The uncertainty in the promise of HVO: why electrification is the only commercially viable solution for today’s fleets
By Mike Nakrani, CEO at VEV
Fleets across multiple sectors are under increasing pressure to decarbonise rapidly. With supplier contracts placing much more emphasis on lower scope 3 emissions, organisations that don’t find quick ways to meet expectations stand to miss out on lucrative business.
In this race to find fast solutions, Hydrotreated Vegetable Oil (HVO) has emerged as an appealing option for fleets seeking a sustainable alternative to diesel. But, as the industry is shedding further light on the fuel’s production and sustainability in practice, the stopgap solution is quickly losing its credibility.
The recent BBC investigation into HVO supply chains has turned up the levels of scrutiny in this respect, and the reality of HVO’s impact at scale is far more complex than initially thought.
HVO: sustainability on a technicality
HVO is sold as being typically produced from waste cooking oils or animal fats. When sourced in this way, its lifecycle emissions can be significantly lower than conventional diesel – and there is where the problem lies.
The carbon savings HVO-powered fleets achieve are only on paper, and tailpipe output isn’t actually reduced; it’s a technicality linked to the lifecycle emissions. Given that HVO originates from a plant which has been grown, carbon has been pulled from the air as part of the ‘production’ process – carbon which is subsequently re-released by being burned in a combustion-engine. HVO is therefore only greener than pulling new carbon out of the ground and burning it into the atmosphere from a net-emissions perspective.
While fleets may view HVO as a simple way to swiftly book emissions savings, there is a wider problem, in that the supply of real waste oil is severely limited. As demand for HVO grows, the restricted sources of waste oil aren’t sufficient to meet it; it simply can’t be used at scale.
Producers are therefore increasingly turning to virgin plant oils, like palm oil, to fill the void. Palm oil cultivation is one of the leading causes of deforestation globally, with irreversible consequences for biodiversity, carbon sinks, and indigenous communities.
As a result, the more fleets adopt HVO without truly understanding the source of their supply, the greater the environmental impact becomes.
Reassessing the HVO business-case
While there are viable use-cases for HVO, such as in bulldozers or other specialist machinery that doesn’t yet have an electric equivalent, scaling it up to power intensive fleet operations on a regional or even national level in the medium- to long-term does not make sense from a sustainability perspective.
The cost side of the equation doesn’t add up, either; HVO typically costs 10% to 20% more than conventional diesel.
Fleet operators should not spend valuable resources investing long-term in a fuel that risks damaging their credibility and bottom-line. They should instead be focused on long-term, cost-efficient, sustainably powered solutions that are genuinely sustainable by design, and not just prioritise HVO as a delaying tactic.
Reinforcing the case for electrification
That is where electrification wins out; many businesses are already making the shift, allowing them to get ahead and achieve cost-optimised operations with smart energy- and fleet-management, while realising emissions-savings at the tailpipe and via the clean off-grid power produced at smart-fleet depots. Operators of buses, refuse collection vehicles, HGVs, and vans have readily available solutions that fit the bill in this respect.
As we see more fleets make the switch, operators are already realising the benefits of smart EV fleet management from solutions like VEV-IQ; with consolidated operations on one interface, data-driven maintenance, dynamic energy-load management, and intelligent route optimisation, operators can achieve meaningful cost-savings on an ongoing basis – all while delivering significant emissions-reductions.
So, while it might feel sustainable to use HVO, the reality is far more complex. By funnelling demand into a constrained and increasingly unsustainable supply, businesses are only setting themselves up to be caught out – actively exacerbating environmental crises while squeezing their profit-margins.
With a smart implementation strategy and expertise from industry-leading partners like VEV, electrification represents a robust investment in long-term infrastructure and commercial resilience.
Fleet operators shouldn’t wait for the perfect moment to go electric; the tools, infrastructure, and support exist today. It’s time to shift the focus from interim fixes to future-fit solutions, and that means putting an intelligently executed electrification plan first over swift perceived gains.