Market Dynamics Shift: UK’s HVO Fuel Industry Faces Unprecedented Change

HVO fuel, produced from recycled natural vegetable oils, offers many environmental advantages over fossil diesel, including reduced carbon emissions by up to 90%.

Supply and Demand

Hydrotreated Vegetable Oil or HVO has become the talk of many businesses over the last six-12 months and many are considering switching away from traditional fossil fuels to HVO as an environmentally friendly fuel option.

HVO can easily replace red diesel in existing infrastructure while providing significant cost savings while simultaneously cutting carbon emissions and helping decrease Scope 3 emissions from their supply chains.

HVO has generated much enthusiasm as an economical renewable liquid heating fuel option in the UK domestic heating market, with significant investments being made into production capacity.

hvo fuel in the UK
Source: Unsplash.

HVO demand has also seen significant growth as nations seek to meet renewable energy targets and decrease greenhouse gas emissions. HVO can easily be blended in at any percentage without needing to modify equipment or drain storage tanks, making it suitable for all vehicles including heavy goods vehicles and marine engines.

HVO has been approved for use by the International Sustainability and Carbon Certification (ISCC) as an eco-friendly fuel that does not contribute to deforestation, being produced from waste products that would otherwise end up in landfill, producing lower lifecycle emissions than fossil fuels, being easy to store, use in any vehicle and storage, making HVO an invaluable choice when transitioning off fossil fuels to low-carbon alternatives like biodiesel – helping the UK reach its Net Zero goals by 2045.

Supply Chains

Many companies are turning to HVO fuel in an effort to decrease their carbon footprint and meet government regulations, but switching can present its own set of challenges.

HVO production has increased due to legislative requirements for greener fuels. This trend has led to some oil refineries and co-production facilities switching their production plants over to produce HVO, or developing dedicated HVO refineries; others specialize in producing it using feedstocks such as tall oil (a byproduct of papermaking), rapeseed or waste cooking oils as an energy source.

HVO differs from biodiesel in that it's made from renewable raw materials that don't compete for land or water resources with food crops. Produced using the same process as biodiesel but using hydrogen instead of methanol in its esterification step, hydrogen-based VGO doesn't suffer the same issues of oxidation and degradation that biodiesel does.

An increasing number of transport, construction, aviation, marine and off-road equipment manufacturers use HVO fuel; not to mention both HS2 rail system and Glastonbury festival has been running exclusively on it since 2019. You can visit this site to learn more about Glastonbury’s use of green fuels.

Glastonbury Festival
Source: Unsplash.

Businesses considering HVO as an alternative to diesel face the challenge of ensuring sufficient supplies in the future, which is where long-term contracts with HVO suppliers come into play.

Not only can these contracts guarantee sufficient supplies of HVO fuel; many also include deforestation-free production guarantees and chain of custody assurances from leading suppliers.


HVO pricing is currently considerably higher than standard diesel due to being taxed as transport fuel instead of home heating oil.

HVO can deliver significant savings over fossil fuels when used in both commercial and domestic applications, due to its higher cetane number and lower cloud point; this allows it to be used at temperatures as low as -42 degrees Celsius! Furthermore, its nontoxic characteristics make HVO an appealing option for vehicles, machinery and boilers.

HVO fuel is one of the most eco-friendly options available to businesses, producing less harmful emissions than diesel and up to 90% reduction of CO2 emissions. As such, HVO can play a pivotal role in combatting climate change when produced from existing waste materials in compliance with ISCC sustainability criteria.

market dynamic shift for the HVO fuel industry
Source: Unsplash.

HVO production plants can utilize a wider selection of feedstocks compared to traditional biodiesel production facilities due to hydrogen's use as part of its esterification process, rather than methanol; this allows UK HVO Fuel suppliers greater flexibility when choosing sources for HVO. This fuel has the additional advantage of not experiencing the same stability issues as conventional biodiesel, gas oil or diesel due to its production process which renders it immune from diesel bug and contamination that could affect performance when stored or in use.

Furthermore, due to its superior quality and long term storage lifespan of 10 years without microbial growth occurring if appropriate management and tank maintenance procedures are in place.


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