Onsite bio-LNG production is profitable if the underlying business case is strong. Profitability depends on how much bio-LNG and biogenic CO₂ you can produce, what you can sell them for, and what it costs to run the plant, including biogas supply, energy, labour, and maintenance.
In simple terms:
Profit = revenues from bio-LNG + certificates + CO₂ minus biogas costs + energy + operations + financing
If revenues exceed these costs, you have a viable business case. The sections below outline the key factors that help you assess whether onsite bio-LNG production is right for your location.
How is the price of bio-LNG determined?
The market value of bio-LNG is typically built on three components:
Energy value: In Europe, this is linked to the TTF gas market and reflects the baseline price of the fuel. As natural gas prices rise, so does the energy value of bio-LNG.
Sustainability value: Depending on where the fuel is used, you may be eligible to generate tradable green certificates. Their value depends on local legislation and the carbon intensity (CI) of your bio-LNG. The lower the CI, the higher the green value. In many cases, this sustainability value is a major contributor to project profitability.
Marketing premium: Some customers pay extra for locally produced, fossil-free fuel to support their sustainability goals. This premium varies by sector and buyer.
Together, these three elements determine your achievable selling price for bio-LNG, and therefore your revenue potential.
How do I calculate the carbon intensity (CI) of my bio-LNG?
Your product’s CI must be calculated and certified if you want to claim green value. In Europe, this is done using the methodology defined in the EU Renewable Energy Directive (RED). Qualified certification schemes such as ISCC or Redcert audit and validate your CI.
This verification is required to generate and trade sustainability certificates, and the lower your CI, the higher the potential certificate value.
What are the main costs involved in bio-LNG production?
The cost of producing bio-LNG is driven by four main elements:
Biogas supply: Typically the largest cost. This includes not only the purchase or production of raw biogas, but also feedstock handling, cleaning, and pre-treatment.
Energy: The second major cost component. While some upgrading technologies (such as adsorption-based systems) require additional heat for regeneration, Nordsol’s process uses only electricity. By relying on membrane-only upgrading and fully integrating it with the liquefaction step, Nordsol minimises energy losses and achieves a highly efficient overall process. This integration lowers operational costs and reduces the carbon footprint of the installation.
Operations and maintenance: Includes labour, maintenance, and consumables such as activated carbon. These costs tend to be higher in systems that use adsorption-based upgrading.
Capital and financing: Depreciation, insurance, taxes, and financing costs also factor into the full picture.
Understanding these costs is essential for evaluating the profitability of your bio-LNG project.
Can I quickly check if a bio-LNG plant can be viable at my location?
Yes, you can get a first indication in just a few minutes. Nordsol offers a free online tool that helps you assess whether bio-LNG production could be profitable for your biogas business.
By answering just seven quick questions about your location, biogas flow, and gas composition, you’ll receive a personalised business case report. This report includes key insights into potential revenue, cost drivers, and overall feasibility, all tailored to your specific situation.
Who can I sell my bio-LNG to?
Bio-LNG is typically purchased by two types of customers:
Fuel traders and distributors: Some operate their own physical infrastructure, such as LNG filling stations, while others focus on the commercial side without handling logistics themselves. The bio-LNG that Nordsol produces in Amsterdam, for example, is purchased by Shell.
Transport companies: These companies are switching to renewable fuels to reduce their carbon footprint. They are actively looking for reliable, sustainable fuel options like bio-LNG to decarbonise their operations in a cost-effective way. RenEco in the UK is a good example.
Heavy industry: In some cases, bio-LNG is also used to establish a virtual pipeline to heavy industry. This can happen in areas where biogas is produced locally but no gas grid is available. The gas is liquefied and transported by truck to an injection point of a gas grid, or directly to an industrial site. This model is a relevant use case in regions with abundant organic waste and no existing gas infrastructure.
Who can I sell my biogenic CO₂ to?
Biogenic CO₂ can be sold to companies that use CO₂ in their production processes and are looking for cleaner, fossil-free alternatives.
Horticulture: Growers use CO₂ to stimulate plant growth in greenhouses. These businesses increasingly prefer sustainable sources as part of their broader environmental strategy.
Food and beverage industry: CO₂ is used for carbonation, packaging, and cooling. Dry ice producers also rely on high-purity CO₂ and are starting to switch to renewable sources to improve their carbon footprint.
E-fuels producers: Companies developing e-fuels require large amounts of renewable CO₂ for synthesis and benefit from a verifiable, low-carbon source. As demand for e-fuels grows, the value of biogenic CO₂ is expected to rise accordingly.
What should I consider when setting up a sales contract for bio-LNG?
Because there’s no industry-standard template for bio-LNG sales, contracts are usually tailored to fit the specific needs of both producer and buyer. Key considerations include:
Pricing structure: Some contracts offer a fixed price to ensure stable income, while others are linked to market prices, allowing for higher returns but also more risk.
Reliability and quality guarantees: Buyers often expect guarantees about the volumes and quality of bio-LNG they will receive. This includes technical specifications like temperature, composition, and sustainability credentials. If you can’t guarantee delivery at all times, you may need to offer fallback arrangements or accept penalty clauses.
Contract length and flexibility: Some buyers prefer long-term certainty, while others opt for shorter commitments to stay agile in a changing market.
Take-or-pay clauses: In many cases, these clauses mean the buyer pays even if they don’t collect the product, giving the producer more financial security.
Similar considerations apply when negotiating contracts for biogenic CO₂.
How can I assess if bio-LNG production is profitable for my site?
Profitability depends on the balance between your revenues (bio-LNG sales, certificates, CO₂ sales) and your costs (biogas, energy, operations, financing). Every site is different, and the business case depends on your specific biogas characteristics, local energy prices, available offtake contracts, and regulatory incentives.
The best way to start is with a quick feasibility check using Nordsol’s free online tool, followed by a more detailed technical and commercial assessment.
Nordsol specialises in helping biogas producers evaluate and implement profitable bio-LNG projects. Our modular, energy-efficient systems are designed to maximise revenue potential while minimising operating costs.
Contact our team to discuss your project, or explore our other FAQs.
