An easy-to-understand breakdown of the costs of switching from diesel to HVO

Written by James Taylor

Regular diesel is cheaper than HVO, but that’s a false comparison. Here’s why Prema HVO offers a cost-effective route to reducing your greenhouse gas emissions over time, at a rate that suits you.

Cost of HVO

Regular diesel is cheaper than HVO, but that’s a false comparison. Here’s why Prema HVO offers a cost-effective route to reducing your greenhouse gas emissions over time, at a rate that suits you.

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This guide explains:

  • The true cost of Hydrotreated Vegetable Oil (HVO) versus other green alternatives.
  • How our blending capabilities allow you to spread costs over time.
  • How our pricing is designed to manage risk

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#1 Is HVO expensive? It’s all about OPEX vs CAPEX


True, the unit cost of HVO is higher than regular diesel. But because regular diesel is on the way out anyway as we transition away from fossil fuels, this is somewhat of a false comparison.

The real comparison you need to make is HVO against other the options available to you for reducing greenhouse gas emissions over the near-to-medium term. Most alternatives, like electric or hybrid electric equipment, require large upfront capital investment. Electric generators, for example, are currently 3-5 times more expensive than their diesel counterparts.

In contrast, HVO requires no capital expenditure whatsoever – you can extend the life of your existing assets simply by switching the fuel they use. HVO is 100% interchangeable with diesel, so the switching process is seamless.

In other words, HVO allows you to spread the cost of reducing your emissions, enabling you to get ahead of regulatory requirements and customer expectations at comparatively low cost. Even if you are planning to electrify your assets in the long-term, using HVO in the meantime will demonstrate your environmental credentials until these assets are ready to be replaced.

 


#2 You don’t need to go the full hog in one go


The beauty of Prema HVO is that it can be blended with conventional diesel at any ratio. As the UK’s specialist liquid fuel oil blender, we can help you to transition to greener fuel over a time period that suits your circumstances.

For example, you could start at a 20% or 30% HVO mix, which can be as little as 2-5p/litre more than regular diesel but will provide greenhouse gas emission savings of 18-27%. This can gradually be moved up to a 40% or 60% blend, and so on.

Again, this is without any requirement to upgrade equipment or infrastructure. It’s as simple as calling us when you are ready to take the next step.

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#3 Price risk management


Unlike other fuel providers, we can offer Prema HVA on a fixed-rate basis to help manage price risk. Our pricing is also index-linked with wholesale diesel, ensuring that the price differential will not increase after you starting using HVO.

 


Want to know more about Prema HVO?Download HVO Brochure

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