Lubes’n’Greases Exclusive by Boris Kamchev and Simon Johns
The conversation surrounding carbon-neutral transport centers on electric vehicles, especially in Europe and North America. But there may be an existing, inexpensive and faster way to reduce emissions – one that could also flatten declining lubricant demand.
Most people in the world are unlikely to own a passenger vehicle, let alone one powered by electricity. For those who can afford a conventional engine car, the cost of ownership can be substantial, with fuel being a significant part of that economic burden.
For example, the average motorization rate in Africa is around 180 vehicles per 1,000 people, compared with Europe at 610. Many countries in Africa are also underserved by consistent power supply infrastructure and have a low median income, which rules out a new EV. Even China, the biggest auto market in the world, has a motorization rate of 173.
From Asia to South America, one solution to reducing emissions without turning to plug-in vehicles is to instead use natural gas as a transport fuel. Natural gas vehicles, or NGVs, run on methane, which can be compressed natural gas from an oil well, liquefied natural gas, biomethane from plant sources or a refinery byproduct called liquid petroleum gas.
In some parts of the world, natural gas fuel can be significantly cheaper, reducing the cost of ownership. In Turkey, the world’s number two market for LPG, also known as auto-gas, gasoline costs 7 lira per liter (U.S. $0.82) whereas LPG costs just over half at 3.99 lira ($0.47). The cost of a new NGV can also be attractive. In Germany, where there are almost 80,000 NGVs, a new CNG-powered Volkswagen Golf costs €2,242 more than the gasoline version of the same specifications, but €3,188 cheaper than the base level ID.3. Retrofitting a used car with a CNG kit can be cheaper still.
There are almost 70 NGVs available from major OEMs in Europe alone, from trucks and buses to popular passenger cars models, Robin Hörrmann, a spokesperson for the Natural Gas Vehicle Association Europe, a Brussels-based industry advocacy group, told Lubes’n’Greases via email.
In its literature, NGVA Europe says there are about 26.5 million vehicles in the world* that are powered by natural gas, of which 1.4 million are in Europe. This equates to about 2.2% of the world's fleet, more than three-and-a-half times the number of EVs in the world. The top three countries by unit numbers are land of the EV boom China, oil-rich Iran and emerging India.
Across the European Union, more than 550,000 new plug-in EVs were registered in 2019, whereas the number of the CNG- and LNG-fueled vehicles in the same year was a modest 87,420 units, according to NGVA’s figures. The association predicts that by 2030 there will be 13 million NGVs in Europe.
For the lubricants industry, NGVs represent a more attractive route to reducing carbon dioxide emissions than EVs while maintaining demand. NGVs are powered by internal combustion engines that have unique, but not insurmountable, lubrication formulation challenges and require lubricants in similar quantities to gasoline and diesel vehicles. Battery EVs do not use engine oil, and both industry consultancies Kline & Co. and McKinney expect the shift to EVs will reduce lubricant consumption by around 1% per year.
Bearing in mind that the share of on-road plug-in EVs was a little over 0.5 percent (about 7.5 million cars) of the total vehicle parc by the end of 2019, EV OEMs have some catching up to do to overtake NGV vehicles in absolute numbers.
“The market is fragmented, and the degree of fragmentation will accelerate during the forecast period. The increase in the number of CNG vehicles will offer immense growth opportunities,” the firm said in its Global Compressed Natural Gas Market 2020-2024 report.
NGVs can also play a greater role in reducing fleet emissions, with a 40 ton NGV truck emitting up to 16% less CO2 than a typical diesel equivalent.
“Considering the overall well-to-wheel impact, there are significant benefits and reduced greenhouse gas emissions from passenger cars, as well as [other] light- and heavy-duty vehicles, when switching to CNG or LNG from petrol and diesel,” Hörrmann said.
Few doubt that the number of low- and zero- emissions vehicles will keep rising in the decade to come. That seems to be the assumption upon which major automakers in Europe and Asia are basing their production strategies. Despite the rapid growth in sales over the past 10 years, EVs have to date made little dent in demand for mineral-based fuels and lubricants. Last year, only 3% of the total number of passenger cars sold worldwide were EVs, according to the International Energy Agency.
While countries such as Norway, the United Kingdom and Germany are far along the road to low- or zero-emission transportation – whether that be hybrids, plug-ins or vehicles powered by fuel cells – developing countries outside Europe are grappling with other pressing economic and societal challenges, leaving little room for investment – in some cases, for power stations let alone charging infrastructure.
“NGVs are of course an alternative for all kinds of transport scenario. They have the same engine-to-power characteristics, lower noise levels, very competitive pricing and total cost of ownership, vehicles are broadly available, the infrastructure is in place and NGVs have very low emissions, especially,” Hörrmann said.
Meanwhile, those hundreds of thousands of used ICE cars that will be banned from the streets of London, Berlin and Oslo, will have to go somewhere. They may end up on the well-established secondhand car market in sub-Saharan Africa, maybe even with a natural gas tank retrofitted in the trunk.
* Including two-wheelers, medium/heavy duty, off-road and passenger cars.