WHAT IS IT?
Hydrotreated Vegetable Oil (HVO) is a renewable diesel fuel produced by reacting vegetable oils or animal fats with hydrogen under high pressure and temperature. Unlike biodiesel (FAME), HVO is chemically identical to fossil diesel and can be used as a drop-in replacement without any engine modifications.

HOW IS IT MADE?
Feedstock (e.g. palm oil, rapeseed oil, UCO, tallow, soybean oil) → Hydrotreatment (removes oxygen) → HVO (renewable diesel) + Bio-naphtha (co-product) + Renewable LPG (co-product)

KEY PROPERTIES vs FOSSIL DIESEL

Cetane number: 70–90 (vs 51–55 for fossil diesel) — better combustion

No aromatic content — cleaner burning

Better cold flow properties than FAME biodiesel

Virtually zero sulphur

Drop-in: blendable in any ratio or used neat (HVO100)

FEEDSTOCKS (in order of sustainability premium)

• UCO (Used Cooking Oil) — highest premium, double-counted under RED II

• Animal fats (tallow, lard, fish oil) — high premium

• Rapeseed oil — medium

• Soybean oil — medium

• Palm oil — lowest (limited in EU due to ILUC concerns)

TRADE CORRIDORS


Major producers: Finland (Neste — world's largest), USA (Diamond Green Diesel), Netherlands (Neste Rotterdam), Singapore (Neste Singapore)
Major buyers: Europe (largest market due to RED II mandates), USA (California LCFS market)
Tetra relevance: Singapore ↔ Germany corridor. Singapore is a key HVO trading hub.

CERTIFICATIONS (mandatory for claiming renewable fuel credits)

ISCC EU — most widely accepted in Europe

ISCC PLUS — for non-EU markets

RSB — alternative certification

Proof of Sustainability (PoS) documents must accompany every shipment

PRICING


Premium over fossil diesel. UCO-based HVO commands 2–3× the fossil diesel price. Priced on ARGUS or ICIS assessments. No single public exchange.

CO₂ SAVINGS
UCO-based HVO: up to 90% lifecycle CO₂ reduction vs fossil diesel
Palm-based HVO: ~40–60% reduction (less valued by EU buyers)

HVO renewable diesel drop-in biofuel ISCC RED II palm oil UCO