In an era dominated by discussions around electric and hydrogen-fueled vehicles, fleet managers and business owners find themselves at the crossroads of deciding on the most efficient and sustainable fuel option for their operations.
Read also: AI Power Surge Fuels Demand for US Natural Gas
Among the above mentioned, there’s another contender making waves on the market – Liquefied Natural Gas (LNG).
Joost Jansen, Business Development Manager, at Dover Fueling Solutions® (DFS) commented: “Ultimately, consumers seek energy that is affordable, reliable and environmentally friendly. LNG meets these criteria, and its competitive costs make it a promising choice for commercial transportation.”
DFS takes a closer look at LNG as a compelling alternative fuel and delves into its environmental, cost, and business impacts to determine if it could be the perfect solution for your fleet fueling business.
Environmental impact
As the continent transitions towards Net-Zero, buyers and governments are now refocusing their efforts on lowering CO2 emissions to meet decarbonization goals.
LNG is a natural gas that has been reduced to a liquid state through a process of cooling, and it is the cleanest fossil fuel, as it produces 40% less carbon dioxide than coal and 30% less than oil.
Its primary component is methane (85-89%), which releases fewer pollutants during combustion, making it a sustainable choice that improves air quality.
Another key player on the market is Bio-LNG, which emits 85% less CO2 than diesel and is a key solution in minimizing emissions from the heavy goods vehicle (HGV) sector.
LNG manufacturing has another advantage in the race to net zero. During the production of LNG, Boil-Off Gas (BOG), which causes the pressure inside the LNG storage tank to rise, is continuously evaporated. However, venting BOG into the atmosphere is extremely dangerous and will become illegal as part of the Europe (Green) Deal. In order to rectify this, Gasrec implemented DFS’ patented LIQAL BTU Boil-off Gas Treatment Unit that converts BOG back into liquid form, avoiding venting and preserving LNG stock, thus reducing losses – both financial and environmental.
Moreover, the LIQAL BTU system offers unlimited holding time for LNG with no need for active management of LNG tank storage pressure, posing a significant opportunity for the reduction of costs.
A cost-effective solution
Fuel poverty is a real problem, so providing affordable energy is critical. LNG emerges as a cost-efficient solution, thanks to the ample supply of natural gas resources and the steadiness of its prices, in contrast to the fluctuations observed in the oil market.
During the first half of 2023, LNG imports in Europe were predominantly led by nations in East Asia and Europe. China, Japan, and South Korea emerged as the top three global importers, followed by the UK, France, and Spain, where the majority of European regasification capacity is housed.
Access to a diversity of suppliers can not only reduce prices but can also give us the flexibility to move to more reliable shippers or avoid geopolitically sensitive markets.
The affordability of vehicles powered by LNG is on the rise, supported by an expanding infrastructure catering to the specific fueling requirements of fleets.
Furthermore, LNG engines typically incur lower maintenance costs, yielding long-term savings for businesses. Unlike electric vehicles, which often demand substantial upfront investments in charging infrastructure, LNG presents a more gradual transition without the necessity for a massive initial financial commitment.
A recent study has highlighted the effects of ongoing advancements in liquefaction and shipping technologies on the reduction in production, transportation, and regasification costs, fueling the swift expansion of the global LNG industry. The purification and liquefaction costs of natural gas have seen a decrease of 35%–50%, while the transportation cost per unit of LNG has declined by 40%, making LNG a price-competitive solution for today and for the future.
“Businesses have the opportunity to invest in LNG fuel dispensers that provide truck drivers with an intuitive refueling experience and exceptional uptime. When paired with the LIQAL BTU Boil-off Gas Treatment Unit to ensure consistent performance, businesses can upgrade their fuel sites with a low total cost of ownership (TCO) while embracing the latest clean fuel technology,” commented Joost Jansen, Business Development Manager at DFS.
Positive business impact
Transitioning to LNG can positively impact businesses in several ways. Firstly, LNG engines often boast a longer lifespan than traditional diesel engines, enhancing the overall durability of a fleet. The gas is also readily available, with a growing network of LNG refueling stations worldwide, ensuring operations are less likley to face disruptions due to fuel shortages.
“LNG infrastructure may be embryonic, but it is fast growing. There are around 635 LNG stations on the continent, with the bulk concentrated in Western Europe, and its cost-competitive benefits means it has strong potential for commercial transport,” said Lise-Lotte Nordholm, vice president and general manager of clean energy and global platforms at DFS, in an interview for Fuel Oil News.
According to the latest statistics, the majority of LNG stations in Europe are in Germany (128), followed by Italy (125) and Spain (88).
LNG is especially well-suited for long-distance road freight transport, given the limited availability of alternatives to diesel in this case. Moreover, its familiar refueling method should appeal to drivers. With the emergence of reliable and convenient refueling units, such as the compact LIQAL LNG Mobile Refueling Unit (MRU) that Gasrec incorporated to suit numerous locations, it becomes easier for fuel retailers to implement clean energies with minimal work or additional costs – this can even be in addition to conventional fuel dispensers at larger service stations, to cover a multitude of drivers.
Increasing demand for LNG as a ‘transitional fuel’
As the EU transitions towards its intermediate target of a 55% reduction of net-emissions by 2030, ‘transitional fuels’ will likely play a big part in everything from long haul transport to powering our home deliveries.
A transitional fuel, in contrast to conventional fuels such as oil-derived petrol and diesel, are any types of fuels which contribute to FIT reduction targets. As the cleanest of all fossil fuels, natural gas is the cleanest burning of all transitional fuels and emits significantly less CO2 than its traditional counterparts.
In comparison to other clean energy sources such as EV, LNG requires minimum investment in infrastructure, which means it’s a perfect bridge until the world transitions to a fully emissions-free society.
LNG, especially BioLNG, is not only a cost-effective solution, but it also has the ability to reduce emissions, and that’s highly attractive to the heavy-duty transport industry and other adjacent carbon-intensive sectors.
According to the European Commission, LNG development into a global commodity can improve the security of energy supply in general by boosting the use of natural gas as fuel for transport. LNG provides a long-term solution, as The International Energy Agency predicts there are enough resources to last 230 years if consumption remains at current levels.
Conclusion
“With its environmental advantages, cost-effectiveness, and positive business impacts, LNG is on the way to becoming one of the most in-demand fuels globally for heavy-duty transport. It can contribute to future energy security measures and facilitate the worldwide transition to decarbonize major carbon-emitting economies. We’re witnessing the evolution of the consumer experience in fueling and convenience retail,” concluded Joost Jansen, Business Development Manager at DFS.
Sources
https://www.statista.com/statistics/1251785/number-of-lng-refueling-stations-in-europe-by-country/
https://www.doverfuelingsolutions.com/customersuccess/reliable-bio-lng-refueling-for-gasrec
https://alternative-fuels-observatory.ec.europa.eu/general-information/alternative-fuels
