Downstream oil in brief: what is the future for HVO in European fuel markets? Report

Insight 21 July 2020

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Report summary

As environmental legislation across Europe is becoming ever more stringent. As such, we expect biofuels, such as hydrotreated vegetable oil (HVO), will play an important role in meeting climate change goals in the coming years. Some estimates suggest that HVO fuel output will double by 2030. It is 100% renewable and less pollutant than conventional fuels. Despite being more expensive than regular diesel, HVO proved to be a practical choice for Scandinavian fuel marketing companies to green their offerings. But what would it take to repeat its success in lower-income European economies?

HVO finds success in Scandinavia
Climate change goals are bringing HVO into focus
As the market grows, production faces new challenges
Conclusion
Stronger light end prices support increased Northwest Europe refining margins in June
European fuels marketing margins fall further into the five-year range from the highs seen earlier in the year