Freight Logistics — Renewable Diesel
It is a question that may be considered debatable or open to discussion, how cost-effective the global push to replace diesel-powered vehicles with EVs is.
Despite all the big talk and virtue signalling by stakeholders, some interesting facts emerge to debunk the “embrace EV” culture.
The American Transportation Research Institute (ATRI) recently conducted a study that yielded significant findings. It revealed that the transition to battery-powered trucks is not only more cost-effective but also more operationally efficient than using renewable diesel (RD) fuel.
While the initial costs of electric vehicle purchases and electric infrastructure may seem daunting, it’s important to consider the long-term perspective. Over 15 years, these investments are projected to cost the long-haul sector more than $1 trillion. In comparison, using renewable fuel to power ICE trucks will cost $203 billion to achieve similar decarbonization benefits. This offers a promising outlook on the potential long-term cost savings.
Renewable diesel, a distinct fuel from biodiesel, is often misunderstood. Unlike biodiesel, which is known to corrode engines, renewable diesel is made more or less on the same petroleum diesel chemical processing. This makes it a viable option for use in traditional trucks, either as a blend with petroleum diesel or as a stand-alone fuel.
In line haul (long haul freight movement), the availability of charging infrastructure will continue to be challenging even for developed world countries such as the USA and Europe.
Another important factor to consider is the payload, which refers to the maximum weight a vehicle can carry. This has a direct impact on operational efficiency. Batteries for EV trucks are heavy, reducing the cargo carrying capacity and thus affecting the financials of each trip.
The ATRI study found that for every 1,000 ICE trucks replaced by BEV trucks hauling the additional weight, as many as 343 more trucks — with corresponding additional emissions — will be needed to haul the same amount of freight. This suggests that the environmental benefits of EVs may be offset by the increased number of trucks required, highlighting a potential operational challenge.
Renewable diesel and biodiesel are both high-quality fuels made from the same oils and fats, but they have different chemical compositions and performance characteristics.
Renewable diesel is also known as hydro-treated vegetable oil (HVO) or green diesel, renewable diesel is a pure hydrocarbon diesel fuel with a similar chemical composition to fossil diesel. It’s produced using hydrotreating, gasification, pyrolysis, and other biochemical and thermochemical technologies.
Renewable diesel has a lower cloud point, which means it handles cold weather better, and can be transported in existing pipelines. However, it’s generally more expensive than biodiesel because it requires more complex processing and higher quality feedstock.
Biodiesel is known as fatty acid methyl ester (FAME); biodiesel is not a hydrocarbon and has a higher oxygen content and more impurities than renewable diesel. It’s produced using transesterification, which can be less capital-intensive than the hydrotreating process that produces renewable diesel. Biodiesel is often blended with petroleum diesel to be used in modern diesel engines, but it generally requires separate storage and handling.
Indian Oil (IOCL) offers a green diesel called XtraGreen at 126 fuel stations in 63 cities across India. XtraGreen is a more eco-friendly diesel with a lower sulfur content and a multi-functional additive that reduces emissions of carbon monoxide, nitrogen oxide, and particulate matter. It also has a higher cetane number, which leads to better combustion and longer durability than conventional fuel.
What’s the global scenario? The commercial plants for the production of renewable diesel have been installed all over the world. Currently, over 5.5 billion litres of renewable diesel is produced globally and is forecasted to grow up to 13 billion litres in 2024, according to Anu Choudhry, an energy expert. (https://thebluecircle.co/article/2021/03/18/renewable-diesel-an-overview-and-india-status)
Neste, a Finland-based petroleum refining company, is currently dominating the production of renewable diesel. It is the world’s top producer which operates four facilities, 2 in Finland and one each in Rotterdam and Singapore. Oil & gas companies such as ENI and Total also producing a significant amount of renewable diesel and employing technologies.
Enilive (Eni Sustainable Mobility), through the Eni Fuel company, and Lannutti Group, a leading operator in the logistics and road transport sector, have signed an agreement for the use of HVOlution, a diesel fuel produced from 100% renewable raw materials.
With 300 trucks in its Italian fleet already powered exclusively with HVO (out of a total European fleet of 1,500 units), Lannutti Group — founded in 1963 and now operating in 8 European countries — has chosen to make an active step forward in its decarbonisation journey.
HVOlution is exclusively produced using biogenic raw materials (mainly waste and residues) such as used cooking oil or vegetable oil processing waste, and can also be made from oils produced from marginal land not in competition with the food chain, supplied through a network of agri-hubs Eni is establishing in several African countries. Enilive has a network of over 5,000 points of sale in Europe. HVOlution is also distributed in over 550 service stations.
Total Energies, Europe’s leading retailer of biofuels with more than 2.4 million metric tons incorporated into gasoline and diesel in 2018, and developed in-depth knowledge of the markets and customers. To become becoming a leader in sustainable biofuel markets, it transformed our La Mède refinery in France into a world-class biorefinery. One of the largest facilities of its kind in Europe, the biorefinery has a capacity of 500,000 tonnes of HVO-type biofuels per year, in order to continue to meet growing demand.
Total Energies concede that production costs are higher for biofuels than for conventional fuels, so their use is primarily encouraged through regulations. These regulations can have different objectives depending on the country, ranging from fighting climate change and securing energy independence to support for farmers and land planning. The percentage of biofuel in a product can vary depending on regulations and fuel specifications.
The global regulations and policies are playing a vital role in the development of the renewable diesel production. The regulation-driven demand in the US and EU is forecasted to encourage a USD 5 billion of investment (over the next five years) in new renewable diesel plants.
The Renewable Energy Directive (RED II) sets the framework for renewable energy use in the EU. It requires that by 2030, at least 14% of energy used in transport must come from renewable sources, including a minimum of 3.5% from advanced biofuels. Advanced biofuels are made from raw materials listed in Annex IX Part A of RED II. The RED II also requires that fuel suppliers meet this target.
