Z Energy’s leadership is very open about the fact that climate change will 100 per cent change the game for a business that was built around selling fossil fuels. It already has.
“We’ve just got to have a myopic focus on customer experience,” says Z Energy chief executive Mike Bennetts, of guiding the business away from contributing to climate change and towards offering solutions.
“What are our customers looking for? Mobility solutions. What’s the experience we want to give them around that?”
Z has invested in a car-ride sharing company, installed EV charging units in some of its service stations, and is considering options for its biodiesel plant at Wiri, Auckland.
“The good news for us is we’re not going to have a Kodak moment,” says Bennetts. “We’re not going to be here one year and gone in two years’ time. We can see this [change] coming and we have plenty of time to adapt the position of the company, experiment, learn and scale up.”
Of Z’s 200 service stations, 8 already have an EV charging unit. In considering whether to install more, Bennetts says you have to consider trends in EV ownership. In New Zealand, we have 4.2 million vehicles on the road, of which just 25,000 are currently EVs.
“We think New Zealand is going to be very much like Norway, and in Norway about 50 percent of new cars are EV cars – and that’s where New Zealand wants to be in about 2030,” he says.
“But 85 percent of battery charging is done at home, 10 percent is at a destination like your office or a shopping mall, and only about 5 to 10 percent is on the road in the way you would normally refuel today.”
Z opened the country’s first commercial scale biodiesel plant in 2018, then shuttered it last year because production costs were too high. Now, the company is reconsidering its future after the Government announced a biofuels mandate, meaning a certain percentage of fuels used in New Zealand will have to be biofuels.
“The options are to reopen the plant as is, reopen and expand, or bring in biofuels from overseas,” says Bennetts. “There is a tension between local production and providing the most cost-effective option for customers.”
When the Government announces more detail on the mandate (expected mid-year) Z will be better placed to make a call on the biodiesel plant’s future.
The short answer is no. Z is working really hard to maintain its position as a leader in energy provision.
There are three fuels that will [replace] fossil fuels in the future – electrons, hydrogen and biofuels, notes Bennetts.
“The latter two use the infrastructure we already have and the capabilities to get to market. They are hazardous materials, they are liquid, you store them, you need trucks to move them around. They are lower carbon but use the kit we already have.”
In the future we will need a mix of all three technologies because they each have their place, says Bennetts. Trucks taking cargo up and down the country will use hydrogen, the passenger sector is more likely to switch to EVs and planes based in New Zealand will mostly use biofuel (for long-haul flights).
As it is, fuelling cars is just a portion of Z’s business, which includes a significant retail component. “Forty percent of our sales are to truckies, which are likely to be a hydrogen or biofuel option in future and 20 percent of our sales are jet fuel, which will be biofuel.”
Given Z’s commitment to change and its active role in changing how we choose to get around, Bennetts sees a bright future ahead.