Many businesses are now starting to consider greener alternatives for their fleets to ensure that they’re prepared for the upcoming ban on new petrol and diesel vehicles. Alternative fuels are therefore rising in popularity, however, they each have their own benefits and challenges, so it’s important that you choose the fuel type that can best fulfil the needs of your fleet.
Previously, we’ve analysed the range of alternative fuels that are available to businesses. In this guide, we will be focussing on HVO to give you a better understanding of how it works and how it could benefit your business.
What is HVO fuel?
Hydrotreated vegetable oil, otherwise known as HVO, is a renewable diesel which is made from processed vegetable oils or animal fats. HVO can be used as a drop-in substitute for diesel, so there is no need to change the current infrastructure or vehicle. This makes it a viable choice for businesses, particularly as it also has a long shelf life and can reduce greenhouse gas emissions by up to 90%.
What are the differences between HVO and biodiesel?
HVO is often confused with biodiesel as they are both fossil-free alternatives to conventional diesel. Although they are both produced from renewable sources, their production process is different, and they are also subject to different fuel standards.
HVO fuel uses hydrogen as a catalyst, whereas biodiesel uses methanol in the esterification process. This prevents HVO fuel from oxidising or degrading, so it can be used as a complete replacement for diesel and can be stored for several years without lessening the quality of the fuel. However, biodiesel contains oxygen and so cannot act as a 100% substitution for fossil fuel as biodiesel content is limited to 20% by most Original Equipment Manufacturers (OEM).
How can businesses transition to HVO fuel?
As HVO fuel is a suitable drop-in replacement for conventional diesel, it’s simple for businesses to make the transition as there’s no need to invest in new, expensive equipment or vehicles. HVO fuel can also be blended into the tank at any ratio without affecting performance or reliability. This means that businesses do not need to drain their fuel tanks before using HVO as it can be added freely, even if you still have some diesel left, so the transition can be completed immediately.
How can businesses benefit from using HVO fuel?
HVO fuel will undoubtedly have a prominent role in the future of transport as it offers businesses many benefits. These include:
- Environmentally friendly – HVO fuel is made from sustainable and renewable materials, so businesses can reduce their carbon emissions. In addition, the use of greener vehicles will improve brand reputation which could help to boost the profits of your company.
- Long storage life – HVO fuel can be stored for up to 10 years which is considerably longer than conventional diesel which can only be stored for up to 12 months.
- Low viscosity levels – Unlike EV technology which can be negatively impacted by extreme temperatures, HVO fuel can be used all year round as it stays mobile and filterable even at temperatures of -32°C.
- Simple transition for drivers – As previously mentioned, HVO fuel can be used in existing equipment and vehicles. Not only will this save businesses money, but drivers will be able to quickly refuel as before without needing any additional safety training. This will result in less downtime than electric vehicles which can take a considerable amount of time to recharge.
What are the challenges of using HVO fuel for businesses?
Despite the benefits of HVO fuel, there are some limitations that businesses need to be aware of. The main challenges of HVO fuel are:
- Inaccessibility – When compared to the rest of the EU, the supply of HVO is undeveloped and so many smaller businesses in the UK are unable to utilise it for their fleets. However, HVO fuel is currently more accessible than hydrogen technology and businesses do not need to rely on an infrastructure being developed before they can use it.
- High cost – The price of HVO is currently more expensive than conventional diesel. However, this cost is still lower than investing in new hydrogen or electric vehicles.
- Incompatible with some vehicles - Businesses need to ensure that they get written confirmation that HVO is approved for use in their specific vehicles before they refuel. As some manufacturers have not endorsed the use of HVO, you could invalidate the warranty of your vehicle if approval is not obtained first.
HVO fuel is already being used by large companies across the UK, such as McDonald’s because it offers an emission-free alternative to diesel without needing to change fleet vehicles or the refuelling infrastructure. Although HVO fuel will help to decarbonise the fuel industry, it’s currently too inaccessible to be used on a wide scale. Businesses that can produce HVO fuel themselves will benefit the most as they’ll be able to keep costs down and have an unlimited supply. However, many businesses will struggle to source enough HVO to fuel their entire fleet, plus the high purchase cost will be difficult for those that are already struggling with the current cost-of-living crisis.
We understand that more businesses will begin to switch to alternative fuels for their fleets soon, so we will aim to provide a selection of fuel cards that can be used by a wider range of vehicles, no matter what type of fuel they use. This will include an EV charge card which will be launched soon.
However, if your fleet still contains petrol and diesel vehicles then explore our current range of fuel cards today by using our simple comparison tool, as we can save your business time and money. Alternatively, if you’d like to find out more information about our services and products, then contact our friendly team at 0113 202 5110.
Matt DoddsWith over 14 years of experience across two of the leading fuel card companies in the UK, Matt Dodds joined RFC Edenred to help lead the development of products to support our customer's move to EV and other alternative fuels, a transition he feels passionately about.