Diesel vs HVO vs Hydrogen: The GenSet Fuel Review
With this article we have compiled information and insights on 3 genset fuels in order to help you make the right decision for your use case when choosing a generator.

This article looks into three different fuels for gensets. Namely diesel, HVO, and hydrogen. With today's strong focus on reducing global emissions to meet net-zero goals, we want to help you better understand each of the three main fuels used to power generators.

Executive summary

With regulations and net-zero emissions rightly in the spotlight across all industries, fuels are taking a central role in getting us closer to global and local emissions-related goals. In our look at fuels, we will do it within the context of use in electrical generators, or gensets, as they are known. Gensets are prolific, though hidden, they are required for failure mitigation, backup power, and vital power generation in remote, off-grid locations, and many other uses. 

The current market standard is the use of diesel-fuelled generators. Diesel generators are known for their tried and tested but noisy, dirty, and inefficient power, ultimately making them a top target for replacing with a more efficient and less polluting alternative. The two alternatives being put into use to reduce emissions are HVO (hydrotreated vegetable oil - a type of bio-diesel) and hydrogen. 

These three fuels cover the tried and tested (diesel), the in-between transition aid (HVO), and the future ubiquitous fuel which is also available today (hydrogen). Here we aim to provide a short introduction to each fuel and some background on how they are each produced as well as the positives and negatives of using each fuel as the fuel for gensets. Lastly giving our view on which fuel you should use depending on your requirements, factoring in use-case and environmental goals.


The market for diesel generators was valued at $20.8 billion in 2019 and is projected to grow to $37.1 billion by 2027, at a CAGR of 9.8%*.

Due to the necessity for steady power and short startup times diesel gensets are frequently utilised as backup power for tasks like data centers, hospitals, and pharmaceutical manufacturing, among other things.

These benefits in addition to the ubiquitous availability of the fuel are key drivers for other use cases in off-grid primary power applications such as music festivals that generally take place in remote locations with little to no access to power and construction sites that also lack initial grid connectivity.

As concern over the pollutants produced by diesel fuel is expanding along with the demand for diesel gensets there is more focus on mitigating the resulting pollutants that will be released by the growing number of generators. This puts us in a catch-22 situation as more applications for the requirement of a generator become active yet an increasing need for generators sits at odds with the need to decarbonise and reduce noise and air pollution. This pressure against diesel generators will be reinforced by increasing regulations aimed at reducing CO2, noise, and air pollution due to factors like noise and CO2 becoming important considerations. This could result in a large number of older models of generators having to be put out of service as they do not meet regulatory requirements, while also driving increased urgency in looking for a cleaner alternative than diesel for gensets.

How Diesel is Made

Crude oil, which is produced when enormous amounts of decaying biomass (both plant and animal) from millions of years ago are mixed with pressure and heat, is the precursor to the diesel fuel that is used by the end user. After this crude oil is extracted, it is brought to a refinery where it goes through three processes: separation, conversion, and purification.

Large distillation towers are used for the separation process, inside these the oil is subjected to intense heat, forcing it to separate into gases and liquids. Different parts of these gases and liquids are separated out based on their temperature, into different products such as petrol (gasoline), diesel, jet fuel, or oils used for plastics or pharmaceuticals. Typically these products are split with gases at the top of the distillation tower, fuels (including diesel) found in the middle, and things like lubricants near the bottom. 

The Positives of Using Diesel as a Fuel

Durability. Diesel engines have been around for over a century and have thus been significantly developed and refined. They can withstand heavy wear and tear in a variety of environmental situations and their reliability is proven.

Easier to Store. Diesel is easily stored as a liquid at atmospheric temperature and pressure. Although flammable it is less likely to catch fire than other fuels like petrol.

Many generator options. Compared to hydrogen gensets, diesel generators are available in a variety of power output options. Having been around for so long, there is a size of generator for almost every need, with some brands offering units with 2100 kVa from a single generator.

Availability & Price. You can easily find a diesel generator to hire as there are plenty of offers online and in local construction rental shops. As a result, the cost of hire is relatively low and if you factor in the ease of finding diesel to fuel the generator it quickly becomes the go-to option even for last-minute jobs.

The Negatives of Using Diesel as a Fuel

As discussed earlier, diesel is made from biomass from millions of years ago. This effectively locked away huge amounts of carbon and burning it as a fuel rapidly releases this carbon back into the atmosphere as the greenhouse gas carbon dioxide (CO2). This CO2 is one of the main drivers in global temperature rises.

One litre of diesel being burned releases on average 2.7kg of CO2 gas along with other greenhouse gasses such as nitrogen oxides. Also when considering the full well to site power, this increases to 3.8kg.

Apart from emitting greenhouse gasses, diesel generators have a disproportionately large influence on pollution when compared to other power sources. It does not simply create carbon monoxide but also other air pollutants such as particulate matter dangerous to human health.

Finally, diesel generators contribute to noise pollution which is of growing concern as more research is conducted into the effects on humans and wildlife.

Diesel generators are doomed to be replaced by cleaner forms of energy generation in light of European rules and regulations on greenhouse gas emissions and the principles of the Paris Agreement. This ultimately brings the question of when is it the right time to start using low-carbon or emissions-less options for your business so as to avoid any potential issues on site with an out-of-date generator.


HVO, or hydrotreated vegetable oil, is a low-carbon fuel that is made from processing various bio-based oils such as used cooking oil, vegetable oil, or other lipids. Ultimately HVO or HVO100, is s paraffinic diesel fuel. It can be utilized as a direct drop-in replacement for diesel with little to no engine modification required.

HVO is meant to deliver superior combustion, filterability, and cold temperature performance than diesel while reducing greenhouse gas emissions during combustion because it is stable, renewable, sustainable, and of high quality. However, the feedback we have from users of HVO on the ground has often fallen at odds with this promise. While the jury is out on some of these facts, most agree it is a valuable transition fuel.

How HVO is Made

HVO is produced by the hydrotreatment of entirely renewable materials. Generally, the starting point is used cooking oils, ranging from sunflower to vegetable oils. They are considered low carbon because they are made from recycling a waste product, which itself was derived from a replenishable source. The growth of the crops used to make the cooking oil sequesters carbon, these crops are converted to cooking oil, which is then converted to diesel, and ultimately that carbon is then released again when the diesel is burnt in an engine. Hence, HVO is considered a low-carbon fuel, as there is a reduced quantity of “new” carbon emitted into the atmosphere.

The conversion of these bio-oils is a two-step procedure, the oils are first cracked to remove any impurities before they are saturated with hydrogen at temperatures above 300 degrees Celsius (hydrotreatment) (isomerisation).

This results in constant, high-quality fuel that is free of impurities and esters, preventing performance degradation at both the moment of use and throughout storage. This process improves its oxidation stability, in turn reducing biological growth in the diesel, making it last longer in storage. 

However, a report from the UK Environment Agency published last year raised concern about the used oil supply chain and how soon it would run out. This will inevitably result in an increase in virgin palm oil demand, which in turn is likely to increase deforestation to meet the ever-growing demand.

The Positives of Using HVO as a Fuel

Even though HVO emits greenhouse gases when burned, the argument is made that due to the nature of the product of oil coming from plants, the emissions are offset by the CO2 that gets absorbed over the plant's lifetime. This is where the lower carbon footprint aspect comes into play with HVO.

HVO is promoted as being 90% net carbon neutral. According to the manufacturers, it can also cut particle emissions by up to 85% and nitrogen oxide emissions by up to 30%. According to research by Pflaum et al. (2010), HVO can reduce CO and hydrocarbon emissions by up to 50% when compared to regular diesel.

The Negatives of Using HVO as a Fuel

With the UK Environment Agency now also looking to ban the use of HVO with its contractors, it adds more skepticism to the green claims that are being made in favour of HVO. HVO's claim of a 90% reduction is based on lifecycle reduction, not reduced tailpipe emissions. Tailpipe reduction of CO2 is relatively small (there are mentions of 6%). While the 90% reduction may sound good it is very difficult to actually validate how and where the reductions are made and what it is directly comparable to with the diesel supply chain. 

With a large amount of HVO coming from unverified ‘renewable’ sources it begs the question of how can we be certain of the CO2 being absorbed by the bio products grown? As reports suggest that HVO is being created with palm oil there is the risk that with a rapid increase in demand, it could lead to increased deforestation, reducing the amount of carbon that these forests absorb, negating the positive impact of using HVO. 

Even if one can be certain that the HVO comes from used cooking oil, there is a concern that countries that would have relied on used oil as animal feed are now exporting cooking oil due to the demand, and using virgin palm oil to produce animal feed or directly for HVO, leading to further deforestation. 

For biodiesel, virgin vegetable oils (rapeseed, palm oil, soy) make up almost 80% of the feedstock used in EU production. Rapeseed oil makes up the largest share (36%) of the feedstock, followed by palm oil (30%). The report also noted that the overall share of palm oil imports used for biodiesel production reached an all-time high in 2020, with 58% of EU palm imports used for biodiesel.

Finally, there is an economic negative, HVO costs more than ordinary diesel. HVO prices can be around 10-15% higher than diesel.


With a growing focus on net-zero for many governments and businesses, finding a fuel and genset that can provide stable power whilst meeting net-zero targets and emitting no local pollutants, including noise, can seem like an almost impossible task. This is where hydrogen can step in. It has been the fuel of the future for years, but that has changed and it is here and usable now. It brings the potential for emissions-less power generation with a by-product of only water, and far quieter operations, hydrogen-powered assets will get us closer to net-zero .

Hydrogen can be produced through a number of methods, but the two dominant ones are either through using electricity to split water and make hydrogen and oxygen, or, more historically, to convert fossil fuels. Hydrogen is not naturally occurring and must be made, in doing so it stores energy for future use. In that way making it a fuel. 

Hydrogen Generator

The energy that gets stored in hydrogen can be unlocked through two methods. The most commonly used method is a chemical reaction inside a fuel cell. Fuel cells convert hydrogen into electrical energy through a chemical reaction between hydrogen and oxygen, often provided by air. 

The second method is through burning hydrogen either to release heat energy or to do mechanical work through the use of an internal combustion engine, which can be used to provide motion or electrical energy.

Fuel cells are the more established technology, they are more efficient, almost silent and have very few to no moving parts, making them the dominant technology in products and use today. However, there are ever-increasing developments in hydrogen internal combustion engines. 

These work on the same principles as traditional internal combustion engines, and while they are cheaper to manufacture, they are less efficient, noisy and produce some emissions. We see a place for both technologies depending on the use case and how the total cost of ownership plays out across different types of use cases. A different topic for a different day. 

How Hydrogen is Made

Today there are two dominant processes for hydrogen production, and we will focus on these. One is called electrolysis. The other, which currently makes up 95% of hydrogen production, is steam methane reforming, typically using natural gas. 

Electrolysis is the splitting of water into hydrogen and oxygen gas using electricity. The electricity can come from any source, but to make green hydrogen it needs to be a renewable source of electricity. 

This method produces high-purity hydrogen gas on demand and is likely to be the dominant method for producing hydrogen as we progress to the future as it pairs well with many of the current and coming methods of electricity generation. 

The electrolyzer cell, which is where the electrolysis reaction occurs, is its most crucial component. Put simply, electrolysis is when we use a special machine to split water into two parts, one part oxygen and one part hydrogen.

An ion exchange membrane serves as a barrier between the anode and cathode, the two electrodes that make up a cell. A platinum catalyst is utilized at the electrodes to create hydrogen with the highest purity possible, up to 99.9995% purity.

The following reactions happen when an ongoing voltage is applied to the electrodes on the electrolyzer cell:

The water molecules lose two electrons at the anode (the positively charged electrode), creating one oxygen molecule and four hydrogen ions.

2H2O - 4e anode = O2 + 4 H+

The oxygen created in this portion of the reaction is safely released into the atmosphere. The four hydrogen ions then move through the ion exchange membrane (attracted by the cathode's negative charge) and gather four electrons from the input electric source, which transforms them into two hydrogen molecules.

Cathode 4 H + + 4 e = 2 H

The ion exchange membrane, which is impermeable to molecular oxygen, separates the hydrogen gas produced from the oxygen. 

The other process is called steam methane reforming which generally involves the use of fossil fuels for the large-scale industrial production of hydrogen. Natural gas, which is mostly methane, can be converted into hydrogen using a process called steam methane reforming (SMR). Currently, it is the primary source of industrial hydrogen as fossil fuel prices historically were much lower than renewables and natural gas was easy to get in large quantities.

The procedure involves heating the gas to a temperature of between 700 and 1,100 °C (1,292 and 2,012 °F) while using steam and a nickel catalyst. Carbon monoxide (CO) and molecular hydrogen (H2) are created as a result of the endothermic reaction that separates the molecules of methane to produce the hydrogen gas.

The carbon monoxide gas can then be heated with steam and passed over iron oxide or other oxides to produce additional amounts of hydrogen gas. The drawback of this process is that significant atmospheric emissions of CO2, CO, and other greenhouse gases result from its by-products.

The Positives of Using Hydrogen as a Fuel

Hydrogen can, at times, seem like the solution to all of our climate problems which can be up for debate. However, hydrogen as a fuel for energy to power a generator definitely has the ability to help achieve our emissions-less goals through a myriad of benefits.

One of the key positives is that the by-products of converting hydrogen to energy are completely harmless and have no known adverse effects. Hydrogen is typically transformed into drinking water for astronauts on ships or space stations after it has been used. This is a drastic difference compared to the pollutants released by diesel generators.

Hydrogen is unusual for a fuel source because it is non-toxic from a by-product perspective as well as the fuel itself. This results in minimal environmental damage and does not hurt or negatively impact human health, unlike diesel and HVO which both cause considerable harm to the environment at all stages from refining to end-use emissions.

Another major benefit of using hydrogen fuel cells is that they operate without excessive noise, unlike diesel-powered generators which can be noisy, even with the latest technology. Noise pollution for many applications can be a concern, for construction sites or film production especially as it can cause a site to be shut down or add additional costs to post-production editing.

Finally, due to a lack of moving parts, a hydrogen genset requires far less maintenance than a diesel genset which has a considerable number of moving parts that, through kinetic energy, cause the degradation of components. Without any of those moving components, there is no need for lubrication and servicing which helps to lower the overall costs.

The Negatives of Using Hydrogen as a Fuel

Like any new incoming technology and industry, using hydrogen is costly. It hasn't had the time or investments yet to scale up to the same levels that we have come to expect of fossil fuels. While this isn't surprising it does mean that using hydrogen today will cost more than using diesel. 

However, when considering all of the external benefits of using hydrogen and that it is probably the leading approach to decarbonising high energy use cases, costs need to be factored into the financial planning alongside proactive policy steps to address. Hydrogen must be given a level playing field through a combination of subsidies, like having been in place for both fossil fuels and renewables for decades, and higher carbon taxation to account for the consequential damage of polluting fuels. Sadly both of these are not yet where they need to be.

With that being said, the increasing costs of energy have created a big shift towards renewable energy and the development of solar and wind power. This is resulting in the costs of electricity dropping which will lead to cheaper green hydrogen.

Availability is the second biggest challenge when looking to use hydrogen for new projects and use cases can be a challenge today. Today most hydrogen production has been put in place for industrial processes where production has been matched with consumption. 

There is hydrogen available for other projects and use cases but this side of the hydrogen industry is only just starting to scale up, meaning that projects have to be planned with much greater lead times. This is a problem that is rapidly changing as more green hydrogen production is coming online from 2023 onwards, equally reducing the often talked about challenge of using grey hydrogen and the emissions it creates.

The operational complexity of using hydrogen comes from three compounding factors: operational change, non-standardisation, and many layers of regulation. Hydrogen will require new ways of working and operational processes in all use cases. While some of these changes will be large, others will be smaller than the changes required in moving to other technologies, e.g. you can fill a hydrogen fuel tank at the same timeframe as with diesel or petrol. 

As the industry is young there is a lack of physical interface standardisation, different manufacturers and operators have different processes and physical connections. These can change depending on the pressures of gas handled, country of origin, or purely manufacturer preference. This only further complicates the deployment of hydrogen assets on projects. 

Lastly, the complex regulatory landscape is made up of regulations and standards that were not created with many of the current and emerging hydrogen use cases in mind. As a result, the regulatory landscape demands a depth of knowledge and understanding in order to navigate and ensure compliance and safe operation of hydrogen deployments.   

It is these topics that most businesses will need support in adopting, even if they can afford hydrogen, as they will not have the required knowledge, processes, and tools to transition.

Emissions Targets - What is the best fuel for your goals?

With all of the above information, you can start to get an idea of what fuel may be best suited to your needs. Whilst we have done our best to provide actionable information we also want to provide an overview of how we see each fuel type fitting into today's net zero emissions goals.

Not all fuels are made the same, some have been around for a long time and some are going through a transitional phase thanks to new technology and innovations. Choosing the right genset and fuel is really always going to be based on your own business goals and needs. 

Today’s standard

The diesel genset has been tried and tested in many environments and situations as well as the wide availability of diesel fuel, it should be considered the go-to option if you just need a genset. One factor to consider is that from a net zero goals perspective, diesel is obviously not a choice given the emissions it gives off as well as the general process of refining diesel too.

The emissions-intensive processes alongside both noise and air pollution mean that it really does have a limited scope of life left on the horizon. As more industries focus on reducing emissions, diesel generators will not help to reach those net zero goals. 

Ultimately diesel will be chosen when the cost is the only criterion. Given that other fuels and generator technologies are fast developing to catch up to diesel it would be a tough decision to invest in one for the long term.

The first transition step

HVO can be considered the middle-ground transition quick step between the polluting diesel generators and the emissions-less hydrogen option. Given that HVO can be used with existing diesel gensets and claims up to 90% CO2 reductions, HVO should be considered as the opportune method of reducing emissions immediately at a moderate cost increase.

HVO is ever easier to come by, there are local suppliers across the country, it’s considered less harmful than diesel, and does not require any changes to gensets or equipment to use it. 

One of the issues with HVO that does need to be addressed is the claim of 90% emissions reductions which is still being reviewed and debated, and which HVO may not live up to. Something to consider with HVO is that it will not meet LEZ requirements as CO, NOx and other gases are still being pumped out.

If you want to start the transition to net zero then HVO is a good option that does not require a high initial investment. 

For zero emissions and zero carbon 

If you are looking to achieve truly zero emissions (no particulates or other harmful gases) and zero carbon solution then hydrogen gensets are really the only option for achieving this. Furthermore, when using a fuel cell-powered generator air and noise pollution do not have to be considered as the gensets are whisper quiet and emit only water as a by-product. 

With areas such as London's 'Low Emission Zone' for Non-Road Mobile Machinery being developed and also expanding in the next coming years, the logical option for this will be hydrogen generators. 

While hydrogen has these challenges, there are companies pushing to address these challenges through new products and business models. Technology is being improved upon at a rapid pace, far quicker than most projections are saying which should result in falling prices for all aspects of hydrogen if users are willing to play their part in adopting to provide the demand for the scale-up. 

With the right collective effort, we can reach a future state of cheap, emissions-less assets that will address net zero targets as well as improve noise and air pollution.


Marius Fermi

Marius is the Communications Manager for Hydrologiq where he is putting his 10 years of marketing experience to use helping grow awareness and business.

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