The trouble with renewable diesel

For decades, oil and its derivatives have run our economy, powering everything from tractors to aeroplanes, and heating 40 per cent of Irish homes. However, these products are also the source of about 20 million tonnes of planet-warming carbon dioxide pollution in Ireland each year; more than all other fossil fuels combined, and equivalent to nearly all greenhouse gases from the agriculture sector.

To combat climate change, we urgently need to replace oil within one generation, an imperative that presents an existential threat for fossil fuel industries.

Fuels for Ireland, formerly the Irish Petroleum Industry Association, has been lobbying for a greater role for liquid biofuels in the Government’s climate strategy. They advocate for the use of hydrotreated vegetable oil (HVO), claiming it as a sustainable and convenient alternative to diesel that could cut carbon dioxide pollution by more than 80 per cent.

Irish Rail, various haulage companies and data centres plan to use HVO as part of realising their decarbonisation ambitions.

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Fuels for Ireland and oil boiler manufacturers are also promoting HVO as a decarbonisation solution for home heating, emphasising the disruption in installing heat pumps and insulation.

The attraction of HVO is compelling: as a “drop-in substitute” for liquid fossil fuels, made from biological sources including organic waste, it requires no changes in daily life or expensive investment for a business or home to cut its greenhouse gas emissions.

It sounds too good to be true.

Recent research suggests that it is. HVO, far from being a carbon-neutral solution, could inadvertently be fuelling tropical deforestation.

Concerns have arisen as to whether part of the supply of its main feedstock marketed as used cooking oil (UCO) is in fact pure palm oil, one of the main drivers of deforestation.

Because of decarbonisation policies incentivising biofuels, UCO can fetch a higher price than palm oil in Europe, and inadequate traceability controls offer palm oil traders an attractive arbitrage opportunity.

Case in point: in 2020, Malaysia, the world’s second-largest producer of palm oil, exported five litres of UCO per capita (about 150 million litres in total) to the UK and Ireland. This far exceeds the volume that was actually collected in the country.

These concerns have led to the EU capping the use of UCO for meeting renewable transport targets to 1.7 per cent (though this is being revised upwards). Ireland, one of the heaviest users of UCO for biofuels in the EU, exceeded this cap threefold in 2021. Moreover, these caps don’t apply to heating, and HVO is considered a zero-carbon fuel in greenhouse gas accounting, ignoring the potentially substantial emissions arising from deforestation and other factors in the supply chain.

The EU is taking measures to improve supply chain integrity, outlined in a recent report by Byrne Ó Cléirigh.

One solution is for the EU to limit biofuels and their feedstock to those sourced from within the EU, with full supply chain traceability, and to ban all products derived from palm oil within the energy system.

Producing biofuels from crops has fallen out of favour given biofuel’s competition with food production, and questionable greenhouse gas savings. But shifting biofuel feedstock towards waste, like used cooking oil, is not a panacea for the climate, beyond niche cases.

Waste is not a scalable energy source: A study by the Sustainable Energy Authority of Ireland (SEAI) found that waste sourced from Ireland can meet only 4 per cent of our total energy demand.

Biofuel from waste as part of local, circular economy can have strong benefits for the climate, as seen from UCC’s collaboration with Midleton Distillery to develop biogas from distillation byproducts to replace fossil fuels in the production process.

The limited supply of genuinely sustainable bioenergy derived from waste should be used locally, prioritised to turn waste streams into resources, and displacing fossil fuels where no alternative exists.

Food production is being disrupted by conflict and climate change, and close to a billion people are now food insecure: food should have no place in our energy system, especially palm oil, which is associated with devastating environmental damage.

Moreover, HVO produced from imported cooking oil fails to solve broader sustainability issues within Ireland’s energy system. It does not significantly cut nitrogen oxide air pollutants from road traffic, or address high energy import dependence. The drive to retrofit and insulate houses is as much about making comfortable, healthy homes and reducing energy bills as about cutting greenhouse gas emissions: HVO does not bring these advantages.

Realising these benefits requires addressing the inherently unsustainable nature of our energy, transportation and heating systems, by undertaking structural transformation to cut energy demand and use renewable electricity instead of fossil fuels. There are no shortcuts.

Rather than the climate saviour it’s promoted as, “renewable diesel” could be viewed more accurately as a life raft for the liquid fuels industry.

Hannah Daly is a professor of sustainable energy at University College Cork