<article><p><i>Experts called on the industry to diversify in terms of renewable feedstocks and output while not neglecting substantial fossil LPG opportunities, writes Aidan Lea</i></p><p class="lead">A scarcity of affordable renewable feedstocks is the key impediment to scaling up bio-LPG production, but a range of strategies exist to help overcome this, expert panellists said during the Liquid Gas Europe e-Congress over 28-30 September.</p><p>Italy's Eni plans to invest in expanding product offerings at two of its hydrotreated vegetable oil (HVO) biofuel plants in Venice and Sicily, according to the president of the latter facility, Francesco Franchi. The Gela plant in Sicily will add sustainable aviation fuel to its list of products — biodiesel, renewable naphtha and bio-LPG — from 2024, while production capacity at the Venice plant, which also uses some oil feedstock, is to expand to 560,000 t/yr from 360,000 t/yr — 420,000 t/yr will be biodiesel, with the 140,000 t/yr of other products including bio-LPG. </p><p>Bio-LPG remains hamstrung by a lack of available feedstock and higher costs of renewable feedstocks compared with oil, Franchi said. "Now we are not so optimistic" that the problem of feedstock access can be addressed, he said. "When we started, we thought we could use palm oil, soya oil... but now [the EU] has decided that we cannot use feedstock in competition with the food chain... so our research and development office works every day to find the best solution," Franchi said.</p><p>Eni is growing castor beans across thousands of hectares in Tunisia to produce castor, or ricin, oil, as it is not used for cooking. "They do not need a lot of water to grow and we can make 4-5 t/yr per hectare," Franchi said. The need for multiple feedstocks means Eni's next investment at Gela is to expand the biomass treatment unit to be able to use residues from olive oil and other agricultural production.</p><p>The need to diversify feedstocks and biofuels output is crucial as "there is no silver bullet", Netherlands-based LPG distributor SHV Energy's sustainable fuels director Rebecca Groen told delegates, acknowledging the difficulty of producing the quantities of bio-LPG needed. This is why SHV and its peer UGI International are promoting the use of renewable dimethyl ether (rDME). "We started looking at things very like propane but maybe easier to make right now," Groen said.</p><h2>Taking off</h2><p class="lead">Sustainable aviation fuel is gaining policy traction after the EU proposed that a minimum 63pc of jet fuel must be renewable by 2050. This was a guarantee that investors needed to start pouring capital into building production assets, bio-jet fuel firm SkyNRG's chief executive Maarten van Dijk said.</p><p>As someone who spent 12 years lobbying EU policy makers to support biojet, he advised the LPG industry to leverage the progress already made by biofuel producers and concentrate on commercialising any bio-LPG that is a by-product at HVO plants. HVO facilities can use the bio-LPG they produce for heating, improving their sustainability profile, Van Dijk said. A clear commercial advantage to process the LPG yields must be there to encourage investment. "It is a simple cost equation. Government intervention could add the value for bio-LPG needed by HVO producers, while the LPG industry would not need to solve the feedstock, technology and scaling up challenges by itself," he said. </p><p>Low volumes of bio-LPG production and the lack of tangible expansion plans means supply "is a very long way from meeting potential demand", consultancy IHS Markit's vice-president of NGLs, Walt Hart, told the conference. The LPG industry should focus on finding a home for the vast quantities of conventional LPG expected to be produced over the coming decades. IHS Markit forecasts bio-LPG output to grow by around 10mn t/yr by 2050, while fossil-fuelled production could reach 400mn t/yr — which would be an increase of about 71mn t/yr from the 329mn t in 2020, according to Argus data. "Fossil LPG is not going to disappear," Hart said. "We have to find some way to use it, even if it is not in Europe or other markets committed to net zero. It should be a big opportunity for retail companies," he said.</p><p><div class="picture"><div><span class="pic_title">Global bio-LPG capacity from HVO</span> <span class="units"></span></div><img src="https://argus-public-assets-us.s3.amazonaws.com/2021/10/05/p3achart05102021110403.jpg"></div></p><p><div class="picture"><div><span class="pic_title">Bio-LPG capacity increases</span> <span class="units"></span></div><img src="https://argus-public-assets-us.s3.amazonaws.com/2021/10/05/p3bcapacityincreases05102021111802.jpg"></div></p></article>
