The UK LPG industry continues to push hard for the inclusion of LPG and renewable liquid gases in the government's future heating strategy, after England and Scotland outlined plans to abandon gas boilers for heat pumps. The government's latest energy strategy, released on 30 March, made no mention of renewable liquid gases or off-grid homes. But positive signs from the EU on the inclusion of renewable gases in its decarbonisation plans and a receptive audience with UK policy makers continue to give the industry hope. Argus' Waldemar Jaszczyk spoke with industry association Liquid Gas UK chief executive George Webb:
The UK government's "powering up Britain" strategy fails to mention renewable liquid gases. What does this signal for the industry?
The positive thing is that at least a strategy came out with more detail. It did miss out renewable liquid gases and off-grid. But the main thing it did say was that the biomass strategy would be out in May and June, which will affect off-grid consumers more. So we now await the biomass strategy.
What could the biomass strategy include?
The best-case scenario is they name renewable liquid gases as part of the short, medium and long-term future in a mixed-technology approach. We accept that heat pumps will be suitable for some of the housing stock, but a large part of the domestic off-grid housing stock is not suitable for heat pumps for various reasons. We see ourselves as an existing infrastructure that is proven and in place with a drop-in solution to be part of a renewable future.
Are you still optimistic about engagement with the government?
Yes. We have had continuous engagement since 2019. And that's one of the reasons why we developed our 2040 Pathway. It gives third-party stakeholders an overview of where we're going as an industry. What backed up the pathway document was working with third parties to give detailed projections of producing renewable DME and bio-LPG to go into that biomass strategy. All that information has been fed to the government's heating team, and we have an ongoing dialogue.
Will the EU's decision to recognise the role of renewable liquid fuels in heating impact UK policy?
Any good news from Europe is an example the UK government can see. The EU accepts what we all know — that electrification is going to play a major part, but it is not the silver bullet. This proves that the industry, not only in the UK but also in Europe and the rest of the world, has done enough work and in-depth analysis showing how renewable liquid gases can be part of the future energy mix.
What progress has been achieved in decarbonising the UK LPG industry?
More than £260mn [$321mn] has been spent on renewable gases without any government policy direction. Another £600mn is going be invested over the next 3-4 years. We have the renewable DME plant being developed in Teesside, which will produce 50,000 t/yr in 2025. And we have a renewable DME project where members will be supplying a mixed blend of up to 10pc renewable DME with LPG to consumers from the end of this year on a test basis. So there are many developments, and I think the government understands this.
How has the UK industry dealt with the lack of LPG availability this winter?
Scotland was a major concern this winter, with less supply from the Mossmorran natural gas liquids plant. The issue stems from the price differential between natural gas and LPG narrowing — in fact, LPG became pricier than gas, which has never happened in my working life in this industry. It's well known that LPG has been used by refineries instead of natural gas — all that has a knock-on effect of reducing road fuels, more so in Scotland. Mossmorran has put extra pressure on all the refineries in the UK, and more product had to be trucked from England. It has been more of a hand-to-mouth situation this winter. We've been lucky because, with the cost of living crisis, consumers have used less LPG.
Investment has been made for next winter, from the 120,000 t/yr tripartite deal in Middlesbrough to the Avonmouth-Bristol Port LPG pipeline, that will allow for storing product through the summer. So several solutions will ease the pressure on existing infrastructure because, let's face it, the refineries have not seen a great deal of investment over the past few years.
Has the government's support for LPG users in the energy crisis been sufficient?
Looking at feedback from consumers, the £200 grant has been welcomed. But the time it took to be implemented was a bit of a negative, and I think it should have been rolled out at the same time as the natural gas £200 payments. It did cause some issues for us in supply because some consumers were holding off to get their £200, which made a little bit of a backlog of orders. So it has been welcomed, but I feel it could have been rolled out quicker and alongside the mains gas, which would have eased some of the pressure we faced this winter.
Do you think off-grid boilers will become a political issue in the next election?
The new poll showed that the 2026 ban on fossil fuel boilers is hugely unpopular. That shone through like a gaping light. Almost 50pc of homeowners not connected to the gas grid would be more inclined to vote for a political party if it pledged to scrap the policy or extend it to 2030. I wouldn't say it will become a hot potato, but definitely a political fighting ground for all parties when it comes to polling time.
Do you expect Scotland to review its 2025 boiler ban following the country's leadership change?
I do not see a great change in Scotland because the new leadership is going to adopt the same policies. We are working very closely with all MSPs [members of Scottish parliament] to bring to the surface that electrification is not a silver bullet, and we need the mixed-technology approach. We are going to be a part of a parliamentary exhibition in Holyrood [Scottish parliament] in August, for instance, where we are going to highlight the effect the current policy will have on rural Scotland to MSPs.
