The case for HVO as a sustainable low carbon liquid fuel for both the transport sector and in heating has been made with increasing conviction. Apart from its excellent low temperature and ignition properties, it has the same chemical structure as the fossil fuels that it can substitute and is therefore an ideal drop-in replacement.
There are, however, some issues that need to be considered in assessing its adaptability/suitability for this purpose, in particular:
- By whom/where and in what quantities/scale will/can it be produced, physically and cost effectively from new bio-refineries, co-processing at existing oil refineries?
- Is there sufficient availability of the requisite feedstocks (such as residues, waste, etc.) and, critically, green hydrogen (for the hydro-treatment of the feedstocks) to make scale quantities?
- At what cost can it be made available, mindful of (a) production scale and (b) product cost of feedstocks and hydrogen
With the above in mind it will be interesting to see the extent to which new bio-refineries are commissioned and/or existing oil refineries follow the example of the Phillips 66 Humber refinery in adding/adopting co-processing as part of normal refining operations. It may be that Government has a part to play in offering incentives to pursue.
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