HVO Fuel - Heading in the Right Direction

1/Great news to hear Chiltern Railways have launched the first UK passenger service powered by green HVO fuel! Hopefully just the beginning of rolling out cleaner fuels across rail

In my previous role I was a big advocate for HVO, so quick thread on what it is and why it’s so good

2/HVO is a synthetic bio diesel, basically made from vegetable oil. When talking about HVO in UK it will normally be being produced from used cooking oil (UCO), but any bio-feedstock could be used (though which one has big impact on sustainability benefits)

3/You take your bio-feedstock (chemically just a pile of carbon and hydrogen chained together) “crack” the complex fat chains into simple hydrocarbon “building blocks” that you can then combine together to the correct size to make your synthetic fuel (propane/diesel/paraffin)

4/HVO is chemically almost identical to mineral diesel, so a “drop in” replacement – put in your car and it works fine, no changes required. Minor differences - HVO has less impurities so is cleaner, burns a bit easier but slightly lower energy density

5/HVO can be called a “2nd gen” biofuel vs original FAME biodiesel & diesel blends. FAME is cheaper, comes from same feedstocks as HVO and is also “drop in”. But it is made differently, and is worse – NOx emissions are higher & vulnerable to water contamination (maintenance pain)

6/The main benefit of switching to HVO is a “Net” reduction in greenhouse gas emissions of up to 90%. Some are sceptical of “net” reduction claims, as HVO does produce the same tailpipe CO2 as diesel. However there is lots of work showing net reductions are real and significant

7/The net reduction comes from two sources – the carbon captured by the crops grown to create it. And for HVO from UCO, the averted emissions from the UCO breaking down if it was sent to landfill. HVO price premium encourages more crops, better recycling & less oil being drilled

8/ Ricardo did an excellent study for the EU comparing the whole lifecycle of a wide range of “alternative fuels”. This work confirmed that the climate change benefits of HVO (from UCO) were real, and greater than hydrogen. Report here:

9/Why am I a massive fan of HVO? 3 main reasons:

·      Immediacy of carbon savings

·      Air Quality

·      “Marketisation” of decarbonisation

Though there are two main drawbacks:

·      Availability

·      Scalability

10/ HVO can be introduced practically immediately – no engine mods, no CAPEX. Just call up a fuel merchant and away you go! No other decarb scheme is as quick. We’re in a climate emergency and emission savings NOW are worth more than hypothetical ones in the future

11/For many diesels working in city centres air quality is actually a bigger issue than carbon. HVO offers significant AQ emission reductions, especially on the older engines. When I did lab engine tests we saw reductions as high as 40%! Massively justifies the business case.

12/Air Quality is one of biggest killers in the UK. Even with lower emission drop in more modern engines HVO could still be a big benefit. UK rail emissions cause up to 800 premature deaths per annum, HVO if rolled out across the rail fleet could save lives

13/Finally HVO is brilliant as it gives an opportunity for people to “Put their money where their mouth is”. Gov and companies often talk a good decarb game when they are able to can kick the costs down the road. HVO gives a way of making big decarb benefit now, but at a cost

14/There is no point us investing in the long-term decarb solutions (e.g. electrification) if gov/corporates aren’t willing to spend today on solutions like HVO with stronger business cases. Better to force the political arguments today, rather than wait till its too late.

15/ As once that fight is won, HVO massively improves the case for switching to long-term decarb solutions. HVO “translates” decarb benefits into financial ones, due to price premium vs diesel. Save much more money switching from HVO to battery than from diesel

16/However what's the catch? Well the big one is cost – HVO is more expensive, approx. 20% premium. But the bigger issue is availability – as emerging market, not many suppliers and price can be very volatile.

17/Impossible to hedge/fix the price in long term contracts which is essential for larger fuel users that need certainty of cashflow. Also guaranteeing the sustainability of supply chain harder with smaller suppliers. But things improving as bigger players like Shell moving in

18/The other issue is scalability– used cooking oil is a limited resource. We simply don’t have enough sustainable HVO for everything – switching all UK rail diesel to HVO would consume about 25% of the EU supply, and of course with limited supply price will increase with demand

19/DfT has tried to “reserve” biofuels for harder to decarb sectors like aviation. But rail is arguably the perfect and better recipient for the limited supply. It’s able to make use of it immediately and as a more efficient mode of transport is a better use of a limited supply

20/If HVO is so good why isn’t it rolling out faster? Well no real incentive vs higher cost. Despite Gov claims around decarb, rail is under huge cost pressure, and rail’s tax free Red diesel is very cheap. Gov could solve the issue at no cost by limiting tax relief to biofuels

21/Long term of course the rail decarb solution is primarily electrification & battery trains, not just due to sustainability but also because an electric railway is a much better railway for passengers and operators than a diesel one. 

22/ However in the interim HVO is a brilliant solution for existing diesel and bi-mode fleets that we should be encouraging. For isolated and remote lines like the far north of Scotland it should also be seriously considered as the long term solution as well /end

P.S. Sorry for the long thread! But hopefully of interest. Complex topic to condense, but let me know comments and questions. Lots of references out there – recent DfT scientific panel paper good place to start -