Global energy and commodity price reporting agency Argus has launched a set of prices for liquefied natural gas (LNG) made from waste feedstock— a renewable fuel for the shipping sector. The prices, for both subsidised and unsubsidised waste-based bio-LNG, delivered on board, will bring new transparency to an important market for decarbonising maritime transport.

A FuelEU Maritime regulation that came into effect this year requires ships operating in EU waters progressively to cut greenhouse gas (GHG) emissions — starting with a 2pc reduction in 2025 and ramping up to 80pc from 2050. Bio-LNG is an attractive option for shipowner because it offers considerable GHG savings compared with fossil LNG and other low-GHG alternatives.

The EU regulation allows operators to “mass balance” their fleets, by attaching renewable gas Guarantees of Origin to a physical bio-LNG volume or by blending bio-LNG into fossil LNG. Demand for the fuel is set to rise steadily in the run-up to 2030, which is when the International Maritime Organization’s global GHG reduction target of 30pc kicks in, before deepening to net zero by 2050.

Argus’ new bio-LNG prices are the sum of three Argus prices — the Dutch TTF natural gas front-month, the LNG bunker premium to the TTF, and the price of Dutch waste-based biomethane. Added to this is a standardised regulated bio-LNG liquefaction fee charged to attribute biomethane certificates to a volume of LNG. Bio-LNG is made by liquefying biomethane, and is also growing in popularity in the long-haul trucking market as a replacement for diesel.

The prices allow counterparties to identify the bio-LNG bunker premium to existing TTF-linked fossil contracts. The price can also be used on an outright basis for contract and analysis purposes.

“Our new bio-LNG prices draw on Argus’ market-leading expertise across multiple commodities,” Argus Media chairman and chief executive Adrian Binks said. “As the maritime sector explores alternatives to fossil fuels, price transparency and market intelligence become a critical tool in helping market participants evaluate the cost of different pathways. Our new assessments were developed with broad input from the market.”

Argus will publish the bio-LNG delivered-on-board prices for northwest Europe on a weekly basis in Argus Biofuels and Argus LNG Daily. The price is available in €/MWh and $/mn Btu.
Source: Argus Media