Renewable liquid fuel availability to far outweigh potential demand, leading the way for use in UK home heating oil market

Report highlights

• The UK domestic heating oil market can easily be accommodated within the overall requirement for renewable liquid fuels.
• Fuels considered to conflict with demands for food and feed crop feedstock were excluded from the analysis.
• Lifecycle green house gas emission reductions for renewable liquid fuels produced via the processes covered in this study vs conventional fuels range between 82% - 87%.
• There is more than enough projected feedstock availability to meet renewable liquid fuel consumption requirements in Europe and North America.
  • Europe has potential feedstock availability to produce between 64 – 105 million tonnes of oil equivalent (mTOE) of renewable liquid fuels per annum by 2030.
  • European biofuels consumption (biodiesel, biojet and renewable diesel) is expected to be between 19 – 26 mTOE per annum by 2030, meaning projected renewable liquid fuels yield would exceed demand by between 243 – 560%.
  • North America has potential feedstock availability to produce between 123 – 151 million mTOE of renewable liquid fuels per annum by 2030.
  • North American biofuels consumption (biodiesel, biojet and renewable diesel) is expected to be between 21 – 30 mTOE per annum by 2030, meaning projected renewable liquid fuels yield would exceed demand by between 415 – 728%.
• At this stage it is unclear how quickly replacement renewable liquid fuels for oil heated homes can be rolled out in the UK. Determining factors include UK government policy and the extent of the penetration of heat pumps in the predominantly “hard to treat” rural housing stock currently on heating oil. A conservative estimate would be that 50% of homes could be converted by 2030, which matches the timescales of this study.
  • This would lead to a requirement for an RLF of c. 1 mTOE per annum.
  • In this context, the UK heating oil replacement requirement would be between 0.4% and 0.5% of renewable liquid fuel production in Europe and North America.
• It is acknowledged that some of the technologies covered in the report require further development. However, the rapid growth in the HVO market should provide significant comfort. HVO production from 2013 to 2020 increased from 2.2m metric tonnes to 6.2m and forecasts suggest that European production of HVO is expected to increase to 11.30m tonnes by 2025 and in the USA to 12.6m tonnes. Total world production is expected to reach almost 30m tonnes by 2025 – 14 times that in 2013.

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The gap created means that there will be more than enough RLF to heat the UK’s 1.7m off-grid homes using heating oil, replacing the current fossil fuel and achieving a carbon saving of up to 88%.

The research was conducted by Portland Analytics and commissioned by the UK and Ireland Fuel Distributors Association (UKIFDA) on behalf of the Future Ready Fuel campaign.

Ken Cronin, UKIFDA CEO, commented: “The industry has invested heavily in showing that Hydrotreated Vegetable Oil (HVO), the leading RLF currently available in this country, can replace the incumbent fossil fuel, kerosene, in domestic home heating systems with a small upfront investment by the householder of around £500.

“The conversion process takes less than one hour and results in a massive carbon saving of up to 88%. To complement technical work, UKIFDA set about demonstrating that there would be enough renewable liquid fuel from sustainable sources to cover the total demand – this report firmly confirms that to be the case.”

Paul Rose, OFTEC CEO, added: “We are now calling on government to urgently work with the industry to remove the remaining barrier to allow up to 1.7m “hard to treat” oil heated homes in the UK to decarbonise by extending the current RTFO system that reduces consumer prices for RLFs in transport and aviation to rural home heating.”

^{OFTEC CEO Paul Rose and UKIFDA CEO Ken Cronin}