The road freight transport industry is currently in a difficult position to some extent. There is external pressure for the sector to reduce its emissions and companies themselves, as well as their clients, are looking for solutions to accelerate the switch towards zero or net-zero emission deliveries. Yet there are only a handful of options until true alternatives to the diesel fuel trucks we see on the road today can be implemented. Thus, what can companies readily offer customers that wish to reduce the emissions of their supply chains?
Sure, electric trucks are just on the horizon, but they have their own limitations and issues, such as their limited range and/or charging options that are too few and far between. Hydrogen technologies, while much more promising in terms of their capabilities offered to logistics firms, are even further away from adaptation due to high costs.
To some extent, the answer to the raised question is Hydrotreated Vegetable Oil (HVO) or HVO100. At a basic level, the fuel is produced from various feedstock, such as used cooking oil, and can be used in various blends, ranging from 10% (10% HVO, 90% diesel fuel), to HVO100, which is the purest version of the alternative fuel.
If the purest version of the fuel is used, “greenhouse gas emissions can be reduced by up to 90% over the fuel’s life cycle compared to fossil diesel,” according to Neste, a Finland-based oil refining and marketing company. The fuel also reduces local emissions, with up to 33% lower levels of fine particulates, 30% fewer hydrocarbons (HC), 24% lower carbon monoxide (CO) emissions, and 9% less nitrogen oxide (NOx) emissions compared to regular diesel, showed the Finnish firm’s estimates.
Advantages of HVO
Another advantage offered by the alternative fuel is that it can be used as a drop-in solution compared to LNG (Liquefied Natural Gas), CNG (Compressed Natural Gas), or any other less pollutant ways to power trucks. As such, operating expenses automatically are lower: companies do not need to invest in electrified truck fleets that would see limited use due to their shortfalls, such as the need for special infrastructure. Knowing that a delivery will reach its destination even if the truck will have to resort to switching from HVO100 to regular diesel is still a better option than not having the cargo delivered at all.
Still, costs add up and have to be offset by revenues for a company to remain profitable. The basic principle of balancing costs and revenues applies even with the best intentions, especially in the very competitive landscape of Europe’s road freight transportation industry. Nevertheless, as the industry has a clear goal to continue reducing its emissions, HVO will continue playing an ever-increasing role in achieving that goal. The fact that road freight transport providers can easily integrate HVO into their fleets of trucks without any additional acquisition or operating costs goes a long way in advocating for the use of the alternative fuel.
Customers, who see that HVO or HVO100 is easily useable on their current lanes might also be inclined to use the available solution to reduce the emissions of their business. Unlike other fuels, HVO still provides flexibility not only in terms of the used blend but also the usage, in the worst-case scenarios, of regular diesel without affecting the truck’s performance and in turn, the delivery timing.
And much like diesel, it can withstand cold temperatures and has been used for years, meaning this is not a new technology that operators still have to be conservative with for one reason or another. However, where it does win over regular diesel fuel, is that it can be stored for much longer: HVO can sit idly on the shelf for around a decade, while diesel can be stored for up to a year.
The process of making HVO is the reason why it can hold its qualities for such a long time. Per Tuffa Tanks, a fuel tank manufacturer based in the United Kingdom (UK), due to the hydrogenation process removing oxygen from the fuel, “there is a significantly reduced risk of degradation or oxidation. HVO does not absorb water like first-generation biofuels so does not provide an environment where diesel bug can thrive”.
That is another advantage of the alternative fuel that it is readily available, and its stock has steadily grown in the European Union (EU). According to the European Environment Agency (EEA), an agency of the EU, the share of energy from renewable sources rose from less than 2% in 2005 to 10.2% in 2020. Preliminary data indicated that the share of renewable sources stabilized and did not grow in 2021, according to the EEA, which published the data in October 2022.
Supplying HVO for deliveries
As a responsible logistics company, Girteka has been offering its customers the option to use HVO 100 as a fuel since 2020.The alternative fuel became one of the cornerstones of the company’s sustainability pledges. In addition to using more HVO, Girteka also aims to continuously renew its fleet, digitalize operations, increase intermodal transportation levels, educate drivers on eco-driving practices, and ensure responsible consumption. As such, the company has been able to reduce its CO2 levels annually from 742 g/km in 2021 to 720 g/km in 2022.
For customers who are interested in using HVO on their deliveries, there are options even if the alternative fuel is not available on certain lanes. Mass-balancing is a solution when a customer would purchase a certain amount of the hydrotreated oil and the fuel would still enter the Girteka fleet, thus reducing the overall emissions of transportation. For clients whose lanes have HVO, the fuel can be used interchangeably with regular diesel, as well as used in its purest form, namely HVO100.
As mentioned above, the purest form of the oil offers the biggest emissions reductions compared to any other diesel/HVO blend. Still, even if a customer chooses to use a lower percentage of HVO compared to regular diesel, the emission reduction benefits remain. For every 1,000 liters of diesel, there are 3.6 tonnes of CO2 that are produced, while for every 1,000 liters of HVO, the number drops down to 0.195 tonnes, according to Johnston Oils, a UK-based oil distributor.
“In view of all the verifications throughout the work, it is easily concluded that, in addition to the already recognized advantages that biofuel production has in relation to fossil fuel production, the use of fuel mixtures with a renewable component, in certain percentages, makes it possible to achieve higher efficiencies and, consequently, better performances and consumption, with lower emissions,” read one study, conducted by several Portuguese academics, published in November 2021.
“When the SFC [specific fuel consumption – ed. note] of the engine was kept constant with all fuels, HVO and EN 590-30 [70% diesel and 30% HVO blend – ed. note] provided even more significant reduction in NOx emission with smoke still clearly lower than with EN 590 diesel fuel,” read another study by three researchers from the Helsinki University of Technology, as well as a former Research & Development (R&D) fellow at Neste.
Thus, even using some form of an HVO/diesel blend would help reduce the overall emissions of a lane. Girteka can provide its customers with information on how much HVO 100 has been utilized when carrying their goods including how much CO2 emissions were saved as a result of the use of the alternative fuel on the route.
Questions of HVO supply
Despite all of the benefits that HVO has to offer, there are downsides to using the alternative fuel. Firstly, it does not completely eliminate CO2 emissions but – if used in the purest form – reduces them significantly. The goal of the EU is to reduce its emissions to net zero by 2050, with more and more stringent requirements imposed upon manufacturers and road freight transport companies until that time. HVO, as much as it can do good, should not be used as a permanent solution.
Perhaps that is why, as the above-mentioned data from the EEA pointed out, the supply of renewable sources in road transport has stayed the same from 2020 to 2021. While reasons can be plentiful, including the fact that the sector in the EU was recovering from the downturn in activity throughout 2020 and 2021, the fact is that the usage of these fuels has not risen too much. In terms of HVO, Neste was the largest producer of the hydrotreated oil in 2020, with a total production capacity of 1.53 million tons annually. In total, in 2021, EU companies produced 3.3 million metric tons of HVO, according to Statista.
Thus, overall, 93.2% of fuel provided to all road transportation, including private and commercial vehicles, were fossil fuels in 2020, outlined a report by the EEA, published in October 2022. Out of the remaining 6.8%, 1.4% was HVO. Production capacity, as well as the usage of pure HVO, has to grow. Per SGS Inspire, the most climate-friendly option of the fuel was only available in nine countries in the EU, with Belgium being the southernmost point of supply of HVO100. That is troubling, especially considering that operators and manufacturers will have to continue reducing their emissions going forward.
Can EU-based companies increase the supply of HVO quickly enough, though? In December 2021, Argus, a company specializing in various informational activities related to the oil sector, indicated that while the hydrotreated oil will be “instrumental in meeting targets for renewable fuels in road transport”, the ever-growing demand for it will outstrip supply. “Class II HVO price, produced from used cooking oil (UCO), increased by around $1,139/t from the start of this year to 21 December and hit a record $3,001/t on 24 November,” indicated the company’s analysis.
Price is another detriment of HVO compared to regular diesel, especially in the current economic environment. While the EU economy, measured in Gross Domestic Product (GDP), grew by a measly 0.1% in Q4 2022, per preliminary data from Eurostat, inflation continued to pressure businesses and consumers. The latest preliminary data from the EC’s statistical office indicated that inflation was down to 8.5% in January 2023 compared to the prior month’s result of 9.2%. Even then, with interest rates rising – the European Central Bank (ECB) raised them by another 0.5 percentage point – running a business that is reliant on loans for various assets is becoming more and more expensive. As such, priorities might switch, and short-term survival could take over sustainability efforts.
However, Girteka remains committed to its responsible logistics pledge and has continued to work with customers and partners to ensure that its emissions continue going downwards annually by use of the fuel-efficient EURO 6 standard as well as alternative fuels, such as the HVO 100, constant renewal of its fleet with the latest on the market vehicles, drivers’ education on eco-driving skills, digitalizing operations to reduce “empty kilometres” driving, and an increased use of intermodal rail transportation The company has also recently signed a deal with Scania for up to 600 battery-electric trucks to be delivered over the next four years – a major next step in scaling up sustainable transportation.