What future for CNG passenger vehicles?
Following Honda’s plan to phase out its CNG programme in the US market, Megatrends spoke to CNG experts to ask if the fuel has a future in passenger vehicles
Compressed natural gas (CNG) has seen some significant success in terms of adoption as a transport fuel in various countries around the world. As the battle between the alternative fuels rages, with liquefied natural gas (LNG), biofuels, renewables and electricity among those vying for their chance to reduce fossil fuels, what sort of future lies ahead for CNG?
2015 – the end of the road?
Whilst several OEMs continue to fly the flag for CNG, others have decided to abandon ship. Honda, for example, recently announced a plan to phase out its CNG programme in the US.
In a company statement, John Mendel, Executive Vice President, Automobile Division, American Honda Motor Company explained that the next generation Civic will not come with a CNG variant: “With two new engines on the new Civic, including our first turbo engine, we are targeting class-leading fuel economy for Civic, with EPA highway fuel economy a few ticks above 40 miles per gallon. Due, in part to this ability to advance fuel economy through conventional engine technology, the Civic line-up will no longer include a hybrid or a natural gas model, as we will discontinue production of both of these products with the end of the 2015 model year.”
Production of the Civic CNG model was carried out at Honda’s Indiana plant. Sales of the variant remained steady for a number of years. In 2014, however, they started to decline dramatically, dropping 65% when compared to 2013. Mendel believes that the lack of supporting refuelling infrastructure was the main reason behind the CNG model’s demise.
“Honda has promoted CNG-powered vehicles for many years. For most of the past 15 years we have been the only automaker with a dedicated CNG vehicle. Despite this commitment, the infrastructure for natural gas refuelling and consumer demand remains a challenge,” he remarked.
The main message
According to the US Department of Energy (DoE), CNG fuelling stations can cost anywhere between US$45,000 and US$1.8m, depending on the size, fuelling capability, and level of equipment that is incorporated. Some compressors alone can cost around US$550,000, but price varies depending on equipment size, specifications and manufacturer.
Andrew West, Founder and Chief Executive of American Natural Gas – a company that designs, constructs, operates and maintains NG fuelling stations – thinks the price tag can be off putting. “The stations aren’t cheap,” he admitted. “They are a big investment, and sometimes the price is daunting. But our customers attest that both through our design criteria and with our in-house technical experience, we provide a very reliable NG fuelling experience.”
He is confident that, as the CNG network continues to grow, the price of stations will fall. Is the CNG fuelling network developing quickly enough in the US? “Absolutely. The message is: we are all doing this, whether it is on the demand side, the vehicle development side, or the expansion of the fuelling infrastructure. It is all being done for the right reasons. The larger the strategy, the more economic the savings will be. And that margin is getting greater everyday,” West added.
Asked why he thinks Honda cancelled its CNG programme, he replied, “It’s purely to do with economics. While I applaud Honda – their Civic CNG is great and it has done a lot in terms of raising awareness for the technology – is a small sedan really the right type of vehicle to use the technology in? I think you need something bigger, and to have an unlimited production run just wasn’t realistic.”
Europe is committed
The US is not the only place where CNG is seeing enthusiasm. Several European OEMs continue to push the segment forward with sustained investment, and many have models that have been present in the market for some time. SEAT, for example, offers two CNG models – the Leon TGI and the Mii Ecofuel Start&Stop.
The company has recently voiced its confidence in the segment, stating, “In the last five years, sales of cars powered by CNG have tripled in Europe, while they have increased six-fold in Spain in the same period.”
Speaking to Megatrends, Andrew Shepherd, SEAT’s CNG expert said the economics behind CNG make it an enticing prospect for consumers: “The combination of the latest technology engines and a lower fuel price means that running costs with CNG are significantly cheaper than other traditional fuels, with savings between 30% and 50%. A CNG car costs around the same to buy as an equivalent diesel version, so the savings in running costs can be achieved right from the first day of ownership.”
“The recently announced commitments by both the EU and individual Member States to promote CNG as an alternative to traditional fuels will undoubtedly push forward the share of NG as a vehicle fuel over the coming years,” concluded Shepherd. “Italy is currently the benchmark for CNG sales and with the combination of service stations and vehicle availability, the CNG market share there stands at around 5%. This kind of market share is perfectly achievable in Europe as a whole if we make the most of the current favourable legislation for promoting alternative fuels and technologies.”
Honda’s decision to cancel its US CNG programme may have signalled the end of CNG as a passenger car fuel in that market, but in Europe, it appears to remain a serious contender.