Even with the cost of diesel plummeting recently there are still major cost savings to be had in switching to Liquefied Natural Gas (LNG) powered heavy vehicles, as well as the increasing regulatory demands for new vans and HGV’s to have lower emissions. There are tax incentives on LNG, which have been guaranteed even by a traditionally ‘anti Green’ Coalition government where David Cameron famously ordered his ministers to “cut the Green crap”.
What is LNG?
Liquefied Natural Gas is a very similar fuel to the gas you use to heat and cook at home. Where on the national gas grid it is pumped as a gas, the fuel is cooled to between -120 to -170 degrees Celsius so the fuel is a liquid and because it is denser, more can be carried in a load.
LNG differs to the fuel used in many cars and vans – Liquefied Petroleum Gas (LPG), which is a by-product of the fuel refining process. LPG has variable combustion properties due to being a by-product, meaning that your range and power will vary according to where and when you refuel.
LPG is also heavier than air in its natural state, so even as a gas at room temperature it can ‘pool’ and be a greater risk of explosion. LNG is lighter than air so in the event of a leak, it will dissipate – a spark would cause a flame but not an explosion or fire.
Tax incentives
The Chancellor of the Exchequer George Osborne has guaranteed that there will be at least a 50% lower tax on LNG fuel until 2026. This means that vehicles will save considerable sums of money over the service life of the vehicle as against diesel. Estimates made prior to the oil price crash were in the region of £100,000 over five years on a three axle, 44 tonne tractor.
Where the figures will be lower with crude oil being in the region of $60 a barrel, fuel savings will still be over £75,000, meaning that the operator can pass on savings to clients and be at a much greater price advantage against diesel fuelled competitors.
Where this competitive advantage will decrease as more vehicles come onto the road, the time is ripe for early adopters as just over 1% of HGV’s in use today are run on LNG.
Vehicle Excise Duty (VED) is lower for vehicles using lower carbon emitting fuels. You can apply for a lower VED through the Vehicle Certificate Agency here.
Fuel efficiency and capital costs
The capital costs of an HGV running on LNG will be higher initially, at around £15,000 per vehicle (2012 figures). You can see that this will pay for itself in the first year of operation as against its liquid fuelled competitor.
LNG powered vehicles are fuel efficient. Again on heavier vehicles, it is estimated that a tank of LNG will get the tractor 250 miles on a standard tank.
Green credentials
LNG has 28% lower greenhouse carbon emissions than diesel, and if you use biomethane this is reckoned to be as high as 65% because you are removing methane that would go into the atmosphere. The ‘pooh powered bus’ that is being tested in Bristol is a classic example where Bristolians’ sewage is being used to power some of the city’s transport. People will always produce pooh, and this can be used to fuel the trucks feeding them the food that they turn into methane producing waste in their digestive tracts – a feedback loop!
New European emissions regulations – the Euro 6 regulations – favour the LNG powered vehicle, though dual fuelled and bi-fuelled vehicles are less favoured. Until a bigger network of filling stations are in use across the UK, bi-fuel is likely to be the only way ahead.
Dual fuel and bi-fuel
There are two types of intermediate power plant currently available on the market. Bi-fuel is a system where the power plant can use a traditional fuel such as petrol as well as LNG. The ignition systems are similar to petrol, requiring a spark for ignition, so a vehicle can load up on petrol when heading into a LNG barren area.
Dual fuel systems are those where a mixture of diesel or petrol and LNG are sent into the ignition chamber simultaneously. This will reduce your consumption of the liquid fuel considerably, but you will need to fill up on both diesel and gas.
Networks
With demand for LNG still in its infancy there are still very few filling stations across the UK. In my own experience driving across Wiltshire in my LPG powered car there’s only one LPG station on the A303 through the whole county! Consequently you have to plan your trips carefully. There is a push by industry and government to change this, with more and more LNG stations coming online across the UK. With the general governmental and supra-governmental push toward greener fuels, this will continue for many years to come.
It is also legal and possible to draw natural gas from the national gas grid and compress it for use in your depot as Compressed Natural Gas (CNG). You need to invest in compression and storage systems, which in turn are subject to strict safety regulations, but the investment will reap the reward in terms of immediate cost savings over traditional petrol and diesel. Many larger sized truck companies do this with diesel already, so this idea isn’t new to them.
Conclusions
If you can plan your journeys according to LNG filling stations, and can have enough fuel for your vehicles on their runs across the UK, there is a real competitive advantage to be had going over to LNG right now. Savings can be passed to clients, while your company can espouse its green credentials in your marketing materials.
Though supply is a real problem, this will change in the medium term.