Our shared mission to decarbonize is not simply about staying relevant today; it’s about securing the long-term viability of our businesses and the industry for the next generation. As we look back on how far we’ve come, our goal becomes clearer—it’s not a passing trend but a commitment to keep evolving and shaping a sustainable future that honors our past, adapts to our present and prepares us for tomorrow. This reflection draws a parallel between our mission and a historic journey that also embodied courage, transformation and hope: Ellis Island.
For over 60 years, the iconic Ellis Island served as the entryway for millions seeking opportunity and a new beginning. Those who passed through its gates carried a vision for a better life, not only for themselves but for the generations that would follow. Their journey symbolized resilience, determination and an unwavering commitment to change. Today, as we stand at the crossroads of our own monumental shift, the heating oil and Bioheat® fuel industries draw inspiration from the Ellis Island spirit in our quest to decarbonize and create a sustainable future.
Nothing Has Changed, Yet Everything Has
At its core, our industry’s journey is about preserving what is most important to people: home, security and legacy. Just as families arriving on Ellis Island sought stability, today’s consumers expect heating solutions that are reliable, affordable and increasingly environmentally responsible. Like those immigrants, we face challenges that may seem insurmountable. Yet, as history shows us, the path forward is made possible by our resilience, creativity and commitment to change.
In many ways, nothing has changed. The fuel industry remains steadfast in its role as a provider of warmth and comfort to homes across the nation. We still strive to serve, ensuring that each family feels secure through the coldest months. Yet, in every other way, everything has changed. The pressing call to decarbonize, the imperative to mitigate environmental impact and the rising demand for renewable solutions, have redefined our mission and the methods by which we achieve it.
Tools of Transformation
Just as Ellis Island represented a transformative step for many, the introduction of biodiesel and renewable diesel fuels is ushering in a new era for the heating oil industry. Leveraging biodiesel blends in heating oil systems enables us to significantly reduce greenhouse gas emissions, supporting a more sustainable future without sacrificing performance or reliability. Renewable diesel, with its impressive environmental profile, promises an even deeper impact as we work toward reducing our carbon footprint.
This transition, however, requires full commitment. It’s not enough to simply switch fuels. Like the immigrants who crossed oceans to reach new shores, our industry must adapt, innovate and sometimes reinvent itself to thrive in this new world. We are pioneering new blend ratios, optimizing compatibility and refining our supply chain to meet low-carbon standards. As we do so, we are inspired by the courage of those who sought a better life, knowing that the stakes are high—not just for business, but also for future generations, the health of our planet and our customers’ homes and neighborhoods.
The Journey Must Continue
In today’s political landscape, conversations around energy policy and climate action can be divisive and uncertain, often fluctuating with each administration. Yet, the pursuit of a cleaner, more sustainable heating oil solution should not be swayed. Just as immigrants on Ellis Island were motivated by dreams that transcended borders, our industry’s commitment to decarbonization transcends party lines. This mission is not about who occupies the White House or State capitals—rather, it is rooted in a fundamental belief in a sustainable future we have the power to help build.
Whether policymakers prioritize or politicize our journey, the responsibility lies with us to keep moving forward. The debate over decarbonization may persist, but our commitment to progress remains resolute. By embracing renewable fuels, our industry sends a powerful message: We are not waiting for permission to do the right thing. We are leveraging every available tool, including biodiesel and renewable diesel, to redefine heating oil as a sustainable, modern energy solution.
Building a Better Future
For the families who passed through Ellis Island, the journey didn’t end with arrival—it began there. They built lives, raised families and contributed to the fabric of U.S. society. In much the same way, our industry’s decarbonization journey is only beginning.
By incorporating biodiesel and renewable diesel into heating oil, we are not just adapting to change—we are building a legacy. We are ensuring that families today and tomorrow can enjoy the comforts of home heating without compromising the environment they will inherit.
The story of Ellis Island reminds us of the power of hope and determination. The heating oil industry’s journey toward a sustainable future is fueled by a vision for something better. The work ahead may be daunting, but our industry has the resources, resilience and resolve to rise to the occasion. Just as Ellis Island symbolized a new beginning for millions, our commitment to renewable fuels represents a new chapter in our industry’s history—a chapter in which we lead the way to a decarbonized, sustainable future. ICM
Paul Nazzaro, a pioneer in transitioning home heating oil to Bioheat®, has a proven track record of elevating middle distillate fuel quality from average to high performing. Through intelligent oversight and advanced fuel additive technologies, Nazzaro has empowered the industry to adopt cleaner, more efficient solutions, redefining heating oil’s role in a sustainable, low-carbon future. Learn more at yourfuelsolution.com.
In regions like New England and the Mid-Atlantic, biodiesel has taken a leadership role in decarbonizing heating oil, giving rise to Bioheat® fuel, while renewable diesel is gaining ground in both the heating and transportation markets. This journey, however, is fraught with challenges, uncertainties and opportunities, all of which demand an intelligent and collaborative approach from industry stakeholders.
The Growing Importance of Biodiesel, Renewable Diesel
As the world moves toward decarbonization, biodiesel and renewable diesel have become indispensable components of the liquid-fuel mix. Biodiesel, made from renewable sources such as soybean oil, animal fats and used cooking oil (UCO), has proven its viability as a cleaner alternative to petroleum-based diesel. Renewable diesel, a hydrocarbon that is chemically similar to fossil diesel, is also produced from renewable resources and offers the same low-carbon benefits with improved cold-weather performance and shelf life.
Together, these fuels are being increasingly adopted in transportation and heating sectors, providing a way to meet growing regulatory demands for cleaner fuels while maintaining the convenience and existing infrastructure of liquid fuels.
In the Northeast, Bioheat® fuel—a blend of biodiesel and traditional heating oil—has become the go-to solution for decarbonizing the region’s heating-oil market. This transition has positioned the New England area as a leader in reducing the carbon footprint of home heating, an effort that will likely expand into broader markets as policymakers, producers and consumers align on sustainability goals.
Renewable diesel, while still in its infancy in terms of East Coast market penetration, offers another promising pathway for the future. Its flexibility in blending with biodiesel could create new opportunities to leverage the strengths of both fuels, providing a resilient solution to meet both short- and long-term energy needs. The key question moving forward is how the industry will approach blending biodiesel and renewable diesel to meet future demand and regulatory targets—an “all-of-the-above” approach may prove the most effective, but careful planning and coordination will be essential.
The Year Ahead
As the industry prepares for 2025, the expiration of the biodiesel tax credit looms large. This credit, which has provided crucial financial support for biodiesel producers, will give way to the new clean fuel production credit (CFPC), also known as 45Z. This shift is creating significant uncertainty, as the CFPC’s framework is not yet fully understood by many in the industry.
What is known is that the CFPC will base its incentives on the carbon intensity (CI) of feedstocks. Fuels made from feedstocks with lower carbon intensity, such as UCO, will receive more credit value than those made from materials deemed as having a higher carbon intensity, such as virgin soybean oil. This discrepancy will likely lead to increased demand for lower-CI feedstocks like UCO, potentially straining supply chains and creating new competitive dynamics. Industry stakeholders must prepare for these shifts by diversifying their feedstock sources and investing in technologies that can lower the CI of their fuels.
At the same time, several other factors are contributing to market uncertainty. The potential impact of small refinery exemptions (SREs), fluctuations in imports, competition for feedstocks, and the emergence of new markets are all creating additional layers of complexity. As industries such as aviation and marine continue to scale up their use of SAF and biodiesel, the demand for these fuels is expected to grow substantially. This raises important questions about whether the current supply chain is prepared to handle the increased demand and whether the necessary infrastructure—storage, blending and distribution—is in place to support these new, low-carbon fuels.
Infrastructure, Technological Readiness
One of the biggest challenges facing the low-carbon fuel market is infrastructure readiness. While biodiesel and renewable diesel have made significant inroads into various markets, questions remain about the capacity of the midstream sector to handle these new fuels. The infrastructure for receiving, storing, blending and deploying biodiesel and renewable diesel varies significantly across regions, and it is unclear whether all markets are fully equipped to support widespread adoption.
For example, in the heating-oil market, blending Bioheat® fuel requires a deep understanding of the specific characteristics of biodiesel, including its cold-weather performance and interactions with traditional heating oil. Producers, distributors and retailers must be educated on how to handle these blends and effectively communicate their benefits to consumers. Moreover, the technology for producing and blending these fuels continues to evolve, with improvements in production processes and fuel quality on the horizon.
It is essential for stakeholders to stay informed about these developments and be proactive in adopting new technologies that can enhance fuel performance and reduce carbon emissions.
Collaboration is Key
In the face of these challenges, the liquid-fuels industry must resist the temptation to “go on standby” during turbulent times. History has shown that when markets become misaligned or uncertain, there is a tendency to hold off on innovation and wait for clearer signals. Now is not the time to delay action though. The transition to low-carbon fuels is a marathon, not a sprint, and it requires open communication, collaboration and a willingness to adapt.
To succeed, stakeholders across the supply chain—producers, distributors, retailers and consumers—must work together to navigate the complexities of this evolving landscape. Open communication is essential, particularly between buyers and sellers of low-carbon fuels. By fostering strong relationships and sharing information, the industry can better understand the challenges ahead and develop solutions that benefit all parties.
In addition, it is important for the industry to advocate for policies that support the continued growth of low-carbon fuels. This includes engaging with regulators to ensure that incentives like the CFPC are structured in a way that encourages innovation and investment in sustainable energy. It also means educating consumers about the benefits of biodiesel, renewable diesel and SAF, and helping them understand why these fuels are better, cleaner and safer than traditional fossil fuels.
Monetizing the Transition
While the transition to low-carbon fuels presents many challenges, it also offers tremendous opportunities for those who are prepared to seize them. As demand for biodiesel, renewable diesel and SAF grows, so too will the potential for companies to monetize their investments in these fuels. This, however, will require a deep understanding of the market dynamics, regulatory incentives and technological advancements that are shaping the industry.
One key area of opportunity lies in the production of lower-CI fuels. By investing in feedstocks and technologies that reduce the carbon intensity of their fuels, producers can position themselves to take advantage of higher credits under the CFPC. Similarly, companies that can offer innovative solutions for blending, distributing and deploying these fuels will be well-positioned to capture market share as demand increases.
In the end, the liquid-fuels industry must remain focused on its core mission: to provide reliable, high-quality energy solutions that meet the needs of consumers while reducing the industry’s carbon footprint. The road ahead will not be easy but with careful planning, collaboration and a commitment to innovation, the industry can successfully navigate the uncertainties of today’s market and emerge stronger on the other side.
Seizing Opportunity in Uncertain Times
Uncertainty is an inevitable part of any transition, but it also presents an opportunity for growth and innovation. The liquid-fuels industry stands at a critical juncture at which the choices made today will shape the future of energy for decades to come. By embracing the challenges ahead and working together to overcome them, the industry—and, more importantly, the tens of thousands of people who make their living from it—can ensure that biodiesel, renewable diesel and SAF continue to play a leading role in the global effort to decarbonize.
This is not the time to stand by and wait. It is the time to move forward—intelligently, collaboratively and with a clear vision for a cleaner, more sustainable future. ICM
At the Eastern Energy Exposition in Atlantic City, NJ, held in May, Bioheat® fuel enthusiasts came together to learn about yet another milestone achieved by a team under the leadership of Scott Fenwick, Technical Director for Clean Fuels Alliance America.
This latest achievement began approximately three years ago at a Clean Fuels planning session, where those responsible for further commercializing biodiesel utilization throughout heating-fuel markets decided on and committed to developing advanced cold-flow chemistry designed to provide Bioheat® fuel dealers with enhanced winter-weather performance in blends up to B50. Through a uniquely positioned, highly capable group of industry experts and professionals, the team developed and delivered advanced chemistry that has clearly demonstrated success in depressing B50 pour points (PP) down to between -40°F and -50°F and cold filter plugging points (CFPP) to -17°F.
I like analogizing these types of significant efforts and milestones with other notable achievements to demonstrate the importance of planning and executing critical assignments to help ensure that Bioheat® fuel continues to expand throughout the space-heating markets, which demand decarbonization today. For instance, the first recorded people to successfully reach the summit of Mount Everest were Tenzing Norgay and Sir Edmund Hillary on May 29, 1953. Mount Everest, the highest mountain on Earth with its peak reaching 29,032 feet above sea level, posed an awesome challenge—one accepted and conquered by the two adventurers.
Fast forward to 2023 and a collaboration between Clean Fuels, NORA and specialty chemical company Clariant, committed to creating innovative and sustainable solutions for customers from many industries. These visionary organizations came together to deliver a solution to the long-standing cold-flow concerns of liquid-fuel users desiring to use biodiesel for carbon mitigation today. Like Norgay and Hillary, who set out to accept the challenge and scale the mountain before them, and like our own industry’s adventurers, they ultimately did plant a flag at the top of their mountains—whether real or proverbial—as they raised the bar with a new strategy that delivers confidence when managing cold-flow challenges in outside oil tanks.
The cold-flow properties associated with higher blends like B50 pose a major hurdle for the home-heat sector in its pursuit to meet the legislative demands of decarbonization that lie before them. The sale and use of higher and higher blends of biodiesel in heating oil are not optional if success in decarbonization is to be realized. Biodiesel is integral to ultra-low sulfur heating oil (ULSHO) for reducing greenhouse-gas (GHG) emissions and offers a more sustainable alternative to carbon-based fuel oil. Soy methyl ester is the preferred blend component due to its high availability across the U.S. and its more desirable base cloud point of 32°F. However, all biodiesel feedstocks that meet ASTM D6751 are acceptable to create blends of Bioheat® fuel. The cold-flow properties of B50 blends are challenging, especially in areas that experience severe winter weather, and cold-flow additives must be one important part of a systemwide solution to overcome these obstacles.
Understanding what needed to be done, the team set out to develop an attractive solution for the U.S. heating-oil industry—one that would allow for a significant improvement in the cold-flow and storage properties of typical B50 blends and enable enhanced winter operability.
After careful planning with Clariant and NORA, Advanced Fuel Solutions (AFS) acted as the liaison between regional wholesale fuel-terminal operators and domestic biodiesel producers to secure representative samples of ULSHO, biodiesel and various existing additive solutions for this two-year evaluation process. The team ultimately created nine B50 blends to achieve a broad range of different qualities representing real-world supply availability.
Cold-flow improvers (CFI) are not new. They have been, and continue to be, used successfully in diesel fuel and heating oil to improve the winter operability of these fuels in their respective systems. It’s well known that, at temperatures below a fuel’s cloud point, both biodiesel and heating oil will form fatty acid methyl ester (FAME) crystals and paraffinic crystals, respectively, which will accumulate on the bottom of storage tanks. At the same time, the viscosity increases until the fuel stops flowing when its plugging point (PP) is reached. CFI technology modifies the crystal structure in a physical way to keep them small, allowing the fuel to continue flowing at lower temperatures. The properties favorably impacted by CFI technology include PP and CFPP only, as cloud point remains unaffected.
Under the leadership of Dr. Kerstin Mueller, the head of application development with Clariant’s refinery-services business, a comprehensive approach was used to address the challenges of enhancing the winter operability of B50 fuels. Without going into a “Bill Nye, the Science Guy” type of explanation, I will simply stick to the basics to help readers understand how the solution was realized.
Cold-flow additives are complex formulations of polymers with different functions. They start with base components that work with paraffin and FAME molecules in a co-crystallization process. Next up, a synergist is selected and added to help improve the performance of the base components; a synergist alone has no effect. The next component that brings it all together is the addition of an anti-settling agent, which assists in preventing agglomeration. Simply stated, this slows down diffusion times that keep particulate contamination suspended, allowing for continued flow of products inside the tank.
This study confirmed that CFI formulations can contain up to 10 different polymer components described above, but no single component alone improved operability until a combination of all three categories were blended. What we learned when we reached the top of the mountain was, as Aristotle first said, “The whole is greater than the sum of its parts.”
Once the formulation was deemed successful, Dr. Mueller continued to the next level of product development: Determining the robustness of the CFI solution. What exactly is robust testing? It starts with a series of testing that answers questions such as:
* Do water residues in B50 impair the PP and/or CFPP performances?
* Does water in B50 impair the cold-storage behavior?
* Does the new CFI perform in combination with other multifunctional heating-oil additives, such as performance packages and cloud-point depressants?
* Does the filterability of the heating oil change when it contains additives?
* Does the additive cause yellow-metal corrosion?
Using ASTM measurements, all tests generated passing results. The final product solution was selected based on its PP and cold-storage performances, handling and robustness. Now, with the formulation in hand and all the boxes successfully checked off, it was time for upscaling.
In November 2022, 560 pounds of the selected CFI solution were successfully manufactured, with additional volumes planned. These pilot batches were then shipped downstream to AFS to implement Phase I field evaluations.
To conduct these initial field evaluations, AFS worked with Hart Home Comfort, a B50 Bioheat® fuel distributor with comprehensive understanding of how high blends need to be stored, blended and distributed to their expansive customer base. Although these tests were limited in scope because of the time of year we asked for them, they revealed what we expected—deep depression of PPs over the course of two fuel drops, as well as acceptable sedimentation control.
Beyond this field test, AFS and NORA conducted comprehensive laboratory evaluations of various fuels and additive formulations against the newly developed CFI solution and documented an exceptional improvement in flow as well anticipated sedimentation management. More testing is expected late this summer through the fall and winter with expanded parties that now offer B50 to their customer bases.
As the team presented its journey and experiences in this product-development process to a packed house in Atlantic City, Fenwick followed Dr. Mueller’s remarks and reiterated the obvious: The new additive is one part of a broader picture.
Anyone in the liquid-fuels supply chain knows that water is its Achilles heel. Fenwick strongly encouraged those up and down the chain to pay close attention to the multiple touch points in the system—from ship, barge, terminal, delivery truck and home-heating tanks. Let’s face it, we must combat switch loading-deficient bulk-plant surveillance, waterborne fuel challenges and, of course, inadequate attention to oilheat tanks at homes. Oilheat providers must play an active role in this process, Fenwick added, recommending that they stick tanks, conduct periodic bottom sampling and analysis, and keep records of inbound loads of the fuel that is bought and sold. Make a commitment to get teams trained and stay committed to surveillance. One can’t rely solely on fuels meeting ASTM standards because they are minimum specifications. We can and should do better than the bare minimum.
The new additive I’ve discussed in this article is slated for release in winter 2024. Like those adventurers who scaled Mount Everest, this group of visionaries accomplished what many thought could not be done, and they haven’t stopped. Testing continues at NORA and other large molecule manufacturers to continue improving performance of these unique chemistries that will be one very important part of the overall solution designed to allow us to blend higher blends of low-carbon liquid fuels. ICM
It was only five years ago when Arthur Marin, Executive Director of the Northeast States for Coordinated Air Use Management (NESCAUM) addressed the Oilheat Manufacturers Association about the States in the Northeast contemplating policies that would demand drastically reduced carbon emissions from the heating sector. In the years since, many policies have been put in place that require homes to be on a path to significant atmospheric carbon emission reductions.
First among the strategies to eliminate carbon is the removal of on-site combustion for heating and replace it with electric heat pumps. The thinking behind this is that heat pumps can eliminate carbon emissions quickly and completely once the grid is free of carbon-producing electric generation. Much debate has ensued on the efficacy of heat pumps in extremely cold weather, the concerns about the huge increased demand on the grid and the feasibility and speed achieving carbon-free electric generation, as well as the economic consequences of doing so.
The National Oilheat Research Alliance (NORA) decided to let good science show whether heat pumps or low-carbon liquid biodiesel is a better and faster reducer of carbon emissions. Thus was born the Green House Gas Calculator, a transparent multi-variable calculator to examine the conversion of existing oil-heated homes to electric heat pumps versus upgrading the liquid-fueled heating appliance while increasing the amount of biodiesel/renewable liquid fuel used by that appliance.
The calculator uses an Excel-based spreadsheet that allows the user to make key input changes to examine the results of different actions and approaches to reduce greenhouse gases. It also shows how macro activities in the background, such as the decarbonization of the electrical grid, impact the results. Additional factors may be added, either in conjunction with NORA or independently. Like most models, this was developed over time with input from many stakeholders. Good modeling practice has been the basis for this opensource Excel Calculator. To ensure the accuracy, the model was reviewed by EarthShift Global CEO & Founder Lise Laurin. Version 7.1 was deemed to “fairly and accurately present the impact of changes in variables.”
Connecticut use-case
To explain the GHG Calculator and its functions, along with the impact of different variables, this article will use a variety of inputs focused on a Connecticut use-case.
Figure 1 provides the result for the Connecticut use-case and shows the effects of converting all current oil-heated homes to no-carbon liquid solutions by 2050. This model uses normal 5% liquid fuel appliance upgrades per year versus all-electric (heat pump plus resistance backup) conversions at a rate of 1% per year. This graphic shows how the high use of biodiesel blending, along with normal appliance upgrades, reduce carbon emission considerably faster and at a much lower cost than does converting to electric heat pumps.
Connecticut has a biodiesel use mandate in place and its effect on carbon emissions can be seen by the lighter green color in Figure 1. In fact, the mandated levels produce carbon reductions more than three times greater than will heat pumps (orange). Additionally, if an ever-higher biodiesel blend scenario is implemented (darker green), the GHG savings are almost five times as great by 2050.
Of equal importance, the reduction using biodiesel comes at a much smaller cost. Using 2030 as a snapshot, the GHG reduction cost with heat pumps is more than three times greater than with the biodiesel.
Calculator inputs
To ensure accuracy and flexibility, the GHG Calculator allows for more than 30 different inputs (Table 1). Among these are: location, global warming atmospheric lifetime, biodiesel feedstock, heating appliance efficiency, heat pump performance, heating load, biodiesel uptake scenarios, grid decarbonization rates and liquid fuel appliance and heat pump installation rates. The calculator allows additional inputs that include costs for both fuels and installation and conversion costs.
Using the GREET Model, the calculator assigns carbon emissions weight from both the liquid fuels and electricity. GREET stands for Greenhouse Gases, Regulated Emissions & Energy use in Technologies; it is a full life-cycle model sponsored by the Argonne National Laboratory at the U.S. Dept. of Energy’s Office of Energy Efficiency & Renewable Energy.
What does it all mean?
The final result for the Connecticut use-case scenario (Figure 1) in which converting all current oil-heated homes to no-carbon liquid solutions by 2050—and assumes normal 5% liquid fuel appliance upgrades per year versus all-electric (heat pump plus resistance backup) conversions at a rate of 1% per year—shows that high bio-blending along with normal liquid fuel appliance upgrades are more beneficial both in cost and rate of decarbonization to liquid-fueled homeowners and citizens in Connecticut.
Furthermore, looking at 2030, the cost to homeowner per ton of CO2e removed is $560 for heat pumps and $162 for high biodiesel blends. This means that in 2030, the cost to homeowners to remove the same amount of cumulative GHG is approximately 3.5 times higher with electrification of oil-heated homes. It should be noted that this analysis of costs did not assess or incorporate upstream costs associated with a major transformation of the electric distribution system, which will likely impact pricing of electricity.
In addition to Connecticut, the calculator has already been applied to Maine, Massachusetts, Rhode Island, New York and New Jersey with similar results and only variations based upon size of market, weather, prices and each State plan for biodiesel uptake.
The NORA GHG Calculator is the first proven, analytical look at the benefits of carbon reduction using biodiesel in home heating in comparison to electric heat pumps. In addition to the economic and environmental benefits, the liquid fuel heating industry is already positioned, and if fact has begun the transition. It is of added value that very few changes are needed to the delivery, storage and use of biodiesel blends, even at very high levels. Technical issues have been given the highest priority by the NORA, Clean Fuels Alliance America and others. Heating appliance manufacturers are currently gearing up for full biodiesel use and liquid fuel retailers and wholesalers have made the commitment to continue to elevate the biodiesel blending as fast as possible.
Reducing and eventually virtually eliminating carbon from homes is the right thing to do and the liquid heating fuels industry is on the right track to do it.
NORA has assembled this data at NORAweb.org/ghg where one can find more detailed explanations, reports and graphics for each State. ICM
It has been 19 years since the initial communication was sent to our industry’s technical leaders to consider blending low-carbon biodiesel into heating oil, which at that time was beginning its transition from high- to low- and then ultra-low sulfur heating oil—clearly a milestone unto itself.
On June 23, 2003, a memorandum was drafted and sent to Brookhaven National Laboratory and other technical collaborators defining the possibilities associated with heating oil gradually transitioning to a more favorable option, today known as Bioheat® fuel. Much has been accomplished since and, as all the planets have aligned for our industry to transition from carbon-based heating oil to low- and no-carbon fuel, the most challenging aspect of this journey has begun.
The challenge is how to encourage those who are not yet convinced this transition is necessary and that, given time, the need to reduce carbon and greenhouse-gas (GHG) emissions will abate—and it will again be business as usual. I’m no gambler but I am confident this will not happen. Just ask any oilheat industry leader and local or State policy representative, no matter the region.
The Only Obstruction Left
After years spent obtaining critical technical approvals and recording product and market development successes, the only obstruction left to address is our inability to create a powerful enough guiding coalition—one that requests your immediate participation. An industry renaissance often begins with just one or two people or companies leading the way. In cases of successful transformation efforts, the leadership coalition grows and grows over time. However, when a critical mass is not achieved early on, nothing much worthwhile happens.
Many progressive fuel dealers, however, are already on board with the evolution of oilheat. A behind-the-napkin calculation reveals that more than 500 million gallons of B20 Bioheat® Plus fuel—a blend of 20% low-carbon biodiesel and 80% ultra-low sulfur heating oil—has already been introduced throughout the New England and Mid-Atlantic regions. This does not include other biodiesel activities that focus on discretionary blending, but only those that legally utilize the registered trademark on websites, trucks, vans and apparel promoting Bioheat® fuel as the best energy source for home heating. Their promotion of the product publicizes the fact that we are moving in the right direction to clean up this industry, whose image has long been stigmatized as dirty and carbon intense.
There are many steps in transforming one’s company and industry. First, there must be a legitimate sense of urgency to change. By examining market and competitive realities, we suggest that we decarbonize, and quickly. Next, a coalition must be formed to create a vision for how to address the urgent situation. Then, sufficient communication of that vision must be relayed to the marketplace. This has been done, but in doing so there has been a duplication of messaging through various coalitions, which has led to confusion and reduced overall effectiveness. This is evidenced by the lack of financial support required to formulate and execute a broad-based, seamless communication plan to bring the exciting news to customers.
Disruptive & Intrusive?
Empowering heating oil’s expansive fuel-dealer network to act on industry leadership’s vision has been challenging for many reasons, some which include the lack of realizing the seriousness of legislative drivers, continued perceptions that Bioheat® fuel is not ready for prime time, misunderstandings over cold-weather operability and supply constraints. However, the foremost likely reason for the majority of those who are not yet supportive of the transition to Bioheat® fuel centers on change simply being too disruptive and intrusive to their current routine.
It’s difficult to determine where attention should be focused in order to create short-term wins. Planning for visible improvements in getting industry messaging to the customer is an awesome undertaking, and one that takes an inordinate amount of funding—of which our industry is simply deficient at this time.
Every day, the electrification story is told in a favorable light. The messenger paints a wonderful picture of life without oil, life with extension cords and unlimited power without the need to await delivery of heating oil, which sits inside that tank stealing valuable real estate in the basement—space that could be repurposed for a home office or room for the kids to play with their friends as moms and dads enjoy their coffee while being kept comfortable throughout the four seasons. I use the reference about the storage tank because, to many, it is viewed as an eyesore—a hazardous, prehistoric relic.
Alternatively, you can begin now to transition that antiquated mindset to help people realize that Bioheat® fuel is stored, renewable energy in one of its densest forms, meaning, quite literally, that once it is purchased and delivered to customers’ homes, this clean, power-packed energy phenomenon is stored on-site in their fuel tank. It is tangible liquid renewable fuel that does not require a power plant to generate and distribute energy to their home or business.
Instead, their renewable heating-fuel supply is right there and ready to reliably supply fulfilling warmth on the coldest nights and, for some, hot water whenever they need it. Sure, everyone needs a little power to run their oilheat system, but what a benefit it is to the customer for them to know that their renewable home comfort is safely stored in a physical fuel tank on their property, ready and available whenever they need it and independent of external generation.
The next time a customer expresses concern about that storage tank, redirect them by sharing the following: “Did you know that one 275-gallon tank of Bioheat® fuel contains 10,670 kilowatt hours of energy? That’s equivalent to the energy contained within 109 fully charged Ford F-150 electric pickup trucks. However, unlike the nearly 10 hours it would take to recharge one electric pickup, a Bioheat® fuel storage tank can be completely refilled in less than six minutes.” This calculation showcases only the tip of the iceberg when it comes to conceptualizing the security that stored energy like Bioheat® fuel provides.
My point is that it’s time to start having these discussions with customers to explain the countless benefits associated with this low-carbon fuel, which the industry has voluntarily introduced into the markets in order to protect the oilheat sector and those it serves.
The intent of this article is to motivate reasonable fuel dealers to take charge of their own space and build their own company vision. The rewards of doing so are running a sustainable business and securing the chance to stand out from what will always be a fragmented industry of suppliers unwilling to commit to this much-needed change. Companies that ultimately achieve success have created a core purpose and values that remain fixed, while their strategies and practices endlessly evolve to meet the needs of a changing marketplace.
The vision has been established. The heavy lifting needed to provide a fuel that can and will successfully compete against the predictable expansion of electrification is done. Winter is coming, as the now-famous saying goes, and historically high prices are likely to follow—along with frustration and fear of consumer disdain for their next delivery.
Now is the best time to have that conversation with customers and suppliers and begin to take ownership of the collective efforts needed to prepare fuel businesses for the next decade.
Now is the time to let customers know dealers cannot control the price of their home comfort. However, what can be controlled are the quality and performance of the products they sell, which will help customers reduce their energy spending by relying on this 21st Century heating fuel that delivers uncompromised system efficiencies and performance—something certainly worth feeling good about.
For more information, visit mybioheat.com. Take a tour. Build your story on the site’s messaging. Link to it. Share it with your customers and get them involved, educated and knowledgeable about your 21st Century product: Bioheat® fuel. ICM
Full of degree days and turbulence, what a winter this has been here in our world—the Oilheat Nation. Every day, across the supply chain, fuel dealers arrive at work to create and capture customer satisfaction.
They are quickly realizing, however, that today they must sell more than just the physical commodity to achieve that goal. Failing to do so jettisons a company into the “what’s-the-price” abyss, where price pressure and margin compression become the norm as their competitors find ways to match the low deal of the day. A more sustainable and differentiated approach starts with knowing customers, understanding the clientele’s ultimate objectives and determining how to generate additional profit for a business by creating solutions and adding new value that align with customer expectations.
Instead of leading with price, progressive fuel dealers invest time in creating solutions that deliver quantifiable, economic impacts for their customers’ bottom lines—as well their own. These companies avoid the commodity trap by creating better methods to deliver enhanced customer value. In our world, this means bundling an improved distillate fuel with a series of extras that, in the end, help differentiate forward-thinking fuel dealers from ordinary commodity-driven operations.
It would be challenging to find an industry more mature than heating oil. This field has been around for nearly a century as heavier, distilled fractions of liquid crude oil replaced coal, and soon Bioheat® fuel will replace oil. As in many other industries, however, market leaders have distanced themselves from the competition by recognizing and capitalizing on the fact that they offer far more than just heating oil and diesel fuel.
This growing group of high-value wholesalers and fuel dealers choose to sell extensive solutions that deliver additional value to their customers—value beyond a low strike price. These solutions come in many forms and are often a combination of services, technology, enhanced fuels, analytics and support—altogether which encompass a quality product that delivers value for customers and ratable sales for fuel marketers.
For wholesalers and dealers, these practical and complementary services can contribute real, quantifiable value to their core product offering. It also allows them to provide flexibility by mixing and matching various service offerings to meet the needs of each individual customer, market by market.
Creating value alone, however, is not enough if the customer will not pay for it. To succeed in differentiating a company and its superior products, time must be invested in order to both understand the value of these enhanced programs and become accustomed to sharing this story with customers.
Branding is a part of this process, but it doesn’t work for everyone. Simply selling a “commodity” requires nothing more than being the lowest price available at any given time. One can win as quickly as one can lose by that choice when leading with price, and price alone, with no additional value provided. Service contracts, budget plans, early-pay discounts and a few free gallons of oil were common offerings that dealers felt would set them apart. Then, as predictable as death and taxes, the company next door offered the same. Time out. Now what? Does the price need to be lowered still?
Much has been written about fuel quality, renewable fuels, real-time pricing, supply, demand and the life expectancy of our beloved industry. However, very little has been penned on how to wrap additional services around an upgraded diesel fuel and heating oil to enable more market share to be captured while improving company bottom lines and customer satisfaction with enhanced products and services and differentiating from the competition.
A great place to begin that transition to increased market share is product branding. Some might argue that branding doesn’t work anymore. Tell that to Nike, Apple, Microsoft, Charmin, Kleenex, BMW, and countless other nationally and internationally acclaimed brands. No sound debate can be made against a company’s smart business decision to distinguish itself and its products from a congested market.
The role brands can and should play in accomplishing these goals is changing quickly as technology, media, political winds and other influences affect how customers perceive their needs and how best to satisfy them. This change will become more pronounced as time goes on.
When you began reading this article, perhaps you were looking to turn your carbon into proverbial diamonds for a profit or maybe you were hoping to determine whether you were a fuel dealer who simply buys and sells, or one that adds value.
Everyone wants to know where they fit. The purpose of short editorials like this is to rethink “normal.” We welcome the opportunity to share with you our story, which is one that started with an objective to deliver maximum value to our customers. ICM
