SEA-LNG Urges European Commission To Protect Liquefied Biomethane Supply Chains
Our take
The maritime sector's journey toward decarbonization is facing a critical juncture, highlighted by SEA-LNG’s recent call to the European Commission. Their plea to safeguard mass-balance accounting for liquefied biomethane (LBM) underscores a complex reality: achieving ambitious emissions reduction targets requires nuanced regulatory frameworks. The current proposal to potentially restrict this accounting method could inadvertently increase costs and impede the widespread adoption of LBM as a viable alternative fuel. This is particularly relevant given the broader shifts we’re observing, such as the [Shipping Industry Welcomes Proposed Inclusion of Two Indian Ship Recycling Yards to EU List], demonstrating the EU’s ongoing efforts to shape global maritime practices and sustainability standards. The potential for regulatory hurdles in LBM adoption must be carefully considered alongside these other initiatives. Further, the expansion of the Indian Register of Shipping to Hamburg, as detailed in [Indian Register of Shipping Expands To Hamburg To Connect European Suppliers With India’s Shipbuilding Boom], highlights the interconnectedness of global supply chains and the need for harmonized regulations to facilitate efficient and sustainable operations.
The mass-balance approach allows LBM producers to demonstrate that the biomethane injected into the grid is equivalent to that delivered to the end-user, even if it’s physically mixed with conventional natural gas. This system is crucial for scaling up LBM production, as it avoids the impracticality of segregating biomethane throughout the entire supply chain. Eliminating or severely restricting this accounting method would create a significant disincentive for investment in LBM production and infrastructure, potentially derailing the industry’s progress toward reducing greenhouse gas emissions. The argument isn’t simply about the viability of LBM, but about the practical and economic realities of transitioning to a low-carbon maritime fuel landscape. The broader context of how shipping companies are leveraging emissions compliance for commercial gain, as discussed in [From Cost Centre To Commercial Edge: How Shipping Companies Are Turning Emissions Compliance Into Leverage], illustrates that a supportive regulatory environment is essential for driving innovation and investment in sustainable solutions. A poorly designed regulation risks transforming a potential opportunity into a financial burden.
The European Commission’s decision will have far-reaching consequences, not only for the European maritime sector but also for the global energy transition. LBM offers a pathway to significantly reduce the carbon footprint of shipping, utilizing renewable feedstocks and contributing to a circular economy. However, its success hinges on a clear and consistent regulatory framework that fosters investment and innovation. The debate surrounding mass-balance accounting reflects a broader challenge in decarbonization efforts: balancing ambitious environmental goals with the practical realities of implementation. It’s a tension that requires careful consideration of economic impacts, technological feasibility, and the need for international collaboration. The scientific community, including organizations like ours, must continue to provide validated data and empirical evidence to inform policy decisions and ensure that regulations are based on sound science and measurable outcomes.
Looking ahead, the crucial question is whether the European Commission will prioritize a pragmatic approach that supports the growth of LBM and other low-carbon fuels, or whether it will adopt a more restrictive stance that could stifle innovation and hinder the maritime sector’s progress toward decarbonization. The industry is closely watching this development, and its outcome will likely set a precedent for regulatory approaches to renewable fuels in other sectors and regions. Will the EU demonstrate its commitment to a truly integrated data ecosystem, enabling real-time tracking and verification of biomethane flows, or will it create barriers that impede the transition to a sustainable maritime future?
Industry coalition SEA-LNG is urging the European Commission’s Directorate-General for Energy (DG ENER) to protect the mass-balance terminal chain of custody. This comes ahead of expected proposed revisions in 2026 to the implementing framework for the Renewable Energy Directive (RED III).
In SEA-LNG’s latest report, ‘Liquefaction by Equivalence Pathways for Liquefied Biomethane: A Policy Framework to Enable Scalable Maritime Decarbonisation’, SEA-LNG argues that liquefied biomethane (LBM), delivered via mass-balance terminal pathways using liquefaction by equivalence, is the lowest-cost and lowest-emission chain of custody for compliance under FuelEU Maritime and EU ETS.
According to SEA-LNG analysis, LBM bunker volumes grew approximately 100-fold in 2025 compared with 2024, with the overwhelming majority delivered via the mass-balance terminal pathway. It can leverage Europe’s existing network of more than 33 LNG import terminals and around 200,000 km of gas transmission infrastructure, without requiring new capital investment in liquefaction plants.
DG ENER is currently preparing proposed revisions to RED Annex V, Annex VI and Implementing Regulation (EU) 2022/996, all of which will be binding on Member States and will determine the legal status, GHG accounting treatment and commercial viability of the mass-balance terminal chain of custody. SEA-LNG warns that inadvertent restriction of the pathway through narrow definitions, inflated default emission factors, or inconsistency between the instruments could reduce the availability of compliant low-carbon marine fuel and raise costs for European shipping.
Steve Esau, Chief Operating Officer, SEA-LNG, commented: “The global maritime sector faces a critical decarbonisation challenge with Europe playing an important role in this push. Liquefied biomethane is one of the few fuels capable of meeting Europe’s maritime decarbonisation obligations at the scale and speed the regulations demand.
“The mass-balance terminal route, using liquefaction by equivalence, is why LBM bunkering grew a hundredfold last year. It uses infrastructure that already exists, so it is scalable and lower cost than the alternatives such as physical segregation. Such dramatic growth illustrates the maritime sector’s appetite for decarbonisation. Europe has an opportunity to become a global leader in biomethane, e-methane and renewable methane pathways. Today, DG ENER can unleash Europe’s energy potential.”
SEA-LNG is calling on DG ENER to recognise liquefaction by equivalence and recondenser liquefaction as valid RED III mass-balance pathways, and to assign realistic, differentiated default GHG emission values for each liquefaction route based on measured operational data. The coalition is also urging full regulatory coherence between Annexes V/VI and Implementing Regulation 996, to eliminate definitional inconsistency, alongside preservation of cross-border mass-balance mechanisms, including cross-terminal nominations, consistent with single market principles.
Underpinning all of this, SEA-LNG wants long-term investment certainty through a stable regulatory framework extending beyond 2030. Shipowners and operators will look to commit capital for 20–25-year vessel lives. Any regulatory instability will delay orders and could lead to reflagging to non-EU jurisdictions.
Mass balance is not a novel concept for the maritime sector: it is already the established chain of custody model for bio-based chemicals and plastics, agricultural commodities such as cotton, and Sustainable Aviation Fuel under both CORSIA and ReFuelEU Aviation.
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