Huge boost for HVO as Government agrees with removal of import measures

The Secretary of State for International Trade has today announced that the Government is in agreement with the recommendations of the Trade Remedies Authority (TRA) concerning the lifting of anti-dumping duties and countervailing measures on Hydrotreated Vegetable Oil (HVO) imported from the USA into the UK, imposed previously by the EU.

Government has announced agreement with TRA recommendations on HVO import measures.

A comprehensive review by the Trade Remedies Authority, the UK body that investigates whether trade remedies measures are needed on imports, provided interim recommendations in December 2021 to retain existing measures on imports of FAME biodiesel, but to remove measures on imports of HVO given that the UK has an established FAME production industry, but no UK HVO production industry. After a period of consultation and review, the final recommendations were submitted to the Government and have now been accepted.

Widening supply

With the two main concerns over HVO being future availability and cost, the removal of the trade measures would mean that HVO could be imported from the US / Canada for use in UK agriculture and transport as well as an alternative fuel for oil-fired heating. This would help to establish the security of supply as well as the affordability needed to encourage uptake of this low carbon alternative to kerosene as the TRA highlighted in its recommendations which acknowledged the use of HVO in home heating.

TRA chief executive Oliver Griffiths said at the time: “The TRA also established that there is demand for HVO in the UK for use in heating buildings as it offers a cost-effective and more environmentally friendly alternative to existing heating fuels.

“The TRA’s findings on biofuels show how we can tailor existing measures to better suit the UK economy. Our proposals would ensure that British biodiesel producers continue to be protected from unfair international competition from subsidised US products, while helping to drive down prices for users of a type of biodiesel that is not made in the UK.”

An important step for HVO

The government announcement was welcomed by industry trade bodies who see it is as an important step in making the widespread use of HVO in rural home heating in the UK a realistic possibility, but with the caveat that further initiatives are required to make it a reality.

Ken Cronin and Paul Rose, UKIFDA and OFTEC CEOs, said: “This is welcome news. Increasing the availability of HVO into the UK at a time when we need to start decarbonising our heating stock is a smart decision by the government. Our project has shown that we can decarbonise rural homes quickly, without disruption and inexpensively using liquid renewable fuels. We are calling on government to go further by signalling a move to treat the use of HVO across transport, aviation and home heating equally.

“Currently, HVO cannot be delivered to home heating customers as cheaply as those in transport and aviation. In addition, HVO is subject to much higher duties than the fossil fuel it replaces. Removal of these further anomalies would mean a huge kick start to affordable and efficient rural home decarbonisation.”

Further action needed

Bruce Woodall, chairman of OTS Group Ltd, a company with 50 years’ experience in the fuel sector and taking an active lead in creating a sustainable future for fuelling solutions, also stressed the need for further urgent action to encourage uptake of HVO.

“There is no question that a new fuel like HVO, which reduces GHGs by up to 90% immediately, is a vital liquid fuel, especially to replace kerosene in the home heating sector,” he commented. “But the cost has to be aligned with the current cost of kerosene for the domestic market to take it up.

Believing a scheme similar to the Renewable Transport Fuel Obligation is needed for home heating fuel Bruce continued: “The RTFO means that the transport industry get a large discount on their fuel costs especially with double counting of RTFCs. HVO passes all the requirements of RTFCs and therefore RTFO and a similar scheme would help to bring the cost of HVO more in line with kerosene.”

“If the UK is to achieve net zero by 2050 the Government must start immediately taking pragmatic steps towards that goal. Encouraging the use of HVO in the home heating sector for off-grid homes would be a massive step in the right direction and the impact would be immediate.”