Explaining the Difference Between Biodiesel and Hydrotreated Vegetable Oil (HVO)

Why Australian businesses should understand both — and why biodiesel matters right now.

As Australia accelerates toward net-zero transport and freight emissions, renewable liquid fuels are gaining serious attention. Two of the most talked-about options are Biodiesel (FAME) and Hydrotreated Vegetable Oil (HVO) — sometimes referred to as “renewable diesel.”

Both fuels are produced from the same renewable feedstocks such as used cooking oil (UCO), tallow, and other waste fats. But from that point on, their processing, chemistry, behaviour, emissions, and availability diverge dramatically.

Understanding those differences is essential for fleets, councils, contractors, and industry decision-makers who need reliable, local, low-carbon options right now.

What Is Biodiesel?

Biodiesel (Fatty Acid Methyl Ester – FAME) is produced through transesterification, a chemical process where fats or oils react with an alcohol to form biodiesel and glycerine. This reaction increases the oxygen content of the fuel by integrating it into the molecular structure, allowing it to burn cleaner and more completely than mineral diesel.

Key characteristics of biodiesel

• Made from waste vegetable oils and animal fats

• Contains oxygen, producing a cleaner burn and reduced particulate emissions

• Readily blends with diesel (e.g., B5, B20, B100)

• Biodegradable, non-toxic, safer to handle

• Australian-made with an established supply chain

• Available today with 250 million litres/year domestic production capacity

• Supports local jobs and domestic energy security

Biodiesel does require sensible storage management — moisture, oxidation stability and cold-flow behaviour need to be monitored — but these are well-understood and easily managed in modern fuel systems.

What Is HVO (Hydrotreated Vegetable Oil)?

HVO is produced by hydrotreating, a refinery process similar to how petroleum diesel is made. Hydrogen is used to modify the feedstock molecules, removing oxygen and saturating the hydrocarbons.

The result is a fuel that is chemically almost identical to mineral diesel.

Key characteristics of HVO

• Made from the same feedstocks as biodiesel

• Refined using petroleum-style hydrotreating

• Has the same chemical structure as diesel

• Offers excellent stability and cold-flow properties

• Can replace diesel directly with no blending limits

• Produces emissions similar to fossil diesel at the tailpipe

• Not produced in Australia — fully imported

At present, 100% of the HVO available in Australia is shipped from Singapore, and any future domestic facility is realistically 5+ years away.

Side-by-Side Comparison

Feature	Biodiesel (FAME)	HVO (Renewable Diesel)
Feedstocks	Waste oils & fats	Same (waste oils & fats)
Chemistry	Oxygenated fatty acid methyl esters	Hydrocarbon chains identical to diesel
Tailpipe emissions	Lower particulates / cleaner burn	Similar to fossil diesel
Storage considerations	Requires managed storage (oxidation, moisture)	Very stable; same as diesel
Australian production	Yes – 250 ML/yr capacity today	No domestic production
Supply chain	Local, low-carbon, short-haul	Imported from Singapore
Carbon footprint	Carbon-neutral supply chain (ProGreen)	Imported supply chain emissions
Energy security	Strengthens fuel independence	Still an imported fuel

Why Biodiesel Matters More for Australia Right Now

1. Immediate availability and proven domestic industry

Australia already has 250 million litres per year of biodiesel capacity in place. It is the only renewable diesel option that can be scaled today without building new heavy-industrial infrastructure.

HVO, by contrast, relies entirely on overseas refineries. Even with government support, Australian HVO production is years away.

2. A genuinely low-carbon, local supply chain

ProGreen’s biodiesel is produced using a carbon-neutral domestic supply chain. Feedstocks are sourced locally, processed locally, and delivered locally.

HVO used in Australia must be:

1. Shipped into Singapore

2. Refined using imported hydrogen

3. Shipped back to Australia, often long distance

These supply chain emissions frequently erode much of HVO’s face-value carbon advantage.

3. Stronger fuel security for Australia

Local biodiesel production reduces dependence on imported fossil fuels and imported HVO. Every litre produced domestically is a litre of fuel we don’t have to import.

Given Australia’s well-known vulnerability to international fuel disruptions, biodiesel provides a strategic buffer that HVO cannot currently match.

4. Cleaner combustion where it matters

Because biodiesel contains oxygen, it burns more completely than diesel or HVO. This can reduce particulate emissions — important for urban fleets, enclosed worksites, and machinery operating near workers.

5. Costs and infrastructure

Biodiesel works in existing diesel engines using existing storage and pump infrastructure, with minimal changes and wide compatibility. Many Australian fleets already run B20 or B100 successfully.

Where Does HVO Fit In?

HVO is a high-quality renewable fuel that could play a major long-term role. Its cold-flow stability and drop-in compatibility are excellent. At a future time, if Australia were to develop domestic HVO refining, its value proposition could grow significantly.

But that moment is not today.

Right now, fleets seeking a practical, genuinely low-carbon, immediately scalable fuel have one option ready to deploy at national scale: Australian biodiesel.

Conclusion: Biodiesel Now

Both biodiesel and HVO are renewable fuels from the same sustainable feedstocks — but their availability, carbon intensity, and supply chains are very different.

• Biodiesel is Australian-made, carbon-neutral, available today, and strengthens our national fuel security.

• HVO is promising, but fully imported and years away from domestic scale.

For businesses looking to reduce emissions now, support local industry, and demonstrate real climate leadership, Australian biodiesel is the immediate, practical solution.