Japan Country Report December 05

– More than 25,000 NGVs
– 289 refuelling stations
– 686 vehicle refuelling appliances
– Energy security and greenhouse gas policies playing increasing role

As of the end of September, 2005, there are more than 25,000 natural gas vehicles (NGVs) in Japan, supported by 289 natural gas refueling stations, 29 of which are service fleet and bus operators exclusively, as well as 686 vehicle refueling appliances (VRAs).

NGV’s have primarily been promoted due to the solution of the air pollution problem and to promote alternatives to crude oil derived energy. As a result, NGV’s have become popular among heavy vehicles, trucks and buses, where the diesel substitution produces the greater air quality benefits.

In recent years, the social interest in greenhouse gas reduction has risen with the coming into force of the Kyoto Protocol. Due to the CO2 benefits of natural gas vehicles, this has resulted in an increased interest in NGVs for gasoline substitution, particularly among passenger cars and light to medium duty vans.

Due to Japanese Government policy on the reduction of the greenhouse gas, in addition to the existing green house gas reduction law, the law concerning the rationalization of the energy use will be revised from April, 2006. The main point of this revision is that the control subject of this law expands into the transportation field (the transportation business and the consignor ) from the conventional factories. The revision of this law has been decided in the Diet (Japanese Parliament) and the Japanese Government is reviewing the detailed standard which is necessary to operate this law.

From the viewpoint of energy security, natural gas is playing an important role to decrease petroleum dependence. With crude oil prices increasing substantially in the past year, this has become especially important. These price rises, along with the added advantage of relative price stability, have made natural gas competitive in relation to gasoline and diesel. Japan imports natural gas as LNG (liquefied natural gas) and the pricing structures and longer-term contracts make LNG pricing less volatile, thus making LNG an attractive alternative to crude oil and its derivatives. In Japan fuel price depends on the contract between the filling stations and the users, but prices currently average around 125 yen/l of gasoline, 100 yen/l of diesel, and 70 yen /m3 of CNG.

Japan’s strong automotive manufacturing sector produces a large number of OEM (original equipment manufacturers) natural gas vehicles, The presence of OEM NGVs in Japan means engine and emissions performance is of an exceptional standard. Unfortunately, this also means that the price differential between natural gas and diesel or gasoline vehicles is relatively high. While mass market penetration of NGVs would bring prices down, reaching that stage remains a problem for the industry

Despite the above challenge, by effectively using the policy of Japanese Government concerning energy security and the global warming problem, the NGV industry members in Japan are confident that natural gas vehicles in Japan will increase in popularity in coming years.

Tamaki Yamada
Manager,Technical and Planning Section
Natural Gas Vehicle Project Department
THE JAPAN GAS ASSOCIATION

 

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