Understanding Renewable Diesel: What Fleet Managers Need to Know

Source: Fleet Auto News - By Marc Sibbald (15.05.2025)

At the Trucking Australia 2025 conference, John Oxley, Senior Technologist at BP Australia, delivered a highly informative and accessible presentation on renewable diesel. He demystified terms like “paraffinic diesel,” “HVO,” and “biodiesel,” while also explaining recent changes to fuel legislation that now support the introduction of renewable diesel in Australia. For fleet operators seeking to reduce emissions without replacing entire vehicle fleets, Oxley’s insights provide a roadmap for what’s available now — and what’s coming next.

What Makes Diesel “Renewable”?

Oxley began with a simple but critical clarification: a fuel is considered renewable because of what it’s made from — not what it looks like.

Renewable diesel is not defined by its colour, viscosity, or chemical structure. It’s defined by its feedstock — the raw material it’s made from — which must be biogenic (derived from plants, waste, or other organic materials). This distinguishes it from fossil diesel, which is derived from crude oil.

But just because a fuel is made from renewable sources doesn’t mean it behaves like conventional diesel in an engine. This is where different types of renewable diesel — like biodiesel and HVO — come into play.

Biodiesel: Not the Same as Renewable Diesel

Biodiesel, commonly referred to as FAME (Fatty Acid Methyl Esters), is the earliest and most well-known renewable fuel. In Australia, it has been approved for limited use — typically blended at up to 5% with petroleum diesel.

While biodiesel does reduce tailpipe CO₂ emissions, it has distinct chemical differences from fossil diesel. Oxley used the analogy of “kids holding hands in a circle” to describe biodiesel’s molecular structure — a different arrangement that includes oxygen atoms, making it less compatible with all engines.

These differences can affect cold flow performance, fuel stability, and elastomer (seal) compatibility. While it plays a role in reducing emissions, biodiesel isn’t considered a direct drop-in replacement for conventional diesel — especially in high-performance or older engines.

HVO: The “Drop-In” Renewable Diesel

In contrast, Hydrotreated Vegetable Oil (HVO) — often called paraffinic diesel — is a chemically refined fuel that closely resembles fossil diesel and can be used without modifying engines.

HVO is made by hydrotreating renewable feedstocks such as vegetable oils, animal fats, and waste oils. This process removes oxygen and leaves behind straight or branched hydrocarbon chains — chemically similar to diesel, but cleaner. Oxley compared the structure to “kids holding hands in a straight line” — a simpler, more stable molecular configuration that aligns with the needs of diesel engines.

Paraffinic diesel has several benefits:

• Near-zero aromatics, meaning less particulate matter and cleaner combustion.
• High cetane number, improving ignition quality.
• Low sulphur content, which reduces exhaust pollution.
• Good cold flow properties, especially when isomerised — a secondary treatment step that improves low-temperature performance.

Oxley explained that HVO is already used extensively in Europe, and Australia now has the legislative framework in place to allow its adoption, thanks to new fuel standards introduced in February.

New Fuel Standards Enable Renewable Diesel in Australia

Australia now has two key standards that enable the legal use and sale of paraffinic diesel:

1. Paraffinic Diesel Determination – A new specification defining the physical and chemical characteristics of 100% paraffinic diesel. This aligns with European EN15940 standards, with some “Australianisms,” such as a higher flash point.
2. Conventional Diesel Determination – Updated to allow blending of paraffinic diesel with fossil diesel across a broader density range, including blends below the traditional 820 kg/m³ density threshold.

These changes mean fuel suppliers can now blend renewable diesel into conventional diesel legally and safely, and fleets can use these fuels without technical modifications, provided OEM approvals are in place.

Key Considerations for Fleet Operators

While HVO is a promising fuel, Oxley cautioned fleet managers to check with vehicle manufacturers before adopting paraffinic diesel, especially in high concentrations. Some seals, gaskets, or older fuel systems may not be compatible without aromatics, which in fossil diesel help swell and seat rubber components.

He also flagged cost and supply as current limitations. HVO is currently 2–3 times more expensive than conventional diesel, and feedstock competition — particularly from the aviation sector — may constrain local availability.

However, BP and other energy companies are investing in domestic renewable diesel production, and the new standards now support both mass-balance (credential trading) and physical delivery models.

Oxley’s presentation was a practical guide for how renewable diesel — and specifically HVO — can support decarbonisation in the short to medium term. For fleets that rely heavily on diesel and can’t yet electrify, paraffinic diesel offers a viable interim step to lower emissions without sacrificing performance or investing in new vehicles.

As Oxley put it, “It’s not just about burning new molecules — it’s about enabling choice and supply chain flexibility.” For fleet managers, understanding the difference between biodiesel and renewable diesel is the first step in making informed, emissions-conscious fuel decisions.