Where renewable liquid gases can add value in Europe’s energy transition

As Europe’s energy transition shifts from ambition to delivery, a key challenge is coming into focus: how to decarbonise the parts of the economy where electrification is hardest to deliver.

Electrification and network-based gases will remain central to the long-term pathway. But in rural areas, off-gas-grid locations and harder-to-electrify applications, these solutions can be costly, slow to deploy or technically complex.

A new White Paper, commissioned by DCC Energy and SHV Energy, explores where renewable liquid gases (rLG) can help close this gap. The analysis covers the EU-27, the United Kingdom, Norway and Switzerland, focusing on residential heating and selected industrial process-heat applications.

A practical complement to electrification

rLG are low-carbon alternatives to conventional liquefied petroleum gas (LPG). They include fuels such as bioLPG and renewable dimethyl ether (rDME), which can be produced from sustainable feedstocks, including waste and residues. Crucially, rLG can be used as a ‘drop-in’ solution in existing LPG infrastructure and appliances, allowing emissions reductions without requiring significant changes to equipment or networks. This makes them particularly relevant where other decarbonisation options, such as heat pumps or grid-based hydrogen, are more difficult or costly to implement.

Our findings show that rLG can play a meaningful role – particularly where infrastructure constraints, high upfront costs or technical limitations delay electrification or access to network-based gases.

At the point of use, rLG-based solutions can already be cost-competitive in several applications.

In residential heating, this is most evident in off-grid single-family homes. For a German reference house, the average annualised total cost of ownership – which spreads total system costs over its lifetime, combining upfront investment with ongoing energy and maintenance costs – is about €2.9k for a LPG boiler boiler, compared with €4.5k for an air-source heat pump. Under a central assumption of increasing rLG, the cost of an rLG blend boiler is around €3.9k. Similar patterns are observed in Poland and Italy.

These results suggest that rLG can offer a lower-cost, less disruptive pathway to decarbonising heating in certain contexts – particularly where electrification would require significant retrofit.

Figure 1 German reference house and associated heating Total Costs of Ownership (TCO)

Supporting harder-to-abate industrial processes

In industry, rLG performs best in medium- to high-temperature applications, where electrification often requires substantial plant modification and capital investment.

Our analysis identifies several viable use cases, including brick firing plants. While electrification is technically possible, it typically requires major retrofits or full replacement of existing kilns. This leads to higher energy costs per unit of output compared with LPG or rLG blends, alongside additional capital expenditure.

Figure 2 Cost comparison for brick firing processes

Reducing pressure on energy systems

The report highlights the wider system implications of electrification. Fully electrifying current LPG demand in the sectors analysed would increase annual electricity demand by around 100 TWh and raise winter peak demand by around 20 GW. This would significantly increase the need for additional back-up capacity – equivalent to roughly 100 open-cycle gas turbine plants.

Substituting current LPG demand with rLG could help moderate these peak increases, reducing pressure on electricity supply during scarce hours – particularly during cold Dunkelflaute periods, when low renewable generation coincides with high demand.

From a network perspective, rLG can also play a role in easing transmission constraints. In constrained locations, they can limit additional peak load, reducing the need for costly grid reinforcement and supporting overall system adequacy.

Targeted emissions reductions

From a climate perspective, the value of rLG depends not only on supply volumes, but also on where they are deployed. Under a moderate supply scenario, cumulative emissions savings to 2040 could reach around 76 MtCO2e when replacing fossil LPG, with greater savings where rLG displace higher-carbon fuels such as heating oil.

Implications for policy

Overall, the findings point to a clear role for rLG as part of a balanced decarbonisation strategy. Policy should enable their use where they provide a cost-effective complement to electrification and network-based gases.

Key priorities include