Is Methane Gas ... Credible Road Transport Alternative

8/6/2019 Is Methane Gas ... Credible Road Transport Alternative

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mm/b ENGVA, 2004

IS METHANE GAS REALLY A CREDIBLEALTERNATIVE IN THE ROAD TRANSPORT

SECTOR?

Peter BoisenChairman of European Natural Gas Vehicle Association (ENGVA)

[email protected]


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5.3 MILLION NGVs WORLDWIDE

Canada: 20,500

USA: 146,900

Venezuela: 44,100

Colombia: 100,000

Brazil: 1,117,900Bolivia: 45,000

Argentina: 1,459,300

Russia: 46,000

China: 127,100

Egypt: 67,100

Europe: 441,000

New Zealand: 500

Indonesia: 6,600

Japan: 28,000

Korea: 9.000

Malaysia: 18,300

Thailand: 11,200

Australia: 2,100

India: 222,300

Iran: 128,700

Pakistan: 1,000,000Bangladesh: 42,200

Armenia: 47,700

Ukraine: 67,000

120,000 buses, 100,000 trucks, 5,100,000 carsSource: The GVR, July 2006


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METHANE LD/MD VEHICLES

ON THE EUROPEAN MARKETOEM offers:

Citron Berlingo/C3

Fiat Dobl/Ducato/Multipla/Panda/Punto

Iveco DailyMB 200E NGT/Sprinter

Opel (Astra)/Combo/Zafira

Peugeot Partner

Renault Kangoo

Volkswagen Caddy/Crafter/(Golf)/TouranVolvo S60/V70/(S80)

Some QVM offers:

Ford FocusJollySkoda OctaviaSmart


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WORLDWIDE USE OF NG BUSES

Air quality problems and high oil prices have

accelerated the use of NG buses all around the world.According to the best available statistics the total NGbus fleet now exceeds 140,000 units:

China 32,400, Ukraine 30,500, India 10,100, USA 10,000, Armenia 9000,Korea 9000, Russia 8000, Egypt 5400, Mexico 3000, Iran 2400, France2000, Italy 1800, Germany 1300, Japan 1100, Bangladesh 1000, Canada

1000, Australia 900, Sweden 700, Spain 400, Portugal 250, Slovakia 200,Bulgaria 150, Turkey 150 and a long range of countries with somewhatsmaller fleets.

Together these buses consume as much fuel as 2

million passenger cars.


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WORLDWIDE USE OF NG TRUCKS

The world fleet of NG trucks is around 100,000 units, most of them

MD trucks using CNG tanks, but also some HD trucks using LNGtanks. For city operated vehicles like garbage trucks CNG vehiclesare chosen to help reduce air quality problems, but in thecommercial sector total operating costs is the decisive factor

which is favouring dual fuel LNG trucks. Existing larger fleets ofNG trucks include:

Russia 35,000, Ukraine 29,500, Armenia 14,000, Japan 14,000, Germany 6700,

Myanmar 3600, Egypt 3400, USA 2000, Australia 1100, Spain 500, UK 400, Poland400, France 400, Latvia 300, Italy 500, and Sweden 300

Together these trucks consume roughly as much fuel as one

million passenger cars.


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GAS FILLING STATIONS IN SWEDEN

Source: Fordonsgas



MARKET GROWTH IN SWEDEN

(Million Nm3)

Methane now accounts for 0,50 % of the Swedish

road fuels. This figure would grow to 2 % in 2010with an annual growth of 35 %.



THE HISTORY OF BIOGAS

Biogas used already two thousand years ago

in ChinaPrinciples described by Volta in 1776

Pasteur in 1884 described how biogas from animal

by-products could replace the coal based town gas

Manure used as feedstock for some 2 million smalldomestic biogas plants in India - providing both fuel

and fertilizer


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EU-15 THEORETICAL BIOMETHANE POTENTIAL 1200 TWH.THE TOTAL USE OF ROAD FUELS IS ABOUT 3200 TWH OR275 MTOE)

The German Wuppertal institute in January 2006

released an estimate that up to 20 % of all roadfuels by 2030 could be replaced by biomethane


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SOURCES FOR PRODUCTION OF BIOMETHANE

Syngas from forest industry waste

Syngas from salix grown on set-aside land

Biogas from energy crops grown on set-aside land

Biogas from manure

Biogas from other agricultural waste Biogas from organic municipal waste

Biogas from sewage sludge Biogas from food industry waste

Biogas from park and garden waste

Landfill gas


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Yields MWh/ ha from crop based biofuels(data from recent German and Austrian studies)

MWh/ha

0 5 10 15 20 25 30 35 40 45

RME (rape)

Methane (maize)

Ethanol (wheat)

MWh/ha


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BIOMETHANE POTENTIAL (% of all vehicle fuels)Conventional organic waste, use of currently set-aside land, assumed

8 % of annual forest growth

0,0 10,0 20,0 30,0 40,0 50,0 60,0 70,0

United Kingdom

Sweden

Spain

Portugal

Netherlands

Luxemburg

Italy

Ireland

Greece

Germany

France

Finland

Denmark

Belgium

Austria

waste

set-aside

forest

Source: Peter Boisen, Target 2010 Partners, May 2003


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ADVANTAGES WITH BIOMETHANE

Landfilling of organic waste must be phased out in Europe by 2016Biogas production offers an approved and efficient method forbiological waste treatment

Reduction of fossil carbon dioxide emissionsBiomethane results in lower net greenhouse gas emissions than anyother vehicle fuel

Reduced air quality problemsLess harmful emissions than any other fuel(except H2 produced from renewable resources)

Security of supply

Large domestic waste potential in all countries, higher fuel output perhectare of land than competing crop/forest based biofuel options

Nutrients recycled, reduced eutrophication

NPK (nitrogen, phosphorus and potassium) returned to the soil,thus reducing the use of artificial fertilizers


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URBAN AND RURAL WASTE

NOT A PROBLEM, BUT A RESOURCE

Substantial oil replacement potential

Raw materials available both in citiesand rural areas

Process provides both gas and fertilizer

Biogas can be used to generate electric power,but the heat produced is then often wasted

Gas upgraded to a quality on par with natural gas

can be transported via the natural gas grid, andused to substitute natural gas as a vehicle fuel


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METHANE ON THE ROAD TO BECOME A

SIGNIFICANT FUEL ALTERNATIVE

Methane today accounts for 0,5 % of all fuelused in Swedish road transports

Biomethane accounts for 50 %, natural gas 50% of the gas volumes used for road transports

The total annual use of methane in roadtransports is currently around 40 million Nm3


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CO-DISTRIBUTION OF BIOMETHANE (UPGRADEDBIOGAS) AND NATURAL GASCycle of raw material for production of biogas

Raw biogas55-65% methaneMetals

GlassElectronic

devices

Wastefor

combustion

Biode-gradableorganicwaste

Digestionresiduesback toagriculturalland

Digestiontank

(non-contaminatedorganic waste)

MSW

sludge

Restaurant

Digestiontank

(sludge)Digestionresiduesto municipalparks etc.

Raw biogas

55-65% methane

Purifi-cationplant

Natural gas

sludge

96-98%bio-methane

Greengas

principle


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THE GREEN GAS PRINCIPLE

Households

Industry

VehiclesNatural gas

Biomethane

The possibility to inject produced biomethane into the natural gasgrid, and then withdraw a similar volume at another point on the gridprovides essential synergies and economic advantages.

Whether the methane molecules used in the car are of fossil or

renewable origin makes no difference in the engine.


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CONNECTING THE BIOGAS ISLANDS

Sweden now has some 15 cities relying on biomethane for their NGvehicles with many more cities in the pipeline

Four regional distribution companies cooperate regarding new stationsin white spots

To cover wide areas of Sweden yet without either biomethane ornatural gas supplies LCNG filling stations are now proposed. These

stations would supply LNG for dual fuel trucks in long distance traffic,but also be able to refuel conventional CNG vehicles.

The LCNG stations will be supplied by 21 tonne LNG trailers using

imports, local liquefaction of high pressure pipeline gas at pressurereduction stations, or cryogenic purification and condensation ofbiogas.

Making LNG available for dual fuel HD vehicles also means a fast

growth potential for this type of vehicle, and a very significant oilreplacement potential.


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CONCLUSIONS IN A RECENT SWEDISH

STUDY There is a possibility, considering technology as well as

economics, to replace a large portion of todays use of vehicle

fuels (petrol and diesel) with biomethane and natural gassupplied in the form of LNG.

LNG is an attractive alternative for heavy duty vehicles whichcould simultaneously support the distribution of biomethane andnatural gas in the form of CNG.

LNG can be produced both from biogas and natural gas.

The infrastructure could be developed in steps based on supplyfrom the natural gas grid, or from local biogas production. ForHD trucks in long distance traffic a network of 24 well locatedLCNG filling stations would be sufficient in order to provide anation wide coverage in Sweden.

Quote from recent study made by Vattenfall Power Consultant


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INVESTMENTS REQUIRED FOR AN LNCGINFRASTRUCTURE

LCNG infrastructure with annual sales of 2.4 TWh LNG

(240 million Nm3, or about 3 % of total Swedish road fuels)

LNG production facilities in Malm 27 MSEK ( 4.9 MM AUD)

LNG production facilities in Gteborg 80 MSEK (14.4 MM AUD)

20 LNG trailers 54 MSEK ( 9.7 MM AUD)

24 LCNG stations 89 MSEK (16.0 MM AUD)

TOTAL (2,4 TWh LNG) 250 MSEK (45.0 MM AUD)

Specific investment costs 0,1 SEK/Nm3 (0,018 AUD/Nm3)(when operating at full capacity)

(1 SEK ~ 0.18 AUD)

Quote from recent study made by Vattenfall Power Consultant


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50 % REDUCTION OF FOSSIL CO2 EMISSIONS

Cars using natural gas instead of petrol have 25% lower CO2 emissions

Cars running on biomethane have zeroemissions of fossil CO2

With a 50 % share of biomethane, and with 10 %petrol use in bi-fuel cars, the net emissions offossil CO2 are currently on average reduced by 53

%

Dedicated NGVs totally relying on biomethane,

e.g. bus fleets in 14 Swedish cities, of course,completely eliminate fossil CO2 emissions


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LESSONS LEARNT CONCERNING FUEL

SUPPLY AND DISTRIBUTION Moisture or oil entering the vehicle gas tanks would sooner or later result in

serious mechanical problems thus important to control the dispensed gas quality

Underdimensioned CNG refuelling stations could result in overheating, andgasified compressor oil entering the vehicle tanks.

The refuelling station status must be continually supervised (usually via remotecontrol), but also via regular replacement of filters.

Customers expect round the clock availability of refuelling, and easy payment viastandard credit cards (in addition to any local cards used)

Essential with 24-hour maintenance preparedness to minimize refuelling stationdowntime. Early adapters are often fleet customers that will not tolerate frequent

and lengthy unavailability of the fuel.

As backup against maintenance downtime on biogas purification units LNG tanksholding several days supply is a cost efficient solution

Use economy of scale i.e. standard solutions rather than starting from scratch atevery new biogas production plant, purification unit, or refuelling unit.


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LESSONS LEARNT CONCERNING VEHICLES

Conversion of light duty petrol engines mayresult inincreased engine wear unless suitable changes aremade to valves, valve seats and cylinder heads.

Technical problems in HD bus fleets are often causedby the use of unsuitable lube oils, or by ignoringmaintenance requirements.


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BASIC TECHNICAL CONDITIONS FOR MARKET

GROWTH IN EUROPE

Standards covering fuel quality, fuel distribution

facilities and vehicle specifications HD engine certification rules and national type

approvals

LD vehicle certification rules and European wholevehicle type approval system

Regular inspections of vehicles and refuellingfacilities ensuring that the fuel supplied will performas intended in different vehicles (a task for thenational authorities)

OTHER FACTORS AFFECTING MARKET


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OTHER FACTORS AFFECTING MARKETGROWTH

Available refuelling structure will determine vehicle use and fuelsales (a joint task for government and various stakeholders)

Large investments (infrastructure/vehicles) require stableconditions over a 15 year period (a task for national

governments)

Inconveniences suffered by early adapters must becompensated via adequate incentives (a task shared by

national, regional and municipal government)

Offered alternatives must be efficient, sustainable, limit airpollution and reduce GHG emissions


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HOW LONG DOES IT TAKE TO DEVELOP THE

MARKET? In 1995 Sweden had 1 bus filling station and 1 public station

Sweden, with 9 million inhabitants, now has some 25 refuelling stationsreserved for buses and other municipal vehicles, and another 80 publicrefuelling stations. The number of public stations grows by 35-40 %annually, as does the fuel sales volume. The vehicle fleet right now isaround 10,000 units.

Germany with 84 million people has over a four year period added 500new stations, and now has a total of some 700 stations.

The transition from natural gas to biomethane could be made step by

step. Austria and Germany both plan a 20 % biomethane share by 2020latest. Sweden has already reached a 50 % share, Switzerland liessomewhere in between.

Modern factory built NG vehicles are available from most European

OEMs. To provide RHD versions of existing LHD vehicles is no big dealonce the market demands the vehicles.


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INCENTIVES

The Swedish taxes on vehicle fuels are:- petrol 0,552 SEK/kWh (AUD 0,099/kWh or 0.87/l)- diesel 0,368 SEK/kWh (AUD 0,066/kWH or 0.65/l)- NG 0,112 SEK/kWh (AUD 0,020/kWh or 0.20/Nm3)- biomethane 0 (meaning AUD 0.20/Nm3 less than NG)

NGVs from 2006 enjoy a slight annual road tax advantage over petrol vehicles,which in turn have a significant advantage vs diesel vehicles

Concerning income tax payable by users of company cars NGVs and hybrids

from 2006 enjoy a 40 % reduction (E85 cars a 20 % reduction) of the taxablevalue, but max 16000 SEK, which in practise means an annual tax reduction by8000 SEK ( 870)

The doubled company car tax benefit for NGVs in 2006, in combination with acontinually improved refuelling infrastructure, about 30 % lower fuelling costs,and the exemption from the Stockholm congestion tax, has meant boomingsales. Flex fuel (E85) cars, NGVs, and hybrids together now account for 15 % ofthe new car sales in Sweden!

On the second hand car market NGVs disappear as fast as they are offered for

sale. In this context lower fuelling costs, avoided congestion tax in Stockholm,and free parking benefits in many cities are the three main drivers.


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OTHER GOVERNMENT SUPPORT

The national government provides a 30 % subsidy on approvedinvestments in alternative fuel refuelling infrastructure and biofuelproduction facilities

Gteborg in 1998 made a commitment that 50 % of all municipally usedvehicles inside five years would be environmental vehicles. Othermunicipalities followed. Today the municipal or regional targets areoften 90 %.

Also the national government now has a procurement policy whichdemands that a certain share must be environmental vehicles. At theend of 2005 the target was raised from 50 to 75 % (certain exemptionsfor the police, military demands, ambulances etc).

Leadership by example is slowly advancing also on the national level(meaning that also ministers have now started to use environmentalvehicles).

On the municipal level this change took place years ago. The mayor ina city with local production of biomethane would normally use a bi-fuelCNG car.

CRITICAL SUCCESS FACTORS BEHIND


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CRITICAL SUCCESS FACTORS BEHINDBOOMING SWEDISH MARKET FORENVIRONMENTAL CARSEuropean strategies for reduced oil dependancevia biofuels and other alternative fuels

Local action driven by national,regional and municipal initiatives

Leadership qualities among differentstakeholders government, fuel distributors,car industry, and NGOs

Biogas Cities is a Swedish initiative allowing citiesto share experiences in a search for best practise.BiogasMax is a new EU project 2006-2009 whereexperiences from many countries are shared.


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Is Methane Gas ... Credible Road Transport Alternative