-More than 240,000 NGV’s
-Over 720 refuelling stations
-Energy security and greenhouse gas policies playing increasing role
-Comparatively low conversion costs
-Government initiated training programs and subsidies
China Natural Gas Vehicle Market Overview
1. Natural Gas Reserve in China and NGV numbers and types in China
China’s natural gas reserve is fairly abundant; the explored geological natural gas reserve in China is about 1520 billion cubic meters, while the expected resources reserve is about 38,000 billion cubic meters.*
The consumption of natural gas takes 2% of the total first energy consumption in China, showing the potential of natural gas industry. However, the infrastructure (the pipelines) is still not efficient to meet the demand from the east coast, which limited the further NGVs development, especially in the rich metropolitans such as Shanghai, Shenzhen and Guangzhou etc. A lot of cities use LPG as the alternative fuel for transportation, before they can obtain a reliable natural gas supply. In some western provinces full of natural gas reserves such as Sichuan, the development of NGV is very fast.
China built 3 LNG refueling stations in Beijing, Urumqi and Changsha, for the LNG transit buses demonstration projects.
The following diagram shows the gas refueling stations development by year 2005:
Source: China Alternative Fuel Vehicles www.cafv.com.cn
The main market for NGV in China is urban transit buses and taxis. Some other application of NGV started to rise, such as trailer truck for LNG transportation, and municipality refuse vehicles, but still at an early stage.
This shows the size of market segment of NGVs in China:
Source: China Alternative Fuel Vehicles www.cafv.com.cn
The LNG vehicles started to be used in the transit buses, mainly in Urumqi, Beijing and Changsha. The total volume of LNG buses in China is 120 units.
Among all the natural gas vehicles in China, most of the engines are at a lower end. Due fuel engines are popular due to unsecured natural gas supply especially in the winter seasons. Another part of NG engines are modified from gasoline engines, because of the very low cost – $600USD for taxies, and around $1000 for buses.
The modified CNG engines has shown a trend to be replaced by OEM engines, as most of the indicators are problematic such as safety, emission, fuel consumption etc. Vehicles with modified CNG engines are still taking a slight lead over the OEM NGVs in total number. The percentage of dedicated CNG vehicles takes a very small portion – about 5% of the total NGVs.
2. Government involvement and support to the NGV program
The government support and involvement to NGV industry and programs are from two levels, national government and municipal governments.
The national government taking the lead on this is called China National Clean Auto Leading Group (Leading Group), which is firstly established in year 1999, and under direction of mainly the National Development and Reform Commission (NDRC) and China Ministry of Science and Technology (MOST). This Clean Auto program’s mission is to encourage the application of clean vehicles (including NGV, hybrid, electric vehicles, ethanol etc.) in the 19 appointed key cities. The China Clean Auto Leading Group sets up targets and plays a role of supervising and evaluation of the results.
The Leading Group also sets up local offices in municipal governments to develop local clean auto programs and lower lever supervision. Those offices are always headed by the Vice Mayor, and set up within the local Development and Reform Commission, Environment Protection Bureau, or Science and Technology Bureau.
The Leading Group provides a little financial fund to OEMs to encourage them develop clean vehicles. But this fund is very limited, and always kept under 1 million RMB (equivalent to about 125 thousand US dollars). However, the Ministry of Science and Technology is investing in big amount through its 863 Plan on more advantageous technology development projects, such as Fuel Cell and Hybrid studies.
Support from NDRC is mainly represented by the control of gas price. The gas price in most part of China is still remaining at a low level, which helps to maintain a economic operation cost comparing with diesel and gasoline.
More substantial support to the NGV industry is always happening with municipal government. The municipality normally allocates their own finance according to the local emission standards, infrastructure need, and financial capability. A good example is Beijing. In order to meet the environment requirement of 2008 Olympics, Beijing municipality made big investment from its environment fund to subsidize the Public Transit every year since 1999. Till now, Beijing Public Transit owns a CNG fleet with the total number exceeding 2700.
Other support policy from municipal government include subsidize on the natural gas refueling station set up, and land allocation. For example, Xi’an has 27 natural gas stations in year 2004, but with government support, especially with a favored land use policy, Xi’an increased the total station number to 50 by end of year 2005. The fast increase of refueling stations in some western cities helped the further development of NGVs.
3. Standards and training
The National Clean Auto Leading Group is taking the lead to organize the set up of NGV regulations and standards. It decides the items (from gas supply, to refueling station) for standard, and allocates relevant institute or organizations to work out the standard. In term of the NGV standard, China Automotive Technology and Research Centre (CATARC) had worked out a full set of NGV standard, including LPG, CNG and LNG vehicles, fueling stations, gas system etc.
The Leading Group and its regional offices also set up training programs for R&D staff, fleet operators and fueling station administrators regularly on a regional basis. It also requires that every organization to conduct the internal training on safety, operation, and technology to their own employees.