Italy Country Report April 05

– NGV numbers continue to rise in Italy
– Increase in OEM participation and quality of aftermarket conversions
– 360-370,000 NGVs on Italy’s roads serviced by 510 refuelling stations
– CNG bus orders surpassing diesel buses
– Cylinder Exchange System maintains cylinder safety
– Govt programs supportive of continued growth

Number and types of natural gas vehicles

Italy, the “country of natural gas” has seen a rise in the NGV numbers in the past couple of years, due to a) a clear decision by the main car manufacturers to go into the NGV business, and b) aftermarket manufacturers being successful in complying with the new stringent Euro 4 and OBD regulations.

Aftermarket conversions rose to 30,000 in 2004, increasing 20% over the previous year, and the OEM cars and commercial vehicles were about 12,000, double the previous year. Thanks to the wide spectrum of models and to the good quality of Italian NGVs, sales for the start of 2005 are again double 2004 levels. The total number of NGVs is presently about 360-370.000 in Italy, the percentage of such vehicles being about 8% in the more “methanized” areas.

CNG urban buses are also proving successful in Italy and today number about 1,200, spread over almost 50 towns. In 2004 the number of CNG buses ordered was higher than diesel buses! Heavy duty trucks for garbage collection and downtown delivery are also available but their uptake is currently slower than expected.

Number and types of refuelling stations.

Refuelling stations have grown from 370 at the end of 2001 to more than 510 by the end of 2004. Thanks to the government and to the support of local authorities (see below), it seems that the chicken and egg cycle has been broken by the filling stations. Total gas sold for transportation is in the range of 440-445 million cubic meters per year, increasing slowly over time.

What is still missing in Italy is the allowance of self-service refuelling, in spite of the permission for such systems all over Europe.

The use of vehicle refuelling appliances (VRAs) is practically unknown, (the installation constraints being the same of the big stations) and actions are under way to alter the requirements in the legislation.

Price of CNG

CNG street price is now in the range of 0.7 €/kg, comparing with 1.25-1.30 €/kg for diesel fuel and to the 1.45 €/kg for gasoline, thanks to the very low excise. This is deemed by the authorities to be a primary incentive for the use of natural gas.

Cylinder Exchange System

Italy also has a unique CNG cylinder exchange system, operated by ENI, a majority Govt owned company, which is proving useful for maintaining safe cylinders throughout the country. Users purchase cylinders when they purchase or convert their vehicles. After 5 years the cylinder is exchanged for one which has already been inspected. R110 compliant cylinders are given a visual inspection while still in the vehicle. Cylinders that don’t pass inspection are destroyed. A surcharge of €0.015-0.02 per kg of CNG sold covers associated costs.

Government involvement and support

The first weeks of 2005 were very dry in Italy, and the particulate content of urban air rose well above the allowable limits, pushing local authorities to a) favour the use of natural gas (and of LPG) with incentives and b) restrict the circulation of older vehicles in urban areas.

There is presently a wide range of subsidies for the erection of natural gas filling stations, for both private fleet and public use. There is also a wide range of incentives for buying new gas vehicles. These go in parallel with the traffic restrictions for which gas vehicles are exempt.

Prospects for the NGV industry

The NGV industry is ready to follow this expansion in Italy, but also has very big business opportunities in the rest of the world, thanks to its quality. Italian equipment and components are sold in South America, in the Far East and in Russia. Some Italian companies are better known abroad than in Italy.

Overall assessment

Looking back to the last few years, signs are evident that the NGV business has started to grow seriously in Italy, thanks to the government support and traffic restrictions for the liquid-fuel vehicles, and thanks to the decision of national vehicle manufacturers to commit to natural gas vehicles.

What is still at the early stages is the task of educating the general public about NGVs but this situation is changing also as new communication campaigns have just started.

NGV Italy:

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