Lower-Carbon Substitutes for Natural Gas for Use in Energy-Intensive Industries: Current Status and Techno-Economic Assessment in Lithuania

Significant shortfalls in meeting the climate mitigation targets and volatile energy markets make evident the need for an urgent transition from fossil fuels to sustainable alternatives. However, the integration of zero-carbon fuels like green hydrogen and ammonia is an immense project and will take time and the construction of new infrastructure. It is during this transitional period that lower-carbon natural gas alternatives are essential. In this study, the industrial sectors of Lithuania are analysed based on their energy consumption. The industrial sectors that are the most energy-intensive are food, chemical, and wood-product manufacturing. Synthetic natural gas (SNG) has become a viable substitute, and biomethane has also become viable given a feedstock price of 21 EUR/MWh in the twelfth year of operation and 24 EUR/MWh in the eighth year, assuming an electricity price of 140 EUR/MWh and a natural gas price of 50 EUR/MWh. Nevertheless, the scale of investment in hydrogen production is comparable to the scale of investment in the production of other chemical elements; however, hydrogen production is constrained by its high electricity demand—about 3.8 to 4.4 kWh/Nm 3 —which makes it economically viable only at negative electricity prices. This analysis shows the techno-economic viability of biomethane and the SNG as transition pathways towards a low-carbon energy future.