HVO Business Opportunity

[Rose Narrowboats]

Just now, dmr said:

 

And they have exactly the same duty as red and white dinodeisel so I don't understand what the problem is?

A far as I can work out, it is not rebated for use as a domestic heating oil - probably because it didn't exist when the list was drawn up, but if it's not on the list......

Just now, ditchcrawler said:

Do you think its just down to supply and demand?

I guess is that when fuel prices were going through the roof, someone a long way up the supply chain took the opportunity to raise the price of HVO, so most of the regional bought it at an inflated price but red then dropped back a bit, so they are probably stuck with expensive HVO - but I re-iterate that is just a guess.

[Lady M]

16 minutes ago, dmr said:

 

And they have exactly the same duty as red and white dinodeisel so I don't understand what the problem is?

However, there isn't a specific entry for supply of HVO in private pleasure craft.

[dmr]

37 minutes ago, Lady C said:

However, there isn't a specific entry for supply of HVO in private pleasure craft.

 

Can we assume that HVO is biodiesel in that FAME and HVO are just two ways of producing biodiesel?

 

have a look at this:

 

https://www.gov.uk/guidance/fuel-used-in-private-pleasure-craft-and-for-private-pleasure-flying-excise-notice-554

 

Its a tiny bit ambiguous because in 2.1 in mentions rebated red including bio blends. It does not mention pure bio diesel (not blended) but certainly doesn't exclude it.  Section  2.2 however is clear, its illegal to use rebated diesel, BIODIESEL or blends for propulsion unless the extra duty is paid.

 

The only possible issue might be heating. I have always assumed that the red we use for non propulsion is rebated/non road diesel (11.14 duty) rather than heating oil (10.7) so if I am correct heating does not really come into it????.

 

However I assume the source of the trouble is this:

 

https://www.gov.uk/government/publications/reform-of-red-diesel-entitlements/reform-of-red-diesel-and-other-rebated-fuels-entitlement

 

which suggests that bio diesel used for heating is not chargeable (no duty???).

I think boats use rebated fuel for "non propulsion" (which could include battery charging) rather than explicitly for heating so I think its ok. The worse that could happen is that HMRC get a bit more money than they are entitled to 😀.

Boaters do not divide fuel use into propulsion/non propulsion/heating

 

 

[Cheshire cat]

Sorry, I've been out and about all day.

 

To quote the relevant piece of the article:-

"Adoption will be complicated

The complication is that HVO is only supposed to be used for propulsion, you are technically not allowed to use it for heating or battery charging. In theory it is not the boater or boatyard who needs to worry about this; the fuel supplier is the one likely to be held to account.

Currently there are two main suppliers, Crown and GBF Ltd. Both import it from Neste in Rotterdam and they are both in negotiations to argue the unique use-case for boaters. 

And to further complicate the issue these regulations are not being overseen by HMRC but by the DoT which devised the labarinthine Renewable Transport Fuel Obligation (RTFO) scheme "

[Cheshire cat]

From the quote I am guessing that HVO is granted a subsidy because it is considered by the DoT to be a "technically advanced development fuel" for which the government provides an 84p subsidy. Of course the subsidy is currently with the expectation that it will be used for propulsion....................

 

[dmr]

6 minutes ago, Cheshire cat said:

Sorry, I've been out and about all day.

 

To quote the relevant piece of the article:-

"Adoption will be complicated

The complication is that HVO is only supposed to be used for propulsion, you are technically not allowed to use it for heating or battery charging. In theory it is not the boater or boatyard who needs to worry about this; the fuel supplier is the one likely to be held to account.

Currently there are two main suppliers, Crown and GBF Ltd. Both import it from Neste in Rotterdam and they are both in negotiations to argue the unique use-case for boaters. 

And to further complicate the issue these regulations are not being overseen by HMRC but by the DoT which devised the labarinthine Renewable Transport Fuel Obligation (RTFO) scheme "

 

Thanks, that's very interesting. I note the web site of one HVO supplier lists use as "commercial boilers" so is it only domestic heating that is the problem?

3 minutes ago, Cheshire cat said:

From the quote I am guessing that HVO is granted a subsidy because it is considered by the DoT to be a "technically advanced development fuel" for which the government provides an 84p subsidy. Of course the subsidy is currently with the expectation that it will be used for propulsion....................

 

 

but its also used loads in Generators????  or is that classed as propulsion as an engine is involved?.

If it really is subsidised by 4p then its going to cost an arm and a leg without the subsidy.

[Cheshire cat]

Ah but you don't know how much they are paying for it!

 

More likely it's being used until someone tells them they can't. Who knows?

 

It looks like a lack of joined up thinking between two government departments. Trouble is this kind of stuff takes an age to be sorted out.

[dmr]

https://www.futurereadyfuel.info/?gclid=CjwKCAiA55mPBhBOEiwANmzoQkmvVsneYMKpgUz6iRrFdRn1PDzcCj7I9kOWnxEfhHUVxP6MnW2onRoC0FoQAvD_BwE

 

HVO for your boiler......I am confused.

[MtB]

2 hours ago, dmr said:

https://www.futurereadyfuel.info/?gclid=CjwKCAiA55mPBhBOEiwANmzoQkmvVsneYMKpgUz6iRrFdRn1PDzcCj7I9kOWnxEfhHUVxP6MnW2onRoC0FoQAvD_BwE

 

HVO for your boiler......I am confused.

 

 

And there was me all ready to buy 1,000 litres, and all that website does is ask me to write to my MP!!

 

 

 

[dmr]

27 minutes ago, MtB said:

 

 

And there was me all ready to buy 1,000 litres, and all that website does is ask me to write to my MP!!

 

 

 

 

Oops, more half baked www research from me 😀

Just go and buy a drum of the stuff, I suspect it will likely pay for itself (though your engines burn pretty clean anyway). Preventing one diesel bug incident and you've got your money back, and in my case I suspect the better combustion means less unburned stuff washing down the cylinder walls so might get a bit longer engine life. We have also been getting very smokey of late and HVO has given a very good reduction so won't get the eco warriors throwing eggs at us.

 

Actually got some eggs thrown at us coming up through Manchester, apparently the locals have gone soft and don't throw bricks anymore. 😀

[midnight cowboy]

Has anyone put HVO in their 50+ year old Lister?

[dmr]

9 minutes ago, midnight cowboy said:

Has anyone put HVO in their 50+ year old Lister?

 

I believe a member of this forum is running it in a Bolinder, will that do?

[IanD]

9 minutes ago, dmr said:

 

I believe a member of this forum is running it in a Bolinder, will that do?

I'm pretty sure it's been tried in old Listers too with no problems, but I can't find the reference right now...

[dmr]

7 minutes ago, IanD said:

I'm pretty sure it's been tried in old Listers too with no problems, but I can't find the reference right now...

 

I was a bit concerned about my JD3 as the Stanadyne pump is a fussy device, and the slower than designed idle does put the governor right on its limit. I suspect older in-line injection pumps will have no problems at all.

[Steilsteven]

Here is the situation as of 14 December from DBA forum

 

A Summary

HMRC have accepted that HVO can be taxed as a rebated fuel with duty and VAT similar to red diesel.

It can be used to heat homes, and by extension heat non-commercial (recreational and residential) boats and be used to provide light and power.

It can be used to propel recreational craft if full duty (and VAT) are paid on the proportion used. The principal issue is price. Directorate of Transport (DfT) have taken the view that under the Renewable Fuel Transport Obligations (RFTO) the issue of Renewable Fuel Transport Certificates (RTFC) (the subsidy) will assume that marinas will only sell HVO at a 60/40 split and the duty is due accordingly - this results in HVO generally being significantly more expensive than red diesel and

Bulk supply of HVO for heating is available at the rebated rates of both VAT and Duty (usually at a minimum drop of 500 litres by tanker but some HVO available in 205 litre drums). Both Crown Oil and New Era Fuels supply HVO for heating.

This position has been agreed by my RYA and IWA colleagues.

The next step needed is to approach all the government departments concerned DEFRA, DfT, HMRC and Department for Business Energy and Industrial Strategy (DBEIS) to achieve a common structure recognising the use of HVO made from waste oil as an appropriate interim solution for reducing pleasure craft emissions, reflecting the existing tax arrangements for red diesel used for propulsion in recreational craft, and confirming the full application of RFTCs.

[Steilsteven]

As regards smelly exhaust smoke, I have been using HVO in my Mastervolt generator and my boiler on an almost daily basis since September. 

There has been no noticeable smell from either.

 

Keith

[Momac]

1 hour ago, Steilsteven said:

The next step needed is to approach all the government departments concerned DEFRA, DfT, HMRC and Department for Business Energy and Industrial Strategy (DBEIS) to achieve a common structure recognising the use of HVO made from waste oil as an appropriate interim solution for reducing pleasure craft emissions, reflecting the existing tax arrangements for red diesel used for propulsion in recreational craft, and confirming the full application of RFTCs.

 

The present position regarding duty is very clear in that the duty to be paid on HVO is the same as for diesel.

 

There is a very strong case for using HVO in boats with regard to much lower emissions compared to diesel and longer shelf life.  This is all providing the HVO is ethically sourced eg not sourced from areas where rain forests are being lost to agriculture .

The only consideration is whether retailers who serve the inland and coastal leisure boating market  like marinas are prepared to change from diesel to HVO. If the encouragement to change was to be a reduction in duty payable on HVO for propulsion use there might be more of a rush to make the change.