Molson Group bring their Service Portal into play.

By John Edwards.

From 1 April 2022, changes to UK law mean that many people and businesses who use red diesel (AKA rebated fuel; gas oil; tractor diesel) will need to switch to more costly white diesel, which carries the full Fuel Duty rate…

This change to the red diesel rules is part of the Government’s 2050 net-zero decarbonisation plan. It is aimed to encourage the wider use of white diesel and greener fuels by the commercial sector, especially in mining, quarrying, construction, plant, logistics, leisure, and highway maintenance.

At the recent Hillhead exhibition, I had the opportunity to sit down with Jason Powles who is Chief Operating Officer at Molson Group to discuss the recent changes on diesel fuel and the reaction from the construction, quarrying and recycling industries and Molson’s take on it from a dealer ‘point of view.’

Jason, “A lot of our customers did not think it was going to come in and it was a surprise to them when it did. A number of our customers have seen their fuel bill triple overnight and with over 70 accounts on our books it is an enormous impact; with one customer going from 0.5 million pounds to 1.5 million pounds in a week so it is a massive impact.”

We discussed the practicalities and agreed that everyone has an opinion on the future of diesel power with some arguing that with the advent of electrified equipment it is on its way out, with others saying it will always have its place. One thing however is certain, alternatives are available, and some are becoming more realistic options in terms of practicality and cost. Many OEMs agree that the option of hydrogen propulsion is many years away and it is obvious with the industry where it is, the problem is not going to go away. The hybridisation and electrification of construction equipment is a trend that has been gaining momentum and is a choice now often made in the Recycling Industry where this mode of propulsion is comparatively easier.

How viable are hydrogen fuel cells in construction equipment?

Hydrogen fuel cell (HFC) technology and its potential application in construction equipment is being increasingly discussed, but there are questions surrounding how cost effective it can be in real-world applications.

It is a fairly simple concept; HFCs combine hydrogen and oxygen to produce electricity, which runs a motor. The only by products are heat and water.

With compact fuel cells that take up less space than batteries equipment manufacturers can be more creative in machine designs. Unlike traditional lead-acid batteries, hydrogen fuel cells have no power degradation, and refuelling takes about three minutes, much like an internal combustion engine.

However, the big downside is expense with the cost being higher than in more time-tested technologies but should decrease as adoption increases. On the positive side there is no grid dependency and solar power can be harnessed to make hydrogen on site so, in concept, it could be a sustainable technology.

Jason, continued, “Working in the field (quarries/construction sites) makes it difficult for electric operation where there is no infrastructure to support this mode.

“Electrification will however certainly proliferate at the smaller end where they can ‘plug-in;’ for instance, two fairly static machines operating on a waste site would be comparatively straight forward for the adoption of machines electrically driven.

“We are currently making great strides in the waste sector. Sennebogen for instance has a long-standing heritage with electric drive machines; we also have new products released from Terex Ecotec, so I would like to think we are leading that type of conversation and have the practical working knowledge to recommend an electric option.”

The Environmental, Social and Governance Agenda (ESG):

What are the Environmental, Social, and Governance (ESG) criteria? Environmental, social, and governance (ESG) criteria are a set of standards for a company’s behaviour used by socially conscious investors to screen potential investments. Environmental criteria consider how a company safeguards the environment, including corporate policies addressing climate change, for example. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.

Jason, commented, “By 2050 the government has stated we must all be net zero so all of us have to change our habits and the first step is reporting.”

How do you capture that CO2 data?

“Well at Molson we have been developing our own telematic software for many months to capture that data from all the machines in one place. By next month we will launch a product which will report to the client and give him a full breakdown – number of machines, CO2 output by day/machine/operator and then will all this data they can decide how to change their behaviours.”

With a clear path a client can then decide if the application can only embrace diesel usage, then how can he change the way he burns it.

While diesel engines become cleaner, smaller, and more efficient, construction equipment manufacturers are also developing diesel-electric solutions that allow them to meet performance requirements needed for off-highway equipment, as well as operate within changing environmental regulations for both noise pollution and carbon emissions. Also pairing diesel engines with an electric drivetrain can offer the same benefits expected of electrification – improved fuel efficiency, reduced noise, lower operating costs, and reliable power – but with the added durability that is expected from diesel engines.

Jason, added, “changing the way the fuel is used can be achieved for example, by changing the operator’s style to reduce the idling time, turning the air-con down (even if its hot today) as they do not know what they are burning! It is just a matter of re-training (Molson hope to be an active player in this retraining).

“Currently we have a number of customers trialling this on our new portal which will eventually be ‘rolled out’ to all of our customer base allowing them to track fuel usage and co2 and change how their sites are operated.

“You can split this into 3 categories: category 1 which is measurement, category 2 is what actions you can take in your own business to reduce your own carbon, and category 3 is how do you help the supply chain to reduce their carbon.

“As a dealer of construction equipment, we are currently measuring the CO2 in our business and then apply mitigation actions into our own business such as electric cars, solar panels when we choose, but then we have to develop the supply chain – so what do we do to get our customers to reduce their carbon?

“That is really important for a number of reasons as we have been set a target by government in 2015 which is currently been examined very keenly by financial institutions. It is a fact that those who have a carbon output higher than say someone else then these institutions will be less keen to lend money and inevitably charge them a higher interest rate; this is very real and is happening right now!

“Recently we met with our banks, and we showed them the service portal which illustrates a category 3 process which allows us to borrow money as we are doing something positive hence effective borrowing.

“Banks have their own target so they can turn around to you and say your carbon levels are too high we can’t lend the money to you, so as a business it is the top of our agenda.”

How will the market react?

It is a huge technology and behavioural change, so the market needs the tools to start measuring and realise that CO2 levels are important for the global environment and economic climate change.

Jason, added, “I actually believe that at a local level if we can reduce their fuel burning by 2 litres/hr across the entire fleet it will make them significant savings.

“We are also working with the manufacturers about what is going to be driving this issue long-term (will hydrogen be driving the change?) or is it going to diesel, or electric or hydrogen? I do not see a world where electric is going to be completely dominant as it will be down to the sighting of an electric feed or hydrogen tanks.

Key part of the offering:

“Advise comes with sale of a machine, it is a selling asset as the knowledge is a key part of our offering. We can have a significant impact on the industry, what we sell and how we sell it. For example, on the crushing and screening side of things we can offer insight on machine set-up (having the screener level for instance) improving throughput thereby reducing the cost/tonne and the co2/tonne thereby maximising the machine performance at the lowest cost level. The only way to do this is analyse the data through our platform and feed-back information so that people can change the way they operate.

“It sounds simple, but the reality is its quite complex and we understand this, but we are on the road to full development of that if we do not as a business, I think Molson will not experience growth, because the banks will increase the interest rate.”

Jason, concluded, “We have to look at our employment agenda we have to bring people into the industry, and we have to drive change by having exciting technical data platforms bringing people in we never knew we could get into our business to drive our service portal.

“We have a team right now; about a dozen people whose sole focus is to analyse the data not just within our company but in our customers as well

“We have gone ‘live’ with half a dozen customers who we are evaluating over the next three months. We have a number of improvements like core modules which will be developed over the next 3-6 months. We will capture their feedback, ironing out any bugs and then a full launch in Q3.”

With 25 years of industry knowledge Molson realise data is the key and through their exciting Service Portal are on their way to providing that data to their customer base.

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