Client: Liquid Gas Europe (LGE)
Date: December 2024
Project Team: Dr Andrew Dyer, Consultant & Dr Adrian Higson, Managing Director
Background:
Renewable (and recycled carbon) liquid gases including renewable LPG and dimethyl ether (DME) can be produced through multiple pathways, either directly in a dedicated process, or indirectly as a co-product when producing other low-carbon fuels. LPG is a versatile, globally used fuel for transport, domestic heating, and diverse industrial, agricultural, and chemical applications. Low-carbon liquid gases present a key opportunity as a drop in replacement for existing fossil LPG infrastructure and equipment, allowing for effective decarbonisation of hard to abate sectors across the European economy.
Objective:
Alder BioInsights (Alder) was commissioned by LGE in partnership Frazer-Nash to identify pathways to produce renewable liquid gases and to quantify, through modelling, how much renewable liquid gas which could be produced and placed on the market in Europe, from 2030 through to 2050, considering limitations from feedstocks and technological development.
Our Approach:
Initially we began with a data collection and assessment of the market outlook for LPG. This involved three major steps:
- Developing a list of pathways which could be used to produce renewable liquid gases before condensing the list by considering technological maturity, feedstock availability and existing commercial developments.
- Producing a database of existing processing capacity based on existing sectoral knowledge, available datasets, public announcements and stakeholder engagement to quantify current and near-term renewable liquid gas potential.
- Collection of data on the yield of renewable liquid gas and feedstock conversion efficiency for each pathway and any other data requirements for modelling each pathway.
- Undertaking a literature review and case studies in Europe, identifying key feedstock distribution, regional market demand for renewable liquid gases, existing policy support and other drivers impacting the renewable liquid gas market. Allowing, a quantitative assessment of regional feedstock availability.
The next step was to develop baseline, moderate and high scenarios for future development which allowed for future modelling by defining the parameters which would impact market growth such as market competition factors, feedstock competition and projected growth rates for facilities.
These data sets and scenarios were used as the basis for a Bayesian model produced by Frazer-Nash in partnership with Alder. Bayesian modelling allows variability and uncertainty in datasets to be modelled with the output delivering statistical likelihoods of different outcomes occurring.
Outcomes and benefits:
The resulting model and reports gave the clients a long term qualitative and quantitative perspective on the potential for renewable liquid gas production. The output highlighted the key factors which would impact whether these potential market potentials can be achieved or fall short of expectations. This benefits clients by supporting their engagement with policymakers, providing clear guidance on how policy can enable the delivery of renewable liquid gas as a low-carbon fuel for hard-to-abate sectors.
The outputs were used to produce a guidance document for LGE: