Ireland-based LPG distributor DCC Energy and Californian firm Oberon Fuels announced in late March that they would partner on producing and selling renewable DME in Europe. Oberon plans to develop new production facilities, while DCC will buy and retail the product as the offtake partner. The two firms also said they would explore the use of DME as a hydrogen carrier, utilising Oberon's DME-to-hydrogen reformer technology. Argus' Waldemar Jaszczyk spoke with DCC's LPG and renewables supply director, Paul Westerman, and Oberon chief executive Rebecca Boudreaux about the joint venture:
How did the partnership come about?
Boudreaux: Oberon and DCC are involved in the World LPG Association, Liquid Gas Europe and the International DME Association and met through their various networking opportunities at conferences. Associations such as these bring together industries, technologies and companies to encourage collaboration and partnerships such as ours, and ultimately to meet energy needs of the future.
What locations will you consider for the first renewable DME production plant?
Boudreaux: Part of the work we will jointly be doing is finding suitable production sites. At this point, all we can say is that this is likely to be in northwest Europe, although we are exploring other options outside this region. Feedstock access, transportation networks and strong regional demand are key factors in our location selection.
What types of feedstock do you plan to use?
Westerman: We are focused on acquiring biogas from varying sources, such as agricultural waste and woody biomass, and/or renewable methanol. Our initial analysis of the market indicates there are significant volumes available.
How much will you invest in the production projects?
Westerman: We are not disclosing financials at this time. With numerous variables in play, including feedstock type and volume, facility size and offtake, location and logistics, the economics of each project will vary.
Is there a timeline for your first project?
Boudreaux: We are actively in discussions with potential feedstock suppliers. Once we finalise an agreement, we can begin the plant project. We estimate 18-24 months for development once a location has been identified.
What will the plant's production capacity be?
Boudreaux: The partnership will consider multiple potential facilities and various technical approaches to renewable DME production. The capacity will be determined by local feedstock supply and regional demand. Oberon's skid-mounted, modular production facilities can be scaled based on feedstock supply, with the smallest plant having a capacity of 10,000 t/yr of renewable DME.
Why is DCC looking to renewable DME as a way to decarbonise LPG?
Westerman: DCC is considering different paths to help defossilise its customers' energy needs. Renewable DME is one of them, as is renewable LPG.
What is the biggest challenge to growing the renewable DME market in Europe?
Westerman: The biggest challenge is the regulatory environment. It is vital to have a level playing field for all renewables.
Boudreaux: We're thrilled that Liquid Gas Europe has recently called on the EU to accelerate adoption of renewable DME. They have called for financial incentives in the form of tax rebates, capital grants and fuel subsidies to encourage switching to all renewable technologies including renewable DME.
Are you concerned about the direction of EU policy in light of its latest regulations on CO2 emissions from cars and vans?
Westerman: We believe it is important that regulators create a level playing field for all renewable energies — they must be technology agnostic and be mindful of affordability. Our main focus today is on renewable DME as an alternative to fossil LPG, although it also shows potential as a carrier of renewable hydrogen. Hydrogen is touted as playing an important role in decarbonising transportation.
Boudreaux: With the proper regulation and incentives, we believe renewable DME will be a great asset in the overall efforts to meet Europe's stated climate goals.
Given its successes in California, how involved will Oberon be in lobbying European policy makers?
Boudreaux: Oberon is excited to leverage its 12 years of experience in working with regulators, standardisation bodies and OEMs (original equipment manufacturers) to create pathways for the use of DME as a transportation fuel. When Oberon started, there were no regulations in place for DME as a transportation fuel. Over the past 12 years, international consensus standards have been developed, California changed its Code of Regulations to allow DME to be sold as a fuel, DME can now be sold across the US, and California changed the law to create equal taxation for DME compared with other alternative fuels. Those are a few of the wins we have experienced in bringing an innovative fuel to market.
Key to these wins were informing regulators and elected officials, making investments with private funding and putting real steel in the ground, and creating full-time jobs for the communities in which we operate. We look forward to working with the International DME Association, Liquid Gas Europe and the World LPG Association on informing the relevant policy makers about the safety, sustainability and applicability of renewable DME in the LPG and hydrogen markets
Is DCC planning to enter the hydrogen market with the help of Oberon's DME-to-hydrogen reformer technology?
Westerman: We can't comment on that right now but we believe renewable DME is a promising H2 carrier for delivering green H2 to off-grid users.
