Q&A: LGE calls for more EU backing as Congress begins

The European Parliament election on 6-9 June is expected to result in centre-right Ursula von der Leyen remaining as president of the European Commission despite an increase in support for far-right groups. The election came just before European LPG association Liquid Gas Europe's (LGE) 2024 Congress in Lyon, France, over 18-20 June. Argus' EU correspondent Dafydd ab Iago spoke with the LGE's general manager, Ewa Abramiuk-Lete, about the election and the EU's climate and energy policies on the eve of the conference:

What do you want from the newly constituted parliament and commission?

A positive overarching framework from Brussels is needed to drive demand for renewable gases such as bioLPG and renewable and recycled carbon DME in heating and transport. For instance, retrofitting diesel or gasoline engines after 2035 is a potential solution for legacy fleets. But this goal is currently missing at the EU level. Energy taxation is another critical issue, with the current directive unchanged for more than 20 years. It's crucial that revenue from energy taxation is re-invested into the production of renewable fuels to avoid a vicious cycle.

Do you expect parliament to push for a clearer future for renewable liquid gas fuels despite plans to phase out ICE [internal combustion engine] vehicles?

There's obviously a trend towards electrification. And as set out in the current legislation, the European Commission will come forward with definitions of CO2-neutral fuels. But member states have woken up to the gravity of the ban on ICE vehicles. Legislative solutions need to come really fast. We don't want to wait two more years until the effect of the new CO2 standards for cars fully kicks in.

Can a new parliament tweak existing legislation on the EU's 2030 climate and energy goals?

The ICE phase-out has intensified scrutiny of the Green Deal, at the member state level and in the European Parliament. But significant changes to the 2030 goals are unlikely as the targets are set for 2030. And Europe remains committed to achieving climate neutrality by 2050. Considerations to be examined include the role of liquid gases, especially in rural areas that account for about 3pc of EU energy demand. They rely on LPG as an off-grid solution.

Does the EU need to rethink the 2040 goals?

The suggested 2040 strategy set out by the outgoing commission still has to translate into legal proposals for parliament and member states to decide upon. The major question is where the industry will get to in 2040. Achieving 90pc net greenhouse gas savings by 2040, and then climate neutrality by 2050, will require significant investment. We expect an increase in the production of renewable gases by 2030, and a further scale-up towards 2040. But the industry also needs investor security. Some countries such as Italy, the Czech Republic and Spain have mentioned renewable LPG in their national energy and climate plans. That provides some degree of investor security.

Will LPG still be part of the EU's heating and transport picture as we move towards 2030 and 2035?

Yes, particularly for industrial use as Russian gas is being phased out. Major industries such as steel and ceramics need high heat that was previously supplied by natural gas, which cannot be replaced everywhere with electricity. There is significant interest from energy-intensive industries. For heating and boilers, the commission is developing guidance documents defining fossil boilers, which must outline a future pathway for boilers, especially important for off-grid areas. Those guidance documents need to recognise that boilers can run on both fossil fuels and renewable blends.

Is an extension of the ETS [emissions trading system] to transport and heating proceeding smoothly for the LPG sector?

The expansion of the ETS is new for many in the sector, requiring firms to establish trading for ETS allowances. While some companies were already under the ETS, the EU-wide extension now includes medium and small-sized firms, which face crucial upcoming deadlines. Companies must estimate their emissions and purchase allowances, adding costs for consumers. And implementation has been challenging for some member states, particularly in identifying relevant companies falling under the ETS, making the process more difficult than anticipated.