Key Market – Recommendation 1

Better positioning of LPG to policymakers and energy users

LPG, as a fossil fuel, increasingly faces an image problem alongside other fossil fuels, and this will likely remain one of the biggest challenges facing the industry unless now tackled effectively. We believe that this is an important strategic challenge across all fossil fuel sectors, including the natural gas and LPG industries. Overall, based on Delta-ee’s detailed tracking of policy trends and developments in Europe and elsewhere, this challenge is not being addressed effectively enough. Until this can be done, then it will be more difficult or impossible to secure some of the policy developments that could accelerate uptake of LPG in certain applications.

The challenge is especially the case in Europe, but is set to become an even stronger issue globally. We do not see these trends going into reverse over time. At a time when the long-term energy scenarios for decarbonisation developed by influential policymaking bodies, including the International Energy Agency, anticipate a phasing out of all fossil fuels in many regions, we believe that it continues to be vital that the LPG sector supports other gas industry initiatives to identify potential roles for LPG that are both consistent with decarbonisation scenarios (such scenarios do exist) and maintain a role for it.

This will likely be a complex and long-term challenge to tackle effectively, with multiple facets to it.  We therefore recommend that as part of this strategy, the industry should develop and communicate a detailed vision of the role of LPG in a decarbonising energy future

We see no inconsistency between a continuing / expanding role for LPG in the wider energy market, and the trajectory to the decarbonising of energy systems over time to 2050 and beyond – but it is clear that many influential policymakers, energy research agencies, think-tanks and NGOs do, and therefore oppose incentivisation of high efficiency and low carbon applications such as CHP.  Given that the use of LPG / natural gas is needed until energy systems can be fully decarbonised, it makes sense to utilise these fuels as efficiently as possible through such applications.

Priority:                 High

Time-fame:             Short, medium & long-terms