The need for the global adoption of renewable liquified petroleum gas (LPG) is becoming increasingly apparent, as the fuel may offer the transitional qualities needed as the world looks to decarbonize. This was one of the biggest takeaways from the Gaseous Fuels Forum in Warsaw in May 2024.

The key to making renewable LPG a success in the future is framework and legislation, for which Liquid Gas Europe is advocating, with general manager Ewa Abramiuk-Lété stating that now is the time to promote renewable LPG and bioLPG into law.

BioLPG is produced from renewable sources, including biological oil and fats, and the fermentation of glucose by microorganisms, with an even lower carbon footprint than conventional LPG.

Some countries in Europe have already adopted renewable LPG into their national energy plans—Spain, Italy and Czechia, where bioLPG is part of subsidy packages—and it is hoped others may follow, according to Abramiuk-Lété.

Dimethyl ether (C2 H6O)—known as DME, used extensively in industry worldwide, is a colorless gas that is chemically similar to butane and propane and like LPG, it is easy to handle and store in liquid form. However, Renewable Dimethyl Ether (rDME) is specifically produced from renewable feedstocks, such as methane from agricultural and municipal waste, renewable power and CO2, meaning that carbon emissions are substantially reduced, by up to 85%.

There are many alternative fuels on offer. Biogas to bioLPG product is an increasingly popular pathway, as well as using Renewable Dimethyl Ether (RDME) for blending with LPG. BioLPG is a viable solution to address green fuel targets across Europe, and although currently at low levels, production quantities are increasing.

Global renewable LPG production capacity has risen steadily in recent years and is now around 200,000-250,000 metric tons/year. And if all planned projects come to the market, bioLPG production could reach around 625,000 mt/year by 2025, Abramiuk-Lété noted.

Renewable liquid gases, such as bioLPG and renewable and recycled carbon DME bring even greater climate benefits than that of conventional LPG.

On a cost level, RDME can be blended with propane at up to 20% by weight without major infrastructure changes, according to Oberon Fuels chief executive and president Dr. Rebecca Boudreaux. When blended with propane, the fuel offers a potential greenhouse gas reduction of up to 60%, Boudreaux added.

Renewables producer Oberon Fuels is continuing to ramp up its expansion plans in the RDME sector. The firm is expected to announce a final investment decision on a proposed Texas-based RDME production facility later in 2024. This would be its second plant in the U.S., following the start of production at a facility in Brawley, southern California, in 2021. In Europe, Oberon Fuels announced in March 2023 that it would partner with Ireland’s DCC Energy to design and build RDME production plants in the region.

RDME can be made from a range of feedstocks including forest and agricultural residues and animal manure, and can create wider revenue streams, Boudreaux said. Additionally, because of the molecular structure of DME, there are opportunities for propane companies to play a role in the growing hydrogen economy. DME is a clean, cost-effective way of transporting hydrogen, given it is easy to deploy and not dependent on pipeline and a grid, Boudreaux added.

There are also opportunities for growth in the conventional LPG sector. The World Liquid Gas Association (WLPGA) identified the several growth areas including the autogas, marine, domestic and industrial sectors.

LPG serves around 3 billion people worldwide, nearly half the global population, but for the remainder, access and infrastructure needs consideration, which is a widespread issue in the developing world, WLPGA deputy managing director Michael Kelly said in his presentation at the Gaseous Fuels Forum.

LPG is often the first fuel people turn to when cooking as an alternative to wood, biomass and charcoal. It is a popular choice because it is flexible and it can be easily transported. The fuel can ensure no community is left behind amid the energy transition.

In many countries, the domestic electricity grid simply doesn’t reach enough people and is not reliable, according to Kelly. That can have a huge impact on the economy and quality of life in such countries. For example, when demand for electricity exceeds the available supply in parts of South Africa, planned supply interruptions may have to be carried out, referred to as load shedding. In these instances, LPG can offer an excellent alternative for power supply systems, large or small, said Kelly.

There are around 49.2 million rural households in the EU and most of them are not connected to a gas grid, data from Liquid Gas Europe showed. These buildings will typically use fossil fuels for heating.

LPG will continue to play a key role in reducing carbon dioxide emissions and the energy transition across multiple platforms – for heating, industrial, marine or even domestic use.

Liquid Gas Europe are currently lobbying to convince policymakers and stakeholders that LPG is an excellent fuel for the energy transition. Governments became really excited at the prospect of electric vehicles, but it turns out they aren’t the only solution to reducing emissions, Kelly added.

“The transition from petrol and diesel to electric is going to take longer than people think, and it isn’t going to be achieved in the next two to three years. Therefore, we need alternatives and LPG is a great one. I’m not saying in 30 years we won’t all be driving electric vehicles but before we get to that point, we need transitional fuels,” Kelly told delegates.

The autogas sector continued to be Poland’s largest recipient and user of LPG—making up 75.6% of the total Polish LPG market, according to the 2023 report from LPG association Polska Organizacja Gazu Ptynnego (POGP). But the actual percentage LPG accounts for in the Polish autogas sector is relatively small—13.6% – compared to diesel and petrol, which make up 32.8% and 53.5%, respectively, POGP data showed.

Another sector that has received a lot of interest and development over the past few years is the marine industry. Since the International Maritime Organisation reduced the limit of sulfur content in marine fuels to 0.5% from 3.5%, LPG has emerged as a potential alternative shipping fuel.

“We are starting to see more carriers propelled by LPG, given it is a cleaner fuel than fuel oil as well as reducing costs and conforms with most standards and regulations,” said Kelly. “There is also a great opportunity for the smaller coastal fleets, and this is an area we are looking at significantly expanding, after being successful, at least initially, on the larger carriers.”

Post-December Concerns in Poland

Sanctions on Russian LPG imports in the European Union and what will happen after Dec. 20, 2024, was another hot topic discussed widely during the conference.

The EU announced its latest slew of sanctions against Russia on Dec. 19, 2023, which included measures to ban LPG imports with a 12-month transition period. There is a stay of execution until Dec. 20, 2024, for contracts concluded before Dec. 19, 2023.

Russian LPG used to make up around 75% of the total flow to Poland, but this has eased, dipping to around 49% in 2023. So, the question is, where is Poland going to source 49% of its total LPG imports when it can no longer seek out Russian flows? The answer comes by looking further afield, but that comes with cost implications.

There are four main seaborne LPG terminals in Poland: Police, Szczecin, Gdansk and Gdynia. However, their combined capacity is not enough to cover the total seaborne flows needed to make up for the ending of Russian LPG trade, consultancy Information Market (IM) said in its presentation.

Gdansk was the most active port in Poland for handling LPG in 2023, making up around 56%, according to data from trader SHV Energy. Gdynia and Szczecin made up the remainder, 25% and 19%, respectively.

Meanwhile, Polish demand for LPG sourced from Sweden has risen by 20% over the past two years, IM added.

On the rail network, Poland will need to rely on supplies by train from the West to make up for the shortfall. Poland imported around 1.1 million mt/year from Russia via rail last year, according to consultancy A-95.

However, early indications are that relying on the rail network might not be viable, following concerns over logistical problems reported in Germany that have caused delays and bottlenecking, IM noted.

IM suggested Poland could take advantage of flows coming from Germany and the Amsterdam-Rotterdam-Antwerp trading hub to the eastern terminals via rail links, but it also pointed to countries in the East, other than Russia, from which Poland could import.

One of these was Kazakhstan, a country from which Poland has imported LPG in the past and could still do so again. Poland imported around 8,000 mt of LPG from Kazakhstan in 2023, and 35,000 mt in 2022, according to data from trade analytics firm Global Trade Tracker (GTT). From the Baltics, Poland imported around 26,000 mt from Lithuania and 13,000 mt Latvia last year, up from 25,000 mt and 4,000 mt, respectively, in 2022, GTT data showed.

Looking ahead, a post-December Poland is going to be more reliant on seaborne flows than it ever has been and there are many challenges ahead. But there are also many opportunities for the Polish market, one of which is ramping up renewable LPG output using local feedstocks. By utilizing its natural resources, Poland can create renewable products such as RDME, methanol and hydrogen to embrace energy independence and reduce greenhouse gas emissions.