The market for bio-LNG

The European Green Deal requires an accelerated transition from fossil energy sources to renewable sources. For the long-haul road transport sector and maritime transport sector this presents a major challenge. These sectors, which together are responsible for approximately 12% of global GHG emissions, are currently dependent on fossil fuels. 

It is expected that long-haul transport will use a mix of biofuels, hydrogen and hydrogen-derived fuels. However, most of these fuels are still in research phase and not available at commercial scale. Bio-LNG is a carbon neutral fuel that is available today and that takes advantage of existing infrastructure and engine technology. Bio-LNG will also play an essential role in decarbonizing maritime and heavy-duty road transport in the future. The future needs bio-LNG and demand is growing fast.

Long-haul, heavy-duty road transport needs bio-LNG

Several studies report and forecast steep increase in the number of LNG trucks in Europe. For example, the ACEA (European Automobile Manufacturers’ Association) reported that the share of new truck registrations on alternative fuels (of which 99% run on LNG/CNG) increased from 2.2% in 2019 to 2.9% in 2020.

Market share of LNG/CNG fueled trucks in 2020 according to ACEA

Medium and heavy trucks over 3.5 tons  new registrations by fuel type in the EU in 2020 – Source ACEA

In 2021, the Natural & bio Gas Vehicle Association (NGVA) Europe forecasted that the amount of LNG trucks in Europe will grow from 12,000 in 2020 to 280,000 trucks in 2030. These vehicles will use approximately 100 TWh of fuel and at least 40% of that amount is expected to be bio-LNG. That is 2.8 Mton bio-LNG.

This growth is supported by the expanding LNG fuelling infrastructure that bio-LNG can make use of. In the past years the number of LNG fuelling stations have increased at an accelerated pace.

Expansion of bio-LNG fueling infrastructure is accelerating

In february 2022, the number of LNG stations reached 500 – Source NGVA

Shift in maritime transport sector

In a recent report, DNV stated that the shipping industry has accelerated the shift from conventional fuel to alternative fuels. In 2021, about 12% of newbuild ships were ordered with alternative fuel systems, versus 6% in 2019. More than 50% of these alternative fuel systems are LNG engines.

Shipping shifts to alternative fuels 2021 - Source DNV

Uptake of alternative fuels for the world fleet as of June 2021 including ships on order – Source DNV

Rapid expansion of bio-LNG production

The need for bio-LNG in the transport sector is also visible in the bio-LNG production capacity forecasts.  In 2021, the European Biogas Association (EBA) expected the number of bio-LNG plants and total bio-LNG production capacity in Europe (TWh/yr) to expand rapidly from 2018 to 2024.

Expansion of bio-LNG production capacity - Source EBA

Current and future development of the number of the total bio-LNG production capacity in Europe (TWh/year), 2018- 2024 – Source EBA

Biomethane production

Gas for Climate projects that biomethane production will ramp up to 1170 TWh in 2050, from 20 TWh in 2020. 50% of that biomethane will be used as bio-LNG for the heavy-duty transport sector. That is about 40 Mtons of bio-LNG per year.

Gas for Climate biomethane production growth
Gas for Climate projection of biomethane utilization in 2050

Feedstock availability is sufficient

Agriculture and waste are the two largest potential feedstocks for biomethane production, which is the basis of bio-LNG. Studies show that there is enough feedstock available to fuel fast growth of bio-LNG. In 2020, annual biomethane production in Europe provided 20 TWh in energy. With the available sustainable feedstock, the energy supply from biomethane production in 2050 is estimated at about 1170 TWh. This is twice the estimated amount of biomethane needed to service the demand for bio-LNG in 2050.

Bio-LNG is supported by the European Union

The EU Renewable Energy Directive (REDII) establishes a policy for the production of energy from renewable sources. Bio-LNG obtained from 100% organic waste complies with this policy. The EU recognizes bio-LNG production as an important instrument to reduce methane emissions from the agriculture and waste sector. The “Fit for 55 package”, a set of 13 proposals adopted by the EC in 2021, also accommodates bio-LNG. In fact, one of the first projects to receive funding from the Fit-to-55 package was the FirstBio2Shipping project. This project, initiated by Nordsol, Attero and Titan, will help decarbonize maritime transport through bio-LNG produc-tion at the site of Attero in Wilp, The Netherlands.