HVO FAQ's and Additional Information

HVO FAQ's and Additional Information

The information in this article has been gathered from industry sources, including an Oil Installer article from September 2022, https://oilinstaller.co.uk/202...  the Future Ready Fuel website, futurereadyfuel.info and the Rural Home Heating - Response to Government Proposals document, https://futurereadyfuel.info/w...

Future Ready Fuel is a campaign by the liquid fuel heating industry, led by OFTEC and UKIFDA. To learn more about the campaign and support their goals please visit futurereadyfuel.info

The HVO project is moving at a pace, as such data and activities are being regularly updated. Please visit http://futurereadyfuel.info/ and https://ukifda.org/news/ for the most up to date information.

Why are renewable liquid fuels needed? 

Around 1.5 million UK households use oil heating, and, with the exception of Northern Ireland, most are located in rural areas. A further 686,000 mainly rural homes rely on oil heating in the Republic of Ireland. Compared to properties on the gas grid, oil heated homes are much more diverse in character, age, design, and construction and collectively pose a unique and difficult decarbonisation challenge. 

The government’s prioritisation of these homes for conversion to heat pumps overlooks a number of constraints: 

• 97% of oil heated homes in Great Britain are energy inefficient (EPC Band D - G) so will require improvements to their insulation first. 
• 46% were built pre-1919 with hard to insulate solid walls. 
• 51% are detached and typically larger than average. 
• Some households face significant financial challenges, with limited disposable income, little or no savings and high levels of unsecured debt. This means they have little capacity to act. 
• Many have valued period features or planning constraints. 
• Their diversity and geographic isolation makes it difficult to put in place cost-effective roll-out programmes or achieve economies of scale. 
• Oil-heated homes in the RoI share a similar range of challenges. 

The challenge of older homes 

Homes built before 1920 will usually have solid walls and are often poor at retaining heat. A much higher percentage of oil heated homes are in this category compared to those on the gas grid. Around half of oil heated homes in Great Britain were built before 1920 while 65% (765,000) are in the poorest Energy Performance Certificate (EPC) bands E-G. These will be among the most difficult to convert to heat pump systems and will usually require significant insulation and other improvements such as double-glazing, underfloor insulations, cavity wall insulation, and external wall cladding. These are very costly and disruptive to install. 

The government has calculated that the average cost to upgrade an oil heated home in EPC band E to an acceptable Band C is £12,300 and, from EPC Band F/G, £18,900. However, the actual cost will vary and, depending on the condition of your home, you may need to install some or all of the following measures: 

• Improved loft insulation £180 to £3,500 
• Replacement windows and external doors £1,200 to £10,000 
• External wall insulation £4,300 to £20,000 
• Cavity wall insulation £300 to £1,200 
• Internal wall insulation £2,500 to £11,600
• Floor insulation £550 to £900 

* These figures come from the ‘BEIS, What does it cost to retrofit homes’ report. 

In some cases, the cost of renovating existing properties to achieve an energy rating of EPC C is likely to greatly exceed any return that could possibly be achieved by the owners. 

While we would always recommend improvements to insulation where cost effective, it is likely that converting these properties to use a heat pump may be difficult. In such cases, the benefits of being able to use a renewable liquid fuel to achieve a substantial cut in carbon emissions while continuing to heat the building effectively, are clear.

Heat Pumps VS HVO

Heat pumps may be an excellent choice for some of these homes, particularly those that are already energy efficient or when installed as part of a larger renovation project. However, households who already have efficient traditional heating will see little improvement to their quality of life to be motivated to invest in these low carbon alternatives.

We think many households would welcome other, cheaper and simpler low carbon options such as HVO that are better suited to their individual circumstances.

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HVO Frequently Asked Questions from futurereadyfuel.info

How is HVO made and is it sustainable? 

HVO, is a renewable liquid fuel made from certified waste fats and oils and manufactured by a synthesised process with hydrogen to create a greener, cleaner fuel. The ISCC (International Sustainability and Carbon Certification) confirms HVO is a sustainable fuel that is made from waste products or crops and doesn’t contribute to deforestation. 

How will HVO support the UK's net zero target? 

Properties that convert from oil heating to HVO will immediately benefit from an 88% reduction in carbon emissions. This figure is based on the UK Government’s Standard Assessment Procedure (SAP 10.2) and is a consistent methodology for apportioning an equivalent carbon emission factor based upon common greenhouse gas emissions (GHG) from home heating fuels. While we of course advocate for full decarbonisation where possible, it’s important to note that the term ‘net zero’ is not an absolute figure and it accounts for variation across the entire UK economy. For example, it will be impossible to make some off-grid buildings suitable for zero carbon heating, while for others it may be feasible but not cost effective. HVO allows almost any off-grid building to get very close to the target and can be seen both as a final solution or as a stepping stone, depending on the situation. 

Does HVO contain palm oil? 

Renewable liquid fuel is a globally produced and traded commodity and there is currently still palm in the supply chain. However, the development of stringent environmental and sustainability standards means this has diminished dramatically. For example, a leading HVO producer has stated that palm feedstock accounts for only 5% of the HVO produced and none of this product is used in the UK or Europe. The UK Government’s own monitoring states that no palm product is used in imported HVO. 

When will the new fuel be available? 

We hope to introduce the new fuel in 2022, subject to the completion of successful trials and obtaining government approval to use HVO as a heating fuel. Our aim is to then enable existing oil heating users to convert to the new fuel gradually during the 2020s and 2030s. 

Will HVO be more expensive? 

Renewable solutions tend to be more expensive when they are first introduced to the market and HVO is no exception. We are currently discussing with government how best to introduce the new fuel for heating and have proposed a similar price support model to one currently used for green road transport fuels. This would ensure households are protected from excessive running costs. Once the HVO market is mature we expect prices to normalise and support should no longer be required. 

Will there be enough HVO to meet demand? 

Demand for renewable liquid fuels is increasing – and so is the supply of waste materials to manufacture them. Large quantities of biodiesel are already used in transport fuels and as electric vehicles become more common, the raw materials can be used to make HVO instead. Production of HVO is forecast to rise by over 300% in Europe alone between 2020 and 2025 and expected to increase as fast, or even faster, elsewhere in the world. We have spoken to all of the main European and US HVO suppliers and they have confirmed that their plans to increase production would meet our requirements. We are working with Government to ensure that there are clear policies in place to encourage supply as demand grows and reduce costs. 

To what extent will the UK need to rely on imported fuel? 

It is likely that the UK will always rely on imported fuel as there isn’t enough waste material available domestically to make all the fuel needed for the heating and transport markets. This is no different to the situation now with existing fuels. However, government could introduce measures to improve UK waste capture and fuel production capacity which, for some fuel types, lags behind other countries in Europe. 

Will HVO work with older appliances and AGAs? 

Yes. Testing carried out so far suggests HVO will work with virtually any existing oil heating appliance once some simple modifications have been made. In all cases the use of HVO will dramatically cut carbon emissions, but to achieve maximum carbon reduction, we recommend upgrading older appliances to a modern, high efficiency ‘A rated’ boiler. This is likely to save significantly on fuel and running costs. Please note: HVO will not combust in a traditional vaporising sleeve burner that use wicks. The burner will need to be replaced with a ‘pot’ burner and the oil control valve recalibrated for the new fuel. 

Can HVO be used in my existing tank? 

Our trials to date suggest this is possible and there should be no reason why HVO cannot be stored in the tank you have, as long as it is well maintained. We will be asking customers to reduce their kerosene levels to as low as possible before making the swap and may recommend having the inside of the tank cleaned as part of the conversion process. As part of any swap from Kerosene to HVO we will be strongly recommending that HVO is not introduced to existing storage installations which do not have secondary containment and/or are over 20 years of age. If you are transitioning from oil to HVO, it may be an ideal opportunity though for you to consider upgrading the tank in your garden and installing a bunded oil tank, which is a tank within a leak proof area or a double skinned oil tank. A bunded tank offers an extra layer of protection for homeowners against costly accidental oil spillages, theft, and environmental concerns. 

Will heating oil be banned? 

As part of its Heat and Buildings Strategy, in a consultation announced by BEIS on 19th October 2021, the government announced that it is “considering whether it would be appropriate to reinforce the regulatory framework by signalling an end date for the use of any remaining fossil fuel heating systems in homes off the gas grid”. This would include the use of heating oil, but is likely to be no earlier than the late 2030s to avoid any boilers purchased before 2026 (see answer below) being scrapped before they need to be replaced. If an eventual end date for the use of kerosene is necessary, adequate time should be allowed for households to switch to HVO, or other low carbon heating systems, and that decision should take into all of the important technical and practical considerations but also carbon reduction potential, cost to the consumer and amount of disruption. 

Will oil boilers be banned? 

As part of its Heat and Buildings Strategy, in a consultation announced by BEIS on 19th October 2021, the government proposed “an end to new fossil fuel heating installations in homes off the gas grid from 2026”. We think it should be permissible to continue to install liquid fuel boiler systems after 2026, providing they run on HVO or another similar low carbon fuel. We encourage all households that currently use oil to consider responding to the consultation, which ends on 12th January 2022. 

What modifications will I need to make to my oil boiler? 

The process for converting existing oil boilers to HVO typically costs around £500 and includes removing fossil fuel residues, water and contaminates from the storage tank, replacing the burner with an HVO specific burner, changing nozzles, and ensuring that all fuel carrying components and seals are checked for compatibility. 

Does HVO work in cold temperatures? 

Yes. The fuel specification states that HVO remains operable in temperatures as low as -22°.

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The liquid fuel heating industry is in the second year of field trials and demonstrations. We are already confident that HVO will work without problems in all existing oil heating systems.

We have had in-depth conversations with a number of current and potential HVO suppliers who have assured us that there will be a sustainable supply of HVO into the UK. This is backed up in our response to the government. 

We have identified that 10% of oil heating demand could be replaced by additional feedstocks such as used cooking oil collected in the UK and converted into a renewable liquid fuel. The government has recently announced the lifting of import tariffs for HVO produced in the US opening the UK to the second biggest HVO market. 

Renewable liquid fuels are significantly more expensive than the fossil fuel counterpart. These fuels are already used in vehicles, non-road mobile machinery and aircraft, and benefit from a reduction in price to the consumer of over 80p per litre through the RTFO mechanism administered by the Department for Transport. 

It seems only fair and logical that a scheme with similar benefits is introduced for the home heating market. 

Significant progress can be made in decarbonising oilheated homes quickly if the proposed policy is adapted to a technology inclusive approach and provides appropriate support for renewable liquid fuels. 

Our industry has a proven track record in serving rural homes. As a mature existing player in the rural heat market, we have all the necessary elements in place to deliver this solution at scale. 

Our customers match our enthusiasm. A recent poll of 2,676 rural households by the Future Ready Fuel campaign found that 98% would welcome the opportunity to convert to HVO.

Discover more about the Future Ready Fuel campaign and how you can get involved. Visit the website at: www.futurereadyfuel.info

Things you can do:

1. Give all your customers a copy of the Future Ready Fuel flyer – it’s available as print or electronic version – simply contact the OFTEC marketing team by email [email protected] and we’ll send it to you.
2. Download the Future Ready Fuel asset package and show your support on social media and websites.
3. Put links to the Future Ready Fuel campaign www.futurereadyfuel.info on your website.
4. Follow the Future Ready Fuel campaign on social media (Facebook and Twitter) and like the posts.
5. Display the ‘I’m supporting the Future Ready Fuel campaign’ logo on your website and social media channels.
6. Write to your MP – there’s a draft letter ready for you to personalise and send – just contact the OFTEC marketing team using the email above and we’ll send it to you.