Potentials of LBM in Europe - LNG BClngbc.eu/system/files/deliverable_attachments/LNG BC D3.9 Potential of... · Potentials of LBM in Europe ... 0.3 Tula Ekengren ECOPLAN Suggested

EUROPEAN COMMISSION

DG MOVE

SEVENTH FRAMEWORK PROGRAMME

GC.SST.2012.2-3 GA No. 321592

Potentials of LBM in Europe

LNG Blue Corridors Project is supported by the European Commission under the Seventh Framework Programme (FP7). The sole responsibility for the content of this document lies with the authors. It does not necessarily reflect the opinion of the European Union. Neither the FP7 nor the European Commission is responsible for any use that may be made of the information contained therein.

Deliverable No. LNG BC D3.9

Deliverable Title Potentials of LBM in Europe

Dissemination level Public

Written By A.Agelbratt, A. Berggren (COWI) September 2014

Checked by Milagros Rey Porto (GNF) December 2014

Approved by Xavier Ribas. (IDIADA) May 2015

Issue date 05/05/2015

LNG BC D3.9 ‘Potential of LBM in Europe’ Public

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Revision History Rev Author Organization Description

0.1 Alexandra Angelbratt COWI Initial draft and updates

0.2 Anna Berggen COWI Initial draft and updates

0.3 Tula Ekengren ECOPLAN Suggested additional content and checked

0.4 Maria Pohjonen SGA Suggested additional content and checked

0.5 Milagros Rey GNF Suggested additional content and checked

0.6 Jordi Ros GNF Suggested additional content and checked

0.7 Xavier Ribas IDIADA Suggested additional content and checked

0.8 Judith Dominguez IDIADA Final check

Statement of originality:

This deliverable contains original unpublished work except where clearly indicated otherwise. Acknowledgement of previously published material and of the work of others has been made through appropriate citation, quotation or both.


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Executive Summary Assignment D3.9 in WP3 comprises the potential of liquefied biomethane, LBM, in Europe and the possibilities of swapping biomethane against LNG in natural gas grids for use in the automotive sector. The primary goal is to investigate the production potential of liquefied biomethane within Europe. The liquefied biomethane potential will be described not only in figures, but also in relation to the fuel demand for vehicles running in Europe today and in the near future.

Biomethane is defined as upgraded biogas or SYNGAS originating from anaerobic digestion, AD, or from biomass gasification.

Only a couple of plants produce liquefied biomethane in Europe today and the ones that exists uses biogas from anaerobic digestion including landfills. Where there are possibilities from a political and infrastructural point of view the issues related to development are mainly connected to plant economy, energy efficiency and maturity of technique rather than the lack of substrate or feedstock.

The future potential of LBM production has been assessed by country based on a number of criteria's; available biomethane potential, policies, availability of LNG/LBM driven vehicles, availability of fuelling stations and technical maturity. An evaluation of the criteria's provides that it can be expected that the production potential for LBM in Europe could reach some 7 TWh by 2020 and 20 TWh by 2030. It can be seen that countries having LBM production today or a comprehensive biomethane production have the largest potential also in the near future, in relation to the biomethane potential.

Biomethane could be injected into the natural gas grids and blended with the natural gas. By injection of biomethane the need for injection of LNG in the net is decreased, hence the LNG could be used as fuel elsewhere. This is the basic idea of swapping biomethane to LNG and vice versa.

Future potential by means of swapping LNG to biomethane in the net are estimated based on the possible maximum demand for LBM within the heavy duty vehicles sector. Of the total biomethane potential of 80 and 190 TWh for year 2020 and 2030 respectively, it is estimated that some 10 % of the potential would be required to meet the LNG/LBM demand in the sector of heavy vehicles in Europe. Related to the figures for imported LNG, about 900 TWh/year, the physical availability of LNG is well enough for swapping to be a realistic scenario.

The expected development of LNG/LBM for long distance transports is 3 % of the total fuel consumption for new trucks, which means up to 300 000 tons of LNG/LBM yearly. 2020 the consumption is estimated to 1.5 million tons LNG/LBM (19 TWh) and for 2030 some 3 million tons (38 TWh). This implies that the production potential of LBM could cover some 40 % of the total vehicle fuel demand for 2020. If the swapping potential is used as well it is reasonable to say that the total demand for LBM in the long distance transport sector could be covered.

The production potential of liquefied biomethane presented in this report is based on the assumption that the mechanisms which promotes the demand for LBM and enables the development of the market are in place. National governments and EU will play an important role when setting the long term targets and incentives needed to enable this development. For the swapping market to develop, it is of outmost importance to develop a well-functioning cross border trade of biomethane.


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Contents Revision History ....................................................................................................................................... 2

Executive Summary ................................................................................................................................. 3

1 Introduction ..................................................................................................................................... 6

1.1 LNG Blue Corridors project ...................................................................................................... 6

1.2 Aim of this deliverable ............................................................................................................. 7

1.3 Project background ................................................................................................................. 7

1.4 Abbreviations .......................................................................................................................... 7

2 Potential of biomethane in Europe ................................................................................................. 8

2.1 General .................................................................................................................................... 8

2.2 Present status .......................................................................................................................... 8

2.2.1 Examples of existing plants ............................................................................................. 9

2.3 Future potential ..................................................................................................................... 10

2.3.1 Potentials of biogas and biomethane ............................................................................ 10

2.3.2 Summary of theoretical and realistic potentials of biogas and biomethane ................ 12

2.3.3 Production of liquefied biomethane ............................................................................. 14

3 Swapping of LNG to biomethane in gas grids ................................................................................ 18

3.1 General .................................................................................................................................. 18

3.1.1 Present status ................................................................................................................ 19

3.2 Future potential ..................................................................................................................... 19

3.3 Biomethane cross border trade – limiting factors and ways forward .................................. 21

4 LBM use for long distance transport ............................................................................................. 22

4.1 Manufacturing requirements ................................................................................................ 22

4.2 Filling stations and use on trucks .......................................................................................... 22

4.3 Potential of replacements ..................................................................................................... 23

5 Key findings of the biomethane potential ..................................................................................... 24

6 Benefits of a renewable share ....................................................................................................... 26

6.1 CO2 savings from using a renewable share ........................................................................... 26

6.2 Financial aspects of a renewable share ................................................................................. 28

6.2.1 Three examples of savings with liquid biogas compared to diesel ............................... 28

6.2.2 Total cost for the truck owner ....................................................................................... 29


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7 Conclusions and Recommendations ............................................................................................. 30

List of Tables ...................................................................................................................................... 31

List of figures ..................................................................................................................................... 31


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1 Introduction 1.1 LNG Blue Corridors project

The LNG Blue Corridors project’s aim is to establish LNG as a real alternative for medium- and long-distance transport—first as a complementary fuel and later as an adequate substitute for diesel. Up to now the common use of gas as fuel has been for heavy vehicles running on natural gas (NG) only for municipal use, such as urban buses and garbage collection trucks. In both types of application, engine performance and autonomy are good with present technologies, as they are well adapted to this alternative cleaner fuel.

However, analyzing the consumption data, the equivalence in autonomy of 1 liter of diesel oil is 5 liters of CNG (Compressed Natural Gas), compressed to 200 bar. Five times more volume of fuel prevents the use of CNG in heavy road transport, because its volume and weight would be too great for a long-distance truck. This opens the way for LNG (Liquefied Natural Gas), which is the way natural gas is transported by ship to any point of the globe. NG liquefies at 162º C below zero, and the cost in energy is only 5% of the original gas. This state of NG gives LNG the advantage of very high energy content. Only 1,8 liters of LNG are needed to meet the equivalent autonomy of using 1 liter of diesel oil. A 40-ton road tractor in Europe needs a tank of 400 to 500 liters for a 1.000 km trip; its equivalent volume with liquid gas would be 700 to 900 liters of LNG, a tank dimension that could easily be fitted to the side of the truck chassis. LNG therefore opens the way to the use of NG for medium- and long-distance road transport.

LNG has huge potential for contributing to achieving Europe’s policy objectives, such as the Commission’s targets for greenhouse gas reduction, air quality targets, while at the same time reducing dependency on crude oil and guaranteeing supply security. Natural gas heavy-duty vehicles already comply with Euro V emission standards and have enormous potential to reach future Euro VI emission standards, some without complex exhaust gas after-treatment technologies, which have increased procurement and maintenance costs.

To meet the objectives, a series of LNG refueling points have been defined along the four corridors covering the Atlantic area (green line), the Mediterranean region (red line) and connecting Europe’s South with the North (blue line) and its West and East (yellow line) accordingly. In order to implement a sustainable transport network for Europe, the project has set the goal to build approximately 14 new LNG stations, both permanent and mobile, on critical locations along the Blue Corridors whilst building up a fleet of approximately 100 Heavy-Duty Vehicles powered by LNG.

This European project is financed by the Seventh Framework Programme (FP7), with the amount of 7.96 M€ (total investments amounting to 14.33 M€), involving 27 partners from 11 countries.

This document corresponds to the 9th deliverable within work package 3. It is a document describing the potentials of biomethane available for the heavy duty transport sector in Europe. This document will be available at the project website: http://www.lngbluecorridors.eu/.

Figure 1-1. Impression of the

LNG Blue Corridors


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1.2 Aim of this deliverable

The aim of this deliverable has been to study the potential of liquefied biomethane available for the heavy duty sector. The goal is to gain knowledge on how much biomethane that is available in 2020 and 2030 for this sector. This can help authorities to put up goals and legislation to support a development towards a share of biogas in this growing sector as well as provide information to customers and gas companies on what could be a realistic goal to achieve.

1.3 Project background

Assignment D3.9 in WP3 comprises the potential of liquefied biomethane, LBM, in Europe and the possibilities of swapping biomethane against LNG in natural gas grids for use in the automotive sector. The primary goal is to investigate the production potential of liquefied biomethane within Europe. As the LBM potential is dependent on the production of (gaseous) biomethane this potential will serve as input to this assignment. Biomethane is defined as upgraded biogas or SYNGAS originating from anaerobic digestion, AD, or from biomass gasification.

Further on, the potential of injection of biomethane into a natural gas grid with respect to swapping possibilities, technical aspects, market conditions etc. should be examined.

The liquefied biomethane potential will be described not only in figures, but in relation to possible level of mixing into gas and LNG fuel vehicles running in Europe today and in the near future. The impact on the heavy vehicles running on LBM will be discussed with respect to manufacturing requirements and examples from filling stations.

Data collection for this report has been performed through published material, presentations, websites, interviews and input from the members of the LNG-Blue Corridors network.

1.4 Abbreviations

BC Blue corridors

CNG, CBG Compressed natural gas, compressed biomethane

GGG Green gas grids

LBM Liquefied biomethane

L-CNG station Liquefied to compressed natural gas, a filling station supported with LNG that warms the LNG and delivers the fuel as CNG. This abbreviation is also sometimes used for filling stations delivering both LNG and CNG

LNG Liquefied natural gas

NG Natural gas

NREAP National Renewable Energy Action Plans

SYNGAS Synthetic natural gas


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2 Potential of biomethane in Europe 2.1 General

This section comprises the present and future potential of biomethane in Europe. Biomethane includes the upgraded biogas originating from anaerobic digestion and SYNGAS originating from biomass gasification plants. The upgraded biogas must fulfil the existing standards for natural gas, NG, vehicles standard in order to meet the criteria for injection into natural gas grids or to be used as a transport fuel. For biomass gasification this implies that a gasification technology that enables upgrading to SYNGAS quality should be applied in order to be able to meet the NG specification.

Liquefied as well as gaseous biomethane is important for this study as it can be used in the same applications. It is assumed that liquefied biomethane, LBM, could be used directly as fuel or transported to a fuelling station where it is used as CBG or LBM. On the other hand it is assumed that gaseous biomethane could be directly injected into a gas grid or liquefied and transported if needed. Biomethane could be blended with its fossil equivalent since the fuel is the same even though the source is different.

The current EU energy policy framework for climate and energy policies encompasses the targets for 2020 and 2030; hence those years are also reflected in this report. The main targets important for the development of biomethane are;

• Renewable energy directive (RED)/2009/28/EC targets: 20 % renewable energy and 10 % renewable energy in transport by 2020

• Targets stipulated within the National Renewable Energy Action Plans, NREAPs

The NREAPs covers the targets for 2020 but not for 2030. Due to this, and the fact that it is difficult to make long term predictions, the estimates presented in this study for 2030 should be seen as indicative only.

2.2 Present status

In Europe biomethane is produced in 15 countries in over 230 upgrading plants with a total capacity of 0.8 billion Nm³/year. The produced biomethane is used in the following applications; as vehicle fuel (in 12 countries), fed into gas grids (in 11 countries) or for heating purposes. (GGG – Proposal for a

European Biomethane Roadmap, 2013)

Only a very few number of plants, in Sweden, Norway, UK and a smaller plant in the Netherlands, produce liquefied biomethane in Europe today to be used as vehicle fuel. The liquefaction plants that exists uses biogas from anaerobic digestion, in UK from landfills and the others from biogas plants. Where there are possibilities from a political and infrastructural point of view the issues are mainly connected to plant economy, energy efficiency and maturity of technique rather than the lack of substrate or feedstock. A certain production capacity is needed in order to get an economically viable plant. In close relation to this is the operational costs where the cost for power is the largest expenditure hence, an energy optimized plant is of outmost importance. A few liquefaction technologies are available in the market but only a few of them are proven in commercial scale applications.


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The development of the biomass gasification market in Europe is in its early days. Important factors related to the expansion are economy and return of investment, logistics related to the supply of feedstock and the gasification as well as upgrading technology. The capital investment cost of a biomass gasification plant is in the size of hundreds of million EUR and the realization of a plant is in most cases dependent of financial support. Gasification projects are mainly focused on the utilization of forest residues or other woody biomass that cannot easily be used in other applications. Even though the raw material is available the sourcing and handling techniques of the same needs to be further developed in order to increase the efficiency in the logistic chain. The gasification technology is not new, however biomass gasification and upgrading to SYNGAS is rare in full scale production plants. Even though the issues described could be acceptable one by one, for investors the total uncertainty may imply that the aggregated risk is too high for an investment decision.

Figure 2-1 Production sources of renewable methane and possible utilization areas.

2.2.1 Examples of existing plants

2.2.1.1 Liquefied biomethane

Lidköping, Sweden The plant in Lidköping is the first LBM production plant in Sweden. It uses industrial waste and agricultural waste for biogas production through digestion. The biogas is then upgraded and liquefied. The capacity of the plant is 1.2 m³ LBM/h corresponding to a production capacity of 60 GWh LBM per year. (www.lidkopingbiogas.se, 2014)

Albury, UK At Albury landfill site in Surrey the UK's first plant for liquefied biomethane opened in 2008. From the


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collected landfill gas contaminants are removed and the gas is further upgraded and liquefied. The production capacity is 4 300 tons of LBM per year, corresponding to some 60 GWh. (gasrec.co.uk/, 2014)

Oslo, Norway A plant to produced biomethane was built and inaugurated February 2014 in Nes close to Oslo, Norway. The plant, operated by Cambi AS on behalf of EGE and the City of Oslo produces biomethane from household waste, 4000 tons of LBM per year. Once the liquefaction unit is in use, the liquefied biomethane will be transported into the city of Oslo where it will be used in the city buses (as compressed biogas). (www.wartsila.com/en/press-releases, 2015)

2.2.1.2 SYNGAS from biomass gasification

GoBiGas, Sweden In Gothenburg, Sweden, the first phase of GoBiGas was inaugurated in March 2014. This is a demonstration plant aiming at gasification of biomass and forest residues at a capacity of 20 MW. The produced gas is cleaned and upgraded to SYNGAS of natural gas quality before the existing transmission gas grid is used for distribution of the gas.

The second phase of the project, if realized, will be of commercial scale with a production capacity of 80-100 MW.

The reference plant for GoBiGas is the gasification plant in Güssing, Austria, where the same gasification technology is used. Here the product gas is not upgraded but used for production of heat and electricity. (gobigas.goteborgenergi.se/Sv/Anlaggningen, 2014)

2.2.1.3 Biogas from anaerobic digestion

The production of biomethane varies a lot across the European countries. Germany, Austria and Sweden for example have well developed markets with a number of biogas plants upgrading to biomethane. A large share of those biomethane plants also practices grid injection. In Germany, which has the highest number of both biogas and biomethane production plants, the main substrate is of agricultural origin followed by sewage. Other countries, like Italy, have a large number of biogas plants but are in its early days when it comes to upgrading. (european-biogas.eu/biogas, 2015)

2.3 Future potential

2.3.1 Potentials of biogas and biomethane

Several studies have been made to find the potentials of biogas and biomethane. The studies focus on either all available sources of substrates or a specific substrate or group of substrates. The results are presented in different units, for example toe, Nm³ or PJ, which makes it difficult to compare. For comparison, we have therefore calculated all potentials in TWh. The potentials for biogas and biomethane production is in some studies calculated as a theoretical potential and sometimes as the realistic potential at a specific year taking into account economical, technical as well as political factors.

According to DBFZ, Deutsches Biomasseforschungszentrum, (Daniela Thrän, European biomethane

potentials, 2012) the total maximal technical potential in the EU 27 is between 151 – 246 billion Nm³ of biomethane (in form of raw and upgraded biogas) on a yearly basis by 2030 (equivalent to 1495-2435


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TWh). Out of this about 48-50 billion Nm³/year (475-495 TWh) is predicted to be a realistic potential, produced to be used in the application of grid injection, biofuel, electricity generation, heating and cooling. The feedstocks foreseen are woody biomass, herbaceous biomass, wet biomass residues and energy crops.

A study performed 2007 in Leipzig (Institute for Energy and Environment, ‘Possibilities of an European

Biogas strategy, January 2007) calculates the theoretical potential of biogas/biomethane production to 166 Mtoe (1930 TWh) in 2020. For the theoretical potential the year is of less importance, so this potential could be compared with the calculated potential above. A long term forecast of theoretical potential of biogas/biomethane from the agricultural sector only is done by the University of Aalborg, Denmark

(Jens Nielsen, The Future of Biogas in Europe: Visions and

Targets until 2020, 2008) showing a potential of 60 Mtoe (700 TWh) for Europe, using manure and crops from 5 % of arable land. The National Renewable Energy Action Plans (NREPAs) from the EU member states contains ambitions for the different energy sources to meet the target of 20 % renewable by 2020. Biogas production is not reported separately but could be estimated in relation to end use. From this end use of biogas, as electricity, heat and as a transport fuel, the realistic potential of primary biogas could be calculated to 28 Mtoe (326 TWh) biogas production in 2020. (Perspective for Biogas in Europe, The Oxford institute

for Energy Studies, 2012) The development for the following ten years, 2020 to 2030, is very much dependent on the EU targets for renewable energy and the actions taken of each member state government. But if the same pace of development is assumed, by 2030 a realistic biogas production is estimated to be approximately 500 TWh. (GGG – Proposal for a European Biomethane Roadmap, 2013)

A realistic potential of how much of the biogas that will be upgraded to biomethane is calculated by the Green Gas Grid project, an Intelligent Energy for Europe, IEE, project. If necessary actions are taken to promote the production of biomethane the IEE GGG roadmap indicates that the level of biomethane (upgraded biogas) could reach some 8 billion Nm³ (80 TWh) by 2020 and 18-20 billion Nm³ (178-198 TWh) by 2030. For 2030 this corresponds to about 3 % of the European natural gas consumption. (GGG – Proposal for a European Biomethane Roadmap, 2013)

Table 2-1 shows the forecasted biomethane supply for Europe for year 2020 and 2030. The potential includes upgraded biogas only and not SYNGAS. Germany together with France, UK and Italy have the highest projected biomethane supply forecast along with the combined potential of the rest of Europe.

Table 2-1 Biomethane supply forecast for Europe. The potential includes upgraded biogas only and not SYNGAS. (Modified after

Table 2, GGG, Proposal for a European Biomethane Roadmap, 2013).

Biomethane supply forecast

2012 2020 2030

Country billion Nm³ CH4

TWh/year billion Nm³ CH4

TWh/year billion Nm³ CH4

TWh/year


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Austria 0,008 0,08 0,089 0,89 0,214 2,14

Croatia - - 0,067 0,67 0,162 1,62

Germany 0,600 6,00 2,000 20 3,000 30,00

Italy - - 0,942 9,42 2,269 22,69

Hungary - - 0,103 1,03 0,718 7,18

Sweden 0,078 0,78 0,101 1,01 0,243 2,43

Netherlands 0,039 0,39 0,670 6,70 0,850 8,50

Slovakia - - 0,085 0,85 0,205 2,05

Spain - - 0,256 2,56 0,768 7,68

Poland - - 0,608 6,08 1,463 14,63

UK - - 1,350 13,50 3,250 32,50

France - - 1,000 10,00 3,000 30,00

Subtotal 0,725 7,25 7,271 72,71 16,142 161,42

Rest of Europe

- - 1,600 16,00 3,551 35,51

Totals 0,73 7,25 8,87 88,71 19,70 196,93

2.3.2 Summary of theoretical and realistic potentials of biogas and biomethane

A summary of the mentioned studies of theoretical and realistic potential of biogas and biomethane from the previous chapter is presented in the diagrams below.


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Figure 2-2 Potentials for biogas production in Europe. Realistic potentials for 2020 and 2030 and theoretical potentials from

different studies. For more explanation on the references of the studies and criterias used please see section 2.3.1.

In the diagram below the realistic potentials for 2020 and 2030 is presented together with the estimated production of biomethane as a share of the total production.

TWh

Figure 2-3 Estimated production of biogas and biomethane in Europe for 2020 and 2030. For more explanation on the references of

the studies and criterias used please see section 2.3.1

0

500

1000

1500

2000

2500

Production

2012

Realistic

potential

2020

Realistic

potential

2030

1) 2) 3)

0

100

200

300

400

500

600

Production 2013 Realistic potential

2020

Realistic potential

2030

Total Biogas production

Biomethane share of total

production

TWh

Theoretic potentials 1) Institute for Energy and Environment, ‘Possibilities of an

European Biogas strategy, January 2007

2) Daniela Thrän, European biomethane potentials, 2012

3) Jens Nielsen, The Future of Biogas in Europe: Visions and

Targets until 2020, 2008 (only from the agriculture sector)

1. 2.

3.

Production

2013


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2.3.3 Production of liquefied biomethane

Production plants for liquefied biomethane are limited within Europe, and only a few projects are under development, for example in the southeast of Sweden, where organic waste will be turned into LBM, approximately 100 GWh annual production with a planned production start in 2017.

The major issues regarding the development of the LBM market seems to be related to political incentives, technology and economy rather than to supply of substrate / feedstock. The development of the market for liquefied biomethane is dependent on several factors; among others:

• A sufficient biomethane potential for a region or a country • EU and national targets aiming at increasing the market share of LBM including long term

incentives • Availability of LNG and NG driven vehicles • Development of distribution networks such as fuelling stations • Maturity and cost competiveness of the upgrading / liquefaction techniques • Market mechanisms - demand for LBM as vehicle fuel

Based on the criteria's stipulated above the matrix below in Table 2 - 2 has been developed. A limitation on biomethane potential has been set to a minimum of 1 000 GWh for year 2020. For those countries meeting this level, 10 countries and the combined potential of the rest of Europe, the other factors have been evaluated for year 2020 and year 2030. Based on how many of the criteria that are assumed to be met for the respective years the potential of LBM production has been estimated. It is assumed that biomethane produced through the gasification of biomass will not be liquefied into LBM but used for injection into natural gas grids, or in other applications, hence that potential is described in section 4-Swapping of LNG to biomethane in gas grids. In the future, when the technologies are more mature, it might be a realistic scenario to produce LBM at biomass gasification plants.

Without a demand for LBM as a vehicle fuel there will not be a market even if the other aspects are fulfilled; hence the mechanisms driving this development must be in place. A major factor is that the LNG/LBM must be cost competitive compared with diesel. Even though gas and LNG vehicles will be more expensive than diesel trucks several transport companies have set their own environmental targets and a way of achieving these goals are by changing into gas and LNG driven vehicles. If the production of liquefied biomethane increases the incentives for the fleet owner will increase further as the mixing of biomethane into natural gas is possible at any proportion hence, the environmental goals could be reached even faster. Further on it is important that the EU legislation and regulations regarding the LNG supply chain; filling stations, trucks etc., is harmonized in the near future. (Lennart

Pilskog, NGVA Europe, 2014)

In Germany the development of gas driven or dual fuel vehicles is promoted in the German National Mobility and Fuel Strategy. The driving forces for this market are mainly the diversification of energy supply and the environmental benefits. However, the lack of LNG trucks and infrastructure network in terms of fuelling stations together with the lack of direct market incentives are hurdles to this development. Also, the strategy aims more at the production of biomethane in general and not specific LBM; "All in all, though, there hasn't been a large discussion about liquefying biomethane here in Germany". (Curt Ganeles, Erdgas-mobil, 2014)

In Spain, at present, the political support for this market development is not in place. (Carlos Duran,

Ham, 2014) However, the Spanish parliament voted positively to undertake a study with the aim of evaluating the possibilities of using natural gas as vehicle fuel. Further on, there are no requirements


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on CO₂ emissions in Spain why, in the short term, there will not be the same interest for LBM is in countries with a more stringent regulation. (Manuel Monfort Colom, T Monfort, 2014) More LNG trucks manufacturers and a development of the engines in the heavy duty range is also required. (Carlos

Duran, Ham, 2014) At present the horsepower of both IVECO and Scania are low compared to what the market needs for international routes. However, the Euro VI models will most likely solve that issue. (Manuel Monfort Colom, T Monfort, 2014) One foreseen driving force is the potential savings on fuel cost for the fleet operators; however the cost for upgrading and liquefaction into LBM is today seen as high. (Carlos Duran, Ham, 2014) Another factor is that the LNG refueling stations in Spain are increasing in numbers which can allow for more LNG/LBM fuelled vehicles in the road. (Manuel Monfort

Colom, T Montfort, 2014).

When evaluating the matrix in Table 2-2, it is taken as a prerequisite that those driving mechanisms are in place.

Table 2-2 Evaluation matrix for LBM production potential in Europe, by country.

Potential >1000 GWh / year

Favorable policies Availability of LNG/LBM driven vehicles

Availability of fuelling stations

Technical maturity

Result

Country 2020/2030 2020 2030 2020 2030 2020 2030 2020 2030 2020 2030

Germany Y Y 1) Y - Y 4) Y Y - Y 3 5

Italy Y Y 1) Y - Y 4) Y Y - Y 3 5

Hungary Y Y 1) Y - - - - - Y 2 3

Sweden Y Y 1)2) Y Y Y 4) Y Y Y Y 5 5

Netherlands Y Y 2) Y Y Y 4) Y Y - Y 4 5

Spain Y - Y Y Y 4) Y Y - Y 3 5

Poland Y - - - Y 4) Y Y - Y 2 4

UK Y Y 3) Y Y Y 4) Y Y Y Y 5 5

France Y Y 3) Y - Y 4) Y Y - Y 3 5

Rest of Europe

Y - - - - - - - Y 1 2

1) Countries with specific support for the use of biomethane as transport fuel (GGG – Proposal for a European Biomethane

Roadmap, 2013)

2) Target for biomethane consumption and replacement

3) Feed-in tariffs for biomethane injection

4) According to the geographical spread of the blue corridors


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Four countries have specific support for biomethane as transport fuel for 2020 and another three has incentives or targets for biomethane. It is assumed that those support/incentives/targets will be actual also for 2030, in the same or updated form.

For those countries with LNG vehicles today it is assumed that they are available for 2030 also. For the countries involved in the blue corridors it is assumed that LNG vehicles are available for 2030.

Statistics from NGVA (www.ngvaeurope.eu/) for 2013 and info about BC network fuelling station has been used for assessment of the existence of LNG or L-CNG fuelling stations. The presence of a fuelling station for LNG vehicles (2013) has resulted in a Y in the table. Poland for example only had two stations by 2013 but as they have taken the first step it is likely that the number will grow up to 2020.

Regarding the maturity of techniques mainly connected to upgrading and liquefaction, it is assumed that development and acceptance of the 'new' technologies will start in the countries which today are home to a LBM plant(s).

Sweden has been used as a reference country. The maximum possible production potential for 2020, based on planned projects, which could be realized if the conditions turn a little more favorable, is used. Sweden already has one plant on the ground and fulfills many of the other criteria's as well.

The estimated maximum LBM potential for Sweden is estimated to 260 GWh by 2020 and 420 GWh by 2030 corresponding to some 26 % and 17 % of the total biomethane potential. For comparison with other countries four levels have been used; 80, 60, 25, 0 % of maximum potential for Sweden. How the fulfillments of the criteria in Table 2-2 have been used in the estimations is presented in Table 2 – 3.

Table 2-3 Basis for estimation of LBM production potential.

Criteria's fulfilled, number of Y

LBM potential, % of maximum

5 80

4 60

3 25

0-2 0


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Table 2-4 LBM production potentials by country.

LBM production potential GWh

Country 2020 2030

Germany 1299 4148

Italy 612 3137

Hungary 0 310

Sweden 260 420

Netherlands 1044 1175

Spain 166 1062

Poland 0 1264

UK 2805 4494

France 649 4148

Rest of Europe 0 0

Total 6 835 20 159

Based on the evaluation method described above it can be expected that the production potential for LBM in Europe could reach some 7 TWh by 2020 and 20 TWh by 2030. It can be seen that countries having LBM production today or a comprehensive biomethane production have the largest potential also in the near future, in relation to the biomethane potential. It might not be true that the potential for the rest of Europe is zero as the biomethane potential is rather large. However, the prerequisites for these countries differs a lot, which is also reflected in the evaluation matrix, which makes it too uncertain to make any more optimistic judgments at present.


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3 Swapping of LNG to biomethane in gas grids 3.1 General

Biomethane could be injected into transmission gas grids and blended with the natural gas. By injection of biomethane the need for injection of LNG in the net is decreased, hence the LNG could be used as fuel elsewhere. This is the basic idea of swapping LNG to biomethane. This could be controlled with for example a biogas certificate system or any other kind of certificate of origin.

Injection of biomethane could be carried out either if a biogas/SYNGAS upgrading plant is situated close to or at a reasonable distance from a gas grid. Before injection the quality of the gas should be assured and the pressure of the gas needs to be increased in order to meet the standard in the net. Another important aspect is that it must be available capacity in the net.

The realization of the swapping potential presupposes that necessary infrastructure as well as terminals for LNG is available. The possible distance to transport LNG from a terminal by trailer or train will set the geographical-distance limit.

Political aspects as well as regulations and incentives will play an important role in the development of biomethane injection, cross border trade and possibilities of swapping

Figure 3-1 Production sources of renewable methane and possible utilization areas


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3.1.1 Present status

Eleven countries in Europe injects biomethane into the grid; Austria, Switzerland, Denmark, Germany, Finland, France, Luxembourg, the Netherlands, Norway, Sweden and the UK. (GGG - Proposal for a

European Biomethane Roadmap, 2013) A major part of the biomethane plants, some 80 %, inject the upgraded biogas into natural gas grids. (GGG - Biomethane guide for decision makers, 2013)

Several countries in Europe have a good coverage of gas grids whereas the UK and the Netherlands are among the best. (GGG - Biomethane Market Matrix, 2013) However, for countries where the transmission gas grid has a limited geographic spread, like in Sweden, the production of LBM would imply a possible increase in the biomethane market share.

In Europe the natural gas is used mainly in residential and commercial sector, industry or at power plants. The net import of LNG by 2011 was some 900 TWh. (Eurogas, Statistical report, 2012). About 50 % of the natural gas trade in Europe is performed at a Hub, where a hub is a market place which can be both physical and virtual. The largest hubs are the Dutch TTF and the British NBP. (Elin Akinci - Full

gas i industrin, 2013) Of the natural gas within the gas grid about 25 % originates from LNG. (Eurogas -

Statistical report, 2012)

3.2 Future potential

According to the members of the Green gas grids there seems to be available capacity in the gas grids in Europe. Either, the present capacity is enough or capacity could be created by using 'within grid' compression. Several countries, for example Germany and the UK, are investigating how the gas grid capacity could be increased in order to enable the injection of more biomethane. (GGG - Biomethane

Market Matrix, 2013)

An issue that needs to be resolved pertains to the specification of the gas. Different demands on for example calorific value and oxygen could vary from a local gas grid, to a national transmission grid and between countries. Partners of the GGG also indicate that there are quality issues still to be handled.

In order to increase the share of LBM as vehicle fuel for heavy duty trucks one way is by swapping LNG to biomethane in the gas grids. Several factors affect the development of the swapping possibilities of LNG to biomethane:

• Demand for LBM as vehicle fuel • Technical and political possibilities of injection of biomethane in the transmission gas grids • Development and facilitation of biomethane cross border trade • Political instruments and willingness

Future potential by means of swapping LNG to biomethane in the net are estimated based on the possible maximum demand for LBM within the heavy duty vehicles sector. The result is presented below in Table 3 – 1. There are several different usages of methane gas, as mentioned previously, such as use in industrial sectors, residential and commercial sector, as a vehicle fuel in compressed form and in power plants. The share of usage in different sectors depends on the situation in every country especially regarding subsidies or other political support. In this report the available share for use of biomethane (in compressed form) for the heavy duty vehicles has been estimated to be maximum 10 % of the potential. The usage today is less than 1 %, but since meeting the goal of 10 % renewable fuels in the transport sector in general and for heavy duty vehicles in particular is one of the most difficult


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challenges in the EU renewable goals for 2020, we think that regulations and subsidies will increase this share and therefore estimates the possible share to 10 %. This would mean that out of the biomethane potential of 80 and 180 TWh for year 2020 and 2030 respectively it is estimated that 8 and 18 TWh are available. This could be related to the figure for imported LNG, about 900 TWh/year.

Table 3-1 Swapping potential of LNG to biomethane in the gas grids

Estimated swapping potential % of biomethane potential

Available volumes for heavy duty vehicles TWh/year

2020 10 8

2030 10 18

For countries which practices grid injection today and also have an LNG terminal and a developed infrastructure for LNG, for example UK and the Netherlands, the swapping potential are highest and it is assumed that these countries will be the forerunners. Other countries which have either a large capacity of grid injection but lack a terminal (such as Germany) or have small scale terminals and grid injection but a grid with small geographic spread (such as Sweden) could be next in term when it comes to swapping.

As the biomethane trade cross borders are in its early days a swapping from LNG to biomethane in a gas grid will start on a national arena. The swapping potential could be most efficiently utilized if the cross border trade is fully developed and national as well as EU targets and incentives are harmonized.

The swapping potential from the production of SYNGAS produced through biomass gasification is difficult to estimate as the technology is in its early days. Several projects/plants are in the planning stage and have also applied for money within the EU program NER300 which gives support to commercial scale projects within renewable energy. The raw material in form of woody biomass seems to be in abundance, however as other sectors, such as the petrochemical industry, are converting into green production a situation of competition could occur.

It is assumed that a large proportion of the produced biomethane will be injected into the grids in the future as well as the Renewable Energy Directive together with national targets calls for an increased share of renewables in the energy system. How much of this potential that will be used for swapping will be determined by the factors discussed above. Another aspect is that a plant located at a natural gas grid can secure long term off-take agreements of the product which is desirable from a plant owner point of view. Not only political incentives but also political instability regarding the supply of natural gas will promote an increase in energy self-sufficiency. On the other hand, if a large market for natural gas vehicles exists the demand for biomethane as vehicle fuel, used locally, might increase as well which will decrease the potential for grid injection.


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3.3 Biomethane cross border trade – limiting factors and ways

forward

At present the trade of biomethane cross borders is limited and when it occurs it is more often through physical road transport rather than using the natural gas pipeline network. Several factors are limiting the cross-border biomethane trade, for example:

• The lack of an international registration system which meet the mass-balance requirements • Financial and other support are restricted to the domestic production and excludes imported

biomethane in most of the European countries • Incentive schemes are giving preference to green electricity production and use as opposed to

green gas production • Different taxes and other fees limits the possibility of trading biomethane between European

countries

Increase of the cross-border trade will occur if imported biomethane will be treated as equal to biomethane produced domestically. Support systems should be equal for domestically and imported biomethane given that imported product fulfils the general specification. On the other hand it is important that double support and double counting is excluded. (GGG – Proposal for a European

Biomethane Roadmap, 2013)

Further on, a biomethane market that is disconnected from the physical product, similar to the market for electricity, might be a way of developing and streamline the trade.

The Renewable Energy Directive 2009/28/EC comprises the concept of cross-border cooperation mechanisms which enables renewable energy produced in one Member state to count towards the target of another; “This Directive aims at facilitating cross-border support of energy from renewable

sources without affecting national support schemes. It introduces optional cooperation mechanisms

between Member states which allow them to agree on the extent to which one Member State supports

the energy production in another and on the extent to which the energy production from renewable

sources should count towards the national overall target of one or the other.”


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4 LBM use for long distance transport

4.1 Manufacturing requirements There are two different technologies for LNG/LBM vehicles that are commercial available and applicable for the Euro VI regulations. One is a dual-fuel technology using a diesel engine. This technology also uses a small amount of diesel for ignition during combustion and uses both diesel and LNG/LBM during operation. The second one uses the spark ignited engine technology and can therefore use only LNG/LBM during operation.

Due to the similar properties of LNG and LBM, the use of LBM as a main or complementary fuel to LNG does not affect the manufacturing requirements of LNG-trucks or LNG-filling stations significantly (Johan Stålarm, Volvo Trucks, 2014). However, the small differences in the fuel quality might require some adjustments, especially in the case of dual fuel engines.

Due to safety requirements, LNG and LBM have very similar behavior when released accidentally. The safety requirement on filling stations, trucks and other equipment that is needed does not differ if LBM is used as a vehicle fuel instead of LNG.

4.2 Filling stations and use on trucks The composition of LNG differs to some extent depending on the source of LNG. Variations in composition of LNG from different production sites are presented in Table 4 -1. (Staffan Johannesson,

Gas quality, 2014) LBM is always upgraded biogas and consists of almost 100 % methane, which differs slightly from the quality of available LNG.

Table 4-1 Variations in LNG quality (Staffan Johannesson, Gas quality, 2014).

The differences in composition give variations in heating value and methane number, which mainly affects the use on trucks. Due to the lower heating value of LBM, the driving range on the trucks will be shorter than if LNG is used. The variations are around 5 % (Johan Stålarm, Volvo Trucks, 2014).

For early versions of LNG-trucks, the variations in methane number between LNG and LBM can affect the combustion conditions. The variations can in some cases raise the fuel consumption and also increase the diesel consumption on the truck. These consequences will not be a problem in a longer term, mainly due to technology development of the trucks (BiMeTrucks – Slutrapport, 2013). The fact that vehicle manufacturers like Volvo and IVECO are part of the LNG BC network will promote this development.

Gas component LBM UK LNG Norway

Risavika

Finland

Porvoo

LNG (Algeria) LNG (Qatar) LNG (Oman) LNG (Nigeria)

Metane CH4 98% 97,55% 90,07% 98,14% 87,60% 89,30% 86,70% 90,50%

Ethane C2H6 2,21% 8,97% 0,71% 9,40% 7,10% 8,40% 5,10%

Propane C3H8 0,11% 0,58% 0,23% 2,00% 2,50% 3,30% 3,00%

Butane C4H10 0,04% 0,05% 0,08% 0,20% 1,16% 1,80% 1,50%

Pentane C5H12 0,01% 0,02% 0,10% 0,10% 0,10% 0,00%

Nitrogen N2 1,99% 0,03% 0,31% 0,76% 0,60% 0,00% 0,00% 0,00%

Carbon dioxide CO2 0,01% 0,01% 0,04% 0,00% 0,00% 0,00% 0,00%

SUMMA 100% 100% 100% 100%


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4.3 Potential of replacements At present, the market share of natural gas driven heavy duty and medium duty trucks is only 0.04 % of the total European market. (www.ngvaeurope.eu/) Very few of those are operating on LNG/LBM. The market share for new LNG-trucks has the potential to be around 3 % of the total amount of sold heavy duty trucks within the next 5-10 years in Europe. The development after that is hard to predict, it depends on factors such as infrastructure development and other conditions. (Lennart Pilskog, NGVA

Europe, 2014)

The expected development of LNG/LBM for long distance transports is 3 % of the total fuel consumption for new trucks, which means up to 300 000 tons LNG/LBM yearly. 2020 the consumption is estimated to 1.5 million tons LNG/LBM and for 2030 some 3 million tons LNG/LBM, which is equivalent to 19 TWh and 38 TWh. (figures from Lennart Pilskog, NGVA Europe, 2014)

This implies that the production potential of LBM could cover some 40 % of the total vehicle fuel demand for 2020 as presented in Table 4 – 2. If the swapping potential is used as well it is reasonable to say that the total demand for LBM in the long distance transport sector could be more or less covered. The amount that actually will be used depends on different factors, one important issue is the incentives that can cover the difference in the price of LNG and LBM.

In the EU references scenario 2013 (EU Energy, Transport and GHG Emissions. Trends to 2050. Reference

scenario 2013) the total energy need for the freight transport on road is predicted. The estimated growth of freight transport on road is high, but there is an expectation that the development towards more energy efficient engines decreases the energy need to some extent. According to the scenario, the estimated energy usage in freight transport on road is 120 Mtoe 2020 and 126 Mtoe 2030, which corresponds to 1400 TWh and 1470 TWh.

This means that the expected share of LNG/LBG is increasing, but still stands for a moderate share of almost 3 % of the total energy usage in fright transport on road in 2030. This volume of liquefied gas could be covered by LBM or swapped biomethane.

Table 4-2 LBM production potential in comparison with heavy vehicle fuel demand

Vehicle fuel demand Million tons LNG/LBM/year

LBM production potential. % vehicle demand

2020 1,5 40

2030 3,0 55


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5 Key findings of the biomethane potential The predicted biogas production estimated from all countries in their National Renewable Energy Action Plans (NREPAs) is around 326 TWh for 2020. If the development is continuing in the same pace, the production of biogas in EU is estimated to be 500 TWh in 2030. These volumes can be compared with the theoretical volumes estimated to around 2000 TWh by different sources.

The share of biogas to be upgraded to biomethane is estimated by the Green Gas Grid project. It is estimated to be 25 % of the biogas production in 2020 and 38 % in 2030, corresponding to 80 TWh in 2020 and approximately 190 TWh in 2030. The major part of the biomethane is assumed to be injected to the natural gas grid and several countries now have incentives in place to drive this development, for example Italy and Denmark.

To liquefy the biomethane is to take one step further. The production potential of liquefied biomethane presented in this report is based on the fact that the mechanisms which promotes the demand for LBM and enables the development of the market are in place. National governments and EU will play an important role when setting the long term targets and incentives needed to enable this development. The production potential is estimated based on several different factors to 7 TWh in 2020 and 20 TWh in 2030. Some countries, most likely the ones where the LBM production has already started, will be the forerunners showing the strongest growth in the near future. When the technology is proven in several commercial scale plants and the infrastructure related to the distribution is in place more countries will follow.

One other possibility to introduce biomethane to the heavy duty sector is to virtually swap the biomethane injected to the natural gas grid with LNG. The swapping potential is expected to be large, as the import of LNG in the European gas grids stands for one fourth of the total volume and the fact that about 80 % of the biomethane plants today injects into the gas grids, a share that is predicted to stay high. Further on, the future production of biomethane from gasification plants could contribute to a significant part of the capacity.

It is of outmost importance for the swapping market to develop a well-functioning cross border trade of biomethane. If the production and physical product is disconnected from the actual trade the use of biomethane and LNG could be more efficient and logistically optimized. The market for electricity is built up like this and could be used for inspiration. The possibility of swapping injected biomethane and LNG could mean an additional source of biomethane to the heavy duty sector.

The other areas of use for the natural gas and LNG such as use in the energy, industry and passenger cars sector should be taken into account. It is not realistic to plan for a high share of gas to the sector of heavy duty vehicles in the close future, so a moderate 10 % of the available biomethane has been estimated in this report as a possible share available for swapping. This is equivalent to 8 TWh 2020 and 19 TWh 2030.

The market share of gas and LNG driven medium and heavy duty trucks is assumed by NGVA Europe, Natural Gas Vehicle Association Europe, to increase to about 3 % in the coming 5-10 years. The demand beyond the coming 5-10 years is rather uncertain and depending on a lot of factors pertaining to the development of the market. With an assumption of a growth where 3 % of new sold trucks are LNG giving a full 3 % of the whole market in 2030, the potentials for LBM production and


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biomethane swapped with LNG shows that the share of renewable gas in the form of LBM or swapped biomethane could stand for a very large share of the demand, see Figure 5-1.

Figure 5-1 Demand Liquefied gas versus estimated available LBM 2020-2030

An introduction of LNG into the fuel system will lead the way for LBM. From a technical point of view both gaseous and liquid biomethane can use the existing infrastructures for its fossil equivalent. A great advantage with biomethane in gaseous or liquid phase is that it can be blended, in any proportion, with its fossil equivalent, compressed natural gas or LNG. If we would take 5 % of the estimated biogas production 2030 (see Figure 2-3), liquefy the biomethane and mix it with LNG, we could have a share of 13 % renewable gas to the heavy duty sector by 2030. This could be a way forward for the transport sector to continue to lower the impact on the climate.

0

5

10

15

20

25

30

35

40

Demand of liquefied

gas

Estimated available

LBM

TWh

2020

0

5

10

15

20

25

30

35

40

Demand of liquefied

gas

Estimated available

LBM

Biomethane

from

swapping

LBM

production

TWh

2030

Demand of

liquefied

gas


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6 Benefits of a renewable share Moving from diesel to the fossil LNG has a lot of benefits. The emissions of air pollutants are for example less with natural gas as fuel. The decreased emissions of air pollutants is not depending on if it is LNG or LBM, since they are both methane gas but with different origins, one fossil and one from renewable origins. However, some benefits increases, or decreases, with moving to a renewable share, which is the focus of this report. Two of the specific benefits of having a share of renewable LBM or biomethane are described below, CO2 savings which increases with a renewable share, and the financial savings which is the same or decreases compared to pure LNG.

6.1 CO2 savings from using a renewable share As seen in Chapter 4, there are two main types of heavy duty vehicles that run on gas – dual fuel conversions/methane diesel engines and OEM dedicated gas trucks.

The dual fuel conversions have been a vital transition technology in countries like the UK and The Netherlands to allow refuelling infrastructure to develop to serve this market. However, as a transitional technology, dual fuel conversions are not ideal as they generally suffer with methane slip. Methane slip is when unburnt gas goes through the engine and is emitted to atmosphere rather than being fully combusted. Methane is 28 times more potent as a greenhouse gas than carbon dioxide, so any methane slip erodes the clean burning characteristics of gas, whether that’s LBM or LNG. This has showed to be the case also with the Volvo EURO V methane diesel truck, when using LNG. (GreCOR

WP7 — Pilot projects - Evaluation of the environmental impact from using liquefied natural gas or

biogas to fuel trucks for heavy duty transport).

The new Volvo EURO VI truck will have to live up to the emission demands of EURO VI, and will not have a methane slip. Newer OEM vehicles that use spark ignited 100% gas engines do not suffer from methane slip either. However, currently they are around 5% less efficient than diesel engines (Scania figures), although this gap would be expected to close as the gas engine technology matures.

In 2012 Coca-Cola Enterprises Ltd. ran a trial in the UK comparing a 26 tonne Iveco Stralis gas vehicle operating on biomethane only and an identical Stralis vehicle running on diesel only. The findings of the trial were published in a report by Cenex, a centre of excellence for low carbon and fuel cell technologies. (The Coca-Cola Enterprises Biomethane Trial Report – Cenex, March 2012)

In amongst the criteria for the report were comparing emissions of CO2, NOx and particulates. The report also compared fuel efficiency. The biomethane was supplied by Gasrec and also included in the CO2 calculations the embedded energy contained in the LBM fuel from its manufacture and distribution. At the time the Gasrec plant ran on electricity supplied by the grid, however, more recently the plant is mainly supplied by a gas engine running on excess landfill gas. This power generation qualifies as a renewable supply, therefore reducing the carbon footprint of the Gasrec Biomethane.

Based on the March 2012 Cenex report and using the new carbon emissions factor of the Biomethane produced by Gasrec at Albury (Gasrec Emissions Factor Assessment – Cenex, August 2013), the table below shows the expected CO2 savings for varying blends of Gasrec LBM:LNG across varying substitution rates up to 100% gas.


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The table assumes a 5% loss in efficiency compared to a diesel engine, 100,000 miles (160,000km) per year travelled and 10 miles per gallon (3.54km per litre). No methane slip is factored in, so the table is relevant for newer OEM vehicles that do not suffer from methane slip. The assumptions on LNG emissions figures for the blending are taken from well-to-wheel calculations by the UK Department for Transport.

Table 6-1 CO2 Benefits for varying Bio LNG blends and substitution rates

Substitution Rate

87% 45% 50% 60% 70% 80% 90% 100%

% L

BM

in

th

e L

BM

:LN

G B

len

d

10% 9% 11% 14% 17% 20% 23% 26%

15% 11% 12% 16% 19% 23% 26% 30%

20% 12% 14% 18% 22% 25% 29% 33%

25% 14% 16% 20% 24% 28% 32% 36%

30% 15% 17% 22% 26% 31% 35% 40%

35% 17% 19% 24% 29% 34% 38% 43%

40% 18% 21% 26% 31% 36% 41% 47%

45% 20% 23% 28% 34% 39% 45% 50%

50% 21% 24% 30% 36% 42% 48% 53%

55% 23% 26% 32% 38% 44% 51% 57%

60% 24% 28% 34% 41% 47% 54% 60%

65% 26% 29% 36% 43% 50% 57% 64%

70% 27% 31% 38% 45% 53% 60% 67%

75% 29% 33% 40% 48% 55% 63% 70%

80% 30% 34% 42% 50% 58% 66% 74%

85% 32% 36% 44% 53% 61% 69% 77%

90% 33% 38% 46% 55% 63% 72% 81%

95% 35% 39% 48% 57% 66% 75% 84%

100% 37% 41% 50% 60% 69% 78% 87%


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As can be seen, a 100% dedicated gas truck running on 100% Gasrec Albury LBM will reduce its carbon dioxide emissions by 87%. The Cenex report for Coca-Cola Enterprises also showed a reduction in NOx of up to 86% and with N2O in particular being 265 times more potent than CO2 as a greenhouse gas, small amounts of N2O emissions can still add significantly to the overall Global Warming Potential (GWP) from running fleets of diesel HDVs. (GreCOR WP7 — Pilot projects - Evaluation of the environmental impact from using liquefied natural gas or biogas to fuel trucks for heavy duty transport)

6.2 Financial aspects of a renewable share LBM used as fuel for heavy duty vehicles is a very new business. There are only a few plants in Europe up and running producing LBM. The technology and the process is still immature and under development. Therefore, there is a very limited basis to compare costs from.

There are several factors influencing the fuel price such as substrate costs, production technology, differences in taxes, distribution and storage costs. There are both different production technologies and technologies for upgrading the gas on the market. The technology will most probably develop during the coming years resulting in more efficient plants and lower production costs when the produced volumes are increasing. This, in combination with use of different substrate with different costs, has a huge effect on the fuel price. For example, depending on if the substrate is considered an industrial raw material or just a waste product, without value, will cause different costs. As the waste staircase becomes better understood and implemented in different countries, substrates considered waste today will be classified as raw materials and will be more expensive tomorrow. This can be seen clearly in for example Sweden, where biogas and biomethane in the beginning was very cheap when produced from sewage sludge and household waste. As the number of biogas plants increased, as well as the need for substrate, there were suddenly competitions for the existing waste as well as a need to use of organic waste that was earlier used for other purposes and therefore had a price.

The taxes and other financial instruments also vary from country to country within the EU.

6.2.1 Three examples of savings with liquid biogas compared to diesel

In the UK cost savings over the last year of using 100% LBM is typically 20% compared to diesel for heavy vehicles. For liquid natural gas, LNG the cost saving is even better, at about 40%. For the future, a standard blend of 85% LNG and 15% LBM is underway to be established. This maximises the savings while still achieving around 20% carbon savings for a well-managed dual fuel truck. For a dedicated gas engine truck the carbon savings would be even greater at the new standard. (Rick Twomey, Gasrec,

April 2015)

In the Netherlands a LBM production is currently starting up. The challenge is to produce LBM at a cost price level which is competitive with diesel. Calculations show however, cost reductions of about 20% compared to diesel. In the Netherlands there are no incentives or subsidies to promote the usage of LBM, the excise duties for both LNG and LBM are the same. (Peter Hendrickx, Rolande LNG, April 2015)


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In Sweden there is one production site running in Lidköping. They have been producing LBM since 2012. Calculations based on prices in April 2015 shows equal cost or a smaller advantage for the fuel cost of LBM than diesel, included the tax reduction for the LBM. However it is important to realise that this price is set by the producer to give the market a chance to grow, and this price does not completely cover the cost to develop this new market. (Johan Olfsson, Göteborg Energi 2015-04-30)

6.2.2 Total cost for the truck owner

For the truck owners and it is important to consider the whole cost calculation for the gas truck before making a decision. The gas trucks are, at the moment, more expensive than the diesel trucks. The price of the truck is a market price varying a lot from country to country. In the Netherlands and Sweden the gas trucks are about 30-40 % more expensive than the diesel trucks today. Some countries may have a subsidy for the extra investment cost, the 70 trucks running in Sweden did get approximately € 17 500 per truck. The service intervals and prices are about the same for both vehicles. Since there are no used trucks available on the market yet, it is difficult to estimate the residual value.

The financial savings for the truck owner depends on very many factors that differs a lot between countries. For examples, calculations from the Netherlands indicate that he costs per km are lower for the gas truck and that the total costs are 7 % lower during the lifecycle for a gas truck compared to a truck run on diesel. (Peter Hendrickx, Rolande LNG, April 2015)

The financial savings for the truck owner when using a renewable share might be affected if the fuel price is higher with a renewable share. But the savings could also be affected positively for example by receiving funding for the investment as the case has been in Sweden. The main value for the truck owner today is the market opportunity to get new business where a green transport is required.


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7 Conclusions and Recommendations The study shows that there is a potential of biomethane production that could be used in this sector.

A great advantage with biomethane in gaseous or liquid phase is that it can be blended, in any proportion, with its fossil equivalent, compressed natural gas or LNG.

The predicted biogas production estimated from all countries in their National Renewable Energy Action Plans (NREPAs) is around 326 TWh for 2020. If the development is continuing in the same pace, the production of biogas in EU is estimated to be 500 TWh in 2030. These volumes can be compared with the theoretical volumes estimated to around 2000 TWh by different sources.

If we would take 5 % of this estimated biogas production in 2030, upgrade it to biomethane and either liquefy the biomethane and mix it with LNG or inject it into the natural gas grid and use green certificates to swap with LNG, we could have a share of 13 % renewable gas to the heavy duty sector by 2030, giving a share of the truck fleet of 3 % gas trucks.

The potential of CO2 savings using a renewable share is of course large. How large depends on the share. If a share of 15 % is used, the UK experience shows a saving of 30 % compared to diesel using a vehicle running purely on gas.

There are too few production facilities to draw any far-reaching conclusions about the financial savings. But, considered the early stage of the development and the immature market, there are still already strong indications showing a reasonable price. With larger volumes, more technical development, more stable processes and more efficient distribution, it will most probably be even more cost efficient to run vehicles with a share of LBM in a future.

Our recommendations to the EU Commission for the future work with a possible renewable share in the heavy duty sector are the following:

1. Support the path to have a renewable share in all decisions and strategies. 2. Give the member state the possibility to support the renewable biomethane with financial instrument. 3. To be able to use the existing distribution system, the natural gas net, work has to be done to be able to distribute biomethane across borders, especially related to the Renewable Energy Directive. 4. Continue to support technical development of engines, production plants and infrastructure 5. Continue to support market introduction and building of infrastructure 5. Continue to work with harmonization, standardization and regulation in the area

References List of Tables

Table 2-1 Biomethane supply forecast for Europe. The potential includes upgraded biogas only and not SYNGAS. (Modified after Table 2, GGG, Proposal for a European Biomethane Roadmap, 2013). ..... 11

Table 2-2 Evaluation matrix for LBM production potential in Europe, by country. .......................................... 15

Table 2-3 Basis for estimation of LBM production potential..................................................................................... 16

Table 2-4 LBM production potentials by country. ......................................................................................................... 17

Table 3-1 Swapping potential of LNG to biomethane in the gas grids ................................................................ 20

Table 4-1 Variations in LNG quality (Staffan Johannesson, Gas quality, 2014). ................................................. 22

Table 4-2 LBM production potential in comparison with heavy vehicle fuel demand ................................... 23

Table 6-1 CO2 Benefits for varying Bio LNG blends and substitution rates ........................................................ 27

List of figures

Figure 1-1. Impression of the LNG Blue Corridors ............................................................................................................ 6

Figure 2-1 Production sources of renewable methane and possible utilization areas. ..................................... 9

Figure 2-2 Potentials for biogas production in Europe. Realistic potentials for 2020 and 2030 and theoretical potentials from different studies. For more explanation on the references of the studies and criterias used please see section 2.3.1. ............................................................................................................................... 13

Figure 2-3 Estimated production of biogas and biomethane in Europe for 2020 and 2030. For more explanation on the references of the studies and criterias used please see section 2.3.1 ............................ 13

Figure 3-1 Production sources of renewable methane and possible utilization areas ................................... 18

Figure 5-1 Demand Liquefied gas versus estimated available LBM 2020-2030 ................................................ 25

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Potentials of LBM in Europe - LNG BClngbc.eu/system/files/deliverable_attachments/LNG BC D3.9 Potential of... · Potentials of LBM in Europe ... 0.3 Tula Ekengren ECOPLAN Suggested