the UK in September 2021, so that is a positive step.

“We have put a lot of pressure on the government in the Republic to bring in E10 and it has committed to bringing it in in April of this year.”

Another recent highlight for Circle K was its Musgrave Marketplace deal, which now sees them supply 14 Musgrave sites in Northern Ireland, with further sites in the planning.

“We have a good relationship with Musgrave across Ireland,” said Jonathan. “We supply them with fuel, and they supply us in the retail sector, it’s great to have that partnership with them.”

RETAIL RESILIENCE

Looking ahead to 2023 and beyond, Jonathan said it is a busy and challenging time.

“We are looking forward to the year ahead and have several key projects in the pipeline. In fuels, our priority is in growing our EV and alternative fuels offering.

“We also want to grow our retail offering and obviously encourage our Dealer Partner network to go from strength to strength.

“On the forecourt side of things, we are continuing to look at sites there also. We took on 14 new sites in our company-owned side in the last 18 months, and we are still looking at more opportunities there.

“In terms of our Dealer Partner reach, we also expanded our network by 14 sites in the same 18-month period. Our target is to add 5% to our network each year,

we did that in 2022 and will do that again in 2023.

“We are really keen to continue growing our network in Ireland and will also have 10 trading franchise stores by this summer.

“We are continuing to look at opportunities in the high street, and we have a number of irons in the fire there. Hopefully we can acquire a few more.

“In B2B, following a competitive tender process carried out by the Office of Government Procurement (OGP), we were awarded the new framework agreement for provision of fuel card services to An Garda Siochána and all public sector bodies excluding the Health Service Executive and the Health Sector. The contract commenced in December last year and will run for a period of up to four years, so this was a real win for us in 2022.

“There are of course challenges we face, for example inflation and the impact that is having on our costs.

“It is also a highly competitive jobs market, so recruiting and retaining employees is key, which has been a challenge in the last 12 months. We need to make sure we are looking after those working for us.”

“Our industry is a particularly dynamic and innovative one, and, if you look at the times that there were significant economic challenges, then our industry was one of the most resilient in terms of retail, and I do not see that changing. People need fuel for their cars and their bodies.”

TO SEE THE FULL FEATURE IN THE NEIGHBOURHOOD RETAILER YEARBOOK, CLICK HERE