Global Alliance Open Innovation challenge: Transformation of Diesel Fleet

Challenge details

• Who can apply?

  Entrants to this competition must be established businesses, start-ups, SMEs or individual entrepreneurs.

  Africa-based entrants, UK-based entrants and those from RoW (rest of world) are invited to apply.

  UK applicants must ensure that receiving the £25k seed funding will not exceed the £315,000* state aid threshold under UK Minimal Financial Assistance regulations over the current and last 2 fiscal years [or *200,000 euros for applicants affected by EC de minimis regulations]

• Tolaram and BHN Logistics

  Tolaram is a global company, headquartered in Singapore, with significant business operations in Nigeria. Their three main areas of business in are:

  • Consumer goods including Minimie noodles, Dano milk powder and brand partnerships with Kelloggs, Colgate and Guinness.
  • Fintech including Amar Bank, Tunaiku and Insureka
  •  Infrastructure and industrials including Lagos Free Zone, Lekki Port and BHN Logistics

  BHN Logistics is a market leader in logistics and haulage, with 4,000+ vehicles serving the distribution needs of Nigeria’s biggest brands. These include companies within the Tolaram group and external partners such as Olam, Lafarge Africa, Hypo and Munch. Their effective working process and commitment to efficiency over 30+ years ensures their customers’ goods are transported seamlessly in a cost-effective way. Their truck fleet consists of Volvo, Howo, Foton and Faw trucks, which are included in delivery plans according to the logistical task.

• Challenge background

  BHN has 1,600+ heavy trucks (30+ tons) with engine sizes of between 142HP and 500HP. There are 105 new trucks (under 1 year) and 90 trucks over 9 years, with the fleet’s average age being 4.5 years. The fuel efficiency difference of older trucks is approximately 10% lower than newer trucks.

  The fleet has a variety of Euro V, Euro-2, Euro-6 and Zero Emission engines. About 10% of the newer trucks run on cleaner fuel such as CNG and LNG, and there is one EV truck. The other 90% of trucks run on diesel.

  Diesel is currently the most efficient and affordable fuel, but there are many reasons to look at alternatives for future needs. BHN is keen to explore a wide range of solutions, and willing to trial the most promising ones.

  BHN’s goal is to have a completely diesel-free fleet within 6 years and this innovation challenge will provide a first step towards this goal. The company has explored retrofit technology previously but without success. The purpose of this challenge is twofold:

  • Economic benefits. The price of diesel is no longer subsidised in Nigeria and is an increasingly heavy expense for transport operators. Alternative solutions will allow flexibility in fuelling choices.
  • Environmental benefits. In an effort to reduce carbon emissions and limit local pollution, moving away from fossil fuels will be beneficial to both staff and the general public.

  Either of these benefits are desirable, and both of them are ideal, via a practical and affordable solution. Diversity is a strength in communities and also in fleets. Additional fuelling options will support more robust logistics.

  The fleet of Volvo and Chinese trucks range from 30t to 45t to 60t capacity, with various engine and gearbox types. Different trucks suit different customer uses, eg: noodles have higher volume and lower weight vs juice or cement having lower volume and higher weight.

  In terms of costs, a typical CNG truck costs $70,000 to purchase. A typical diesel truck costs $46,000 to purchase, and $45,000 to convert to CNG. Once converted, there are ongoing cost savings as, per litre, diesel costs 1,200 Naira vs CNG at 700 Naira.

  BHN has been slowly increasing their CNG/LPG fleet, but the lack of infrastructure capacity is already leading to 48 hour waits to refuel trucks, causing significant operational delays. Increasing the number of fuel cyclinders on a truck extends delivery range but decreases load capacity.

  BHN has three main hubs, in Lagos, Port Harcourt and Kaduna. A range of 21 contract partners are responsible for recruiting drivers and managing sub-fleets. Truck crews usually comprise of one driver and one team member. There are 1,800 drivers in all, including standby drivers.

  Fuel theft and fraud are ongoing problems, so keeping track of supplies and usage is essential. There is a checking schedule, and spot checks, on the fleet.

  Initial cost, recurring costs and lifespan are critical factors for any solution, so please consider these in your application. Also compare current and possible emission rates. For any fuel additives, consider their lubricity effects also.

• Additional considerations

  Related areas that are being considered include:

  • Retrofitting BHN’s fleet from diesel-powered to CNG-powered vehicles.
  • Explore potential solutions for hydrogen/biogas to power the fleet
  • Using Tolaram’s manufacturing by-products to produce sustainable, alternative, low cost, combined fuels?
  • Implementing a satellite-based tracking system for the fleet
  • Valorisation of worn-out tires (considering pyrolysis) for reuse
  • Valorisation of used engine oils
  • Developing solutions to estimate fleet emissions from diesel usage

  Some of these may be included alongside and/or within your solution if they help to solve the main challenge requirements.

• Rewards and benefits

  • Up to GBP 25,000 seed funding (Subject to T&C)
  • Opportunity to pitch your solution to Tolaram
  • Collaboration/partnership with Tolaram
  • Technical support from Tolaram team
    Sector expertise from Innovate UK
  • Support in the development of a prototype or pilot
  • Invitation to attend or present at Innovate UK events
  • Investor introductions (if investment is required)
  • Application support for any related competitions that are relevant.

• Briefing and support

  Innovate UK Business Connect will hold an online brieing on Thursday 20 March from 10-11.30am GMT. Click here for briefing details.

  If you would like to discuss this challenge further, please contact Babar Javed. Additional technical details are also available upon request.