Financial analysis of renewable diesel in commercial fishing vessels

 

Project description

The New South Wales Government has set goals for reducing carbon emissions, including a target to reduce emissions by 30 per cent below 2005 levels by 2030. There is an opportunity to reduce emissions through a transition to renewable diesel (HVO100) across eight state managed commercial fisheries. The analysis aimed to support the state’s Net Zero Plan by evaluating the impact of fuel price increases associated with renewable diesel adoption on business profitability and carbon emissions reduction.

BDO's role

BDO were engaged to evaluate the potential impact of rising fuel prices associated with a transition to renewable diesel. As part of the engagement, BDO:

• Conducted a comprehensive financial analysis to model the effects of renewable diesel blends on fuel costs and profitability.
• Developed three fuel price scenarios based on domestic and imported renewable diesel prices.
• Estimated carbon emissions reductions from various diesel blends, targeting a 30 per cent reduction in line with NSW’s climate goals.
• Profiled average fishing businesses across eight fisheries.
• Assessed the sensitivity of each fishery to fuel cost increases, highlighting those most vulnerable to transitioning to renewable fuel.

Project outcomes

The financial analysis of renewable diesel across NSW commercial fisheries provided a clear understanding of both environmental and economic impacts. Scenario modelling revealed how different fuel blends and price points affect profitability across fisheries, identifying those most and least sensitive to fuel cost increases. The study demonstrated the trade-offs between achieving emissions reduction targets and maintaining business viability, offering valuable insights for policy and investment decisions. It also highlighted the potential benefits of domestic renewable diesel production in reducing financial strain on fishing businesses through transition.