Deploying liquid biomethane in the Dutch transport sector. Analysing economic, environmental and organisational sustainability.

SUMMARY The Dutch government has set sustainability goals for the year 2020. In that year, 16 % of the energy use must come from renewable sources and the emissions of greenhouse gasses must be reduced by 20 % with respect to 1990. These goals are part of a plan which must eventually reduce the Dutch dependence on fossil fuels and the related emissions of greenhouse- and other harmful gasses. LNG fuel usage is internationally considered as a viable option to replace oil products in the transport sector. LBM is the “green” variant of LNG and can expand in the wake of the LNG market development. LBM usage may be an option to achieve the government goals. The central research question is: ‘What is needed to maximise the use of LBM in the Dutch transport sector and what is the optimum from an economic, environmental and organisational perspective?’ To maximise LBM use in the Netherlands a strong growth of the LNG sector is necessary along with government support for producing LBM. The organisation of an LBM infrastructure is preferably fully integrated with the LNG infrastructure. From an economic point of view LBM is more advantageous for the government than grid injected green gas, but the environmental benefits only become apparent after 2020. LNG is natural gas which is liquefied by cooling it to a temperature of -162 °C. This is then transported by bunker ship to well isolated LNG storage terminals in Zeebrugge and Rotterdam. LBM is produced by upgrading biogas and then liquefying it. LBM is an option to extract energy from biomass, next to green gas and CHP. An analysis of the production costs of LBM shows that these are about 2 times higher than the market price of LNG and what LNG distributors are willing to pay. In the total picture however, LBM is probably a cheaper option than green gas injected in the natural gas grid. Therefore LBM should be incorporated in the SDE+ scheme. To create a level playing field between LBM and green gas, the excise taxes for these fuels have to be equalised. The price of LNG at the pump is currently lower than that of diesel, but it is uncertain how these prices develop when the LNG market grows. The Dutch availability of biomass for the production of energy is limited to about 8 % of the primary energy use. Gasification is not expected to take-off before 2020, but has the most potential. Anaerobic digestion has less potential and, on top of that, is used for different forms of energy generation. Moreover, the current government policies are focussed on stimulation the production of green gas instead of LBM. LBM production thus has limited potential and can only fuel a part of the transport sector. LBM fuel is best suited for use in heavy duty vehicles and shipping. For shipping, large storage bunkers have to be realised along harbours. A network of refilling stations has to be created to service heavy duty vehicles. The properties of an LNG truck are comparable to diesel and investments pay themselves back in three years. LNG and LBM are most likely offered as single fuel at the filling stations. If all heavy duty vehicles in the Netherlands would run on LBM, CO2 emissions would be reduced by 3 % with respect to 1990 levels. The energy usage would then be about 2 % of the Dutch primary energy use. This scenario is unlikely, given the limited availability of biomass. The shipping sector approximately has the same environmental potential but LNG use develops even more slowly there. The contribution to the 2020 goals is almost nothing, mainly because the number of LNG trucks grows slowly in the coming years. The conclusion must be that, although LBM is an interesting option to reduce the CO2, NOx and PM10 emissions in a part of the transport sector, the total potential is limited. Moreover, the development of the LNG market is in a too early stage to already start introducing LBM next to it. Short term introduction of LBM thus means a high risk compared to other forms of biomass conversion and generates relatively little advantages. Replacing LBM with LNG is preferably done when LNG has established itself firmly as a transport fuel in the Netherlands.