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European Natural Gas Vehicle Market

Multi Stakeholder appraisal of the opportunities and challenges facing the European Natural Gas Vehicle Market In-depth interviews with Major Fleet Companies, Howard Tenens and KBC Logistics, and infrastructure developers GAZPROM and EDP Gás – as well as key vehicle manufacturer, MAN Diesal

New Euro VI regulations have meant that HGVs have had to lower their emissions. we speak with a range of stakeholders from across the value chain to identify the main opportunities and challenges for natural gas vehicles in Europe. Secondly. to a European wide shift in interest to the opportunities presented by Liquefied Natural Gas for Heavy Duty Trucking. financial support and policy from the government is still in early development. Volvo – as well as Leading suppliers such as Shell and Gazprom taking part. The company’s haulage range extends north to the Midlands and as far west as South Wales. Dave Ashford is Director. Nonetheless there are two hurdles still hampering the industry’s growth: there is still a clear lack of infrastructure to support Fleet Companies who want to make the switch. resulting in more and more Fleet Owners considering the benefits of LNG and dual fuel. The Netherlands Dave Ashford Director. KBC Logistics is a haulier operating on routes from local ports to regional distribution centres. Gas Suppliers. KBC Logistics operates a 24-7 business model. Transport and Compliance Manager at KBC Logistics Limited. leading a 2013 strategy for increasing NGV refuelling infrastructure across Europe. Howard Tenens has been proactive in the early adoption of dual fuel vehicles. Amsterdam). Transport and Compliance Manager KBC Logistics Limited. Mövenpick Hotel.com/eu © FC Business Intelligence ® 2011 . Iveco. This maximises profitability and underlines the business case for LNG conversion. a family owned Haulage company.European Natural Gas Vehicle Market Fleet Operators Thoughts INTRODUCTION The Natural Gas Vehicle Industry in Europe has grown substantially in the last five years. Develop a Profitable and Sustainable Market for Heavy Duty Natural Gas Vehicles in Europe www. such as the Clean Air for Transport Package. In this interview piece. The conference will focus on how to drive a sustainable and profitable infrastructure for natural gas fuel in Europe. Government financed projects such as Blue Corridors Network. 2nd Annual Natural Gas Vehicle Conference and Exhibition November 25-26. which means that its trucks almost never stop rolling. Support at the European Commission has never been stronger. Scania. are also in full swing with key OEMs. with clear policy initiatives.ngvevent. Amsterdam. The market has evolved from a centric Compressed Natural Gas (CNG) industry – led by leader’s Germany and Italy. introducing its first in 2008. Paul looks after ten sites handling all engineering requirements. Interviewee Profiles: Paul Gowland Group Fleet Engineer Howard Tenens Paul Gowland is Group Fleet Engineer at Howard Tenens. has never been more paramount. Natural Gas Utilities and Fleet Operators alike are investing millions of Euros to develop a profitable and sustainable NGV infrastructure in Europe. So the need to set a business model and future strategy in order to be competitive in this market. Remember all our interviewee’s will be speaking at the Natural Gas Vehicle Conference and Exhibition (25-26 November.

Amsterdam. and it’s good for our customers. adding approximately 20. It’s good for the environment. costs and environmental benefits. The use of natural gas in the transport sector has good potential to meet this purpose. is an E ciency Adviser at MAN. one of Europe’s leading manufacturers of trucks and buses. Howard Tenens has been proactive in the early adoption of dual fuel vehicles. it is important for DSOs to increase the amount of gas distributed across their infrastructure. Interview with Paul Gowland . the role of the Distribution System Operator (DSO) is limited to the promotion of natural gas in transportation but not its implementation. MAN has a 255-year history and is the third leading OEM in its field in Europe. The Netherlands As a fleet operator what were the main benefits that drew you to using natural gas as a fuel? All of us have got to reduce our carbon footprint and we want to be known as a responsible operator. 2nd Annual Natural Gas Vehicle Conference and Exhibition November 25-26.8bn in 2012. Recently. We reviewed all of our fuel options and came to the conclusion that natural gas was the most viable. MAN restructured its sales division to focus on e ciency issues. Develop a Profitable and Sustainable Market for Heavy Duty Natural Gas Vehicles in Europe www. We can encourage new business as a result of being able to o er our clients a low cost option of improving their carbon footprint. Mövenpick Hotel. Globally there are roughly 7. GAZPROM is one of the largest producers of natural gas in the world and is active across the industry value chain. In the future we could replace that with biomethane.Group Fleet Engineer at Howard Tenens Paul Gowland is Group Fleet Engineer at Howard Tenens.000 clients and is growing fast. Robert advises the salesforce as well as customers on vehicle pricing. because they don’t have to invest in all the machinery and all the infrastructure. introducing its first in 2008. leaving this role to other market agents. which distributes gas across a 4. technologies. Paul looks after ten sites handling all engineering requirements. in line with EU energy market reform rules. Recently EDP Gás went through a process of unbundling its distribution arm from its commercial supply activities. On the other hand.Distribuição Pedro Avila is Technical Director at EDP Gás Distribuição. David has responsibility for helping GAZPROM to develop its natural gas for vehicles business in Europe. boasting a turnover of €8. Pedro Avila Technical Director EDP Gás .ngvevent.000km network in the north east of Portugal.European Natural Gas Vehicle Market Fleet Operators Thoughts David Graebe Head of Gas for Transport GAZPROM Germania David Graebe is Head of Gas for Transport at GAZPROM Germania.com/eu . For that reason.000 clients per year. EDP Gás now has approximately 300. it’s good for the company. Robert Staimer E ciency Advisor MAN Truck & Bus AG Robert Staimer. Beginning operations in 1997. a family owned Haulage company.500 CNG engines and vehicles manufactured by MAN on the road. in particular energy suppliers.

Amsterdam. the Howard Tenens board decided that this is a good opportunity. What we have done is build two gas stations of our own and we’re building a third one commencing in January next year. We looked at the infrastructure of where we can refuel our vehicles and it’s pretty limited in the UK at the moment.com/eu .ngvevent. When I joined the only vehicle available in the UK was the Mercedes and only one particular company was converting the vehicles. There’s a lot more chance now of more companies being able to get the type of vehicle that they like and have it converted to dual fuel. This is important because operators do sometimes have a preference for a particular vehicle. But we do need other organisations. We’ve had lots of di erent customers. Howard Tenens trialled the first CNG DAF in the country last year. which is beneficial to the UK. by giving people more choice of what type of vehicle they can have. Of course. So that’s why we’ve built 3 stations of our own and we’ve made them available to other operators to help them get started in operating gas vehicles. who need to reduce their carbon footprint and are looking for like-minded companies to transport their goods around the country. The more gas vehicles are manufactured the www. It’s early days yet for this type of fuel medium in the country. We also have a deal with MAN who put the first MAN CNG vehicle in to the UK last year. I suppose in reality that will happen. Other haulage companies can use them and they can get the benefits of running on gas as well.European Natural Gas Vehicle Market Fleet Operators Thoughts Howard Tenens made a commitment to all of its customers to reduce the carbon footprint of storing and transporting their products. Our theory of how to make things better in the industry is we’ve got to work at it and work together. there are now five or six di erent truck manufacturers who can all have their equipment converted to CNG operation. The environment is one thing but it’s a good investment for the company as well. Whereas five years ago there was one particular make capable of running on CNG.it was and still is limited. Since my introduction to the company we’ve found an alternative supplier of conversion equipment and by working closely with them we’ve managed to convince DAF to supply us with vehicles. This should also be good for the CNG industry because there’s more availability of di erent types of vehicles. We seem to be winning that war at the moment. all of which are open to the public. 2nd Annual Natural Gas Vehicle Conference and Exhibition November 25-26. to start introducing more gas stations. people who can actually supply gas. We’re working closely with the manufacturers and the conversion specialists to try and put more CNG vehicles in to operation. The Netherlands Develop a Profitable and Sustainable Market for Heavy Duty Natural Gas Vehicles in Europe Have there been any major challenges / hurdles you have faced in the process and how have you addressed those challenges? The biggest problem that we’ve had and also other operators would have is the refuelling infrastructure . We’re also prepared to trial vehicles and if there are any pitfalls they will hit us first and we can iron out these faults out before they’re o ered to other people. It’s getting better but there’s still a long way to go. We’re happy to be at the forefront and associated with taking the risk and working through any problems. Mövenpick Hotel. for example Coca Cola. Could you tell us a little bit about the process you went about switching your fleet to NGV? Which vehicle type did you choose and why? How have you developed supporting infrastructure to fuel your NGV fleet? I’ve only been with Howard Tenens for three years and when I joined the company it was already two years in to exploring gas dual fuel vehicles. This alternative gas company are now supplying a vast range of vehicles to run on CNG dual fuel.

it takes a number of years of continuous use for the payback time to be reached. We do expect to make a profit on it though. If they put the price up then the margins of profit will become smaller and therefore the investment will become harder to make back. So there is an afterlife for the equipment and it lasts maybe fifteen years. For a vehicle that does long distances trunking up and down the motorway then as an average you might expect a return on your investment in two years. Its just a case of it starts o slowly at first. hauliers have started to utilise the vehicles a lot more. The positive angle is that not only do we save Co2 emissions but it’s a slightly lower priced fuel as well. Payback time can spread to three or four years for light duty vehicles with low mileage. At the moment gas is cheaper than diesel.000 and £35. In recent years. If the government leave the tax on gas alone it will encourage more people to switch because gas will be cheaper than diesel.that’s a huge investment. make profits for the company and help the business to grow as well. We’ve just purchased forty-one new vehicles and they’re all going through the conversion process at the moment. The Netherlands Develop a Profitable and Sustainable Market for Heavy Duty Natural Gas Vehicles in Europe Looking to the future do you see an increased use of NGV within your fleet operations? And if so what plans do you have in mind? Natural gas is an integral part of our haulage firm. If they put diesel prices up or gas prices up we’re stuck with what’s been handed out to us and we have to try and accommodate it. at the end of the life of the vehicle (say five years) you can remove that equipment and refit it to another vehicle. as the transport industry has tried to survive in the di cult economic climate. in which case I think the price of buying and converting a vehicle might put people o . Its always dependent on the exact amount of use the operators place on their fleet though. After you’ve paid for all the infrastructure and the substantial cost of vehicle conversion. Payback time depends on how much you use the vehicle. 2nd Annual Natural Gas Vehicle Conference and Exhibition November 25-26.000. We were one of the lead operators to take up gas. If the vehicle is double shifted so it gets more use and you use more fuel. www. We recently won support from the Department for Transport and by the end of 2013.ngvevent. 75% per cent of our heavy fleet (over eighteen tons that is) will be converted to dual fuel . so one will follow the other. One kit could potentially service three vehicles over a fifteen year period. so there are advantages for the operator. Like everyone else we’ve got no control over that. One of the benefits that people might not now about is if you get a vehicle converted to dual fuel. That reduces the time the vehicle is stood so assets will pay for themselves faster. Operators can make fuel savings as well as carbon savings. If you only use the vehicle for a few hours a day then it takes a longer time to pay back. Are you able to share any information on the overall cost of your NGV project? And when you are expecting to receive a pay back from that investment? As a company we’ve invested probably about £2m to £2. the government could tax it more. Mövenpick Hotel.5m so far in this scheme.European Natural Gas Vehicle Market Fleet Operators Thoughts more need there will be to refuel them. Other companies are now starting to pick it up and with more vehicles requiring fuel the suppliers of stations will see that need and hopefully start building some new ones.com/eu . the payback time reduces. Payback time also depends on how the vehicles are financed. however there’s always going to be the question in the back of most operators minds that if it takes o and becomes very popular. To convert a basic heavy goods vehicle it costs anywhere between £20. Amsterdam.

although we’re finding the return on investment is stretching somewhat because of the current price of gas.European Natural Gas Vehicle Market Fleet Operators Thoughts Is there any advice you would o er other fleet operators considering making the switch to NGV? The main thing is to be very clear about the duty cycle of the vehicles. We’re out there to be seen and to be talked to by other operators. 2nd Annual Natural Gas Vehicle Conference and Exhibition November 25-26. They’re all 6x2 tractor units running at 44 tons (44. Amsterdam. We’ll always help and answer questions to anyone interested in dual fuel vehicles to make sure they get some advice. I think we bought the second one in February and then we’ve just put another five on over the last couple of months. We’re reducing the amount of Co2 we’re producing by a considerable amount. KBC Logistics operates a 24-7 business model. This maximises profitability and underlines the business case for LNG conversion. Transport and Compliance Manager at KBC Logistics Limited. KBC Logistics is a haulier operating on routes from local ports to regional distribution centres. They should also speak to operators and get first hand experience. The company’s haulage range extends north to the Midlands and as far west as South Wales. It’s really early days for us though and we had lots of issues to start o with but we’re now just starting to see the benefits of it. The Netherlands Could you tell us if you are working on any specific projects to integrate natural gas fuel into your operations. Interview with Dave Ashford. which means that its trucks almost never stop rolling. We bought our first LNG truck in November last year. almost 25% of our fleet now is dual fuel. Director. Dave Ashford is Director. which is linked to the cost of fuel and thereby has increased our gas prices from ten to fifteen per cent in the last few weeks. There’s an issue with UK production at the moment. So now we have actually got seven vehicles on the road running on dual fuel LNG systems.000 kilos). Operators thinking about converting need to be very clear about what duty cycle the type of vehicles they’re going to buy will work on. Transport and Compliance Manager at KBC Logistics Limited. because at the end of the day it’s a huge commitment to any haulage company. Fortunately most haulage companies will help each other. Develop a Profitable and Sustainable Market for Heavy Duty Natural Gas Vehicles in Europe www. We’d also encourage them to talk to others to get a rounded picture of what’s going on. They then need to explore whether CNG or LNG works best for them and to talk to as many companies as possible to find out about what they o er. It’s easy to be impressed by the glossy figures and expect to see fantastic returns. Mövenpick Hotel. you get better returns from high mileage vehicles. installed by Hardsta . However. As a fleet operator what were the main benefits that drew you to consider using natural gas as a fuel? Dave Ashford: There are a number of reasons we decided to move in to the natural gas environment.ngvevent. The main one was cost savings. which is causing us to get our gas from Europe. Another reason is that want to be seen as being environmentally conscious and we want our clients to see that we’re thinking about the environmental impact of commercial vehicles and trying to reduce our carbon footprint. or are you mainly just considering the options? Dave Ashford: We’ve actually taken the plunge and invested in seven trucks that run on LNG.com/eu .

‘OK well how many vehicles have you got?’ When you answer that you’ve only got two they’ll tell you. a chicken and egg thing in the UK. 2nd Annual Natural Gas Vehicle Conference and Exhibition November 25-26.European Natural Gas Vehicle Market Fleet Operators Thoughts Have there been any major challenges / hurdles you have faced when deciding to peruse using natural gas fuel. www. The Netherlands Develop a Profitable and Sustainable Market for Heavy Duty Natural Gas Vehicles in Europe Are you expecting to receive a pay back from any investment you have made. So that was a bit of hurdle for us when we decided to branch in to natural gas. So they supply the tank. and we know how to repair the DAFs etc. Up until then we were running around with very expensive bits of kit on diesel with very small diesel tanks. which are more readily available on the second hand market. when will you expect to see that investment? Dave Ashford: We bought three-year-old trucks and paid £26. which is as rare as hens teeth on the second hand market. ‘I need natural gas in my yard. At the moment it’s completely altered the way we use the vehicles. This gives rise to all sorts of problems: my workshops were all geared up for DAFs. It would be nice if there were other companies that decided to move in to the dual fuel LNG market place to give us a little bit more choice. Because we couldn’t get hold of the Volvos we went for the Mercedes. There are only two marques available for conversion: the Volvo 460. Now we’ve actually got a tank in our yard because we took the time. We spoke to our local authority and started with a £20. We were very lucky in that we managed to source a gas station to go in our yard. The infrastructure for diesel. In addition. What do you think are the biggest obstacles facing fleet operators who are considering using natural gas to fuel their fleets? Dave Ashford: The biggest obstacle would be the infrastructure because there’s a big catch 22 situation going on.000 grant. we know how the DAFS work. they fill it up every week and we pay for the gas.ngvevent. invested and negotiated to get someone to back us. You’ll approach a company for a gas station and say.’ Then they’ll say.touch wood . It fits in with our business perfectly because run a back to base 24-7 business. Another issue is that we’ve had to look at changing the vehicles that we run because DAFs aren’t available in LNG.’ But you’re not going to invest several hundred thousand pounds in another five vehicles until you know you can get a gas station. or the Mercedes 430. on the other hand. Mövenpick Hotel. They come in to the yard and they take a few seconds to fill up because we haven’t got issues with the tanks warming up. Obviously with gas being brand-new the infrastructure still needs investment. because there’s such a lack of choice.everything’s working on gas and we’re seeing some fairly good returns.com/eu . which is what we’ve done. which went in a couple of weeks ago. which helped towards the conversions for the first two trucks. we fill them up with diesel and gas and o they trot. what have been your biggest challenges and how have you addressed these to date? Dave Ashford: One of the challenges we had was actually choosing the right vehicles. only two companies carry out the conversions as far as we’re aware at the moment: Clean Air Power and Hardsta . It doesn’t really give you a lot of choice. We had a 90% DAF fleet before we started looking at LNG and now we’ve had to change everything. is already in place and has been in place in the UK for the best part of a century. So far . Amsterdam.000 per truck to have them converted to gas. So the trucks come back to base as soon as they’ve finished work. One company stepped up and said they’d put a tank in our yard and all they wanted was a guarantee that we would buy the gas from them. ‘well we’re not going to put a station in your yard for two vehicles. which was causing all sorts of issues. or plan to make in NGVs? If so. we had a large amount of parts for DAFs.

or if you go west you’re looking at 140 miles. If we hadn’t received that start we probably still would have gone ahead. I spend probably around £40. it’s more to do with issues with the production in Avonmouth. We’re looking at up to another ten pence per kilo over the next couple of weeks. there’s not a lot in it to be made. maybe even more now.com/eu . On the gas trucks we save around sixty to seventy pounds per day per truck and we’re running seven trucks on gas. which is getting on for seven to eight per cent of our annual turnover.000 as a business. 2nd Annual Natural Gas Vehicle Conference and Exhibition November 25-26. Savings will depend a lot on what happens with the cost of gas in the UK. Mövenpick Hotel. Fuel is probably 30% of our costs. We do try and utilise the gas trucks on motorway work when they’re most e cient. So for other operators I would say you need to look at this really carefully and Develop a Profitable and Sustainable Market for Heavy Duty Natural Gas Vehicles in Europe www. Obviously that’s coming down because we’re spending probably £3000 per week on gas. The only time the gas really starts to become profitable is if you can use it 100% of the time. We’re going to stick with it because we’ve invested £400. You need to have a high mileage operation and you need to have your own infrastructure.000 gave us a little bit of a leg up but it didn’t really make a lot of di erence to our ideas for moving forward. I went to the Gasrec opening in May at junction 18 M1. I’m just hoping that the government see the light with this. Most of our gas used to come from Avonmouth but there is a bit of a setback with production there so we’re having to import it from Zeebrugge at the moment. Last week we spent £3700 pounds on gas and that’s probably saved us £5000 pounds worth of diesel. However. so £20. The upfront cost is quite a lot higher for buying LNG but we were hoping to get a return within 18 months. however the way gas prices are going now that’s going to be reduced considerably. The transport minister was there and lots of big names in the business were trying to get an answer out of the government as to whether they’re going to stick with the gas prices as they are or whether they are going to start moving in a higher duty on gas as it becomes more and more popular. it would need to suit your business plan. If this happens we could end up having the same sort of situation we saw with LPG in the car and light van market. As soon as it took o the government started sticking a load of tax on it and making it not quite so viable. The Netherlands Is there any advice or further comments you have to others who are considering bring natural gas fuel into their operations? What have you learnt about the process so far? Dave Ashford: It wouldn’t be for everybody. just on gas vehicles. so we’re getting taxed at a higher rate. It depends on the kind of work they’re doing too. we’ve spent about £400. the next one after that was about 110 miles. Amsterdam.ngvevent.European Natural Gas Vehicle Market Fleet Operators Thoughts After that we’ve done everything.000. The way the tax is levied on gas coming from Europe is di erent to that produced in the UK or shipped in from the US. whether it’s mainly motorway or urban makes a big di erence. So my trucks were running out of gas before I could get to fill them up. When we started with gas our nearest gas filling station was about fifty to sixty miles away. Looking to the future do you see an increased use of NGV within your fleet operations? And if so what plans do you have in mind? Dave Ashford: We’ve got plans to invest in another ten over the next ten to twelve months. they see the environmental benefits and keep the cost down to encourage operators like us to invest further.000 to £50. The cost of the gas changing at the moment is nothing to do with the government. That’s fine because they run on diesel but obviously then the tanks warm up when you do finally get to put gas in them it takes ages to fill them because you’ve got to bring the temperature down. Now it will be closer to two years if we’re lucky.000 pounds per week on diesel. In other words you’d need to have a gas supply in your own base or very locally. By the time you take the cost of the conversion and the infrastructure and everything else out. it’s over ten per cent of the cost. it just made life a little bit easier to start o with. which is enormous. we’re having a little bit of a rethink because the savings on the gas are coming down as the price of gas is going up.

Interview with David Graebe. They’d probably break even or maybe make a small profit but the whole idea of them doing it would be purely for environmental reasons or for image rather than for profit. but also with small and medium sized private station operators. However. For us. GAZPROM cooperates with the major automotive OEMs. For LNG as a fuel for vehicles the target groups are buses and heavy-duty vehicles.com/eu . Hopefully other businesses will look at it from that perspective and not just about saving money. This means that NGV drivers can turn up to a normal station. A normal haulage operator would struggle to get a return. With regards to Europe. Currently GAZPROM Germania operates eight CNG filling stations and another six through its subsidiary VEMEX in the Czech Republic. as well as with major oil companies like Total and BP (through its German brand Aral. realize cost savings and reduce CO2 emissions at the same time. With CNG we target operators of fleets of small and medium NGVs. We are therefore not limited to the current geographic scope. In addition. light duty vehicles and buses. like Volkswagen. 2nd Annual Natural Gas Vehicle Conference and Exhibition November 25-26. What experience do you have building refuelling stations and who are you working with now to increase the availability of fuel in Europe for NGVs? David Graebe: The NGV business in Russia dates back to the 1980’s. refuel CNG together with petrol and go to the shop to use the facilities there. We might make some small savings but this year and next year they’re going to be limited because of the investment costs and teething issues that we’ve had. Amsterdam. We have learnt that convenience means creating infrastructure that is made to fit the requirements of the customer as well as the vehicles. but also environmentally friendly vehicles. David has responsibility for helping GAZPROM to develop its natural gas for vehicles business in Europe. Basically our learning curve with running on gas made a little bit of a hole in what profits we’re likely to make. when GAZPROM Germania opened its first CNG filling station in Berlin. Today GAZPROM operates roughly 200 CNG filling stations in the country. Mövenpick Hotel. David Graebe is Head of Gas for Transport at GAZPROM Germania. showing the marketplace that you’re responsible and trying to reduce your carbon footprint. which is the biggest petrol station provider in Germany).ngvevent. the development of the NGV market by GAZPROM reaches back to the year 2006. GAZPROM is looking in to developing the Develop a Profitable and Sustainable Market for Heavy Duty Natural Gas Vehicles in Europe www. but look at the whole of Europe for realizing refuelling infrastructure projects. The further east you go retrofitting solutions become a good option to enjoy the benefits of natural gas fuelled vehicles without having to invest in a brand new car. Using natural gas as fuel can help those customers to comply with environmental regulations. The Netherlands What markets for NGVs are you targeting and why? David Graebe: Apart from GAZPROM’s presence in the Russian market we are currently present in Western Europe. where customers are putting a lot of emphasis on new and e cient.European Natural Gas Vehicle Market Fleet Operators Thoughts you have to look at your business model to see whether gas suits what you do. GAZPROM is one of the largest producers of natural gas in the world and is active across the industry value chain. Head of Gas for Transport at GAZPROM Germania. Our experience in building CNG filling stations teaches us that an integrated model creates the most convenience for customers. it’s not always necessary about profit: it’s about raising the company profile. we’re not going to make a fortune out of running on gas. IVECO and Mercedes Benz. Thereafter we grew organically by adding more CNG stations to the German network. As it happens our business model is perfect for running on gas – provided the gas is the right price.

GAZPROM’s dedicated NGV company. April this year we cooperated with Volvo and the German NGV Association to carry out a field-test of a Volvo 460 LNG truck for a municipal waste company. With respect to LNG. Zeebrugge or Rotterdam and liquefaction facilities in Russia.European Natural Gas Vehicle Market Fleet Operators Thoughts market for LNG for bunkering. Even in a mature CNG filling station market like Germany however. We can supply the station with LNG and the station can provide CNG to vehicles. for example to Hungary. In Europe we also address this topic through the national and international NGV associations. That quickly gets uneconomic. demonstrating the benefits of LNG-fuelled city buses in real-life operations. abundant and already existing alternative to conventional fuels. such as erdgas mobil or NGVA Europe to create greater awareness at national and European level. Right now the transport market is dominated by oil products. 2nd Annual How have you overcome these barriers so far – what have you learnt about advancing in the industry? David Graebe: By now building CNG stations has become quite standard for GAZPROM Germania because we know which legislative and operational processes we need to follow. If you want to supply LNG to the heart of Europe. you have to send a truck from the coast to the mainland. Amsterdam. Mövenpick Hotel.com/eu . For example.ngvevent. The supply is currently limited to import terminals in places like Barcelona. Solbus provided the vehicles and we provided the refuelling. This allowed them to test out the truck and learn more about the realities of LNG as fuel. one of the major challenges is certainly to establish a Europe-wide supply chain for LNG filling station projects. last year with the Polish bus manufacturer Solbus we did a road show through Poland. “GAZPROM Gasomotornoe Toplivo” recently assisted the Russian government with creating a legislative framework to increase the use of natural gas vehicles in Russia. In terms of geography we are directing our e orts based on the availability of Russian gas. The Netherlands Develop a Profitable and Sustainable Market for Heavy Duty Natural Gas Vehicles in Europe www. Here we see LCNG as possible solution. we know that every location has its specific challenges that need to be managed. When it eventually comes to realizing projects in real life. so we have to create hubs and liquefaction capacities located in the proximity of customer demand. Fortunately we have the ability to do so. which is marketed by GAZPROM and its subsidiaries or a liated companies across Europe. What has been the most significant challenge you have faced so far in developing a network of refuelling stations? David Graebe: One of the things we are trying to avoid is the so-called “chicken and egg” issue in order to provide customers as well as the automotive industry with a transport solution consisting of the right vehicle and the right fuel. which o ers a great potential for replacement of conventional fuels by environmentally friendly natural gas. However. This is a developing area where permitting and regulations for the industry have yet to be developed. So ship operators need to make a choice either to continue to use expensive marine gas oil (MGO) or to switch to LNG. environmentally friendly. What strategic partnerships do you think are necessary for advancing NGV projects? David Graebe: On the one hand we work closely with OEMs in the automotive industry to ensure customers get the right solutions. Natural Gas Vehicle Conference and Exhibition November 25-26. For example. We see natural gas for vehicles as a new distribution channel to increase the volumes of natural gas that GAZPROM can sell. primarily because of the legislative situation in the Baltic Sea where from 2015 onwards the Emissions Control Areas (ECAs) are coming in to force. in some places where there is a high tra c load it may still not economically viable to build a CNG filling station because the pipeline is too far away from the site. it is also important to work with governments to educate them about natural gas as an economic.

We have and still are expanding and extending our product portfolio. We built the first gas vehicle in 1943 and today we are a market leader in the CNG bus sector in Europe.European Natural Gas Vehicle Market Fleet Operators Thoughts I think another key issue is keeping customers interested. regardless of the availability of funding and other incentives. Press coverage is useful. but to also show what yet remains to be done. Gas reserves will take us far further than oil will ever take us and if you add biomethane you find yourself on a completely renewable path. including an LNG truck and bus. Amsterdam. As an OEM what where the main benefits and considerations that drew you to incorporating natural gas fuel in your vehicles? Robert Staimer: Operating CNG vehicles is in most cases a win-win situation.8bn in 2012.ngvevent. costs and environmental benefits. Last year we travelled more than 6. GAZPROM and other gas companies have been getting on the road with ‘Blue Corridor Rallies’ to show that driving NGVs through Europe today is actually possible. communicating and demonstrating the benefits of NGVs. and we’ll continue to develop more. The operators benefit commercially and there are environmental benefits as well. Particularly with the low-entry level range of CNG vehicles.com/eu . but we need to communicate more. In Brussels we staged a large event to raise awareness among politicians of the European Commission and the European Parliament. The Netherlands We’re also aware that there will be a shortage of oil reserves in the decades ahead. Interview with Robert Staimer. MAN has a 255-year history and is the third leading OEM in its field in Europe. We want to be in a position where we can actually o er tailored solutions in terms of drive technologies for our customers. Prague. Recently. technologies. what is your outlook for the industry and how do you see GAZPROM’s role developing over the next few years? David Graebe: NGV is one of the key priorities for the GAZPROM group of companies. boasting a turnover of €8. We conducted roundtable discussions at every large city. E at MAN ciency Adviser Robert Staimer is an E ciency Adviser at MAN. Develop a Profitable and Sustainable Market for Heavy Duty Natural Gas Vehicles in Europe What experience do you have in delivering natural gas vehicles and who are you working with now on any NGV projects you have running? Robert Staimer: We have experience with CNG vehicles dating back over decades.700 km from Moscow through Warsaw. inviting them to come and see the vehicles and recognise that NGVs are a reality. Mövenpick Hotel.500 CNG engines and vehicles manufactured by MAN on the road. Robert advises the salesforce as well as customers on vehicle pricing. one of Europe’s leading manufacturers of trucks and buses. www. Some are sticking with diesel but more and more customers are asking for CNG or hybrids because it’s a really attractive alternative. We will continue to expand in to the NGV marketplace and consider investments wherever it is economically viable. which is extremely attractive in terms of sustainability. Eventually we aim to be one of the key players in the European and Russian NGV market. Globally there are roughly 7. 2nd Annual Natural Gas Vehicle Conference and Exhibition November 25-26. our mobile LNG filling station and various CNG vehicles. MAN restructured its sales division to focus on e ciency issues. The main reason for incorporating natural gas fuel in to our vehicles is awareness that di erent customers have di erent demands. Looking forward. Paris and other major European cities to Brussels with a fleet of up to fifteen NGVs.

which can hinder business. ‘consistently e cient’ and we’re sticking to that. for example diesel. Alternative they can o er a guarantee to stay under the price of diesel by a certain percentage. If you introduce a new technology that is nice to have. This is exactly what we’ve done in the UK. If you look at all the technologies available today.com/eu . like many customers in the UK and Scandinavia. Unlike other technologies. It’s still something that needs to be addressed though. Have there been any major challenges / hurdles you have faced in the process of developing and selling natural gas vehicles? Robert Staimer: We’re seeing a similar issue that occurred in the passenger car industry where there was a chicken and egg problem. it’s a ordable and it holds a huge environmental benefit. This gives the operator a clear indication of what the price will be and puts the business on a stable foundation. They can be extremely flexible and o er a fixed term contract. 2nd Annual Looking forward. For the time being though batteries cannot fulfil demands in terms of cost. Amsterdam. freezing the price for the next three to five years. reliability and longevity. are currently doing in Germany and are planning to do in other countries as well. so it’s necessary to team up with the specialists in each field.ngvevent. we believe it is absolutely ticking all the boxes. while on the other hand filling station operators wouldn’t invest money in CNG stations until they knew how many customers would be using it. Natural Gas Vehicle Conference and Exhibition November 25-26. what is your outlook for the industry and how do you see MAN’s role developing over the next few years? Robert Staimer: We’re deeply convinced that we will have more CNG business in the future. it makes the business unbeatable. The other main challenge is political uncertainty surrounding taxation and funding. The Netherlands Develop a Profitable and Sustainable Market for Heavy Duty Natural Gas Vehicles in Europe www. it’s time tested. That said. We’re watching the industry closely and we’re carrying out our own research. for example electromobility. Mövenpick Hotel. it doesn’t help if the average customer can’t pay for it. we recognise the discussion in the electromobility field and we also recognise that electromobility for heavy goods vehicles (HGVs) is on the way. With CNG technology though. we know that CNG is reliable. CNG holds a huge advantage. For example. depending on the amount of gas the operator uses annually. Some of the keystones of this business solution can only be provided if you partner up. Customers wouldn’t buy CNG without knowing where they could refuel their vehicles. The reason for this is that while we can answer questions about vehicle operations.European Natural Gas Vehicle Market Fleet Operators Thoughts What strategic partnerships do you think are necessary for advancing NGV projects? Robert Staimer: In the UK we’ve teamed up with a consortium called the GBA (Gas Bus Alliance). The core slogan of our company is. in order to convince operators to switch over to CNG you need to answer a wide range of questions. we think the best approach is to team up with the filling station operators and gas suppliers. some gas companies can o er an operator a short or long term supply contract for GNG supply. To some extent we have to overcome the same problem. which is a huge benefit for operators. though our business is di erent because city buses go back to a depot at night where they can be refuelled. If you also consider that you can operate your vehicle with biomethane. How have you overcome these barriers so far – what have you learnt about advancing in the industry? Robert Staimer: In order to address the need for refuelling infrastructure. to another technology by o ering a business solution. We are convinced that you can help a customer switch from a standard technology.

technology and maintenance (after sales). The Netherlands What strategic partnerships do you think are necessary for advancing NGV projects? Pedro Avila: There are three key stakeholder groups to partner with in order to be successful.Distribuição Pedro Avila is Technical Director at EDP Gás Distribuição. leaving this role to other market agents. 2nd Annual Natural Gas Vehicle Conference and Exhibition November 25-26. and automotive manufacturers o ering a wider range of gas vehicles. especially regarding pricing. First of all are the manufacturers who need more information. CNG is a readily available fuel and we want to increase the utilisation of this network. The filling station was a project between the urban transportation authority in Braga (who used the station to fuel buses) and EDP Gás. For that reason. What experience do you have in NGV projects and who are you working with now to increase the availability of fuel in Europe for NGVs? Pedro Avila: Twelve years ago. it’s important to partner with enterprises that can benefit from using NGVs. It is green. before the unbundling of the Distribution System Operators (DSOs). Since the first filling stations were constructed. Looking at this new environment we think that natural gas can play a greater role in mobility solutions.000 clients per year. What markets for NGVs are you targeting and why? Pedro Avila: Two significant target markets are urban buses.ngvevent.European Natural Gas Vehicle Market Fleet Operators Thoughts Interview with Pedro Avila. The use of natural gas in the transport sector has good potential to meet this purpose. adding approximately 20. it is important for DSOs to increase the amount of gas distributed across their infrastructure. We work with major filling station operators in other countries and in Portugal we are partnering with companies that can work on the development of new filling stations. in line with EU energy market reform rules. the market has stalled and we haven’t seen a lot of development. to educate them about gas as a cost-e ective green solution.000 clients and is growing fast. which distributes gas across a 4. in particular energy suppliers.com/eu . On the other hand. The other key stakeholder group is filling station operators. hardware –constructors and installers of filling stations and o cial entities). Natural gas in the transport sector represents an unbeatable fuel in terms of cost and environment. we constructed the first gas fuel station in Portugal. Finally. Amsterdam. Technical Director at EDP Gás . with new Euro 6 pollution regulations. Beginning operations in 1997. located in Braga. the waste management industry and fleets like logistics operators. reduces costs and can also be used by companies to boost their Develop a Profitable and Sustainable Market for Heavy Duty Natural Gas Vehicles in Europe www. EDP Gás now has approximately 300. in order to promote and give full information about the emergence of natural gas for vehicles. The development of infrastructure for NGVs is just beginning however. Recently EDP Gás went through a process of unbundling its distribution arm from its commercial supply activities. the situation in Europe is changing though. the role of the Distribution System Operator (DSO) is limited to the promotion of natural gas in transportation but not its implementation.000km network in the north east of Portugal. Now. the higher environmental care for citizens. What are the steps EDP Gás has taken to become more active in the Natural Gas Vehicle market in Europe? Pedro Avila: We’ve been working with the three essential components of the process (software – importers of vehicles. Because we have a distribution network. Mövenpick Hotel.

in Amsterdam. One of the major challenges is to attract more big private operators to develop filling stations. is improving. Though the e ciency of [diesel] engines for large and heavy vehicles is improving. How have you overcome these barriers so far – what have you learnt about advancing in the industry? Pedro Avila: We are promoting the solution in forums. Given the wide range of options available. on the other hand. meetings and conferences. so they capture some of these savings by increasing the purchase price. the competitiveness of natural gas decreases. now there are many new options and it’s a very competitive space. although in relative terms the di erence to diesel/gasoline remains.ngvevent.European Natural Gas Vehicle Market Fleet Operators Thoughts reputation. Amsterdam. Mövenpick Hotel. If you found the information in this interview piece useful then remember that all of our interviewees are speaking at the Natural Gas Vehicle Conference and Exhibition. With NGVs they can be good to the environment while making cost savings as well. because the saving will be less in absolute terms. however the payback period is four. In addition. 25-26 November. What has been the most significant challenge you have faced so far in developing the market? Pedro Avila: Because of the unbundling of DSOs. NGV projects can create cost savings. Another issue that needs to be addressed is the short-term investment outlook of many companies since the economic crisis. the thermal engine’s e ciency. Consumers perceive the private business sector as implementing solutions because they are profitable while government solutions are seen as being adopted because of subsidies and incentives.com/eu . As a result it’s di cult to convince consumers to invest the CAPEX required for NGVs. At present filling stations are funded by public enterprises or o cial bodies rather than private companies. though we have gas stations for our own fleet. due to reduction in consumption. manufacturers know the savings that customers can make on fuel for NGVs. The increased e ciency of thermal engines has a positive aspect (it potentiates these engines compared to others). Ten years ago there were one or two solutions for fuel. but on the other hand. It’s di erent for medium and heavy load vehicles because there are large potential savings to be made by consumers. Often green projects are expensive and businesses will only invest small amounts. especially because now there are an increasing number of energetic alternatives for mobility and. diesel and gasoline. 2nd Annual Natural Gas Vehicle Conference and Exhibition November 25-26. five or even six years. I think CNG faces significant challenges. which limits development. including electric vehicles and hydrogen vehicles. medium and heavy load vehicles consume a lot of fuel so there is a strong rationale to adopt gas. The Netherlands Develop a Profitable and Sustainable Market for Heavy Duty Natural Gas Vehicles in Europe www. Looking forward. EDP Gás Distribuição cannot build and operate commercial filling stations. what is your outlook for the industry and how do you see EDP Gás’s role developing over the next few years? Pedro Avila: The industry is facing major challenges. I think these savings will remain in the future. Today some enterprises don’t have this medium to long term perspective on investment.

Fleet Operators. Natural Gas Producers. OEM’s and Infrastructure Equipment Suppliers .European Natural Gas Vehicle Market Fleet Operators Thoughts Brand New Features to 2013: • Guaranteed Strong Fleet Presence • All New Fleet Track: Learn How to Successfully Integrate NGV’s into Your Fleet • All New Technical Tour around an LNG Refuelling Station • Opportunity to Test Drive LNG trucks • Network with Europe’s leading Natural Gas Utilities.