Wednesday 15 July 2020

Coronavirus inflates gas demand

The rush to fill supermarket shelves at the start of the Covid-19 crisis saw operators draw record amounts of natural gas as a road fuel, according to supplier Gasrec.

Gasrec has recorded a fivefold increase in sales of gas across its commercial vehicle refuelling network in the first quarter of 2020, versus the same period in 2019. This record growth follows an influx of new gas trucks with demand for gas fuel in March 2020 exceeding the previous peak of September 2014: the height of the Euro 5 dual-fuel era.

James Westcott, chief commercial officer at Gasrec, said: “The growth we have seen has been phenomenal, with volumes more than doubling between the final quarter of 2019 and the first quarter of 2020. One supermarket we supply doubled its demand for gas inside a week.

“Growing registrations of gas-powered 44-tonners has played a big role, together with the general realisation from the industry that gas represents the best opportunity right now to significantly reduce emissions and running costs.”

This rise in demand was tempered by a reduction in other freight movements, and Gasrec now expects its CNG and LNG volumes to flatten temporarily as European truck production was largely halted due to Covid-19, limiting the opportunity for new gaspowered vehicles to enter the market.

The success of gas vehicles is driven by two factors: one being a desire by operators to reduce CO2 emissions and the other a fuel duty advantage over diesel which gives payback for the increased upfront cost of a diesel vehicle.

An industry insider told Transport Operator: “The increased capital cost of a gas truck is repaid in fuel cost savings over a period of twoand- a-half years, if we assume the truck runs 120,000 km a year on long-haul. This puts the operator well into profit over diesel if the trucks are on a five-year deal.”

These savings are driven by a two-thirds reduction in fuel duty for gas compared to diesel on a like-for-like basis. Our insider said there was confusion in the market over the environmental benefits of switching to gas.

“When compared to Euro 5 diesel, there was a significant reduction in harmful pollution if operators switched to gas. The arrival of Euro 6 limits, which have reduced diesel emissions of particulates and NOx almost to zero, means that this large differential is no longer there.”

This erosion of the differential has been seized upon by campaign group Transport & Environment, which has used results produced by comparative tests conducted by Dutch researchers TNO to argue the case that the fuel duty advantage currently being enjoyed in the UK and elsewhere should be abolished.

However, the comparison tests cited by TNO appear to compare particle figures for diesel trucks produced on a chassis dynamometer with ‘real life’ figures gathered from gas trucks in operation on the road. The gas trucks tested are identified, but the comparator cleanest diesel truck is not.

It is not clear whether the (unidentified) diesel truck’s figures include a particulate trap regeneration cycle, but two of the three gas trucks tested have such low levels of PM emissions that a particulate trap is not required at all.

The tests also appear to ignore the carbon footprint of AdBlue production and transportation: AdBlue being required to produce the low NOx output of Euro 6 diesels.

Our insider adds, “In spite of the improvements made at Euro 6, gas still provides reductions in CO2 emissions on long-haul applications, but the size of those reductions is very much governed by the source of the gas used, with the most obvious difference being between ‘fossil’ natural gas, and biogas produced by decomposing waste. The carbon footprint of fossil gas also varies from market to market, so what may hold true in Holland, where the tests were conducted, will not necessarily be true in the UK.”

According to UK trade body Gas Vehicle Network, the proportion of biogas used as road fuel in the UK has now reached 80 per cent of the total volume of gas drawn. In any case, UK chancellors have repeatedly stated their commitment to the reduced duty on gas, which has been extended from 2024 to 2032 giving a further 12 years (or at least two vehicle replacement cycles) before review.

In Germany, the exemption from MAUT motorway tolls for gas trucks is to be extended to the end of 2023.

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