What to do about our truck problem?


13 / 09 / 22 - 2 minute read

Long-haul transport is a significant contributor to greenhouse gases. An investment by PATRIZIA into bio-LNG could play a small but critical part in solving the problem.

The next time a driver stands at your door holding your latest online order, it is likely that the trip will have been completed using an electric vehicle. However, behind that last mile delivery is hundreds, if not thousands, of carbon dioxide-strewn kilometres involved in its production and distribution.

The switch to a net-zero economy poses a problem for long-haul road transport, which is responsible for approximately 6% of greenhouse gas emissions in the European Union. The nature of the loads, the long distances travelled and the drivetrains (the system that connects the transmission to the axels) mean heavy-duty trucks used are almost impossible to electrify.

In 2020, the European Union noted road freight transport will increase by 33% by 2030 and 55% by 2050. Experts believe long-haul transport will eventually use a mix of biofuels, hydrogen and hydrogen-derived fuels. However, most are still in the research phase. In between, LNG (liquified natural gas) is promoted by the truck industry as an alternative to diesel.

Natural gas has a 25% lower carbon content than diesel for the same energy content, and gas trucks emit fewer air pollutants. In addition, existing truck and infrastructure investments can still be used. But, although LNG is cleaner, it is still a fossil fuel, which means it can only ever be a bridge to full decarbonisation of the sector.

"But there is an alternative to LNG that is carbon neutral, available today, and takes advantage of existing infrastructure and engine technology," says Matteo Andreoletti, Head of Infrastructure Equity, Europe and North America at PATRIZIA. "That solution is bio-LNG, and it is one of the aspects that led us to invest in Biomet."

Biomet produces biological LNG (bio-LNG) using organic waste from agriculture and urban environments. Bio-LNG offers similar advantages to LNG versus diesel. At the same time, the fixed production costs make bio-LNG a competitive and carbon-neutral alternative to conventional LNG, especially for the transport industry.

Biomet treats the organic waste with an anaerobic digestion process. Microorganisms break down (eat) organic materials in the absence of air. The resulting biogas consists of methane (CH4) and carbon dioxide (CO2). The methane is separated from the CO2, purified and liquified.

This carbon-neutral biogenic methane can then be used to replace transportation fuel from fossil sources. The CO2 can also be captured for distribution to the food and beverage industry where it is used for carbonating beer and soft drinks, amongst other uses.

The production of bio-methane can also help prevent agriculture emissions. The material left after the anaerobic digestion happens, typically called ‘digestate,’ is a wet mixture with few emissions but rich in nutrients that can be used as fertilizer for crops.

Oliver Hailzl, Director of Infrastructure at PATRIZIA, says that apart from the environmentally friendly aspect of Biomet, the company owns every step in the production chain of creating bio-LNG. The raw organic material is treated at a plant in San Rocco al Porto, a commune about 50 km southeast of Milan. The biomethane is then transformed into liquid form at another site in Belgioioso and distributed through the company's on-site filling station and third-party pumps.

"It is that vertical integration that is very appealing," says Hailzl. "Many people in Italy have aspired to do it, but only Biomet has managed to pull it off."

Value in waste

Biomet produces biological LNG (bio-LNG) using organic waste from agriculture and urban environments. Bio-LNG offers similar advantages to LNG versus diesel. At the same time, the fixed production costs make bio-LNG a competitive and carbon-neutral alternative to conventional LNG, especially for the transport industry.

Biomet treats the organic waste with an anaerobic digestion process. Microorganisms break down (eat) organic materials in the absence of air. The resulting biogas consists of methane (CH4) and carbon dioxide (CO2). The methane is separated from the CO2, purified and liquified.

This carbon-neutral biogenic methane can then be used to replace transportation fuel from fossil sources. The CO2 can also be captured for distribution to the food and beverage industry where it is used for carbonating beer and soft drinks, amongst other uses.

The production of bio-methane can also help prevent agriculture emissions. The material left after the anaerobic digestion happens, typically called ‘digestate,’ is a wet mixture with few emissions but rich in nutrients that can be used as fertilizer for crops.

Oliver Hailzl, Director of Infrastructure at PATRIZIA, says that apart from the environmentally friendly aspect of Biomet, the company owns every step in the production chain of creating bio-LNG. The raw organic material is treated at a plant in San Rocco al Porto, a commune about 50 km southeast of Milan. The biomethane is then transformed into liquid form at another site in Belgioioso and distributed through the company's on-site filling station and third-party pumps.

"It is that vertical integration that is very appealing," says Hailzl. "Many people in Italy have aspired to do it, but only Biomet has managed to pull it off."

Over 15,000 heavy-duty trucks in Europe are running on LNG today. Industry estimates are that this could quickly scale up to 300,000, a sizeable market opportunity for bio-LNG.

Matteo Andreoletti, Head of Infrastructure Equity, Europe and North America at PATRIZIA

Big development plans

Biomet's plant currently has a capacity for 40,000 tons of organic waste yearly. The liquefaction facility has a capacity for 8,800 tons of bio-LNG per year, potentially increasing production to 26,400 tons.

PATRIZIA Infrastructure purchased an 80% majority stake on behalf of clients. The €75 million deal, which comprises the equity stake and a committed capital expenditure programme, comes at a late stage of construction of new facilities in the Po River valley, Italy's agricultural heartland.

A liquefaction plant is expected to be commercially operational soon, a new biogas plant for December 2022, and four biomethane upgrading plants by 2024. These will upgrade third-party biogas from agricultural feedstock.

"Biomet will be Europe's largest plant producing bio-LNG using biomethane from bio-waste," notes Andreoletti. "It will also be the first plant in Italy directly connected to the SNAM national gas transportation network with an on-site filling station. The Biomet facility will also be linked to key highways to intercept the waste flows from central to northern Italy."

European heavy road transport at a glance

- There are 6.2 million light- and heavy-duty trucks on the roads of the European Union

- Diesel trucks are responsible for about 6% of all EU carbon emissions

- 65-70% of inland freight is transported by diesel trucks

- Road freight is expected to increase by 55% by 2050, so decarbonisation of heavy-duty road transport is crucial to the EU

- Italy is the second largest market for biogas in the EU behind Germany, with 2 billion cubic metres produced to date