Page 4 - EurOil Week 07 2022

EurOil COMMENTARY EurOil

Natural gas now more expensive

than cleaner biogas: EBA

Natural gas, at least on the spot market, is now 30% more expensive than biogas

EUROPE THE cost of natural gas on European spot mar- at aligning block legislation with its target of
kets has risen to the point that it is 30% more reducing emissions by 55% by 2030. Proponents
WHAT: expensive than cleaner bio-methane, the Euro- of bio-methane argue it can play a vital role in
Bio-methane is 30% pean Biogas Association (EBA) claimed on Feb- delivering on this goal, as it is both cost-effective
cheaper than natural gas ruary 17. and scalable.
right now. Natural gas is currently trading at around €80 Bio-methane enjoys broad support from
($91) per MWh on the spot market, up from €18 the natural gas industry, even though it would
WHY: a year ago, whereas bio-methane can be pro- replace conventional methane, as pipelines and
EBA says it is likely to duced for as little as €55, EBA said. other infrastructure could be repurposed for
remain cheaper in the “While governments are struggling to bio-methane with virtually no modification.
long run. reduce the impact of soaring energy prices on Beyond decarbonising the gas grid, EBA and
citizens’ energy bills, they have a solution within others point to the potential for bio-methane to
WHAT NEXT: reach: scaling up the production of sustainable clean up heavy-duty and maritime transport.
The association calls bio-methane,” EBA said. Ships can be tooled today to run on LNG, bio-
for the right policies to The association said bio-methane would LNG, or a mix of both, and gradually use more
exploit biogas’ potential. likely remain cheaper both in the short and the bio-LNG over time, without having to upgrade
long term, given that the natural gas market is their fuel systems, and the same is true of vehi-
expected to remain tight for some time. It also cle transport. These sectors are notably difficult
noted that other green gases such as green to electrify, as batteries need high autonomy to
hydrogen were between two and four times cover long distances, but this increases their vol-
more expensive. ume and weight and therefore that of the vehicles
Europe could produce as much as 34bn cubic that contain them, undermining their efficiency
metres per year of bio-methane with the right and increasing their carbon footprint.
policies in place, EBA said, enough to cover 10% A truck that would otherwise weigh 40
of its gas demand. It added that a further 6 bcm tonnes travelling 1,000 km would have to be
could be sourced from Ukraine by that point. equipped with a 6.4-tonne battery using the
Bio-methane development will also give the best technology available today, EBA argues,
EU greater energy self-sufficiency. At present the whereas a bio-LNG-fuelled truck would have a
bloc produces only 15% of the gas it consumes, much more compact fuel system. There is also
sourcing the rest from external suppliers such as the issue of whether the world has sufficient
Russia, Norway, Qatar and the US. reserves of cobalt, lithium and other materials
“A strong sense of urgency is growing to needed for batteries to keep up with demand.
secure investments and ensure the deploy- These resources today are mostly produced in
ment of bio-methane facilities across Europe,” countries with weaker environmental regulation
CBA CEO Harmen Dekker said in a statement. and lower compliance with human rights, such
“Additional partnerships, such as the recently as China.
launched Sustainable Bio-methane Initiative, Then there is heavy industry, for which elec-
showcase the interest from industry users, pro- tricity is not an option. Bio-LNG can be provided
ducers and other major companies within the to industries that cannot be connected to future
value chain on the deployment of this renewa- hydrogen grids.
ble gas right now. Fostering the rapid scale-up of Despite the advantages that EBA points to,
bio-methane means supporting climate change there is antipathy towards bio-methane from
mitigation, reducing dependency on external some environmental groups. Even though it
gas supplies and dealing with an unprecedented can in theory be carbon neutral or even carbon
natural gas price increase. A clear legislative negative, opponents point to methane that is
framework will provide certainty for long- emitted into the atmosphere across the value
term investments on the roll-out of sustainable chain. Methane is far more potent a greenhouse
bio-methane.” gas than CO2. The counter-argument, however,
The European Commission last summer is that most of this methane would have been
released its long-awaited “Fit for 55” pack- emitted anyway, had it not been utilised as an
age under the European Green Deal, aimed energy source. ™

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