Renewable Liquid Gases: A Practical Pathway to Decarbonisation in Europe

A white paper commissioned by SHV Energy and DCC Energy, and developed by Frontier Economics, finds that renewable liquid gases (rLG) can play a complementary role alongside electrification in supporting Europe’s decarbonisation journey.

Liquefied petroleum gas (LPG) currently plays a structurally important role in rural and off-grid energy supply. In 2024, total LPG demand across the EU-27 plus Switzerland, Norway and the United Kingdom amounted to around 30 million tonnes.

As a lower-carbon alternative, rLG can be used as a ‘drop-in replacement’ within existing LPG infrastructure. Where applied, rLG enables households and heavy industry to reduce emissions without waiting for costly system changes or major upgrades. This is especially important in rural and off-grid areas, where electrification can be constrained by grid capacity, high upfront investment and delivery timelines.

The analysis also shows that rLG blends can be broadly cost-competitive with electricity-based off-grid energy options, and that increased use of rLG blends can help reduce pressure on peak electricity demand and limit grid reinforcement.

From a system perspective, fully electrifying today’s LPG would add 4% of Europe’s electricity consumption, augment winter peak demand by around 20 GW which would require up to EUR 56 billion in new generation capacity while placing added pressure on grid networks.

Contrastingly, rLG could meet between 70-80% of the remaining LPG demand by 2040. Clear and predictable policy frameworks will be essential to unlock this potential, including coherent carbon pricing, technology-neutral demand-side instruments such as mandates and a level playing field across decarbonisation technologies.

SHV Energy will continue to work with partners across the energy value chain to help deliver renewable liquid gas solutions that support near-term emissions reductions where they are most effective.

Download the white paper here.