Major LPG distributors SHV Energy and UGI International's renewable dimethyl ether (DME) joint venture, Dimeta, is on a mission to quickly ramp up production of the renewable gas. It plans to open its first 50,000 t/yr plant at Teesworks in Teesside, northeast England, by 2024, and another five plants, bringing total output to 300,000 t/yr across Europe and the US, by 2027. By using a "feedstock neutral" technology that allows it to process multiple waste sources, the company believes renewable DME can be "right now". Argus' Waldemar Jaszczyk spoke with Dimeta advocacy manager Sophia Haywood about the company's projects and future plans:
Can you provide an update on your Teesside plant project?
Significant progress has been made since the announcement of our plant location at Teesside, UK, in May. The first phase of detailed engineering design work is now complete as planned, we are in deep discussions with feedstock providers, and we have entered the next phase of engineering works where we will appoint [a final engineering contract] ahead of financial close.
Through our Circular Fuels venture with Kew Technology, we have also joined the Net Zero Teesside Cluster Plan, which is part of the UK Department for Business, Energy and Industrial Strategy's Industrial Decarbonisation Challenge and is managed by Innovate UK. Circular Fuels is an important contributor to this work providing a roadmap to net zero.
Have you secured all the necessary permits and approvals for the plant?
Teesside has a proud industrial heritage, with strong public and political support for these industries, which makes it a prime location to have the first renewable and recycled carbon DME plant in the UK. We are securing planning and permitting approvals, and have received positive feedback throughout the process owing to the strong alignment between our project and the region's net zero vision.
Have you signed any contracts with LPG retailers to sell your renewable DME?
Since the establishment of Dimeta, we have seen a consistently growing interest in renewable and recycled carbon DME from the LPG industry. We are seeing more and more players reaching out to us to discuss supply opportunities for the UK, but also in Europe, the US and beyond. While we can't share commercial information, all the discussions are in progress.
Has the commitment to offer 20pc of the product produced at Teesside to third parties changed?
No, the commitment remains — it is a fundamental aspect of the establishment of Dimeta that the benefit of renewable and recycled DME needs to be realised by the entirety of the LPG industry.
What will be the approximate cost of the Teesside plant project?
The total investment to deliver the facility at Teesside is in the region of £150mn ($185mn). It will create 250 jobs in construction and 50 jobs during operation, providing a boost to the local economy.
In Dimeta's presentation for LPG association Liquid Gas UK's recent Edinburgh conference, your colleague Steven Hallett said that your second commercial-scale production facility would be located in France. Can you confirm this? And if so, what made you choose France and when will you announce the site?
We are currently exploring locations in Europe. There is a considerable LPG market in France with strong decarbonisation objectives — not to mention significant quantities of waste feedstock available for utilisation — making it an attractive geography. We expect to announce the site location in 2023.
Can you tell us some more about Dimeta's plans in the US? That is a potentially huge marketplace.
Propane is the third-most used energy source for homes and businesses in the US, supporting at least 50mn homes and 1.1mn businesses — it is a huge market and there is a significant opportunity for renewable and recycled carbon DME to be blended with propane, helping the sector reduce its emissions as it transitions to net zero. We are developing opportunities in the US and will be announcing these initiatives next year.
Are you looking at the same type of feedstock for future plants or will you use different types?
Dimeta is feedstock neutral when producing renewable and recycled DME. While we are using waste feedstock for our first plant in Teesside, and upcoming plants in Europe and the US are expected to use waste, we are also exploring opportunities with different feedstocks and processes. In addition, technologies at an earlier phase of development, such as power-to-X, could also be of interest for Dimeta further down the line utilising feedstock such as hydrogen and CO2.
What were the reasons behind Dimeta's recent decision to collaborate with the renewable methanol and ethanol producer Enerkem?
In October 2022, we entered into a collaboration with Enerkem, one of the players with the most extensive expertise in waste gasification for producing molecules such as methanol and ethanol. We are working with them in addition to our projects with Circular Fuels. The collaboration is focused on exploring the opportunity for the development of renewable and recycled carbon DME plants in Europe and the US at a larger scale, such as 150,000 t/yr, and with a strong focus on maximising CO2 recycling.
Does this larger capacity refer to the next five 50,000 t/yr plants planned by 2027 or future projects?
Dimeta has an overarching goal of producing 300,000t of renewable and recycled DME a year by 2027. Our first partnership with Kew Technology to create Circular Fuels is one route to delivering this — the plants we develop here are modular, so they can be scaled up or down. These plants are then complemented by additional partnerships, such as our recent arrangement with Enerkem. The size of our upcoming plants is not public yet, but it is ultimately dependent on commercial and market drivers. The important milestone is reaching 300,000t by 2027, so the combination of technology and partners will depend on relative project economics and the speed of development.
Are there any other partnerships you are pursuing with other companies for future developments?
Dimeta is looking to establish more partnerships to deliver a net zero future for the LPG industry, through renewable and recycled carbon DME. Our partnerships with Kew Technology to create Circular Fuels, and now with Enerkem demonstrate that we are looking for collaboration across the whole value chain, from innovative technologies for DME production, to integrating DME into the LPG supply chain, or financing investments in DME infrastructure, for example. You can expect to hear more about our new partnerships in the coming months.
