Market pull and Gasum push for liquefied gas at Elmia Lastbil
At the Elmia Lastbil trucking trade show in Jönköping, Sweden, Gasum AB, the Swedish subsidiary of Finland-headed gas major Gasum Oy, provided an insight behind its planned rollout of liquefied natural gas (LNG) and liquefied biogas (LBG) filling stations across the Nordic region. In short, a market pull and a Gasum push enabled by investment grants sprung from national and European Union (EU) climate, energy, and air quality policies.
Held biennially, Elmia Lastbil is the largest trucking event in the Nordic region. For gas fuel producer and distributor Gasum AB, it was the first time as an exhibitor. The company is building what it describes as a “Nordic gas ecosystem” that will expand the use of LNG and LBG as an energy source for heavy-duty vehicles (HDVs) all around the Nordics.
To achieve this, Gasum is building new LNG/LBG filling stations in Sweden and Norway, as well as expanding the existing LNG/LBG filling station network in Finland.
Gasum is actively building a Nordic gas ecosystem and we are planning to open 25 new gas filling stations in different locations all around Sweden, including Jönköping. LNG and LBG offer the heavy road transport segment a practical and cost-effective alternative to traditional fossil fuels. LNG and LBG can reduce carbon dioxide emissions significantly, said Markus Olsson, Managing Director, Gasum AB.
LNG and LBG needed for cleaner transport
In May 2018, the European Commission proposed mandatory limits on carbon dioxide (CO2) emissions from heavy-duty vehicles for the first time. According to the proposal, the average CO2 emissions of new HDVs are required to be 15 percent lower in 2025 than in 2019, and at least 30 percent lower in 2030.
According to Gasum, LNG is a “clean” fossil fuel that does not release any small particles and gives rise to less nitrogen oxide (NOx) emissions and CO2 emissions than other fossil fuels. Furthermore, compared to compressed natural gas (CNG), liquefaction enables a higher energy density per volume unit, which for HDVs or vessels translates into a longer range for the same tank volume.
For these reasons, LNG is becoming increasingly popular in the marine and heavy road transport sectors. A result the rising demand is that several internal combustion (IC) engine and vehicle manufacturers, including IVECO, Scania and Volvo Trucks that were also exhibiting at Elmia Lastbil, are already offering contemporary LNG powered HDVs.
One heavy-duty vehicle releases approximately the same amount of emissions as ten passenger vehicles do, which is why environment-friendly fuel solutions are needed in this sector to reduce emissions that come from transport. The use of LNG and LBG is a cost-effective way to reduce emissions, said Olsson.
Crucial Climate Step
Biogas is produced through the processing of various types of organic waste and upgraded to biomethane which can be compressed for compressed biogas (bioCNG) or liquefied to LBG. Using LBG as fuel, the emission reduction can be as much as 85 percent compared to fossil fuels.
In Finland, Gasum Oy has received state support to increase biogas production and rollout refuelling infrastructure. Likewise in Sweden and Sofie Lärkhammar, Business Development Specialist at Gasum AB highlighted that investment grant funding, through the Swedish Environment Protection Agency’s “Climate Step” programme, is a crucial part of the equation for its investments in refuelling stations and LBG production in Sweden.
LNG/LBG refuelling stations cost considerably more than conventional liquid fuel pumps to install.
We have been granted funding for locations in Sweden all of which have been strategically selected with HDV transport corridors in mind, said Lärkhammar.
In Sweden, Gasum acquired five biogas plants in January 2017, including the Lidköping plant that has LBG production. The company is looking to partner with other sectors to increase LBG production to supply industry and the transport sector. In December 2017, Gasum revealed that it was in the final stages of a study regarding the production of LBG from wastewater treatment at Stora Enso Nymölla Mill, a pulp and paper mill in southern Sweden belonging to forest industry major Stora Enso.
The Climate Step programme is also applicable for transport companies investing in gas-powered trucks as these cost more than a diesel-powered counterpart. Under the current programme, a transport company can receive 40 – 60 percent of the cost differential as an investment grant.
This investment support creates a competitive advantage for hauliers by being able to offer a green transport solution to transport clients that is competitive with conventional fossil fuels. Furthermore, we can provide hauliers with grant application assistance free of charge and no strings attached other than a framework supply agreement for LNG/LBG, said Mikael Antonsson, Sales Manager HDV at Gasum.
The fuel supply agreement is more like a Letter of Intent as there are no volumes specified or loyalty clauses since it is contingent on a vehicle being purchased first.
It not until the gas-powered vehicle has been bought and LNG/LBG is needed that a fuel supply contract with pricing is then negotiated, explained Antonsson.