The Business Benefits of Dual Fuel Jamie Hartles Commercial and Marketing Director, Howard Tenens

1. The Business Benefits of Dual Fuel Jamie Hartles Commercial and Marketing Director, Howard Tenens

2. Howard Tenens • Overview of Howard Tenens • Sustainability Strategy • Howard Tenens’ Dual Fuel Journey • Business Benefits of Dual Fuel • Summary

3. Howard Tenens Group of Companies Historical Background • Privately owned company with over 50 years trading history • First established in 1958 • Peter Morris, owner and Chief Executive, executed a management buy out in 1983 • Ben and Dan Morris are involved in the business as joint Managing Directors Current Operation • Growing portfolio of freehold property across UK • Now over 3 million square feet (278 709 sq m) • Group turnover over £58 million per annum • Strong balance sheet provides our customers with confidence in our financial strength • Increasing 3PL activities- particularly in Automotive, Retail, Food and Drinks • Investing in skilled management team with a lean structure • Tenens Environmental set up in 2008 to reduce impact of HT

4. Customer Base Food Manufacture Retail Technology & Automotive Forest Products

5. Howard Tenens UK Locations Freehold Group owned warehousing footprint is over 3,500,000 ft2 : • Andover 450,000 ft2 • Ashby de la Zouch 150,000 ft2 • Boston 400,000 ft2 • Crewe 175,000 ft2 • Dagenham 235,000 ft2 • Felixstowe 280,000 ft2 • Swindon 1,085,000 ft2 • Sharpness 470,000 ft2 planning permission to build 274,000 ft2 • Sunbury-on-Thames 50,000 ft2 • South Ockendon 70,000 ft2 + 20 acres hard standing • Tilbury Docks 100,000 ft2 Howard Tenens also operates with strategic partners in the North of the UK. Platform partnership sites include: • Manchester • Newcastle • Glasgow

6. UK Locations

7. Sustainability Strategy • Establishment of Tenens Environmental Division in 2008 • Commitment to reduce the carbon footprint of storing & distributing customer’s products • Innovative solutions being implemented to reduce environmental impacts e.g. • Low energy, motion detecting warehouse lighting • Waste minimisation and recycling of packaging materials • Aerodynamic and low weight trailers • Dual fuel powered vehicles

8. Howard Tenens’ Dual Fuel Journey • Reviewed available fuels and technologies in 2008: CNG most viable option • Trials started in 2009 on two vehicles • Gas containment on both tractor and trailer • 10 conversions undertaken in 2010 and rolled out into fleet • Matching tractor and trailer created operational constraints • Second version delivered containment on tractor only • 13 ‘version 2’ conversions rolled out in 2011 and 2012 • Installed gas stations at Andover, Boston and South Ockendon

9. Howard Tenens’ Dual Fuel Journey • 2013: major fleet replacement programme • 36 dual fuel vehicles introduced: mix of DAF and MB rigids and artics • All conversions undertaken by Prins • State of the art CNG station installed at Swindon depot • 3 dispensers for HGVs and one dispenser for vans • Total of 57 dual fuel vehicles in fleet – 88% of vehicles over 18 tonnes are now dual fuel

10. Dual Fuel Research and Development • Lead partner in a Technology Strategy Board funded research project • Increase our understanding of dual fuel performance v diesel • Ensure we run vehicles as efficiently as possible • Maximise gas substitution • Performance monitoring of vehicles is key • MPG • Substitution rates • Maintenance • VOR • Driver attitudes • Development of telematics system to report both gas and diesel • On-board emissions testing will enable ‘real world’ emissions analysis

11. Why Dual Fuel? 1. Operational Benefits • Vehicle performance same as diesel • Easy to refuel, minimal training required • Driver attitude positive • Minimal additional servicing requirements • Combined gas and diesel tank range (750-900 km) is sufficient to meet most of our shift requirements • Greater flexibility compared to dedicated gas engines • Grid gas connection – security of supply • CNG refuelling network is expanding – helped by Technology Strategy Board funding www.gasvehiclehub.org

12. Why Dual Fuel? 2. Environmental Benefits • Most viable option available for reducing CO2 emissions on HGVS • Dual fuel vehicles has helped reduce our company carbon footprint • Less air pollutant emissions (NOx, PM) helping to improve air quality in towns and cities 15% Reduction 60% Reduction

13. Why dual fuel? 3. Financial Benefits • Rising diesel prices makes gas an attractive option • Gas/biomethane prices range from £0.80 to £1.05 per kg • Reduced duty on gas (70% less than diesel, based on energy content) • Gas prices circa 40% less than diesel on a litres equivalent basis • Duty differential to be maintained until 2024 • Conversions typically cost from £20k to £30k depending on vehicle type and number of tanks required • Payback between 2-3 years based on 120,000 miles per annum

14. Why Dual Fuel? 4. Business Benefits • Sets Howard Tenens apart from competitors – dual fuel is our USP • Helped win new business • Contributed towards the retention of existing business • Working with Howard Tenens has enabled customers to green their supply chain and reduce scope 3 emissions • Recognition through awards • Positive PR

15. Summary • Gas is currently most viable cleaner fuel for heavy duty vehicles • Dual fuel gives flexibility that many operators need • Government has fixed duty differential between diesel and CNG for 10 years • Payback on conversion is typically less than 3 years • Helped win new business and retained existing customers • Positive PR