Huge Cost Savings delivered by Alternative Pathway
“European policymakers need to recognise the important role that natural gas can play.” Klaus Schäfer, CEO of E.ON Ruhrgas AG on behalf of EGaF
The European Gas Forum (EGaF), established by eight major European gas companies in 2010, has produced a new report — Reducing CO2 emissions in the EU Transportation Sector to 2050 – An alternative pathway to reach 2050 abatement targets with lower costs — to provide policy makers and industry players with descriptions of alternative decarbonisation pathways for the transport sector in order to meet abatement targets in 2050 and compares the potential cost requirements of each. The study reveals “continuing the use of [natural] gas is consistent with long term decarbonisation goals and provides economic benefits” (pg 28).
The project compares a transportation sector baseline scenario with an Alternative pathway to demonstrate that cost savings in the order of €68 to €80 billion (USD 88-104 billion) are possible with natural gas. Important cost advantages would come from the heavy trucks and maritime shipping transportation modes but other modes also make significant contributions:
- Heavy trucks: €35 to €40 billion;
- Maritime shipping: €25 billion;
- Buses: €8 to €11 billion;
- Passenger cars: €0.4 to €1.4 billion; and
- Inland shipping: €0.2 to €0.3 billion.
According to the EGaF report, an alternative pathway with a more significant role for natural gas could reach the 2050 CO2 abatement targets in the transportation sector while also delivering cost savings of around €60-70 billion in the period to 2030. A much higher share of natural gas (up to 4.7 times higher) than in the European Commission’s baseline White Paper scenario for the EU transport sector’s energy consumption would make these savings possible.
A further €10 billion saving is possible for 2030-2050; the reduced rate of saving assumes that by this stage natural gas is well established as a transportation fuel. Savings through the whole period, particularly for marine bunker LNG, also assume renewable biomethane generated from waste product to be a component of natural gas fuel.
Across the power, residential and transport sectors combined, EGaF’s ‘optimised’ CO2 abatement scenarios show total cost savings of around €400-700bn in the period to 2030, equivalent to approximately €140-230 (USD 181-298) per EU household per annum.
Heavy duty vehicles using LNG (liquefied natural gas) are likely to see a significant reduction in CO emissions, a 50% reduction in PM compared to diesel vehicles and at least a 50% reduction in NOx. In both of these sectors, natural gas is the main lower carbon alternative to more heavily polluting traditional oil fuels. LNG shipping is already used in the environmental control area of the Baltic Sea, and short sea shipping, e.g. passenger ferries, presents a major opportunity for growth.
Europe-wide there are already around 1.5 million CNG (compressed natural gas) vehicles on the road of which the vast majority are passenger cars or light duty commercial vehicles. Increasing the number of gas powered vehicles would not only generate cost savings but bring multiple environmental benefits, as natural gas is a clean burning fuel:
- CO2 emissions from road transport could be cut up to 25%.
- Significant air pollutant emission reductions could be achieved, including carbon monoxide (CO), oxides of nitrogen (NOx), little or no particular matter (PM)
- Gas-fuelled vehicles are also likely to be quieter and so have positive noise reduction benefits.
The urban fleet vehicles sector such as buses, refuse collection trucks and commercial/delivery vehicles also has significant potential. Especially attractive in this sector is that fleet vehicles can return to their own depots to refuel, so that widespread infrastructure would not be required.
Delivering the benefits of NGVs will nevertheless require policymakers to ensure a supportive regulatory framework. Specific measures could include vehicle purchase/substitution support and low interest loans for the purchase or conversion of natural gas trucks, and increasing the number and emissions limits of Emission Control Areas (ECAs) to promote natural gas ships, in the context of international maritime regulations.
“With this report the European Gas Forum is aiming to facilitate a transparent debate about how best to achieve lower cost emissions reductions in the transport sector,” said Klaus Schäfer, CEO of E.ON Ruhrgas AG on behalf of EGaF. “European policymakers need to recognise the important role that natural gas can play both in the transition to a low carbon economy and in providing economic benefits, as long as European regulation remains technology neutral.”
(This article primarily compiled using information from a European Gas Forum press release)
