HVO vs Red Diesel vs DERV: A Manager's Guide (2025)

Following the 2022 legislative changes restricting the use of rebated red diesel, UK businesses must navigate a complex fuel landscape. Choosing the right fuel is a critical operational decision that balances cost, performance, and legal compliance. This guide provides a straightforward, factual comparison of the three primary diesel fuel options available today: Red Diesel (Gas Oil), DERV (standard road diesel), and HVO (Hydrotreated Vegetable Oil). The aim is to present the characteristics of each fuel objectively, enabling business owners and managers to make an informed choice based on their specific operational requirements and strategy.

Here’s what you need to know about each fuel type.

DERV stands for Diesel Engine Road Vehicle. This is the standard, fully taxed “white” diesel sold at all UK fuel stations. It is governed by the EN 590 quality standard and is the default fuel for all road-going vehicles like trucks, vans, and buses. Following the red diesel rule changes, it has become the most common and direct replacement fuel for off-road machinery previously running on red diesel.

Red Diesel is standard diesel that has been dyed red to signify it is sold on a rebated tax rate. Chemically, it is the same as road diesel but is intended for specific off-road machinery and vehicles. Since April 2022, its use has been heavily restricted by HMRC, and it is no longer a legal option for the majority of industries, including construction, logistics, and manufacturing.

HVO, or Hydrotreated Vegetable Oil, is a type of paraffinic diesel fuel. It is produced from renewable waste feedstocks, such as used cooking oils and animal fats, through a hydrotreating process. This process creates a fuel that meets the EN 15940 standard. It is chemically distinct from conventional biodiesel (FAME) and can be used in many standard diesel engines.

Each fuel has a different technical profile that can affect engine performance, reliability, and maintenance logistics.

The cetane number measures a fuel’s combustion quality. A higher number typically corresponds to a more efficient and complete burn.

• DERV: Has a minimum cetane number of 51.
• HVO: Typically has a cetane number between 70 and 90. A higher cetane number can contribute to smoother engine operation and better performance in cold starting conditions

Fuel stability is a key consideration for on-site storage.

• DERV / Red Diesel: Are susceptible to “diesel bug” (microbial growth) if water is present in the tank. They have a recommended shelf life of approximately one year.
• HVO: Is a more stable compound that does not absorb water and contains no elements that encourage microbial growth. Its shelf life can extend for several years under proper storage conditions.

• DERV / Red Diesel: Are the standard fuels for which all diesel engines are designed.
• HVO: Is considered a “drop-in” fuel, meaning it is compatible with most existing diesel engines, storage tanks, and refuelling infrastructure without modification. It can be mixed with DERV in any ratio. Many major engine manufacturers have approved HVO (EN 15940) for use in their equipment, but it is always advisable to consult the manufacturer’s guidance for your specific vehicles or machinery.

Financial considerations remain a primary driver of any fuel procurement strategy.

Price Per Litre

The upfront cost is the most visible financial factor.

• Red Diesel: Remains the cheapest option due to the tax rebate, but is legally unavailable to most.
• DERV: Serves as the baseline price for fully taxed fuel.
• HVO: Is currently sold at a premium price, typically costing more per litre than DERV. This premium can vary based on supply and market factors.

Factors in Total Cost of Ownership (TCO)

A full financial analysis may include factors beyond the pump price. Managers may consider:

• Maintenance: The cleaner combustion of HVO may lead to less soot accumulation in Diesel Particulate Filters (DPFs), potentially reducing maintenance cycles. Conversely, DERV’s potential for diesel bug requires monitoring and possible expenditure on tank cleaning and additives.
• Fuel Wastage: The longer shelf life of HVO can reduce costs associated with fuel degradation and wastage, especially for businesses with backup generators or seasonal equipment.
• Corporate Reporting: For companies with ESG (Environmental, Social, and Governance) targets, the use of HVO can contribute to sustainability reports, which may have indirect financial value.