Hydrotreated Vegetable Oil (HVO) FAQs
Please also read our full position statement, which can be shared with external audiences.
Why do we have to reduce our carbon emissions?
Balfour Beatty is committed to reducing the impact of its operations on the environment. As part of our Building New Futures Sustainability Strategy, our ambition is to achieve beyond net zero carbon emissions by 2040.
This can only be achieved by considering how we use and power our plant and equipment. (More details below). We are aligning with Science Based Targets initiative in our carbon reduction target setting and as such we must consider both our own emissions (Scope 1 and 2) and the emissions of our supply chain (Scope 3), as illustrated in the diagram below.
Source: Adapted from the Greenhouse Gas Protocol, Corporate Value Chain (Scope 3) Accounting and Reporting Standard
Will Balfour Beatty ban completely the use of HVO from their sites?
Balfour Beatty does not directly purchase HVO fuel for our sites and will expect our supply chain to support our policy position when working for Balfour Beatty. We are working with our supply chain partners to keep HVO use when operating plant and fleet on our sites to an absolute minimum, for example whilst some plant may arrive from other sites with tanks part full of HVOs, once used up, we expect them not to refill their plant with HVO whilst on a Balfour Beatty site.
We will continue to support our supply chain in transitioning to other types of sustainable energy solutions.
I’m a supply chain partner to Balfour Beatty. What does this new position on HVO/GTL mean for me?
This depends on your role as a supply chain partner:
- Direct fuel suppliers – must not provide HVO or GTL to Balfour Beatty sites. If you do receive a request for HVO or GTL from a Balfour Beatty representative, please refuse the order and refer them this document. We have also raised awareness internally on our position on these fuels, so these requests should not be raised. The only exception would be for a pre-agreed trial signed off by the relevant Business Unit Managing Director and Strategic Business Unit Head of Sustainability and recorded in the Balfour Beatty HVO, G2L trial register.
- Plant/fleet providers –The Balfour Beatty Plant and Fleet team can support you in the provision of equipment which meet the right standards for Balfour Beatty sites. Any exceptions will need to be agreed at Business Unit Managing Director and Strategic Business Unit Head of Sustainability level and recorded.
- Subcontractors – We will share our research and innovation in this area and look to collaborate on low carbon fuel solutions. The Balfour Beatty Plant and Fleet team can support the provision of equipment which meet the right standards for Balfour Beatty sites. Any exceptions will need to be agreed at Business Unit Managing Director and Strategic Business Unit Head of Sustainability level and recorded.
- Logistics suppliers or suppliers bringing materials to a Balfour Beatty site currently using HVO or GTL –We will share our research and innovation in this area and look to collaborate on low carbon fuel solutions.
- Materials suppliers using GTL or HVO on their own sites or operations and not on any Balfour Beatty site –We will share our research and innovation in this area and look to collaborate on low carbon fuel solutions.
Our company has already approved HVO as part of our low carbon transition plan. We aren’t able to reverse this. How can we align to Balfour Beatty’s HVO policy?
We have decided that for Balfour Beatty, HVO will not be a transition fuel based on the current evidence available. We will not support the use of HVOs our sites. We will share our research and innovation in this area and look to collaborate on low carbon fuel solutions. If you are currently using HVO outside our sites but relevant to our scope 3 emissions, we will require evidence that the company is using HVO as a short-term transition fuel and ask for an alternative fuel transition plan.
My company has done due diligence on HVO and we are satisfied that HVO provides a sustainable fuel option which aligns to our values. Why do Balfour Beatty think differently?
Balfour Beatty has reviewed audit trails for HVO fuels and haven’t been satisfied that they are able to go back far enough to the original source or consider displacement activity. We have also reviewed independent research on HVO. In addition, we have taken guidance from our Group fuel supplier.
Our key concern is that global demand for used cooking oil is predicted to exceed supply. There is a known risk that this spike in demand is resulting in land use change through peatland and marshland clearance and deforestation in countries such as a Malaysia and Indonesia and that it could also increase the use of virgin palm oil to meet demand.
EU research1 indicates that once the effects of land use change and draining of peatland are accounted for, the GHG impact of palm-oil derived HVO could be up to 3 times greater than standard fossil fuel diesel.
Our Sustainability Strategy requires us to take a responsible approach and to consider all of the environmental implications in the decisions we make.
We will keep our position under review. However, until we have understood all the potential impacts and until we can be confident beyond doubt that HVO will not cause environmental damage elsewhere, Balfour Beatty will not be making a commitment to HVO.
1 https://www.transportenvironment.org/wp-content/uploads/2021/08/Biofuels-briefing-072021.pdf 10 years of EU fuels policy increased EU’s reliance on unsustainable biofuels, July 2021
What source documents did Balfour Beatty review when conducting their due diligence?
In addition to speaking with key fuel suppliers in the UK, carrying out our own trials and reviewing audit materials. We have reviewed information from:
- NNFCC – the bioeconomy consultants UCO Report.pdf (nnfcc.co.uk)
- The Royal Academy of Engineering. biofuels (raeng.org.uk)
- Ecofys, IIASA and E4tech report commissioned and funded by the European Commission. Energy (europa.eu)
- Transport Environment. CE_Delft__200247_UCO_as_biofuel_feedstock_in_EU_FINAL - v5_0.pdf (transportenvironment.org)
- Natgas.com Gas-to-Liquid (GTL) (natgas.info)
Would Balfour Beatty be willing to do trials on HVO with my company?
Balfour Beatty has already undertaken trials on HVO. We are not currently looking to do further trials for HVO or GTL. However, we will continue to examine all new research and data as it becomes available. If you have new evidence or data, or if you have other sustainable energy solutions for plant and fleet, we would be willing to review them.
If I come onto a Balfour Beatty site from working elsewhere where they do use HVO, will I have to drain my tank?
No, you will not have to drain your tank before coming to a Balfour Beatty site. However, we expect you not to refill your plant with HVO whilst on a Balfour Beatty site.
Many of our other contractor customers have requested that we provide them with HVO. Why does Balfour Beatty have a different approach?
Our Sustainability Strategy requires us to consider all of the potential impacts of our actions. That includes potential negative implications in other parts of the world that could, as a result of these actions, drive global carbon emissions up. Balfour Beatty has done extensive research on HVO and to date we do not believe the whole-life impacts provide sufficient sustainability benefits.
If the situation changes regarding HVO, would Balfour Beatty reconsider its position?
This is a situation we are keeping under constant review. We will continue to assess all the data and information that is published on HVO. We would only look again at our position if the issues we have outlined were resolved beyond doubt.
Given that the ultimate source of many HVOs in particular is uncertain, even in those that are said to be sustainably sourced, and the real risk that significant increase in use on construction sites across the country could be causing increased carbon emissions in other parts of the world due to land use change. As such, we are encouraging the Government to undertake a review of HVO use in the UK and to set clearer requirements around their use on publicly funded schemes, to provide clarity to the sector and to ensure a level playing field.
The UK Government has removed the option of using red diesel for construction. This is going to create significant costs for my business. HVO will help us to reduce this cost, so we need to use it for commercial reasons.
HVO is a liquid hydrocarbon which is classified for excise purposes as heavy oil and treated the same as diesel. You will therefore not have any tax advantages from using HVO. You may find that with the removal of rebated fuel, HVO becomes more expensive than white diesel.
If Balfour Beatty do not use HVO or GLT, what do you use on site?
Balfour Beatty is committed to phasing out the use of diesel and other fossil fuels in our operations as quickly as possible – but we are determined to ensure that we do so responsibly. While we are considering how to ensure the traceability and true impact of products including HVO and GTL, we are continuing to make progress on decarbonising our plant and fleet in other ways. In line with our Sustainability Strategy, Building New Futures, Balfour Beatty is pursuing the following steps to reduce carbon emissions from its plant and fleet:
- Hiring or procuring the most efficient plant that meets latest engine emission standards (Stage V).
- Using electric, hybrid and hydrogen powered machinery where available.
- Training operators on the efficient use of the machinery (idling & fuel efficiency), including the launch of the Balfour Beatty Flannery ‘Operator Skills Hub’ in 2020.
- Using telemetry to monitor fuel use and utilisation.
- Using machine control systems to maximise productivity and minimise the amount of additional work required (preventing over-digging and backfilling etc).
- Retrofitting existing plant with selective catalytic reduction technology (SCRT) - whilst this reduces particulates, NOx, hydrocarbons and carbon monoxide and brings them up to Stage V requirements - it does increase fuel consumption by 3%.
- Using Balfour Beatty power profiler, EcoNet, grid connections and battery systems to minimise the need for diesel powered generators.
- Using EcoSense cabins, which contain a range of sustainable applications and components including occupier-activated extractor fan sensors and lower kilowatt heaters with built-in, self-regulating digital thermostats, which will reduce carbon emissions on site by up to 30%.
- For smaller plant there are a range of fully electric and hybrid solutions that are already on the market. For larger plant Balfour Beatty are seeing the introduction of hybrid plant and expect to see more hydrogen powered plant in the next two to three years.
- Collaborating relentlessly on innovative design, trialling and deployment
- Setting up a Towards a zero carbon construction site