Methane will struggle for a share of the European market of diesel fuel

At the beginning of 2017 the world gas cylinder vehicle fleet stepped over a mark of 50 million units. At the moment a number of methane cars come nearer to 25 million and propane-butane — to 27 million pieces. In the next years the world vehicle fleet will continue progressive growth. It is quite possible that it will be helped by campaign against diesel fuel in the European market.

The International Power Agency (IPA) considers quite probable doubling of world vehicle fleet in the next 25 years that is the total of cars in the world has to reach about 2.5 billion units. In principle there is nothing impossible in it, considering a number of people and prompt automobilization of such countries, as China where sales of cars of all classes from 2006 to 2016, according to The International Organization of Motor Vehicle Manufacturers (OICA), grew almost four times — from 7.2 million to 28 million pieces. Actually only China for the last four years provided a gain of world vehicle fleet on 100 million cars.

Thus as probable IPA considers the scenario at which world demand for oil continues to grow till 2040 — generally due to the lack of convenient alternative to black gold in the field of freight automobile transportation, of aircraft and petro chemistry. But in sector of cars, according to forecasts of IPA, consumption of oil will decrease — because of increase of efficiency of vehicles and also because of growth of use of biofuel and spread of electric cars and nothing about the gas engine direction.

We constantly wrote that in world mass media gas remains a poor, deprived of attention relative among alternative motor fuels. Most likely, both methane and propane-butane are too close to oil production and everything that is connected with oil production is non-technological, not eco-friendly and unpromising. We ask not to be indignant with the last phrase as we speak not about objective reality and about its refraction in mass consciousness. If for several years the majority of mass media tells about the future crash of oil industry and triumph of electric cars, why to an ordinary viewer not to believe in crash of one and triumph of others?

The weight of this or that phenomenon in information space is not always equal to its weight in reality. Let’s give an example of the same electric cars. They are treated much more kindly by mass media than natural gas or propane-butane. Quantity of mentions of gas engine branch is much less than about electric cars, moreover, where it is simpler to gas motor fuel to get on pages of editions if the word «gas» is faced by a prefix «bio» and what about reality? There were only 2 million pieces of electric cars in the world at the beginning of 2017. It is incomparable to gas cylinder vehicle fleet.

At the end of 2015 a number of the vehicles working at natural gas reached 22.7 million units and in 2017, according to the most authoritative data of NGV Global in world gas engine branch, — 24.45 million. The gain of methane vehicle fleet made about 1.5-2 million pieces a year in recent years.

In 1996 the world methane vehicle fleet totaled about 850 thousand cars. That is for 20 with small years a number of gas cylinder cars (GBA) on compressed natural gas (CNG) grew almost in 29 times. The total number of methane gas stations by the present moment, according to NGV Global, exceeded 29 thousand units.

As for segment propane-butane, in 2010, according to World LPG Association, world propane-butane vehicle fleet totaled 17 million units and by 2016 reached already 26 million. That is growth is more than 50%. Considering average annual rates of a gain, this year the indicator has to exceed 27 million cars. In the sum both segments — both methane and propane-butane — at a boundary of 2016-2017 stepped over a mark of 50 million units.

We believe that the total of gas cylinder cars in the world is more than called sizes. The assumption is based on the simple, in general, fact: not all countries quickly publish data on the GBA. A striking example is also our country.

If to go deep into available statistics to which the international organizations refer, it is possible to find quite large lags. Certain countries for many years do not provide fresh data. It is possible to forgive some of them — for example, Macedonia and Tunisia, as their gas engine vehicle fleet was initially so small that could make impact on world statistics only at the level of an error. And here when such large gas engine countries as Ukraine hide its progress during some years, it cannot but set thinking: whether all methane transport is counted in the world?

We believe that the difference with the available data can be rather considerable — in repartitions of 1 million units. Fortunately, most of large players quickly share the data therefore, after all we have an opportunity to estimate development of branch and, knowing its dynamics, to foresee rather precisely further growth in the next years. In the current year the total of GBA in the world has to exceed 26 million pieces.

Some questions concerning statistics of China.

In recent years China was approved on the first position in a rating of the countries with the largest methane vehicle fleet. Total of GBA in the country is more than 5 million pieces (based on data for the beginning of 2016).

China is the largest producer of motor transport in the world. According to OICA, production of cars in the People’s Republic of China in 2016 jumped up on 14.5% — to 28.1 million units.
Transfer of transport to gas – a part of the state policy directed at the same time on improvement of an ecological situation and development of the perspective directions of automotive industry. Efficiency of implementation of the program is estimated, in particular, on reduction of specific volume of the fuel used on transport. Gas engine transport in the People’s Republic of China belongs to the class of energy saving cars.

A quantity of GBA in China grew from 1.1 million pieces in 2010 to 5 million by the beginning of 2016 (including 200 thousand units of transport on LNG). Annual growth rate made about 40%. According to the plan of the XIII five-years period by 2020 the People’s Republic of China has to reach rates of production of gas engine transport of 1.2 million pieces a year (it is supposed that 1 million — cars, 0.2 million — buses and trucks).

Already now 32 of 34 provinces of China have transport on natural gas. Besides its distribution went from internal regions rich with own gas to coastal regions where the LNG terminals is constructed.

Unfortunately, falling of prices of oil noticeably struck on alternative motor fuels in China in 2015. Oil is cheaper – it means that transfer of transport to gas is less favorable. Most painfully the low prices of oil struck on LNG transport. The western sources were exorcized nearly about crisis in the Chinese gas engine branch. But crisis in China is when only for the first quarter of 2016 571 methane stations are under construction. Now, by different estimates, their general quantity is in limits of 8-9 thousand units and by 2020 has to reach 12.5 thousand.

Let’s note that, on rough estimations, taking into account dynamics of growth in previous years and «oil shock» of 2015, the total of GBA in China by the present moment has to be within 5.5-6 million units. And it will considerably improve universal indicators.

On the second place by number of gas cylinder cars in the world is Iran. In the last two years it practically did not change, in 2015 having reached 4 million pieces (the latest data — November 2016). On development of this country its ambiguous position in the oil and gas market is partial removal of sanctions, care of the government and the foreign companies which cannot often agree about work in domestic market and slow development of oil processing affects, though it is necessary to recognize also progress of Iran. It is possible to give the recent contract with Renault which is called the largest automobile transaction in the history of the country as an example. It will allow increasing production of cars in Iran by tens of thousands of pieces a year.

It is interesting that for the last year gasoline consumption grew on 8.5% in Iran (to 80 million l per day). Now the country should import 10-12 million l of gasoline per day to satisfy growing demand. According to the estimates of specialists of the Iranian Union of alternative motor fuels if at gas stations to reduce the price of compressed natural gas on 1.5 thousand Iranian rials (4.4 cents), demand for gas motor fuel can be increased quickly. The relevant proposal came to the Ministry of oil, besides the Iranian management closely dealt with issues of improvement of ecology by fuel improvement of quality. In particular, the Administration of the President of Hassan Rouhani ordered car makers to start production, meeting standards of emissions of Euro-4. The program includes improvement of quality of gasoline and advance of compressed natural gas as environmentally friendly and cheaper fuel than gasoline and the diesel and also further development of a network of automobile gas-filling compressor stations (CNG filling station) is provided. Now in Iran, according to The Asia Pacific Natural Gas Vehicles Association, about 2.4 thousand stations.

The third place in the world table of gas engine leaders is taken by India which methane vehicle fleet in 2015 totaled 1.8 million units and at the moment exceeded 3 million. In itself there is no wonder for the country with the population more than 1 billion people, but growth of rates strikes.

The last few years the Indian management periodically addresses to gas engine branch as to a remedy to solve environmental problems. Last year the prime minister of India Narendra Modi emphasized importance of fight against climate change and a high role of reduction of harmful emissions. Quality of air in the cities of India promptly worsens, compelling the government to transfer the country to purer types of fuel quickly.

Not only methane segment develops but also propane-butane. In the middle of 2016 about 2.2 million cars working for propane-butane and consuming 330 thousand tons of this fuel were in India. By the end of financial 2016/17 of sale of liquefied carbonic acid as motor fuel in India grew approximately on 5% (to 346 thousand tons).

The specialized Indian enterprises note that the significant role in increase in demand was played by reduction of prices of propane-butane. After in October, 2016 it became twice cheaper than gasoline, its sales jumped up for 16% (from October 1 to December 31, 2016). In the current year growth proceeded. For example, in March 2017 on 8.2% more auto gas than in March of last year was realized in India.

The state is going to stimulate further increase in demand in the area of propane-butane with changes in the tax law, though objectively the greatest impact on development of gas engine branch is made by the East, will not disregard also the West. In particular the only country from the European Union in the first ten is Italy.

If in 2016 970 thousand cars on methane were here (from 1.27 million European GBA), now the local gas cylinder vehicle fleet at last exceeded 1 million units. Here also the network of methane gas stations, largest in Europe numbering according to the European gas engine association (NGVA Europe), 1176 units is located.

At the same time Italy is the second-large propane-butane vehicle fleet in the European Union (after Poland) and on a global scale it takes the sixth place. The total of the cars working for propane-butane in this country exceeds 2 million pieces. The number of gas stations with auto gas makes about 3.8 thousand (nearly 20% of all gas stations in Italy).

The majority of the Italian cars using propane-butane are the converted petrol cars. But there are many factory gas cylinder models — more than 100 GBA models of 24 car makers (including local) are presented in the Italian market. Also Italy is one of world leaders in production of the high-quality gas cylinder equipment. This country is also interesting by this comprehensive approach to the subject. It develops in both gas engine segments on all production chain (except production). It is a fine example to follow.

However Italy, being the undisputed European leader in the field of gas motor fuel, after all loses to some EU countries in a cryogenic segment.

Development of the LNG segment is perhaps, the major trend in world gas engine branch. There are 3307 traditional methane gas stations and 101 cryogas stations in Europe only, according to NGVA Europe. Thus the leader of the LNG direction is not Italy (10 cryogas stations) but Spain (22 cryogas stations). Moreover, Italy is not even included into the three of leaders, conceding also to the Netherlands (21 cryogas stations) and Great Britain (18 cryogas stations).

Most likely, leaders in this direction are the countries with the greatest number of capacities for reception of large-capacity LNG. For confirmation of these words it is enough to look at other leaders — France (9 cryogas stations), Portugal (7 cryogas stations).

Now it is necessary to tell some words about silent fight which involuntarily joined gas engine branch. It is about the conflict round diesel fuel in the European Union.

Not a lot of time passed from «diesel» scandal when it became clear that the Volkswagen Company artificially overestimated ecological qualities of diesel engines of separate models. Nevertheless it did not prevent. Sales of cars of this brand grew in 2016. But the company suffered enormous reputation losses. Besides, regulators (in the USA and Europe) became more attentive to look narrowly at indicators of cars of other brands.

On this background against diesel fuel in Europe large-scale campaign in something reminding fight against nuclear generation was launched. Plans for restriction of use of diesel fuel were presented. For example, in Stuttgart it will be forbidden for the cars with the diesel motors which do not meet the requirements of Euro-6beginning to entry the city beginning with 2018. However, restrictions will be introduced, only if the maintenance of harmful particles in air exceeds norm.

There were messages that France plans to stop sales of diesel and petrol cars by 2040 and Norway — to 2025. In the diesel market of Europe the easy panic which is actively warmed up by mass media began. «Sell the diesel cars!» It is probable that soon some countries should expect flow of European second-hand «diesels» at low price. In this story it is important for us that, first, diesel fuel is number one at the European motorists, secondly, if the situation develops further present rates, already today diesel has to look for eco-friendly replacement. And the choice in this situation is small: to stake on widely-advertised electric cars or on gas motor fuel.

Volkswagen as it turned out stakes on a considerable rate on the gas engine direction (at all deep respect for electro transport and sincere belief in its prospects). So, the manager of concern who is responsible for the gas engine direction noticed on pages of the Die Welt newspaper: «Our problem [in the field of compressed natural gas] that anybody knows nothing about this fuel». As notes the edition, cars on natural gas in many respects win against electric cars.

Actually similar opinion in the European mass media was expressed by the Head of Fiat Chrysler Automobiles Germany Giorgio Gorelli. He noted that transport on natural gas is as eco-friendly, as electric cars.
We believe that we are at the beginning of large fight of alternative motor fuels in Europe for the released niche in the market. However, it is unlikely diesel fuel will simply leave the scene, without trying to fight for a place in the sun.

Two years earlier it was considered that the gas engine vehicle fleet of Russia makes about 106 thousand pieces of equipment. But after specification of the Ministry of Internal Affairs by structures it became clear that actually its size is much more — 150 thousand. That is we see a special case of the phenomenon about which spoke at the very beginning of article: the real vehicle fleet can be more than the declared digits.

Most likely, toughening of norms of registration of the vehicles using methane and propane-butane as fuel allowed specifying data on quantity of GBA.

According to the Ministry of Energy, in 2016 the volume of realization of compressed natural gas in Russia made 535 million cubic meters, from 2013 to 2016 the volume of its realization grew on 32.2%. For the same period the level of loading of the automobile gas-filling compressed stations grew on 2% and made 26%. In 2017, according to the Ministry of Energy, commissioning of 46 objects of gas-filling infrastructure is planned.

The start of mass production of the Lada Vesta CNG car became one of the most significant events which occurred in the Russian gas engine branch. AvtoVAZ went towards its aim very long. The company managed to make some prototypes, to announce gas cylinder versions of Priora, Kalina and Granta. And at last is Vesta. Judging by the price tag, the car, the first in the domestic market, on natural gas as built has good prospects!

After the beginning of production Lada Vesta CNG it is possible to tell that the Russian car makers are ready to provide natural gas vehicles in all market segments.