Aiming to straighten the market labelling of bio-LNG, Commissioner Jørgensen is addressing concerns of distorted competition caused by 'virtual liquefaction' under the Renewable Energy Directive (RED II). The debate directly affects biomethane producers, bio-LNG plant investors, and environmental policy actors, potentially reshaping costs and incentives in the European biofuel sector.
The answer responds to parliamentary questions by MEPs Engin Eroglu and Christine Singer from the Renew group, who flagged the issue of virtual liquefaction—where fossil LNG is touted as bio-LNG through biomethane certificates without real physical liquefaction. This practice undermines emission accounting and may disadvantage actual bio-LNG producers.
Jørgensen’s detailed response confirms that the Commission is revising Annexes V and VI of RED II to include stricter rules on liquefaction pathways, slated for draft release soon. The update plans to enhance the EU Union Database for tracking greenhouse gas emissions from both physical and virtual liquefaction, thereby ensuring fair treatment and preventing discrimination against genuine bio-LNG facilities. The emission factors and sustainability certification extended by Implementing Regulation 2022/996 and the FuelEU Maritime Regulation framework also emphasize crediting low-emission production pathways.
This policy direction indicates a strengthening of EU-level oversight and transparency—prioritizing emission accuracy and fairness over looser accounting methods. It nudges bio-LNG production toward verifiable environmental performance, potentially raising compliance costs for virtual liquefiers and benefiting producers investing in physical liquefaction technologies.
Stakeholders impacted include EU bio-LNG industry players, national regulatory authorities seeking to enforce robust emissions records, environmental NGOs advocating for real emission cuts, and investors who backed innovative physical liquefaction plants. While physical liquefaction producers will likely gain market clarity and protection, virtual liquefaction operations may face restrictions or heightened scrutiny. The amended framework promises moderate to major impacts on these groups' operational and financial strategies.
The Commission's forthcoming delegated act feedback is expected within months, offering an institutional path to respond to this evolving issue and signaling the EU's policy stance on bio-LNG emissions and market integrity.