LPG industry urged to invest to build EU credibility

Tapping into funding for renewable fuels is seen as key for the industry, but investment decisions must not be made in haste, writes Matt Scotland

The LPG industry has been urged to work more closely with the sustainable aviation fuel (SAF) and other nascent renewable fuel sectors to establish bioLPG and renewable LPG and DME production plants as soon as possible.

"It would be great if the LPG industry could embrace other renewable liquid fuels" as these often already have governmental backing and financing, Vertimass board adviser Neil Murphy told delegates at European LPG association Liquid Gas Europe's Congress in Lyon, France, over 18-20 June. US-based Vertimass aims to commercialise the conversion of ethanol into SAF, renewable diesel and renewable gasoline components. The LPG sector, in its efforts to develop renewable forms of LPG and DME, needs to move from "great intent" to the "earthiness of investment and putting plants down in the ground", Murphy said. Doing so will build credibility among policy makers, he said.

But the sector was also warned about making hasty investments that turn out to be "mistakes", hurting the prospects for renewable LPG in the medium to long term. "The US saw huge failures in its early solar panel manufacturing efforts — billions of dollars were wasted. So, we can't advocate for things just to get steel in the ground, we need the steel in the ground to be successful," US start-up BioLPG LLC's chairman Kimbal Chen said.

BioLPG LLC and Chicago-based research institute GTI Energy have jointly developed the "Cool LPG" process to convert biogas into bioLPG. Italian consortium Green LG Energy is adopting the technology to develop a pilot plant in Chicago and later a larger demonstration facility in Italy, chief executive Francesco Franchi told delegates. The Chicago facility could open before the end of this year and the Italian plant within the next two years. Once operational, the latter will "show policy makers and stakeholders that we can produce bioLPG, allowing us to secure funding and support to develop an industrial-scale plant", he said.

Credibility was a core theme of the conference in Lyon as the industry continues to work to enshrine LPG and renewable alternatives in EU and national legislation. The question the sector needs to ask itself is how to make its proposals and voice credible to EU policy makers after the recent European Parliament elections, LGE president Audrey Galland said.

France could play a vital role, as despite having a 10pc share of the European LPG market, it has a strong voice in Brussels, according to French LPG association FGL president Julie de Fazio. A growing recognition that electrification of heating will not be suitable in most rural areas, and that rural customers want to decarbonise, should benefit the LPG sector, she said. But it still needs "financial incentives and mandates" that encourage investment in renewable liquid gases, she said.

Hearing the possibility for mandates in a positive rather than restrictive sense was "music to my ears", renewable DME company Dimeta's advocacy director Sophia Haywood said. Combining supportive mandates for renewable liquid gases at the same time as financial incentivisation could be key to unlocking growth, she said.

Pragmatic shift?

The recent parliamentary election could be a boon for the LPG industry, according to former EU MEP and UK member of the regulatory policy committee Daniel Dalton. The shift in power from centre-left to centre-right should result in "more pragmatic energy policy" that benefits the LPG sector, he told delegates. And the ascent of the cost-of-living and energy security issues up the EU's agenda should also lead to a "watering down of the hard edges" when it comes to the paths to meeting the EU's bold targets under its Green Deal. "You as an industry are well placed" in assisting the EU in its efforts to enhance energy security and lower energy costs, while also moving towards decarbonised renewable liquid gases, he said.