Transformation of Diesel FleetCopy Link

BHN Logistics (part of Tolaram Group) is seeking innovative solutions for reducing emissions and cutting operational costs by retrofitting their diesel truck fleet. As well as shifting to alternative fuel types, they are open to innovative solutions to improve efficiency. The proposed solutions should bear in mind Capex considerations and align with, or support, sustainable infrastructure. A straight switch to electric, CNG or hydrogen fleets is not viable due to limited resources and built infrastructure available. A flexible, scalable solution would be preferred to benefit Nigerian business operations directly.

Solutions are invited from, but not limited to, the following sectors: 

• Transport
• Energy
• Logistics
• Manufacturing
• Data
• Sensors
• Design
• AI
• Satellite
• Materials

Tolaram/BHN Background

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.

Collaborative Pilot

A collaborative pilot project will be scoped together with the winning solution provider. This pilot may take any suitable form, with suggested timeline of a 3–6-month project with 1-2 trucks fitted out with the new solution. This may involve using new parts/engines or retrofitting/converting old engines.

If you would like to discuss this challenge further, please contact Babar Javed at babar.javed@iukbc.org.uk anytime. Additional technical details are also available upon request.

Innovate UK Global Alliance Africa

Innovate UK Global Alliance Africa project is a six-year project funded by UK International Development through GCRF and the Foreign, Commonwealth and Development Office (FCDO).

• 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.

The identified solution must/should address the following:

• Solution must apply to diesel trucks
• Solution may be integrated at any point in the supply chain
• Solution must be sustainable and reduce emissions
• Solution must provide a flexible energy solution
• Solution must involve cost reduction overall (break-even as minimum)

• Solution may be delivered by external contractor or via in-house team
• Solution must comply with local transport regulations
• Any additional infrastructure required should be identified
• Solutions that can be implemented by trained local staff are preferred
• Solution may address some or all of the challenge, though holistic solutions are preferred
• Solution should eventually support 1,000km range for trucks
• Compare current and possible emission rates
• For any fuel additives, consider lubricity effects also 

• Solution should operate in the context of normal temperatures and humidity
• Solution should be applicable during normal working hours
• Solution must not increase time/frequency of maintenance required
• Versatility and capacity to scale are desirable
• Solution must be safe to operate
• Solution must apply to Nigeria (initially)

• 27 Feb 2025 – Competition launch 
• 20 Mar 2025 – Information session/Q&A
• 11 Apr 2025 – Deadline for applications
• Apr 2025 – Selection and notification of finalists
• May 2025 – Pitch day & selection of winner
• Jun 2025 – Collaboration discussions
• Jun 2025 – Pilot programme activated

• The solution’s operation should aim to be cost-effective and/or profitable in terms of ROI 
• Winning solution providers may become long-term partners, gaining access to Tolaram’s supply chains
• External contractors and in-house technical arrangements will be considered
• The opportunity may later extend beyond trucks to other transport solutions 
• Please specify a topline business case to support your solution
• Consider initial cost, recurring costs and lifespan

Proposed solutions may not be viable if they are:

• Unable to supply robust technology
• Unable to create reliable supply chain
• Not cost effective
• Unsuitable for Nigerian transport regulations
• Unsuitable for Nigerian operations

Entrants to this competition must be:

• Established businesses, start-ups, SMEs or individual entrepreneurs
• Africa-based entrants, UK-based entrants and those from RoW are invited to apply

Due Diligence requirements for seed funding:

• 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]
• Further information will be required later relating to company policies, financial history and recent grant funding received.

Applications will be assessed on:

• Relevance to the topic
• Innovative nature of the subject
• Coherence of the proposed business model
• Feasibility/ economic viability
• Development potential
• Maturity of project/solution
• Ability to launch project quickly/Ease of implementation
• Price/quality ratio
• Suitability for the Nigerian Market

• Existing background IP associated with a potential solution will remain with Solution Provider(s). Where any new IP generation is envisaged, it will be subject to the mutual IP agreement of the Solution Provider(s) and Innovation Challenger.
• Any commercial deployment of a transferred solution or newly developed solution, through licensing, joint venture, partnership or direct investment, will be subject to the commercial agreement between the Solution Provider(s) and Innovation Challenger.
• Where necessary, a non-disclosure agreement (NDA) may be signed to uphold confidentiality in the engagement between the Solution Provider(s) and Innovation Challenger. (This would be expected to be after company selection. It is suggested that details of IP not be disclosed initially. Focus on the outcomes of the technology proposed).
• Innovate UK does not take any share of IP ownership or enter into commercial ventures through the iX programme.

• The application form for this challenge will require applicants to provide company information and answer 3 questions - Idea Summary, Technology Readiness and Intellectual Property – each with a limit of 300 words.
• Optionally, supporting documents can be attached to the application. We recommend that supporting documents are limited to those which are directly relevant to the application. Please note that applications with no supporting document will not receive any penalty in assessment. Supporting documents which the Assessment Panel deems to be superfluous may be disregarded. Examples of useful additional documents include product images or short specification sheets, slide decks detailing the solution and/or company background, or solution case studies.
• We recommend that you complete the application form in Google Chrome as other browsers may have compatibility issues. The application form does not need to be completed in one session and can be saved for future edits. Please ensure that you toggle “Stage Complete” for each section before submission. Note that you will no longer be able to edit your application once you have clicked “Submit Idea” at the bottom of the Summary page.