September 20th, 2024 | Written by Dover Fueling Solutions

LNG: The Perfect Alternative Fuel for Your Business?

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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.

Among the abovementioned, 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, available 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 supply concerns are fading away across the continent, 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 burning fossil fuel. 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 fuel station deployment comes with a challenge in the race to net zero. During the storage of LNG, Boil-Off Gas (“BOG”), continuously evaporates, which causes the pressure inside the LNG storage tank to rise. However, venting BOG into the atmosphere is costly and become illegal as part of the Europe (Green) Deal. In order to manage this, and to illustrate a real world example, Gasrec implemented DFS’s patented LIQAL BTU Boil-off Gas Treatment Unit (the “BTU”) that converts BOG back into liquid form, avoiding venting and preserving LNG stock, thus reducing losses – both financial and environmental.

Moreover, the LIQAL BTU 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 operational costs.

A cost-effective solution

Fuel poverty is a real problem, and 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 into Europe were predominantly led by nations located 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 afford DFS 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 specific fueling fleet requirements.

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 technology and LNG dispensers that provide truck drivers with an intuitive refueling experience and exceptional uptime. When paired with the LIQAL BTU to ensure consistent performance, businesses can upgrade their fuel sites with a low total cost of ownership 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 likely to face disruptions due to fuel shortages.

“LNG infrastructure may be embryonic, but it is fast growing. There are around 713 LNG stations on the continent, with the bulk concentrated in Western Europe, and its cost-competitive benefits mean 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.

As of July 2022, 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 and speed should appeal to drivers. With the emergence of reliable and convenient LNG refueling units, such as the compact LIQAL LNG Mobile Refueling Unit 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, covering a multitude of drivers

Increasing demand for LNG

As the UK expects a colder winter and, in lieu of the paradigm shift in gas imports due to the Russian invasion of Ukraine, we see a subsequent increase in LNG imports as the primary fuel supply.

“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, availability 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 help 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 ____, _____ at DFS.