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The HVO Joint Working Group

The Background: Recreational Boating Sector

The UK recreational boating sector consists of more than 100,000 craft currently operating on canals, rivers and estuaries all around the coast of the UK.

Recreational boating, fishing, and sailing are some of the UK’s biggest participation activities and are estimated to contribute more than £3 billion per year to the UK economy.

Recreational boaters are environmentally aware and there is now a very active dialogue within the community on how to reduce the carbon footprint of boating activities.

Recreational vessels have an exceptionally long life, often 40+ years and hence many of the vessels afloat today will still be operational and using small diesel engines in 2050.

Whilst electric drives or hybrid electric drives are already being offered on new boats, recent analysis suggests that the replacement of existing diesel engines with electric drives is likely to increase environmental impact rather than reduce it and is unlikely to happen in any significant numbers. Hence a different, transitional solution is required.

This situation is further exacerbated in Scotland, due to the remote nature of many coastal marinas, where there is unlikely to be powerful enough grid connections for the electric recharging of boats for many years to come.

HVO has been trialled in a range of vessels and found to offer an immediate way to decarbonise the sector, with minimum investment in infrastructure.

HVO Joint Working Group and #GreenerBoatingDiesel

The HVO Joint Working Group brings together the Cruising Association (CA), The Inland Waterways Association (IWA), Royal Yachting Association (RYA), British Marine (BM) to represent all leisure boaters in the UK.

The goal of the #GreenerBoatingDiesel campaign is to facilitate the rapid decarbonisation of the whole UK recreational boating sector via adoption of HVO as a more sustainable and environmentally friendly fuel for legacy small diesel engines during a 20-30 year transition period as new propulsion technologies are developed and introduced.

In the near and medium term, the use of HVO in existing diesel engines and delivered via existing shoreside infrastructure is the most practical and safe way to reduce emissions from existing engines. While new vessels may increasingly have hybrid drives to increase range, the use of HVO in their range extender generator engines is consistent with reducing CO2 emissions.

In summary, the Joint Working Group believes that HVO is the only route currently available to decarbonise the existing leisure fleet and further reduce the carbon footprint of new electric craft.

 

 

 

Government Policy and Renewable Transport Fuel Obligation

A key objective of the Joint HVO Working Group is to assist the various government departments involved in revising current policies in order to make HVO affordable and available to all leisure boaters.

Boat owners face two key barriers which are preventing the widespread adoption of HVO in the recreational boating sector:

  • Limited Availability – HVO is not widely stocked for recreational boats.
  • Unstable Price – Cost and incentives have been variable.

Like most biofuels, HVO is inherently more expensive to produce than mineral diesel.

Even though some leisure boaters may be prepared to pay a reasonable premium for HVO, the current cost is too high and too volatile for the market, preventing the establishment of a viable supply chain.

Reasons for this instability include the nature of the market for feedstock and finished product.

The second issue is that the Renewable Transport Fuel Obligation (RTFO), the Government scheme that supports renewable fuels, creates a secondary market in the Renewable Fuel Transport Certificates (RTFCs) which encourages fuel producers and suppliers to transition from fossil fuels to biofuels.

 

 

 

The Sustainability of HVO

In April 2025, questions were raised about the sustainability of HVO. According to recent press reports, the Department for Transport is investigating the potential fraudulent use of virgin palm oil in the feedstock of HVO. It is said that these materials are mislabelled as POME, a waste product of palm oil processing.

The HVO Joint Working Group supports a thorough investigation as sustainability of feedstocks is a key concern.

Read the full statement from the HVO Joint Working Group here.

HVO for Inland Waterways Boats

Inland waterways vessels are eligible to use HVO under the Renewable Transport Fuel Obligation – unlike seagoing boats.

This means that HVO supplied to inland vessels for both propulsion and domestic purposes is supported by RTFCs (Renewable Transport Fuel Certificates).

Following pressure from the HVO Joint Working Group, all HVO delivered to a leisure craft can now benefit from RTFCs, regardless of whether it is used for propulsion or domestic purposes on the boat.

However, eligibility under the scheme is not always enough to ensure that fuel retailers will stock HVO, so the number of marinas on inland waterways selling HVO is limited.

FIND OUT MORE (Link to Page 4 ‘HVO for Inland Waterways Boaters’]

HVO for Seagoing Boats

HVO is not currently available for seagoing recreational vessels through coastal suppliers and marinas in the UK.

Seagoing diesel-powered recreational vessels (under 24 metres in length) are currently excluded from using HVO under the Renewable Transport Fuel Obligation (RTFO), the Government scheme which supports renewable fuels.

Seagoing recreational vessels are not eligible to use renewable fuels of a biological origin as they are in the same category as large international shipping under the RTFO, a sector which is expected to adopt alternative fuels like hydrogen and ammonia.

This Government policy has led to administrative complexities for fuel retailers selling HVO to seagoing recreational vessels and a lack of availability of HVO for the coastal market.

FIND OUT MORE (Link to Page 4 ‘HVO for Seagoing Boaters’]

 

Key Objectives of the HVO Joint Working Group

ü COMPLETE: To ensure that the RTFO (Renewable Transport Fuel Obligation) can apply to fuel used for domestic purposes in a boat

The Joint Working Group (JWG) met with the Department for Transport (DfT) to explain the administrative complexity caused by a mismatch between the DfT administered RTFO scheme and the HMRC administered 60/40 VAT and Duty split between fuel used for Propulsions versus Domestic use (e.g. heating). This has subsequently resulted in clarification by the DfT which has removed the conflict and acknowledged that RTFO scheme can apply to fuel used for domestic purposes in a boat, as well as propulsion.

The submitted evidence from the HVO JWG covered several points, such as the request for eligibility for all recreational craft, including seagoing recreational vessels under 24 metres, under the RTFO scheme, therefore allowing seagoing recreational craft to use renewable fuels of a biological origin.

The submission also highlighted the need for changes in the operation of the RTFO scheme to ensure the price of Renewable Transport Fuel Certificates (RTFCs) is at an optimal level to create greater incentives to switch to renewable fuels and to minimise volatility in HVO price.

  • ONGOING: To continue discussions with the Government’s Climate Change Committee, following publication of their Carbon Budget 7 in February 2025, to work for a clear decarbonisation pathway for recreational craft

The Group asks that seagoing recreational vessels be considered as part of a single overall UK recreational fleet for the purposes of decarbonisation policy to lead to a change in the RTFO order.

Following the ongoing efforts of British Marine and the Group, the Climate Change Committee has confirmed that HVO, as a sustainable ‘drop in’ marine fuel, is the most suitable source of energy to decarbonise existing boats in the recreational boating sector, with most of these vessels having an exceptionally long life of 40 years and more.

The Committee’s proposed 2050 Balanced Pathway in the 7th Carbon Budget recommends half of the inland waterways and leisure vessel fleet decarbonises by switching to electric drive-technology which is already being deployed today and the other half of the fleet switching to biofuels.

Following the release of the Maritime Decarbonisation Strategy in March 2025, the DfT has recognised the lack of detailed data on the usage within the subsector of inland waterways and leisure vessels and has released a call for evidence.

The HVO JWG is preparing evidence to request changes in the RFTO scheme and to highlight the need for a decarbonisation pathway for smaller vessels, due 25 July 2025.

  • ONGOING: To lobby relevant APPGs (All Party Parliamentary Groups) for eligibility for seagoing vessels to use HVO which is supported by RTFCs, therefore ensuring seagoing vessels do not pay a higher price

In November 2023, the Group made a presentation to the APPG for the Waterways to explain the various administrative complexities of the RTFO scheme and how this has discouraged the adoption of HVO by the recreational boating sector.

  • ONGOING: To provide key information and survey results for DfT and Climate Change Committee supporting the transition to the use of HVO in the recreational boating industry

The Group has written to the DfT and Climate Change Committee with a summary of key information gathered from the Cruising Association Regulation and Technical Services survey and the Cruising Association’s article on the typical use of engines by cruising vessels. This will reinforce the message that a transition to the use of HVO, as a drop-in fuel using existing infrastructure, represents the only practical way in which seagoing cruising vessels can safely achieve the range between fuelling opportunities.

  • ONGOING: To collaborate with Zemo Partnership about sustainable manufacturing of HVO

Zemo Partnership is responsible for ensuring that HVO sold in the UK is manufactured from sustainable sources and does not result in environmental damage due to Land Use Change.

  • ONGOING: To raise awareness among the UK recreational boating community about HVO and its benefits
  • ONGOING: To work with marinas and fuel resellers to understand the issues
  • ONGOING: To support early adopters of HVO and identify projects in the inland boating sector to help establish the awareness and market for HVO

LOVE YOUR WATERWAYS

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