Written on: November 18, 2024 by NORA
In this interview, NORA President Michael Devine chats with Federica Miano, Secretary General of Eurofuel; Dr. Ernst-Moritz Bellingen, Head of the Heating Dept., en2x energy; and NORA Director of Research, Dr. Thomas Butcher, as they explore the many similarities and some of the distinct differences between the European and U.S. liquid heating marketplaces and how we can gain insights from some of the lessons learned in Europe.
Devine: Federica, let’s start with you. Could you give us a sense of exactly how large the heating oil market is, how many oil systems exist and how many gallons are in operation in Europe?
Miano: Yes, thank you. Eurofuel represents nine countries in Europe—with approximately 10,000 member companies. The heating sector accounts for approximately 50% of total energy demand in Europe, making it one of the largest energy consuming sectors. The markets include residential buildings, commercial buildings and industrial areas. However, focusing on residential buildings alone, heating represents around 75% of the total energy use. I can say that despite the push towards decarbonization, oil heating systems are still widely used in certain regions, and particularly in rural areas that are not connected to the gas grid. We can say that approximately 20 million oil-fired heating systems are in operation across Europe, with a significant concentration in countries such as Germany, France, the UK, Ireland and Austria, which are Eurofuel member countries, as well. These systems are in operation in older buildings, especially in regions that have not yet transitioned to district heating, heat pumps or other low-carbon technologies.
Germany has one of the largest shares of heating oil systems, with around five or six million oil boilers still in use, but I think that Moritz can give you a more tailored answer to this. France is another major user of oil heating, with an estimated 3–4 million homes still using oil boilers. In the UK, oil heating systems are common in rural areas, particularly in Northern Ireland and Scotland, with approximately 1.5 million systems in use. When it comes to Austria, Belgium and Switzerland, they also have a significant number of oil heating appliances.
Devine: Thank you, Federica. Moritz, one of the things that I was really struck by when Dr. Butcher and I were in Europe last year was that the German market is every bit as big, if not larger, than the entire U.S. market.
Dr. Bellingen: That’s possible. We have around five million oil heaters working here. It’s a 25% share of the whole market and this resulted in 11.5 million tons (3.2 billion gallons) of heating oil sold last year. This amount drops with better techniques, with better insulation and with energy reduction.
Michael Devine, NORA President; Federica Miano, Secretary General, Eurofuel; Dr. Ernst-Moritz Bellingen, Head of Heating Department, en2x Energy; and Dr. Thomas Butcher, NORA Director of Research, at the Southern New England Energy Conference, Newport, RI.
Devine: What’s certainly apparent in Europe and in the U.S. is the push to improve our greenhouse gas emission profiles for our fuels and for our systems. Federica, how are the European and Eurofuel’s emission targets set right now?
Miano: The European Union (EU) emission reduction targets are set through a combination of scientific analysis, International commitments, legislative processes and negotiations among Member States, all under the framework of the European Green Deal and the Paris Agreement. As we know, the Paris Agreement is a legally binding international treaty designed to reduce emissions to keep global temperature increases below 2°C. The European Green Deal is an overreaching policy framework for reducing emissions and achieving climate neutrality by 2050.
When it comes to liquid fuels for domestic heating, the EU approach focuses on improving energy efficiency and reducing emissions through legislations such as Eco-Design Directive or Energy Performance of Buildings Directive, also known as EPBD. When it comes to Eco-Design Directive, it establishes minimum energy and environmental performance standards for energy products, including heating systems.
For oil fire boilers and other heating appliances using liquid fuels, under EPBD, they must meet strict energy efficiency standards. The directive sets a maximum level of pollutants that the heating systems can emit. What is important for us is the phasing out of inefficient boilers. Starting from Jan. 1, 2025, there will be the suspension of incentives for stand-alone boilers powered by fossil fuels. EPBD focuses on improving energy efficiency of buildings, including heating systems. Under EPBD, Member States are required to set minimum energy performance for buildings. The EPBD does not only look at new buildings to achieve the nearly zero emission targets, it also looks at existing buildings and those facing renovation and retrofitting.
Devine: And are there specific GHG emission targets that some of the European countries are trying to hit or are being mandated to hit?
Miano: Yes—the 2°C limit on global temperature rise and the 2030 target of cutting 55% of carbon emissions.
Dr. Butcher: Federica, can you say something about the motivation of Industry partners to support renewable fuels and renewable integration? Is everyone pulling in the same direction or is there some reluctance to go in this direction?
Miano: I think everyone is going in the same direction—that’s why Eurofuel is here. Our main goal is to educate policymakers on the importance of low carbon liquid fuels for domestic heating. We make the case with facts and figures, of course, and renewable liquid fuels offer several advantages. They are efficient, they are reliable, they are sustainable, they are cost-effective and they are affordable for the ultimate users. They are flexible as well, meaning that they can be combined with other energy sources such as solar thermal, photovoltaic or biomass to mitigate their intermittency.
Our members try to be proactive rather than reactive. They try to develop new technologies or hybrid solutions that really can help improve and achieve the emission reduction targets. That’s why Eurofuel has developed a three-step approach. The first step is maximizing boiler efficiency, then we move towards hybrid heating systems and finally, we introduce CO2-neutral liquid fuels. The industry is united towards achieving these emission reduction targets.
Devine: Dr. Butcher, there seems to be a lot of commonalities with Europe and the U.S. What are your thoughts on that?
Dr. Butcher: There are a lot of commonalities in the general threads, but a lot of the specifics can lead to some strong differences. One question I’d like to pose concerns the ban on fossil fuel boilers in new installations going forward. Assuming there’s a biofuel mix, is there a certain percentage of biofuel in the mix that’s necessary for it to be considered not a fossil fuel boiler? Is a biofuel-fired boiler exempt from that?
Dr. Bellingen: For sure and I think that’s a very important issue. We must explain that a boiler is not fossil, that only the fuel is fossil. Now they say renewable fuels will be allowed and, in the end, it is a renewable system fired with liquid products.
Devine: Moritz, let’s build on that a little bit. What is your experience with these new fuels?
Dr. Bellingen: We did lots of field tests and held many discussions with boiler manufacturers, tank manufacturers and component manufacturers, because there were some things to adjust. Mostly, we look at plastic materials, at gaskets, maybe flame detection and so on, but mostly minor things if you switch over to HVO (renewable diesel). With FAME (biodiesel), which is very popular in the U.S.— and we also have it in our market—the changes are not too big, either, because here we only allow a share of 20%. We performed lots of test runs and we worked with the boiler manufacturers for over four years, and we didn’t find any fuel-driven problems during the whole run. Even the exhaust gases, the pollutants, will be reduced while using HVO products. What we can conclude is that it works very well.
Devine: We spoke about biodiesel. We spoke about renewable diesel. Are these the prime renewable fuels that Europe is looking at, and how are they being used? Are they being used consistently throughout Europe or are certain countries utilizing these fuels a bit differently?
Dr. Bellingen: There’s a huge difference in Europe depending on the landscape. For example, if you don’t have too many hills or mountains, it’s relatively easy to include a gas grid. Switzerland, for example, has lots of oil but is now switching more to heat pumps than to gas. In Germany, it’s a little different. I think it depends on the structural conditions of the cities and the landscape. In cities, you often find district heating.
In new buildings, you often find heat pumps and you have lots of gas. There is a 25% share of oil, which you mostly find in rural areas or suburban areas. Importantly, you also find oil if you need a secure energy source that can’t be interrupted somehow—to supply a hospital, for example, with heat and possibly electricity. In the future, I would expect that for all these systems there will be a place. De-fossilization and reducing CO2 emissions is such a big job that all energy sources and all technology should be realized.
Devine: How is the German market prepared for these introductions of renewable fuels and which renewable fuels will be growing in Germany?
Dr. Bellingen: We are mostly looking at two different kinds of renewable fuels—hydrogenated vegetable oil (HVO), which is renewable diesel, or biodiesel (FAME). For both, you must have specific regulations; you have to have to have them included in regulations, in laws. You must look at the different technologies and they must be adjusted a little bit. It could be materials, such as copper or plastics, or it could be gaskets that have to be replaced or removed. This has already been done in the past years and I would say we are now ready for the delivery.
One point I’ve forgotten is that the delivery has to be organized. You need specific tank farms; you need a specific system to deliver these products. For example, you also must color the heating oil in Germany, and you have to prove that this new color works at the end. Even the delivery had to be solved, but I think we already accomplished that and are now ready.
Devine: I want to build a little bit now on some of the likenesses and differences in the technologies of systems in the EU and in the U.S. Maybe you can give the U.S. audience an understanding of the types of efficiencies and technologies that you’re utilizing today in Europe?
Dr. Bellingen: In Europe, it’s really a little different than here in the U.S. In Germany, you mostly, or only, find condensing boilers today and, besides this, you also have hybrids. Hybrids with liquid fuels means a combination with solar thermal or with PV and heat pumps—a small heat pump for water production or a larger one that may help the oil system in specific situations.
Dr. Butcher: Could you expand a little bit more on the integration of liquid fuel fired boilers and heat pumps? Why does that make so much sense? Is it capital cost reduction and how is the balance controlled? Is it received enthusiastically?
Dr. Bellingen: It gives you the chance to switch from one energy source to another. This may be an advantage when the prices differ or even if one or the other is not available. The second idea is heat pumps count as renewable here in Germany. So, if you have a heat pump and an oil boiler combination, it fulfills the regulation to introduce 65% of renewable heat.
Our German boiler manufacturers offer these systems but, to be honest, they are not too common. I think that may change because we will probably have a lot of trouble in the electricity market. To ensure that we always have enough electricity in the grid, it would be really nice to have the option to switch specific systems off, cut them from the grid. In these cases, it could be the hybrids and as an advantage or as a benefit, they could get better electricity prices because they only work when there is enough electricity in the grid.
In other countries, such as the UK, is a little different. There, you often have the oil heating system in the kitchen. You can use the heat losses of the whole system as the heat for the kitchen space. They require small systems to fit beside the dishwasher.
Also, there are differences in storage. In Germany, you need to have double wall tanks. It’s not acceptable to store heating oil outside where the temperature can be below 0°C (32°F). The idea is that it shouldn’t freeze. Most of the tanks are in the basement. This is also different from the UK market, there you always have very small, single wall outside tanks.
Another difference to the U.S. market is delivery. I heard from your market that four deliveries per year is quite normal. We don’t have that. We normally have a delivery once a year, or every two years. Five thousand liters (1,300 gallons) of residential storage is quite normal for Germany; for us, biodiesel is not the best product because we must store it for such a long time. In the U.S. market, it works a lot better than in our market where it is expected to be stored over two or more years.
Devine: What percentages/blends of renewable diesel or biodiesel are warrantied in European equipment? Are there differences or are there levels that we’re trying to hit in new technologies?
Dr. Bellingen: Usually, in Germany, you can use 20% of biodiesel. In France, it’s a little different. They have a new regulation asking for a 30% share and the manufacturers adjust it to 30%. On the other hand, if you have renewable diesel, it’s up to 100%.
In Germany, we have a new regulation starting the beginning of this year asking for a 65% share of renewable heat and the renewable heat can be introduced differently. You use a 65 % share of HVO. You also can build a solar thermal system on your roof and reduce the 65% to a lower figure because of the additional heat from the roof.
The good part of the story is you don’t have to start immediately, you only have to do this when you get a new heating system; then you have five years to introduce the 65%. This is quite a good basis to sell renewable fuels in future.
Devine: Dr. Butcher, maybe you can help to break down some of the differences and similarities between the European and U.S. technologies regarding the things that Dr. Bellingen talked about—the tanks, the boilers, the burners and the renewable fuels.
Dr. Butcher: Of course, a lot of things are similar, but a lot of things are different and in important ways. If we look at condensing boilers, Moritz, you mentioned pretty much all new installations are condensing boilers, but your thermal distribution systems can operate at lower temperatures. In fact, as I understand it, it’s required that radiator or thermal distribution systems must be designed with a maximum delivery temperature in mind—which is lower than we use. Therefore, panel radiators, for example, enable effective use of condensing boilers.
I have a question on biofuels. You mentioned the requirement to have 65% renewable heat—I really like that as a way to approach this, to give the homeowner or building owner the ability to make their own decision about what’s the most effective way in their circumstance to meet that renewable requirement. If you have, let’s say, 65% HVO, or we would say renewable diesel, that meets that requirement?
Dr. Bellingen: Yes, it does; 65% renewable fuel is counted as 65% in the regulation.
Dr. Butcher: Do you see the future going to 100% renewable fuels or will blends likely be important on the market for some time to come?
Dr. Bellingen: As Federica already said, Europe decided to be fossil-free in 2050. Germany, as one of the biggest markets, targeted 2045. I expect, or what the law says up to now, that we won’t have any fossil fuels in 2045 in Germany.
Dr. Butcher: How will that path go? Will an increasing percentage of buildings convert to 100% HVO or will everyone use an increasing percentage of HVO over time to get to that target?
Dr. Bellingen: What we are now working on is a balance sheet model. Those that are obliged to use a certain amount of renewable fuel will get a certificate verifying that it is done. The same, for example, will be done by the gas distributors because they are connected to a grid. Somewhere, there is introduced renewable hydrogen or renewable biogas and if you have a specific contract, it will count on your bill at the end. This is the same idea, and it makes things easier; this would lead to the option to add, maybe in the first year, 5-, 7- or 10% to the whole amount or, on the other hand, to sell 100% to only a very few appliances. Both will be possible.
Dr. Butcher: You raise a good point. We’ve talked about the challenges associated with knowing that your fuel is renewable. It sounds like it will largely be done through accounting and tracking, as opposed to measuring and verifying?
Dr. Bellingen: Yes, the measurement is really very difficult. The trouble is that even if you look for renewable diesel, this is a product that is also already in the heating oil—its paraffins. Now you must count the renewable paraffins on one side and the fossil elements on the other side, and they are nearly the same. A measurement is possible but difficult. In the end, we will have a certificate system. If they introduce, for example, a renewable feedstock into the refinery, you give a certificate to them, and they can hand it over to the fuel dealer and they can give it to the homeowner. In our German system, the homeowner is obliged to show that he or she has bought the correct amount of renewable heat and will have a certificate showing so.
Dr. Butcher: Efficiency is clearly important, and we’re focused on efficiency in the U.S. and at NORA. We see a large opportunity in replacing older systems with newer systems and the efficiency that can be realized just with that. Europe has already gone a long way with efficiency. Do you feel there is room for improvement, either through replacement of older systems or even the development of newer systems?
Dr. Bellingen: We have three different boiler types on the market. We call them “standard boilers”, “low-temperature boilers” and “condensing boilers.” If you change an old standard—perhaps 25 to 30 years old—to a condensing model, it is a huge step. However, even condensing boilers have been on the market for 20 years and if you change from an old condensing unit to a new condensing unit, these new technologies will have efficiencies close to 100%. It’s not easy to get more from this. I think the next steps should go in other directions, such as insulation; water heating probably can be improved, as well. I think the ignition, the burning process itself, is close to 100%.
Devine: Frederica, you’re within your first year as a Secretary General of Eurofuel. Can you tell us about your initial observations about the cooperation between NORA and Eurofuel?
Miano: I can say, from what I learned this year, the cooperation between NORA and Eurofuel is long-lasting and focuses on different areas. The cooperation is at the technological innovation level as both organizations share technological advancements related to fuels and heating equipment.
Our collaboration also is at the education and training level because we actively educate technicians, consumers and ultimate stakeholders about safe, efficient and sustainable heating systems. We have also co-contributed to workshops and conferences.
Devine: From a NORA perspective and from a U.S. perspective, I have found this cooperation invaluable for the United States. I think we face a lot of the same challenges when it comes to the pressure to decarbonize. At the same time, I think we also both realize that with the advent of renewable fuels we have pathways to be able to do that and do it very effectively.
Certainly, you’ve made great advancements in your combustion technologies and efficiencies. I think that, by virtue of our agricultural community, we’ve been able to get to high blends and are pushing even higher blends of renewable diesel and biodiesel.
We are continually trying to come together to meet the challenges that we both face.
Dr. Butcher, you’ve been working very closely with Moritz and with Eurofuel for a long time now. What can the U.S. market learn from our European colleagues?
Dr. Butcher: I think the collaboration has been tremendously beneficial for us in many ways, including a vision in terms of what is possible—what can be done and what can’t be done. It’s very encouraging in technical directions, which I think is fantastic. At the same time, we get questions from European manufacturers that want to understand what we’re doing because some of our experience is unique. For example, our work with biodiesel or FAME here in the U.S. and the strong market success that it is having is very different than what’s happening in Europe. Manufacturers want to understand why and how that works and what our experience has been like. There is a great deal of value in the exchange.
Devine: I would, on behalf of Dr. Butcher and myself, like to thank Dr. Moritz Bellingen and Federica Miano for coming to the United States and sharing their insights with us, as well as for their collaboration and their friendship. ICM
