HVO – An alternative to fossil fuel ?

• Approximately 1.5m UK homes and 600,000 business currently use liquid fuel for space and water heating. Kerosene (heating oil) is being phased out with a ban on the installation of fossil fuel burners in new build homes from 2025 and in existing homes by 2035.
• Households are being encouraged to consider electric air or ground source heat pumps, but these can cost between £6000 to £8000 and £10,000 and £18,000 respectively.
• Heat pumps also require a minimum EPC ‘C’ rating which many older rural homes will struggle to meet without very high insulation costs (the cost of moving from an EPC rating of E-G to a ‘C’ rating is estimated as £15,000), together with a significant level of disruption.
• A clean, non-fossil liquid fuel could have a significant role in helping the UK achieve its target of net zero by 2050.
• Hydro-treated vegetable oil (HVO) is such a fuel, and is derived from used cooking oil, tallow and non-food grade crops, i.e. waste products from plants. Work is also taking place to make liquid fuels from algae – so-called third generation biofuel.
• HVO produces up to 90% less CO2 compared with fossil diesel, and is biodegradable, non-carcinogenic, has almost zero sulphur content and is safer to store than current fossil fuels. It has been certified as fossil-free by the International Sustainability and Carbon Certification (ISCC).
• HVO is a near equivalent for kerosene, differing in viscosity and density. There is no discernible difference in heat output from a home heated with HVO to one heated with kerosene. Only minor changes are required to enable existing oil boilers to use it. These changes are estimated to cost around £500. Most existing oil tanks are compatible with the storage of HVO.
• A limiting factor maybe supply, as demand from other sectors such as road transport and aviation is growing. However, HVO production in Europe and US is due to expand by 300% between 2020 and 2025 and there may also be a new plant built on Teesside. It is also possible to use an HVO blend to begin with until HVO production has increased.
• The cost of HVO is currently higher than fossil fuel, although increased production and a change in the classification and tax regime to reflect its use as a heating fuel would help to reduce this (HVO is currently taxed as a road fuel and its cost would be reduced if it were re-classified as a residential heating fuel).
• A UK-wide pilot across nineteen sites has shown that HVO works in virtually all existing oil heating systems with only simple modifications. The project was expanded to around 200 homes during the winter of 2021/22.
• A template letter has been produced by Future Ready Fuels (a coalition of two trade bodies, UKFIDA and OFTEC) to enable people to write to their MP to lobby for affordable green solutions such as HVO being part of future policy. This can be found at http://www.futurereadyfuel.info.