Government policies accelerate NGV growth in China

Cities across China are turning to natural gas-run trucks and buses in a bid to be more environmentally friendly, according to the latest analysis from Frost & Sullivan.

Government subsidies

The Chinese CNG and LNG commercial vehicle market is on an upward trend due to the improved economy, infrastructure development, and government subsidies. With the government implementing and supporting the new energy resource policy launched by the Department of Science & Technology and State Environmental Protection Administration, the prospects for CNG and LNG vehicle manufacturers look bright.

Frost & Sullivan’s latest report, ‘Strategic Analysis of the Chinese Compressed Natural Gas and Liquefied Natural Gas Commercial Vehicle Market’, finds that total natural gas commercial vehicle sales volumes stood at 78 200 units in 2013 and estimates this to reach 246 000 units by 2020. The study covers medium-duty and heavy-duty natural gas trucks and buses.

Green transportation

"The central government is promoting green transportation in more than 100 cities within China, and every regional government is adapting and coordinating accordingly. In fact, Shanghai, Chengdu, Xinjiang and Hebei have already replaced more than 85% of their existing fleets with [natural gas] buses," explained Ming Lih Chan, Automotive and Transportation Research Associate.

However, the supply of natural gas and components of automobiles that use this fuel continues to be limited. Main issues revolve around the geological structure of the country and technical problems surrounding energy supply, quality control and assurance of the fuel. As a result, many fleets are operating in tight conditions in order to keep up with the government's infrastructure plan. This, combined with the high cost of technology components in the vehicles, acts as deterrents to expanded usage.

NGV technology

Poor consumer perception of natural gas technology and the lack of filling stations in the country have also set back the market. Nevertheless, the improving performance of NGVs and an expected increase in the number of fuelling stations from the 4000 in 2013 to 18 000 by 2020, will help dispel apprehensions.

Chan concluded: "[Natural gas] supply shortages are also set to become a thing of the past due to the large shale gas reserve base in China. Not only will this boost the value proposition of [natural gas] commercial vehicles, but it will bring down […] prices."

Adapted from press release by Katie Woodward

Read the article online at: https://www.lngindustry.com/small-scale-lng/20032015/ngv-growth-across-china-452/