EU Future of Transport Fuels Report

Vice President Siim Kallas

Good News for Natural Gas and LPG now, with a potential of 10% of all EU vehicles running on LPG by 2020.

Plus a growing Electric then Hydrogen Infrastructure in the future. The EU study concludes that "Alternative fuels such as electricity, hydrogen, biofuels, synthetic fuels, methane or LPG will gradually become a much more significant part of the energy mix."[At the expense of Diesel and Petrol].

No single substitution candidate, however, is seen. Fuel demand and greenhouse gas challenges will most likely require the use of a great variety of primary energies. There is rather broad agreement that all sustainable fuels will be needed to resolve the expected supply-demand tensions.

Acceptance, however, will be decisive for a competitive acquisition of market shares by the different fuels and vehicle technologies. Any new fuels should demonstrate their availability, affordability and reliability. Compatibility with existing fuels and vehicle technologies would facilitate a smooth market transition and optimise the total system cost and customer acceptance.

Energy Mix

Political and regulatory support will be decisive in the first phase to support the development and market entry of alternative fuels able to respond to the decarbonisation objectives. Liquid hydrocarbon fuels are expected to remain predominant over the next decades. But the use of electricity, hydrogen, biofuels, synthetic fuels, methane and LPG will steadily increase.

Methane/Natural Gas/Bio Gas

Methane gas vehicles can play an important role in urban and medium distance transport in the mid term (2020). A 5% market share for CNG/LNG vehicles could be possible by 2020, with some 15 million vehicles. A higher market share could be reached towards 2030 and beyond. In the city, all types of vehicles can be operated: passenger cars, light duty vehicles, taxis or buses for public transport and trucks, substantially reducing pollutant emissions.

Heavy duty trucks could in the medium range start to replace compressed methane by liquid methane, as the first new engines are currently appearing on the market. In 2050, these vehicles could still take an important share. In urban transport, passenger cars would shift from gas to electricity, while in the medium transport range gas would be more suitable.

The methane vehicle fleet development within the EU is very different from country to country: Italy, Germany, Austria, the Czech Republic, Slovakia, the Netherlands, and Sweden have a reasonably good coverage of their territories with public methane filling stations allowing the development of the private use of light duty vehicles powered by methane. Sweden is leading in the use of biomethane, which is now accounting for 65 % of all the methane gas used in some 28.000 vehicles (as of June 2010). In Italy new passenger cars sold as methane vehicles in 2009 reached 7 % of all new registrations, and Sweden is close to a 5 % share.

A market share of 20 % of natural gas in transport fuels would allow a 5 % reduction of the CO2 emissions from all European vehicles. Assuming that 20 % of the gas used would be made up of bio-methane, the CO2 reduction would increase to 7 %. Over time, the share of biomethane in the overall natural gas supply could increase gradually and ensure further decarbonisation of methane powered vehicles.

***Methane use in buses and trucks substitutes for diesel fuel, and therefore can alleviate the imbalance in the European fuel market between gasoline and diesel. Decreasing pressure on diesel demand would then improve the overall energy efficiency of fossil fuel production.***

LPG

Liquefied Petroleum Gas (LPG) was the first true alternative motor fuel. A mix of butane and propane, LPG is derived from oil refining (40% of the world total; 75% of LPG in Europe) and natural gas processing (60% worldwide; 25% in Europe). LPG can be burned in a slightly modified spark ignited internal combustion engine. Though retrofitted systems have traditionally dominated the automotive LPG market, both supply and demand for new, manufacturer-equipped LPG-powered vehicles is emerging in a series of EU markets.

When LPG motor fuel is used in a properly equipped vehicle, it has advantages over conventional motor fuels, particularly environmental benefits:

•  On a well-to-wheel basis LPG’s CO2 emissions are 14% and 10% lower than those of petrol and diesel respectively.
•  NOx emissions are lower than for gasoline vehicles and much lower than for diesel vehicles.
•  No soot particles are emitted.
•  The octane number is high, which should improve engine efficiency.

In the long term, however, these differences may diminish, with exhaust emission requirements for the different engine technologies converging.

A major advantage of using LPG as a transport fuel is better efficiency in the exploitation of mineral oil, and natural gas wells and thereby improving the energy and greenhouse gas emission balances of those. But this only holds if no other use would exist, which is not the case. The amount of LPG channelled to transport therefore has to be balanced also against its deployment in other sectors.

Infrastructure
The core infrastructure is already established, as LPG is used, in addition to the transport sector, also in domestic, industrial, and other sectors. More than 27,000 public filling stations for LPG were in service in the EU-27 as of end 2009. The cost of individual filling station installations ranges from about €20,000 for a basic unit with dispenser to €125,000 for a station with remote underground tanks and a dispenser incorporated in a petrol forecourt.

Potential
In 2006, LPG consumption for European OECD countries stood at 5.7 Mtoe, up 6% year-on-year. As for the other alternative fuels, spot developments are currently supported by fiscal incentives.

LPG supply is expected to increase as a result of increasing natural gas production worldwide. This could lead to an oversupply situation in the LPG market, as less than 10% of the available total is being consumed at present (21 million tons out of a total of 240 million tons available). This supply situation could allow an increase of the current fuel share of LPG in Europe, from about 3% to 10% by 2020. 

Bio-LPG derived from various biomass sources is expected to emerge as a viable technology in the medium to long term as a by-product in the biofuel production process in bio-refineries. Bio-LPG would then serve the same purpose as now fossil based LPG, namely improve the efficiency and economics of the whole fuel chain.

The current HVO plants are designed to yield mainly paraffinic diesel fuel but they produce also some bio-LPG as side product. Low-CO2 LPG could therefore already be delivered for niche markets. LPG can also be blended with DME produced via synthesis gas.