Decarbonising fleet operations is no longer just a desirable option for most operators. It is now a matter of policy, driven by legislation and moral obligation. It is important to ensure that an organisation’s fleet strategy prioritises sustainability in every aspect.
Electric Vehicles (EVs) have become a viable option for many fleets, including those with diverse assets and intricate operational requirements. However, for some, especially operators with large vehicles, EVs may not be a feasible solution. In such cases, many fleets have turned to Hydrotreated Vegetable Oil (HVO) as an alternative to standard diesel. This is particularly evident among local authorities, emergency services, and infrastructure providers.
The transition to HVO is gaining momentum due to its simplicity, but there are still adoption challenges. Let’s take a closer look at the fuel, its benefits, and guidance on how to implement it.
What is HVO and what is the headline benefit?
HVO is a type of biodiesel made from vegetable oil, used cooking oil, and other lipid sources. The hydrotreating process produces a more dependable fuel compared to first-generation biodiesel, which could cause fatty deposits in vehicle fuel systems. In most cases, HVO can directly substitute fossil-derived diesel.
When running HVO, there will be up to a 90% reduction in net CO2 emissions. This is achieved entirely because HVO is a plant-derived fuel, so the CO2 emissions when the fuel is burnt are equivalent to the CO2 absorbed by the plant stock during growth. This leads to a net reduction. However, it’s only 90% because there are additional emissions to consider from the transportation of the feedstock, the hydrotreating process, and the ongoing distribution of the ready fuel.
So far so good! It is also true that, given a minimum engine standard that most fleets will have complied with for many years, HVO is a drop-in solution and can be used across all diesel assets without any modifications. Although the transition will be driven in the main by the needs of large, diesel-powered assets, all diesel vehicles with access to depot fuelling can benefit. There are, however, some considerations that must be made before the transition is made. There is firstly the question of which operators can make the switch and what are the practical requirements and the second is the significant cost difference between HVO and fossil-derived diesel.
Which organisations can use HVO and what are the first steps?
While HVO can be used in most diesel vehicles as a drop-in solution, fleet managers should consult with the vehicle manufacturer to verify the vehicle’s compatibility. The manufacturer can provide confirmation and recommend any necessary measures to optimise the engine’s performance, such as tuning or fuel filter changes. It is critical to seek these confirmations to prevent any negative impact on the vehicle’s warranty or manufacturer support.
In the UK, the fuel is not available through regular retail outlets, making it an option only for depot-based fleets with storage facilities. This makes HVO an attractive option for local authorities, public sector organisations, and large vehicle fleets with existing facilities that require minimal or no upgrades.
Making the business case for the extra cost of HVO
Without the cost difference, the case for HVO would be obvious. Large organisations, however, need to plan budgets and if there is a request for an increase in the fuel budget, there must be a business case to support this.
The fuel budget of even a medium-sized local authority may run into the many hundreds of thousands of pounds and when you recognise that HVO is around £0.45 per litre more expensive than standard diesel, the business case must be made fully and convincingly. You’ll be asking for around a 30% increase on what is already a significant cost and if this request is made within a hard-pressed local authority, the case needs to be especially strong.
The main argument will focus on the fact that the vehicle fleet will contribute, in a large part, to the organisation’s total emissions and therefore the extra cost should be viewed as supporting overall Net Zero targets. The relative ease with which HVO can be implemented means that the fleet department may be able to set and meet a more ambitious departmental target, which will, in turn, greatly assist the organisation as a whole in reaching the overall strategic goal.
When agreeing new and increased budgets, there must also be a recognition that fuel prices over recent years have fluctuated and at times, risen by much more than a few pence! Given budgets will often come into play some time after they are requested, figures must be realistic and recognise the uncertainties in supply chains. In summary, the cost will ultimately demonstrate the organisation’s commitment to reducing emissions and no solution is without cost.
To further assist in making the case, although the 90% Net CO2 reduction is impossible to ignore, other benefits should be explained. HVO burns more cleanly than fossil-derived diesel and, therefore, produces far less particulate matter within the engine, helping to preserve the longevity of engine oils.
As well as a 90% Net CO2 reduction, there is also a 20% reduction in NOX and 80% reduction in particulate emissions. That all means an overall reduction in the negative effects on air quality, for the general public and of course, for operatives around the vehicle.
There is also a comparative argument to be made that supports the request for an increased fuel budget. There is a huge momentum towards fleet electrification and there are currently an increasing number of viable, fit-for-purpose fully electric large vehicles such as e-RCVs. However, the cost difference of these vehicles when compared with diesel is very significant and they also require costly investment into depot, charging infrastructure. This is not to say that this approach is wrong and there are ways, often through sophisticated contract hire solutions, that this strategy can work extremely well. However, the reality for many organisations, especially when fleets are outright purchased, is that HVO provides a simpler solution, with much lower additional costs, that is highly effective and will continue to be so at least for the medium term.
Fuel storage considerations
Storing HVO requires less maintenance than fossil-derived diesel. It is less vulnerable to contamination and degradation over time and has a suggested 10-year shelf life. It also has a much lower freezing point than regular diesel (approximately -30 degrees compared to approximately -8 degrees), making it suitable for storage in varying climatic conditions without thickening or gelling. This means that it is ideal for bulk purchase and stockpiling for critical incidents and emergency situations. In fact, a 10-day fuel contingency is required by law (Civil Contingencies Act) for operators in local authorities and emergency services.
Regulation and best practices for HVO storage closely align with those for standard diesel. When transitioning, it is advisable to review depot storage facilities. Here is a suggested checklist:
– Clean tanks and remove any diesel residue.
– Ensure that storage facilities are kept cool and dry.
– Plan for regular contamination checks.
– Apply proper labelling.
– Monitor the security of storage tanks and ensure they are sealed.
– Ensure that spill response protocol is in place and that equipment is on hand.
– Comply with local environmental regulations.
In conclusion
Fleet managers are used to demanding routines essential for managing risk, meeting compliance, protecting the health and safety of workers, and increasing efficiency. Therefore, transitioning to HVO may not be too challenging for many, as it does not add to an already complex task. However, to ensure that the full benefits of the HVO transition can be realised for years to come, it’s important to understand that HVO currently has only one main producer in Europe with a limited number of distributors in the UK. It is, therefore, critical that fleet managers stay engaged with suppliers to guarantee access to the fuel.
As long as this is done, there is no reason why the transition will not be relatively straightforward and deliver significant benefits to operators and the environment.
Real world example of a fleet manager making the case for HVO
In 2023, Essential Fleet Manager Magazine interviewed James Gunning, who was at the time, Workshop & Transport Services Manager at Rossendale Borough Council.
We asked James about how he had trialed the feasibility of HVO in practical terms and then justified the extra fuel costs.James said: “The decision to move the whole fleet to HVO was taken after the costs had been calculated and offset against the cost of purchasing electric vehicles.
“We calculated that an overspend of £160,000 would be needed to fuel the fleet with HVO for the coming year.“The information gathered was put in a report to the councillors and the directors. The report showed how, for the extra fuel cost, Rossendale Borough Council would be able to decarbonise its whole fleet, reducing carbon emissions by 90% overall. Crucially this extra cost equated to replacing just one diesel RCV with one electric RCV. It would therefore be a quick win for both cost and reducing emissions. This was received and implemented in the new budget year of 2022.”
