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Asif Iqbal
Doha
Electric vehicles (EVs), compressed natural gas (CNG) vehicles, and liquefied petroleum gas (LPG) vehicles are expected to achieve significant market penetration over the next 23 years, boosting natural gas demand in the long-term, a report by the Gas Export Countries Forum (GECF) has said.
While the transport sector accounted for just over 8 percent of the global natural gas consumption in 2016, the automobile industry will be transformed in the long-term as new technologies and trends disrupt existing transportation markets, according to the gas outlook report released by the GECF recently.
The report said regulatory pressure towards low or zero emission vehicles (ZEVs) is generally expected to become the shaping force behind this transformation, compounded by gradually increasing competitiveness of electric powertrains and hybrid cars.
"This is already reflected in global policy targets, such as the Electric Vehicle Initiative, as well as in the policy priorities of developing countries including India and China.
"Climate change policies and emission controls in developed countries, including the EU, already mandate the replacement of traditional gasoline and diesel-powered car fleet in favour of ZEVs," the report said.
The gas outlook report further said that the share of battery-powered and plug-in hybrid EVs (BEV and PHEV, respectively) is expected to reach 20 percent of the total global sales by 2040 and the prime mover for EV fleet expansion is expected to be the Organisation for Economic Co-operation and Development (OECD) member countries, with over 32 percent of new car sales coming from electric powertrains as a result of policy pressures.
Noting that a shift to EVs will be costly, the report said, it involves a massive upgrade in existing infrastructure, particularly in developing countries. In addition to the investment costs, further advances are likely to be constrained by the capacity and cost of available battery technologies.
"Unless technological innovation picks up, further transition to EVs will not happen over the outlook period," the report added.
The report pointed out that due to technological and competitiveness challenges, most of the global EV penetration is expected to come after 2035, with even EV fleets in developed countries being negligible in 2030. It said by 2040, EVs are expected to amount to 9.2 percent of the global car fleets worldwide and 13 percent in OECD countries by 2040.
Furthermore, the GECF report said that as electric powertrains are increasingly cited as policy priority for developing countries, the momentum to develop CNG and LPG car fleets has slowed."However, despite being out of the policy spotlight, these vehicles are competitive under new emission control regulations, especially in China and India," the report noted.
The report added that the global stock of CNG and LPG vehicles are expected to grow by almost threefold, to over 55 million cars by 2040, accounting for around 2.6 percent of the global car fleet compared to 2.1 percent in 2016. The market of LNG-powered heavy goods vehicles is also rapidly increasing.
"Penetration of autonomous vehicles together with marketplaces for carpooling is expected to impact the vehicle fleet projections after 2030, and will reduce the overall miles travelled and, eventually, the car ownership rate," the GECF report said, adding this is beneficial to consumers as efficiency will increase, driving down prices and improving air quality and longevity, as well as lowering overall energy demand per kilometre driven.
