Politics Home Article | LPG gas: a strategic asset in the UK’s net-zero energy transition

Energy security has returned to the top of the political agenda as geopolitical instability, fragile supply chains and sustained cost pressures expose weaknesses in the UK’s energy system. Too often, however, debate overlooks a critical pillar of resilience: the downstream oil and gas sector – the terminals, storage, logistics and distribution networks that deliver energy reliably to homes and businesses.

At a time of transition, this infrastructure should not be treated as a legacy system to be run down. It is a strategic national asset that must be protected and adapted to strengthen resilience today while enabling cleaner fuels tomorrow.

Recent developments illustrate why this matters. In 2025, the UK lost around a third of its refining capacity, driven largely by high operating costs. This reduced domestic flexibility and increased exposure to international market shocks. As refining capacity contracts, robust import, storage and logistics infrastructure – ports, terminals, storage and distribution – becomes even more important to managing risk, maintaining affordability and safeguarding security of supply.

It’s important for LPG too, a versatile energy source used for heating, hot water and cooking. Stored in tanks or cylinders, it provides a transportable energy source especially useful in off gas grid areas.

Calor is Britain’s leading supplier of this critical energy for rural households, agriculture, hospitality, industry and transport. These diverse applications are underpinned by a mature and resilient supply chain, developed over decades to manage fluctuations in demand and supply across regions and seasons.

Security of supply also depends on diversity of sourcing. The UK LPG market benefits from a balanced supply mix that combines domestic production (from UK refineries) with imports, over 93 per cent of which are sourced from European partners. This diversity reduces exposure to geopolitical risk and has helped insulate LPG consumers from the severe price volatility experienced by some users of heating oil in recently.

Targeted investment in downstream infrastructure delivers resilience benefits. Calor’s Canvey Island import terminal – the UK’s largest LPG storage terminal – demonstrates this clearly. A major investment programme has increased storage capacity and delivered extensive upgrades, strengthening reliability for UK customers.

Crucially, this same infrastructure is vital for decarbonisation. Calor is actively scaling BioLPG – a renewable, drop‑in fuel fully compatible with existing appliances, storage and distribution systems. It can deliver up to 90 per cent greenhouse gas emissions reductions compared with conventional LPG, without disruptive household retrofits or costly network upgrades. This makes them particularly suitable for off‑grid homes and businesses, where alternatives such as heat pumps may be less practical or affordable.         

Most BioLPG available in the UK is produced as a co‑product of sustainable aviation fuel (SAF) and biodiesel production. Since 2018, Calor has supplied BioLPG from facilities including Neste’s Rotterdam biorefinery and the Phillips 66 Humber refinery in the UK. As the UK’s SAF mandate scales, significant additional BioLPG volumes can be generated without increasing competition for sustainable feedstocks, though current market and policy incentives limit access to these supplies.

SHV Energy, Calor’s parent company, has demonstrated confidence in this model through its investment in a 100,000 tonne SAF facility in the Netherlands, due to commence operations in 2028. Their partnership with SkyNRG is expected to unlock 5,000–8,000 tonnes of BioLPG annually – enough to decarbonise thousands of off‑grid homes. The UK could incentivize this co-production in future UK SAF plants via the introduction of Renewable Liquid Heating Fuel Obligation, similar to the SAF mandate, but focused on the fuels rural communities need to heat their homes.

Continued investment in BioLPG depends on policy clarity and demand certainty, particularly for the UK’s four million off‑grid homes, where forthcoming EPC reform will shape the practical routes to decarbonisation. A phased Renewable Liquid Heating Fuel Obligation, alongside technology‑neutral heat policy and proper recognition of renewable liquid gases within EPC metrics, would provide a clear signal to investors while protecting consumers from disproportionate costs.

With the right framework in place, downstream oil and gas infrastructure can be part of a resilient, affordable and socially fair pathway to net zero. Far from being stranded assets, these networks are a durable foundation for the transition – linking energy security, affordability and decarbonisation into a credible strategy the UK cannot afford to ignore.