As the first wholesaler to import HVO into the UK, Prema Energy have had time to develop a strong and secure supply of used cooking oil (waste derived) HVO. As a result, we can provide security of supply for the most environmentally sustainable category of HVO available.
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The rapid rise of waste derived HVO…
Security of supply is important because used cooking oil feedstocks are finite, but waste derived HVO production is set to increase rapidly over the coming years. Investment in HVO production is increasing considerably and there are currently sufficient waste feedstocks available for this scale up. Treatment technologies are also developing, and pre-treatment plants are being installed.
According to the International Energy Agency (IEA), global HVO production capacity is set to increase rapidly to up to 17,000m litres in 2024. That’s almost double the capacity levels of 2019. In the EU specifically, HVO capacity will increase to more than 6,000m litres in the same timeframe, more than double 2019 levels.
To put that into perspective, in the UK in 2019:
- 2,680m litres of renewable fuel was supplied for use in road and non-road mobile machinery under the Renewable Transport Fuel Obligation (RTFO)
- 1,662m litres (62%) of this was conventional Biodiesel FAME
- 1,197m litres (72%) of this Biodiesel FAME was produced from used cooking oil.
The graph below shows how the renewable fuel consumption in the UK under the RTFO has increased since 2011.
What’s happening in the fuel industry…
Policy frameworks and mandates in Europe and the US are spurring considerable investment into new capacity to meet higher demand for renewable fuels. The capacity of fossil fuel refineries being converted to HVO production is increasing because investment costs are lower and project delivery is quicker than for new-build plants – breathing new life into the energy transition away from fossil fuels.
Approximate installed capacity for HVO worldwide in 2020 was:
- Europe 3,870,000m tonnes
- North America: 1,150,000m tonnes
Asia : 1,020,000m tonnes.
How HVO is being sourced…
Further mobilisation of waste feedstock supply chains for HVO is expected over the coming years. As used cooking oil and other waste feedstocks such as animal fat residue (not used in Prema HVO) are spread disparately, businesses and traders that can aggregate these scattered supplies are set to play a key role.
HVO producers may increasingly expand their core business into low volume supply procurement. Producers in Europe and the United States are expected to source supplies from a wider and wider range of countries, especially in Europe – where the collection market for used cooking oil is approaching saturation.
At the same time, technological development of waste feedstock pre-treatment is developing, helping to expand the range of waste and residue feedstocks suitable for HVO production.
The diagram from the IEA below shows that a relatively large percentage of HVO is set to be produced from waste and residue in future, like Prema HVO. 
How Prema Energy ensures security of supply…
Prema Energy were the first wholesaler to import HVO into the UK. From this first-to-market advantage, we have developed our security of supply through our partnership with the world’s HVO forerunner, Neste.
Neste have invested considerably in building a global feedstock and production platform for renewable fuels and are well-positioned to produce waste derived HVO for the long-term. In fact, they are currently expanding their annual production capacity for renewable fuels, from 3.2m tonnes to 4.5m tonnes by the first quarter of 2023.
Neste has existing facilities in:
- Singapore, with a current annual HVO capacity of 910m litres (to expand by 1.3m tonnes by 2023)
- Finland, with a current capacity of 430m litres
- Rotterdam, with a current capacity of 1,280m litres.
Neste are also planning a further 2,000m litre capacity site in Europe, and recently invested heavily in a waste pre-treatment plant in Rotterdam.
In 2018 and 2019, about 80% of the feedstock used by Nesta consisted of waste fats and oils, a relatively large proportion for an HVO producer. They invest 70% of their R&D budget on the development of new raw materials, especially wastes and residues, and are aiming for 100% of their feedstock to be waste derived by 2025. Remember that Prema HVO is always 100% waste derived HVO.
In the highly unlikely event of demand outsripping Neste supply, we also have relationships with several other producers of waste derived HVO as part of our contingency planning.
In summary, you can trust in Prema’s ability to provide maximum surety for the most environmentally sustainable category of HVO available, long into the future.
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