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Global NGV Sales Projected to Top 35 Million by 2025

Natural gas will remain an attractive transportation fuel alternative to diesel for medium- and heavy-duty vehicles, and global sales of natural gas vehicles (NGV) will reach 35 million by 2025, according to a report released by Boulder, CO-based Navigant Research.

The report, "Natural Gas Vehicle Refueling Infrastructure," outlines key factors expected to influence the deployment of NGV refueling infrastructure, including economic growth, fuel prices, NGV sales equipment costs, and regulation. It provides an analysis of how those factors are projected to affect station operators, equipment suppliers and natural gas suppliers.

Expansion of the NGV fueling infrastructure is critical to market growth, and it will be influenced by global forecasts of fuel types, station types and regions through 2025, according to the report. Compressed natural gas (CNG) will continue to be the preferred fuel for NGVs, said Navigant senior research analyst Sam Abuelsamid.

The report examined three types of NGV refueling infrastructure -- fast-fill CNG, slow-fill CNG, and cryogenic liquefied natural gas (LNG). Refueling stations will grow from approximately 23,001 this year to 38,890 in 2025. More than 80% of the stations are expected to provide CNG, Navigant said.

In early 2015, Navigant predicted that the global NGV market would continue to grow steadily, increasing from about 2.5 million vehicles annually in 2014 to about 4.3 million in 2024 (see Daily GPI, Jan. 21, 2015). At the time, the near-term outlook was for lower oil prices and lower gasoline and diesel prices at the pump.

"Natural gas is an attractive alternative to diesel for medium- and heavy-duty vehicles in meeting regulatory standards and an appealing option for reducing operating costs and carbon emissions in many automotive applications; however, it can only be used where refueling infrastructure is widely available," according to the report said, and the "current density of refueling options" is tied mostly to government incentive programs.

"For natural gas to reach its full potential as a transport fuel, easy access to refueling stations and a large population of NGVs are required,” according to Abuelsamid. "Without a critical mass of vehicles in need of natural gas, station operators are unwilling to invest in equipment  -- and without easy access to stations, retail customers won’t commit to purchasing NGVs.”

Navigant said most NGVs use CNG as opposed to LNG. "Despite its lower energy density compared to LNG, CNG is generally considered the superior option for NGVs that are operating within a limited range where extended driving range is not required," Abuelsamid said.

LNG requires extra processing procedures, driving up the overall price of the fuel.

As an example, Procter & Gamble (P&G) said last week that it had reached nearly 25% diesel fuel displacement in its delivery products fleet. The company set a 20% goal in 2013.

"The intent was to spur innovation and additional infrastructure that would benefit both P&G and other natural gas users," the company said in its 2015 sustainability report. "We have more than tripled our amount of active CNG [fueling use] since last year to 14 million miles, and have put in place transportation contracts that will take us to approximately 25%."

P&G's report said the company intends to open more NGV fueling stations and more advanced NGV trucking technologies. CNG stations will continue to be placed in high-volume distribution sites, according to the P&G report.

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