Is HVO Heating Oil A Kerosene Alternative?

On 7th March ACT screened the film “Power to the People” from Cornwall Climate Care. A piece in this film highlights a pilot scheme where use of Hydrotreated Vegetable Oil (HVO) is being trialled instead of Kerosene for heating on oil boilers in 150 houses in Kehelland, Cornwall. This Devon Live advertorial highlights how the supplier is now seeking to expand this service to Cornwall, Devon and Somerset. So it would appear that there is now adequate supply of HVO in Devon.

How is HVO produced

HVO can be made from a variety of feed stocks including used cooking oil, animal fat, technical corn oil, Tall oil pitch, residues from vegetable oil processing. the feedstock is treated with hydrogen at high temperatures (280–450°C) and high pressure (10–50 times normal atmospheric pressure). This process, called hydrotreatment, removes impurities and converts the oil into a clean, renewable fuel that works just like heating oil — but with far lower carbon emissions.

Emissions from HVO production depend on the fuel stock used and the source of hydrogen.

Where does the hydrogen come from

Blue hydrogen is derived by steam reforming of gas, which has higher emissions than green hydrogen, which is formed by electrolysis of water. Green hydrogen is cleaner than blue hydrogen but more expensive to produce.

HVO Properties and uses

HVO is cleaner than heating oil as shown in the following table:

Properties/pollutants	HVO Reduction vs. Heating Oil	Why this matters
SO₂ (Sulphur dioxide)	~ 100% (Near eliminated)	Eliminates acid rain risk and boiler corrosion.
NO₂ (Nitrous Oxide)	20-40%	Reduces respiratory irritants in rural homes.
Particulate Matter (PM)	50–80%	Cuts soot and indoor air pollution.
CO (Carbon Monoxide)	10-30%	Safer for poorly ventilated spaces.
CO₂ (Carbon Dioxide)	15gCO₂vs 300gCO₂ Up to 90% (well-to-tank)	Lower global warming potential.
Energy Density	44MJ/kg same as diesel or heating oil	Same amount of fuel burnt for the same result.
Cetane Number	70-90 vs 45-50 (for diesel)	Better burning than diesel makes it suitable for both diesel and heating oil
Cloud point	-20C to -30C	Colder when it starts to thicken

If you were to use the same HVO in a diesel engine its NO₂ would be higher.

Stable drop in replacement

As well as heating oil, its unique chemical properties mean that it can be used as both diesel and with slight modification even as aviation fuel. It similar density means it delivers the same output per litre as heating oil, so there is no need for larger tanks or more frequent deliveries.:

Unlike Fatty Acid Methyl Esters(FAME) commonly called biodiesel, HVO doesn’t degrade, absorb water, or support microbial growth in tanks. This makes it ideal for long-term storage in home heating systems.

In many cases an existing boiler can be used with just the fuel being replaced, in other cases filters, jets and tanks might need replacing or cleaning, at an estimated cost no more that £500 from experience with the Kelland trial.

Supply

HVO is produced from UK refineries, but most production (784 million litres 2024) is for transport (road, air and sea) usage.

Most supply for heating oil is a blend with some HVO,though a trial has been done with 150 houses, which has proved feasibility and the necessary modifications.

There was a scandal in 2024 where it was suspected that palm oil was used as feedstock, since then at least one supplier of HVO heating oil has certified that they only use waste cooking oil. Clearly it is much better that waste oil is used, than oil derived directly from plants, both from a carbon footprint point of view and to avoid using edible crop bearing land for other usesTo produce HVO, The feedstock used for HVO is reported under the Renewable Transport Fuel Obligation (RTFO), the latest report being for 2024.This shows overall production for 2024 of 800 Million litres of HVO across all uses.

Recycling

Waste oil must be collected by a licenced oil collection facility, who collect waste oil from commercial premises, and supply it to a refinery. Waste oil goes to refineries like Phillips 66 (Humber), Essar (Stanlow) or Neste (Rotterdam). As waste oil as a feedstock has a lower carbon footprint, sending waste oil to a collector provides a ready recycling route that avoid other means of disposal that are more environmentally damaging, and would save agricultural land being used growing feedstock. According to the RTFO report for 2024 most HVO is produced from waste cooking oil.

Demand

I haven’t been able to find a government statistic for the amount of heating oil consumed, so have to resort to an estimate which for now is quite crude.

According to Census 2021 there were 865,940 homes that relied on oil heating in 2021. If these were to use an average of 2000 Litres each, that would give a total demand of about 1.7billion litres of heating oil per year.

This would exceed current production by a considerable amount, before any transport use is considered. Since the supply of used cooking oil is limited, it is likely that any expansion of supply would not use waste products and would therefore compete for land use with agricultural crops.

Cost and Taxation

Recently HVO has cost between £1.20/litre to £1.60/litre whereas heating oil costs between 60 and 80p/litre. This difference could partially be explained by excise duty. Currently HVO costs between.

Following the US war on Iran and inevitable oil price rise, the government announced a price cap for domestic electricity and gas, and has now followed this with a £53m support for households affected by domestic heating oil prices, but surprisingly no corresponding support to encourage the use of alternatives to fossil fuels for heating such as HVO.

According to the Future Fuel Oils Campaign HVO still attracts the same level of excise duty as diesel, as well as VAT. Whilst other uses of HVO for transport are subject to Renewable Transport Fuel Obligation (RTFO) exemption from duty, HVO used as heating oil has no such subsidy.

The government ran a consultation which finished on 10th February , but this anomaly wasn’t mentioned.

The Future Fuel Oils campaign claims that HVO has 88% fewer CO₂ emissions rather fossil fuel heating oil and can run in an existing boiler with possibly small modifications costing in the order of £500. If supplies are available now this seems to be a low-carbon substitute when installing a heat-pump is not yet practical.

Currently the cost of HVO for heating oil is significantly higher than ordinary heating oil, this is likely to act as a deterrent.

The government could equalise the duty and VAT on HVO to level the playing field at least whilst taking action of the effects of raised oil prices pending the outcome of the consultation.

Conclusion

Initially HVO looked an attractive alternative to replacing an oil boiler with a heat-pump, but analysis of supply and demand shows that this is not feasible for the majority of cases, even if the tax disadvantages were to be removed.

Most houses would be better off with a heat pump.