UK receives first renewable liquid fuel shipment from America in boost for off-grid decarbonisation

Plans to transition oil heated homes to the renewable liquid fuel Hydrotreated Vegetable Oil (HVO) have taken an important step forward following the first delivery of the fuel from America, which has the potential to significantly boost supply in the UK.

The announcement follows a decision by the then Department of International Trade in November 2022 to lift import tariffs on American HVO, previously imposed when the UK was a member of the European Union, recognising that HVO could be used in a number of different decarbonisation pathways, including home heating.

The UK and Ireland Fuel Distributors Association (UKIFDA) member, Cornwall-based fuel distributor Mitchell and Webber, undertook the first lifting of USA imported HVO at the Valero terminal in Cardiff on Thursday 30 March 2023.

The move has been welcomed by the Future Ready Fuel campaign which is calling on the government to recognise and support the use of HVO as an alternative, low carbon heating solution for the UK’s 1.7 million off-grid properties on heating oil.

In its Heat and Building Strategy consultation, the responses to which have yet to be published, the government outlined proposals to end the installation of fossil fuel heating systems in homes and small businesses from 2026. The same applies to larger businesses from 2024. Instead, in most cases, these properties will be expected to switch to a heat pump.

However, according to the government’s online calculator, because oil heated homes are typically older and poorly insulated, in many cases the cost to transition to a heat pump could exceed £20,000 due to the requirement for additional changes for the technology to work efficiently.

The liquid fuel industry has instead demonstrated across 150 homes and businesses in the UK that HVO can be used as a direct replacement for heating oil, reducing carbon emissions by up to 88%. The heating boiler conversion process takes about an hour and costs less than £500.

In response to the first import of HVO from the USA, Paul Rose, Chief Executive of OFTEC, and Ken Cronin, chief executive of UKIFDA, commented: “We are delighted to see this fuel being delivered.  We have an ambition to offer all the 1.7m homes that currently use heating oil the option to switch to HVO, reducing their carbon emissions but also avoiding the very high upfront costs for alternative decarbonisation technologies such as heat pumps which many properties will face.

“We believe consumers should have a choice of low carbon heating technologies so they can adopt the most practical and affordable solution for their property. In the current economic landscape and with the need to rapidly accelerate our drive to net zero, we mustn’t overlook the importance of delivering positive outcomes for the end user in this transition.”

UKIFDA recently submitted new evidence to the UK government that showed the raw materials (feedstocks) used to produce renewable fuels in Europe and the US far outweigh the demand and confirmed that there would be sufficient quantities to meet the UK home heating oil market. The US is the world’s second largest producer of HVO, with the US Department of Energy recently forecasting that renewable fuel production will double in the US in the next two years.

Robert Weedon, Managing Director of Cornwall-based Mitchell and Webber, added: “This first batch of Valero’s HVO will be going to businesses in Cornwall. This initiative sits alongside our HVO village, Kehelland, where we have schools, churches and residential homes that have been using HVO successfully for over a year. The process of converting to HVO could not be easier and can be done during a normal boiler service appointment.”

Renewable liquid fuels are termed drop-in fuels, as they do not need to be blended with petroleum to meet engine or boiler manufacturer requirements. The raw materials, such as used cooking oil and animal fats, are refined in a very similar way to crude oil, with many refineries globally now converting manufacturing plants to produce this fuel.