BIOFUELS HVO making it big

The Neste HVO producti on facility in Rott erdam, the Netherlands, is the largest in Europe and among the largest in the world Hydrotreated vegetable oil boasts a great number of vegetable oils, such as soya and rapeseed, require immense areas of land to produce advantages over traditional biodiesel, among them lower the quanti ti es of oil needed for HVO producti on. emissions, higher fuel e ciency and a chemical structure As a result, HVO producers have identical with petroleum diesel. With the growing interest in begun to move away from vegetable oils. “These days HVO is produced to a all markets, particularly in Asia, and the many new production growing degree from waste and residue oils and fats. These come from food, fi sh facilities scheduled to come online in a few years, HVO could and slaughterhouse industries and non- be the fuel of the future. Ile Kauppila food grade vegetable oil fracti ons,” say Honkanen and Eisentraut. Neste – a member of the Rountable he ti mes in the biofuel sector are hydrogenati on or simply hydrotreatment. on Sustainable Palm Oil (RSPO) since a-changin’. In the last decade, In this process, hydrogen is added to 2006 and the holder of the world’s fi rst Tthe marketplace for diesel based either a plant- or animal-based feedstock. RSPO-RED Supply Chain sustainability on hydrotreated vegetable oil (HVO) It combines with oxygen, thus removing certi fi cate – has cut the share of palm oil has developed rapidly. Producti on water from the mix and resulti ng in a in its feedstock mix from 90% palm oil to has increased exponenti ally and new renewable, paraffi nic fuel product. 80% waste and residue materials, such producers keep popping up to try Honkanen and Eisentraut say that in as used cooking oil (UCO). In additi on, their luck as demand ramps up in both the last decade or so, the feedstocks other possible waste feedstocks include traditi onal and new markets. But the used to produce HVO mostly consisted animal and fi sh fat and camelina, soya and greenhorns face tough competi ti on as of vegetable oils. For example, in 2007, rapeseed oil refi ning residues. Finland’s Neste – the world’s largest HVO when Neste opened its fi rst commercial “Neste uses more than 10 diff erent producer – seems to reign supreme in the scale facility – which was also the world’s raw materials to produce our renewable sector. fi rst HVO plant of this scale – in Porvoo, products,” say Honkanen and Eisentraut. But what is HVO? Isn’t it just another Finland, co-located with the company’s “An extensive raw material base provides name for biodiesel or is it something crude oil refi nery, it processed mostly fl exibility, as it allows us to respond diff erent altogether? Neste’s head of palm oil. According to the fi rm, at this to the needs of diff erent markets and technical services Markku Honkanen point, palm oil made up 90% of its HVO customers.” and head of market intelligence feedstock. Anselm Eisentraut talked to Oils & Fats Palm oil, however, suff ers from a bad Di erences with biodiesel Internati onal to explain the basics of HVO reputati on regarding its sustainability. The The large number of feedstocks from and its future prospects. EU has decided to phase high ILUC-risk which HVO can be produced and the vegetable oils out of its list of sustainable fact that HVO is oft en marketed as a Feedstock exibility renewable fuels by 2030m including palm petroleum diesel replacement means HVO can be produced through several oil. Combusti on engine manufacturer the product oft en gets confused with processes, such as hydrocracking, Volvo Penta – which in the beginning of ‘traditi onal’ biodiesel. However, Honkanen but perhaps the most common is 2016 approved HVO as a fuel in all of and Eisentraut say that the two are hydrodeoxygenati on, also known as its diesel engines – also notes that other completely diff erent products, despite

18 OFI – NOVEMBER/DECEMBER 2018 www.ofi magazine.com

HVO.indd 2 04/10/2018 11:21 BIOFUELS

Photo: Neste roughly similar to petroleum diesel. divided between four plants in Finland, HVO, on the other hand, boasts cetane the Netherlands and Singapore. In Italy, numbers above 70. Honkanen and ENI has started production at its Venice Eisentraut say the high cetane number plant, which has a 350,000 tonnes/year helps engines start in cold weather and capacity, while in France, Total’s La Mede lowers fuel consumption, particularly in refinery is set to come online soon, adding urban environments. 500,000 tonnes/year of production Last, but not least, HVO does not capacity to the EU sector. contain any sulphur or aromatics, and so On the other side of the Atlantic, generates few impurities in an engine. Renewable Energy Group and Diamond According to an August 2017 study by Green Diesel have a combined production Gladstein, Neandross and Associates capacity of 750,000 tonnes/year, says for two southern California air quality Greenea. Out of the two, Diamond holds management districts, HVO reduces more capacity, having in 2017 expanded nitrogen oxide (NOx) and particulate its full capacity to more than 800,000 matter (PM) emissions by 13% and 29%, tonnes/year. However, most companies respectively. are planning expansions and new players Honkanen and Eisentraut say that the are entering the marketplace. Greenea savings are higher the older the vehicle expects global capacity to grow by more in which the fuel is burned is. It also than 40% by 2020, reaching 6.7-7.5M generates no ash, which may extend the tonnes, if all the expansion projects go service life of particle filters. Biodiesel, on through. the other hand, can generate more NOx While the EU and the USA are poised The Neste HVO production facility in Rotterdam, the Netherlands, is the largest in Europe and among the largest in the world emissions than fossil diesel due to its to remain the top markets, Asia is rising oxygen content. Honkanen and Eisentraut in the marketplace both due to increasing their superficial similarities. note that the emissions from fossil diesel interest of Asian economic superpowers “The chemical composition of HVO may also decrease the life span of motor – like China and Japan – to boost their is similar to that of conventional diesel. oil and particle filters. share of the renewable fuels market and It can be blended with fossil diesel the number of planned new production in all proportions or used as a 100% Growing production capacity in Asia. HVO-based aviation fuel pure product. The maximum allowed In the global HVO marketplace, demand is also an up-and-coming market segment, concentration of fatty acid methyl ester is set to be growing and there may soon says Greenea, although full realisation of (FAME) biodiesel in regular diesel in be a supply stream changing geographical HVO’s potential could take several years. Europe is usually 7% due to quality shift eastward. So far, according to second reasons,” they say. generation biofuels broker Greenea, Regulatory daydream Unlike most traditional biodiesels, HVO most of the fuel demand has come from Because of the shift to waste feedstocks, can be stored for a long period of time Europe and North America, but there is Honkanen and Eisentraut note that without major changes to its properties. growing interest coming from Asia, which the name HVO is, in fact, becoming an Additionally, HVO does not accumulate could change the map of the HVO supply inaccurate term to describe the product water, which Honkanen and Eisentraut say sector. manufactured by most current producers. is sometimes a challenge with biodiesel. Currently, the global installed HVO Indeed, since the product is to an “Biodiesel should be used within six production capacity stands at 4.745M increasing degree not manufactured from months from its manufacturing date to tonnes (see Figure 1, pg20). Neste is the vegetable oil, the title HVO sounds like an minimise the potential of changes in largest producer in the HVO market with oxymoron. product quality and the risk of microbial a capacity of roughly 2.6M tonnes/year, “However, product names cannot be u growth,” the two note. HVO also benefits from better cold weather performance when compared to biodiesel – an important property in northern countries like Neste’s home Finland. For example, the cloud point, indicating the lowest possible storage temperature, of Neste’s HVO fuel is -34°C, while the cloud point of rapeseed biodiesel is only -10°C, say Honkanen and Eisentraut. The cold weather characteristics of HVO can be adjusted during the manufacturing process. The cetane number of HVO – the indicator of how easily a fuel ignites in the engine, with a higher number signifying better ignitability – is higher than traditional biodiesel’s or even fossil diesel’s. Biodiesels generally have cetane numbers in the range of 50-60, which is Markku Honkanen, head of technical services, Neste Anselm Eisentraut, head of market intelligence, Neste

www.ofimagazine.com OFI – NOVEMBER/DECEMBER 2018 19

HVO.indd 3 04/10/2018 11:21 BIOFUELS

Preem (Co-processing) Denmark UPM AltAir Fuels 150,000 tonnes Finland USA 100,000 tonnes 125,000 tonnes

Total Diamond France 500,000 tonnes Neste Green Diesel Netherlands USA Cepsa 1M tonnes 500,000 tonnes (Co-processing) (Expansion to Spain Finland 800,000) 180,000 tonnes 200,000 tonnes Repsol (Co-processing) Finland REG Spain 200,000 tonnes USA 60,000 tonnes 250,000 tonnes Singapore ENI 1M tonnes Italy 300,000 tonnes Sinopec China (Under constructi on) 20,000 tonnes Italy 550,000 tonnes

Figure 1: Current and planned HVO producti on units Figure: Greenea, Neste Greenea, Figure:

u easily changed to bett er describe the HVO-VS is a sustainability verifi cati on Others catching up? origin of the fuels, as they are common in system designed to verify biofuels’ Both Honkanen and Eisentraut and European regulati on, fuel standards and compliance with the sustainability criteria Greenea trust that the future can be very biofuel quality recommendati ons set by embedded in the EU Renewable Energy bright for HVO. “We believe that the automoti ve companies,” they explain. Directi ve (RED). The scheme is audited demand for renewable diesel will conti nue As the fuel is popularly called HVO, by an independent third party and is to increase globally, going forward, as despite the actual feedstock used to make currently used to verify RED compliance more and more countries and regions are it, the term might cause some confusion of waste- and residue-based biofuels. stepping up their emissions reducti on among consumers. Therefore, producers ambiti ons,” say Honkanen and Eisentraut. oft en give their products diff erent brand For the sovereign market leader Neste, names. Neste, for example, calls its development of pre-treatment capabiliti es product Neste MY Renewable Diesel, is a key focus area. Additi onally, while both Diamond Green Diesel and Honkanen and Eisentraut list non- ENI have ti tled their fuels Green Diesel. technical challenges such as regulatory Regulati ons-wise, HVO is a relati vely developments, ensuring and further non-problemati c fuel. Due to its identi cal developing sustainability and developing chemical compositi on with petroleum new customer segments for renewable diesel, it does not suff er from the limits diesel and jet fuel as issues producers will imposed on the blending of conventi onal be concentrati ng on. biodiesel. The EU, for example, limits Greenea notes that HVO price conventi onal biodiesel blending at 7% development will be an interesti ng factor based on the EN590 diesel standard, to keep an eye on. US producers are while elsewhere in the world blending expected to increase their output in the limits of 10% and 20% can be found. High next few years, which should positi vely concentrati ons of traditi onal biodiesel can infl uence liquidity on the market. Greenea cause problems with engines, says Neste, says this might put pressure on prices, but HVO poses no such problems. breaking Neste’s near-monopoly. “In fact, HVO is the biocomponent But Honkanen and Eisentraut are not recommended by the latest and strictest worried, saying that while some might Worldwide Fuel Charter (WWFC) consider the price of Neste’s HVO fuel a specifi cati on. WWFC 5 does not allow disadvantage, that is not the case. the use of traditi onal biodiesel, but it does “Indepedent research shows that HVO recommend the use of renewable diesel – such as Neste MY Renewable Diesel – is because of its high cetane number, for one of the cheapest opti ons to reduce example,” say Honkanen and Eisentraut. emissions in transport. And it is the only To ensure compliance with EU opti on that can be adopted now, without renewable fuel regulati ons, Neste any modifi cati ons into engines or fuel spearheaded the development of the distributi on systems,” they say. ● HVO Verifi cati on Scheme (HVO-VS). Ile Kauppila is the former assistant editor Figure 2: EU HVO capacity (‘000 tonnes) Approved by the EU Commission, the Greenea Figure: of OFI

20 OFI – NOVEMBER/DECEMBER 2018 www.ofi magazine.com

HVO.indd 4 04/10/2018 11:21