lng for mobility implications on heavy duty … 4 locally at demand centres through small scale...

LNG for Mobility Implications on heavy duty transportation

Transport Alexander GABL1

Abstract:

LNG for mobility is one existing technological concept which is already applied in USA, Asia and parts of Europe. Therefore, this paper will focus on the transportation business and will give a guideline to answer how LNG for mobility could transform the heavy duty transportation sector. What are the framework conditions to support a large scale roll-out? What are the environmental implications? First, the paper will explain what small scale LNG for mobility is in detail and discuss the different forms of application from truck transportation to shipping industry with a focus on the heavy duty transportation segment. Second, the current technological status as well as regulation will be analysed and an outlook for the next years will be given. Afterwards a total cost of ownership (TCO) analysis from the perspective of a transportation company will be carried out including a sensitivity analysis indicating the main cost drivers. Based on such analysis a roll-out scenario for Austria will be carried out showing effects on truck fleets, LNG consumption, substitution effect of diesel consumption and emission implications.

Keywords:

Heavy duty trucks, Transportation, LNG, mobility, TCO, Europe, Technology, dual fuel trucks, mono fuel trucks

1. Application and Market

1.1. LNG Basics

LNG is a natural gas that has been converted to liquid form for ease of transportation. By cooling the gas down to -162 °C the volume reduces to 1/600 compared to gaseous state. Within that process, heavy hydrocarbons (condensate, LPG), carbon dioxide, water and sulphur are removed. It is non-toxic, colourless, non-flammable and non-corrosive. The energy density is 2.4 times higher than CNG. Due to such technical conditions LNG is shipped in large-scale carriers from liquefaction plants to regasification terminals and/or storage facilities in importing countries. At the destination country, the LNG is either regasified and flows into the high pressure national gas grid or is kept in liquid form for different use like transportation or off-grid supply. Small Scale LNG extends the value chain beyond the regasification plant. The reloading of LNG to smaller ships for inland waterway transportation, the reloading to trucks or rail cargoes is called the small scale LNG logistics. The LNG filling stations for trucks and bunkering stations for LNG ships are called the small scale retail network.

1.2. LNG in Europe

LNG is already happening in Europe today. Europe has 25 large scale import terminals with a capacity of roughly 210 bcm per year. In the below graph the terminals are illustrated as dark blue bullets, in operation, or light blue bullets, planned. The red stars are representing the current liquefaction plants. Small scale LNG terminals are shown as blue stars. Today there are about 150 LNG fuelled ships available according to Pöyry. With regards to LNG trucks there are about 1,500 in operation throughout Europe which is quite a low number compared to China with 240,000 trucks on the street and a network of 2,500 filling stations. Beside that in USA 25,000 trucks are operating on daily basis.

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Figure 1: LNG accessibility in Europe The green filled area starting in South West Europe covers all the countries up to Scandinavia. This area does have a high accessibility to LNG due to its sea access and the corresponding regasification terminals. In contrast, the countries in Central Europe down to the Black Sea do only have a limited access to LNG today. Therefore it is not a surprise that the current small scale LNG infrastructure is mainly build in those green areas. Below table on the available infrastructure supports that view.

Figure 2: Small-Scale LNG Infrastructure in Europe

Looking at the current available infrastructure there are already around 100 refuelling stations for trucks and more than 30 bunkering facilities for vessels in Europe available. Regarding small scale infrastructure Northern Europe (Norway, UK, Netherlands and Sweden) is dominant. But Spain and Portugal together have as well a sizeable infrastructure. Below snapshot taken out of the Small Scale LNG Infrastructure map from Gas Infrastructure Europe illustrates how the current truck and ship infrastructure is distributed over Europe. The two circles indicate todays main focus regions for small scale LNG application which are mainly Northwest Europe and Scandinavia. Central Europe namely Germany, Switzerland, Austria and Northern Italy as well as neighbouring states in Eastern Europe have today either no infrastructure available or only a limited one.

Figure 3: Today’s Small Scale LNG focus areas

1.3. Application options

Due to the fact of the cost-competitive advantage and the characteristics of LNG as a cleaner fuel, the fluid gas can be used for shipping business and heavy-duty road transportation. In case of shipping it would replace the heavy fuel oil which is coming under pressure due to the current discussion and global limitations of sulphur content to 0.5% starting 2020. In the European ECA regions the sulphur limit is already at 0.1%. Looking to the road transportation sector, the application would be most likely in the area of heavy duty transportation. Especially businesses active in the long range transportation could benefit on the one hand from lower operational costs and on the other hand from a better environmental balance. Companies and institutions in the short-range distribution business would benefit from lowered noise emissions which would allow for an extension of the distribution window in the morning in inner city locations like Tesco did in London. Beside the short and long-range distance application the public service transport could be as well of interest like city bus fleets or garbage trucks. Furthermore special vehicles like towing boats for harbours and mining trucks, as developed by Shell and Caterpillar, are in a testing phase. Currently there are the two ships Greenstream and Greenrhine operating on the Rhine transporting fuel products for Shell to its refineries in the region. The company ordered 15 additional ships fuelled by LNG for the Danube region. In Scandinavia LNG is also used in the tourism sector for passenger vessels operating in a point to point traffic. Besides the road transportation also the rail sector could be an area of application for replacing the diesel shunting locomotives by LNG. Finally, an already widely used option for LNG is the off-grid sector in countries with a low density of gas pipeline infrastructure. Vos Logistics, a transportation company in the Netherlands, has added five LNG powered trucks to its fleet of international trailers with a mileage greater than 90,000 km per year. But also for the distribution business the example of Tesco’s 35 dual fuelled trucks which are refuelled at Gasrec’s filling stations show the potential of that technology. Or the Viking Grace, which is the world’s first LNG powered passenger vessel with a capacity of 2,800 passengers and operates between Stockholm and Turku. Also large cruise ship providers like AIDA use LNG infrastructure at ports like Hamburg for their fleets.

1.4. Value Chain

When looking at the map with the different bunkers, fillings stations, receiving terminals the value chain of the small scale LNG business needs to be explained. The LNG itself is either being produced

locally at demand centres through small scale liquefaction plants or it is imported via regasification terminals. Usually those terminals have storage facilities for LNG. The LNG can be transported via three different ways to the truck filling station in a certain country. The main and most developed option today is the transportation via truck. Usually such trucks can transport between 18 to 24 tonnes of LNG with a single trip. Another option which is now in development is the transportation via inland waterway ships to larger inland bunkering stations which can be used for ship refuelling or for the distribution to truck refuelling stations. Currently there are already small scale LNG ships operating on the Rhine delivering LNG to inland terminals and/or are acting as a bunkering facility like the ship “Argos” in the area of Antwerp, Rotterdam and Amsterdam. The third option is the transportation via train. The first rail cargo reloading was done near Hamburg in Brunsbüttel in October 2016. Looking at the small scale LNG logistic costs, the transportation via ship would be the cheapest alternative to transport larger LNG volumes to inland demand centres besides rail cargoes. But currently the Rhine-Maine-Danube axis is a bottleneck for ship transportation as the current available ships are not able to meet the restrictions for the Maine section. Once the LNG is at the filling station a certain frequency for the refuelling is needed as the LNG needs to stay at certain temperatures to keep the boil-off at a minimum level.

LNG

LNG LNG

Terminal Logistics CustomerStorage / Filling Station

LNG LNG

LNG fuelled

LNG fuelled

Figure 4: Small Scale LNG Value Chain

1.5. Conclusions

Overall the current variety of applications as well as the current landscape of provided infrastructure indicates that LNG as a fuel for mobility is already in use but for the time being with a focus in areas with sea access. Therefore another conclusion from that chapter is that LNG activities are ramping up in North-West Europe and Scandinavia first. In the next step there will be a spill-over effect to the inland waterways and road transportation routes of West and Central Europe. Today the main logistic option to transport LNG from coastal areas to inland demand centres is the transportation via truck. Other options like rail cargo or shipping is in an early stage of development.

2. Technology & Regulation

The technological assessment will concentrate the analysis on trucks for road transportation using LNG as a fuel. Therefore the concept of mono and dual fuel trucks will be illustrated and explained as well as the availability by OEMs giving an outlook on future developments. First a quick overview on the filling station infrastructure will be given.

2.1. Filling Stations

Three different sizes of refuelling stations are currently known and used in the market. The below pictures illustrate the three versions of moveable, skidded and permanent stations. For todays’ pilot projects with a size of around 20 trucks the mobile containerized station is normally used. Such a station can store between 10 to 18 tonnes of LNG and the costs are below TEUR 500. The clear advantage of that installation is the regional flexibility. Depending on the routing of trucks and demand centres the filling station can be moved easily. Therefore it is an ideal option for smaller pilot projects. The next larger size is called moveable skidded station. That filling station is made for a medium term usage and is able to store 18 to 24 tonnes of LNG. Costs are related to the size and vary between TEUR 500 and 600. Such a station can serve a fleet of up to 40 trucks. The permanent full scale

station from Shell in below picture can store at least 40 tonnes of LNG and depending on the sizing even up to 80 tonnes which allows to cover at least 150 trucks. In the 40 tonnes version the costs are around TEUR 1,000 and do almost double for the 80 tonnes storage version. Such permanent filling stations are either seen as upfront investments to develop a permanent network or are part of larger pilot projects with multiple customers switching to LNG fuelled trucks.

Mobile containerized Station Moveable skidded Station Permanent full scale Station

Figure 5: Small Scale LNG Filling Stations

2.2. LNG Trucks

Today there are two technological options for transportation companies to switch to LNG fuelled trucks. On one hand there are mono fuel trucks operating with Otto engines and on the other hand dual fuel trucks operating with Diesel engines. Mono fuel means that those trucks are LNG “only” fuelled. Iveco, Scania and Daimler are able to provide such trucks for the European market today. Dual fuelled trucks can be operated by diesel and LNG. Volvo is the only truck manufacturer which is selling such trucks in Europe. The advantage of a dual fuelled truck is that for the acceleration procedure diesel can be used and later the engine switches to LNG. That operating mode allows the truck to drive 70% with LNG and 30% with diesel. Volvo is working on an updated version which enhances the substitution effect up to 95%. When comparing the technical specifications of mono and dual fuelled trucks then the main disadvantage of mono fuel becomes obvious. Due to the fact that mono fuel trucks are operated with Otto engines the available torque for the acceleration from zero to cruising speed is only half of the dual fuelled versions. That has some implications on the driving comfort for the truck driver. Another advantage of the dual fuelled truck is the fact that the two tanks allow higher cruising ranges. For example the Volvo FM truck is able to travel up to 600 km with LNG and the additional Diesel tank with ~ 150 l adds to a total mileage of roughly 1,000 km. The decision between Mono and dual fuelled truck depends on the routes and the required mileage but as well the topography plays a crucial role. For example if trucks are operated in the Netherlands and neighbouring area then the mono fuel version may do its job but if the fleet is operated in a more mountainous region like in the Alps then the dual fuelled version might be the better decision. As LNG needs to be stored at a certain temperature level to keep LNG fluid and pressure in tanks at normal levels, the handling of the boil-off gas is also treated differently. There are simple vapour collapse systems in the Volvo or Iveco trucks or vapour return systems in the Scania and Mercedes truck versions. Both systems manage to keep the tank pressure within its limits. Main difference is that the vapour return system transfers vapour to the fuelling station back and the collapse system manages the vapour through an economizer without returning to the fuelling station. Only in critical situations the vapour will be relieved through a valve to the atmosphere to avoid a dangerous situation. The amount of relieved vapour is neglectable with regards to sensible inner heat of truck. The time during which a cryogenic tank is able to maintain the LNG without any venting is called holding time. In Northern America the tanks need to have at least 5 days without any relief to atmosphere.

Volvo FM

Dual Fuel 460 PK

2300 Nm

Vapour Collapse

Min. 6-7 bar(sat.)

PRV 15.6 bar

Iveco Stralis

Mono Fuel 270 PK

1100 Nm

Vapour Collapse

Min. 7-9 bar(sat.)

PRV 15.6 bar

MB Econic

Mono Fuel 270 PK

1100 Nm

Vapour Return

Min. 16-18 bar (sat.)

PRV 24 bar

Scania

Mono Fuel 305 PK

1250 Nm

Vapour Return

Min. 7-9 bar (sat.)

PRV 24 bar

Figure 6: LNG Heavy duty trucks As the technological development is progressing Iveco has presented the new Iveco Stralis NP truck in Madrid in June 2016. The truck has an engine with 400 horse power and 1,700 Nm and the mileage has been optimized for long distance which allows a distance of up to 1,500 km without a stop. The truck has two tanks with a capacity of 540 litres of LNG and is already Euro VI fit. The Total Cost of Ownership have been improved by 3% according to Iveco and fuel costs are 40% lower compared to Diesel, depending on the region as taxation may be different. Another advantage of that Mono fuel LNG truck is the fact that due to its lower emissions compared to a diesel engine the truck is allowed to enter all cities. When comparing a conventional Diesel truck with a LNG truck the fuel efficiency of the LNG truck is around 18% less. But as costs for LNG are much lower than for Diesel the operating costs for a transportation company are lower. Beside that the purchasing costs of a LNG mono fuel truck are in Europe today EUR 20,000 to 30,000 higher than for a comparable Diesel truck. That is still a large amount but the additional purchasing costs have already come down from a level of EUR 40,000. Therefore some progress has been made in the last years and the economics for the technology have improved. For the truck manufacturer LNG fuelled trucks are a working solution to lower the average CO2 emissions of their fleets. Due to almost zero particulate emissions, up to 70% lower noise emissions and 35% lower NOx emissions compared to conventional Diesel truck, the LNG truck has also its arguments for the distribution business in inner cities.

2.3. Regulatory

The previously described advantages of LNG fuelled mobility are also supported by the European Union goals regarding climate change. The EU foresees a CO2 emission reduction in transport sector of -60% vs 1990 levels until 2050. Therefore there is a need to lower emissions in the heavy duty transportation sector. Furthermore, the European Union foresees LNG as an alternative fuel in heavy-duty transportation, inland waterway transportation as well as for sea-going vessels. Power to Gas technology or the so called synthetic gas would be the next step to lower emissions in the transportation sector. The latest European regulations which influence the development of LNG as a fuel for mobility is the “Deployment of alternative fuels infrastructure” (DAFI) and “A European Strategy for Low-Emission Mobility”. The DAFI is a directive and needs to be transferred to national law in each member state by November 2016. Regarding LNG it describes that public accessible refuelling points for natural gas / bio-methane vehicles need to be installed by 2025 ideally in a range of every 400 km along the TEN-T core network and a minimum coverage on main maritime and inland ports. The transformation into national law will show how effective that instrument is but in general it helps to establish a European Union wide core network for the small scale LNG infrastructure. The strategy for low emission mobility focuses on LNG as alternative in heavy duty transportation and foresees two proposals. One, on the certification of carbon dioxide emissions of fuel consumption, and another one, on the monitoring and reporting of the certified data. The European Commission wants to speed up with a public consultation to design options for carbon dioxide emission standards for trucks. As the public institutions should play a first mover role in the application and introduction of such a technology the public procurement obligations will be altered through an updated Clean Vehicles Directive.

To support such a development the European institutions are funding the infrastructure enlargement via different projects. One more prominent example is the Blue Corridor project or the LNG Masterplan. The funding of pilot projects is up to 50% depending on the scope of the project.

2.3.1. Blue Corridor

The Blue Corridors project has the aim to establish LNG as a real alternative for medium- and long distance transportation. First, as a complementary fuel and later as an adequate substitute for diesel. The project is co-financed by EU via “Seventh Framework Programme” and essential working package is supposed to deliver 14 LNG or L-CNG stations thereof are 8 already operating on critical points along the corridors as well as a fleet of approximately 100 LNG fuelled trucks. The project compromises partners like gas companies, truck manufacturers, engineering companies and LNG suppliers. The picture below illustrates the targeted area of the blue corridor project. It is not a surprise that the covered transportation routes of the Blue Corridor project are exactly matching with the green areas of the first figure indicating countries with high accessibility to LNG.

Figure 7: Blue Corridor Project Area

2.3.2. EU LNG Masterplan Rhine-Main-Danube

Beside the Blue Corridor project a second important initiative is the EU LNG Masterplan for the Rhine-Main-Danube region. The aim is to facilitate the creation of a harmonized European regulatory framework for LNG as fuel for inland waterways from North West Europe’s North Sea down to South East Europe’s Black Sea. The picture is illustrating the planned bunkering facilities and terminals for the shipping industry. For example in Bulgaria, Ruse, a LNG terminal including bunkering station for vessels as well as a LNG truck fuelling station has been built.

Figure 8: EU LNG Masterplan for shipping

2.4. Conclusions

The main take away of this chapter is that LNG truck vehicles are already available today, but there is still some room improvement on fuel efficiency. Further, a cost decline on purchasing costs and new LNG vehicles are expected in the coming years. The development of small scale LNG infrastructure is supported by European regulation and several funded pilot projects. However, there is a certain lack of standards for LNG vehicles, infrastructure and HSSE requirements.

3. Total Cost of Ownership (TCO)

From the perspective of transportation companies the total cost of ownership (TCO), meaning the overall cost a truck creates over its lifetime, are a crucial benchmark when deciding on purchasing a LNG fuelled truck or a diesel truck. Therefore the next chapter analyses the cost of a LNG mono fuel truck compared to standard diesel truck. Today the consumption of LNG driven trucks is 18% to 20% higher compared to a conventional Diesel truck for long distance vehicles. Out of the data illustrated below it is obvious that the mileage of todays most advanced LNG truck can be in an optimal case up to 1,900 km depending on tank fuel sizes and operational mode.

3.1. Assumptions

Assumptions for LNG truck

Mono fuel truck costs: EUR 100,000

Tank size: ~ 490 kg

LNG Consumption: 25 kg/100 km

Mileage: up to 1,900 km

Repair & Maintenance: to be assumed 15% to 20% higher compared to Diesel

CO2 Emissions: 56.2 g/MJ Assumptions for conventional truck:

Conventional Diesel truck: EUR 80,000

Diesel Consumption: 30 l/100 km

Repair & Maintenance: 0.1705 €/km

CO2 Emissions: 73.2 g/MJ Other Assumptions:

Expected Lifetime: 10 years

Taxes: Diesel MÖSt and liquid petrol gas (LPG)

Discount rate: 5%

Driven kilometres: 100,000 km/p.a.

Prices: real terms

Diesel Prices: 0.86 EUR/l excl. VAT (based on 2016 average)

LNG Prices: based on long-term historic average

3.2. Total Cost of Ownership

Taking those assumptions into a discounted cash flow model, the results are giving the following picture. Please note that the subsequent calculations and illustrations are exemplary and can vary due to country’s topography, taxation, incentives and fuel prices for diesel as well as LNG.

Net Present Value: ~ 8,000 EUR

Internal Rate of Return: ~15%

Pay Back Time: 5 years

CO2 Emission Savings: 85 tonnes (over 10 years) The first result which we could name as a “base case” is indicating that after a period of maximum 5 years the higher purchasing costs and as well the higher maintenance costs are earned back. During the remaining 5 years the transportation company would have an additional economic benefit compared to the conventional Diesel truck. Calculations from Vos Logistics do also support that analysis as their economics indicate that the payback time is between 4 and 6 years for their long-

distance truck fleet depending on the mileage. Of course, there are some major drivers within that calculation which can drive the result in the one or other direction. Therefore the next step is to indicate those drivers to get a deeper understanding about certain required framework conditions. When looking at the overall costs in the “base case” over 10 years lifetime the below chart shows the share of the single cost elements. Regardless of the fuel engine the purchasing costs have the lowest share on the total cost of ownership. Moreover, it becomes clear that the advantage of LNG trucks is coming mainly from lower fuel costs compared to diesel trucks. The repair and maintenance costs are currently higher for LNG vehicles than for diesel ones. Looking at the variability of the single cost parts it is rather clear that changes on the fuel efficiency and purchasing costs will have immediate effect. Repair and maintenance costs are to a certain extent equal for standard parts like the wear for tyres and brakes. Differences are coming from all the other parts like tanks and engine. But those are costs which cannot be influenced by transportation companies themselves.

Figure 9: Simplified Total Cost of Ownership LNG truck vs Diesel truck

3.3. Emissions

The subsequent chart illustrates the emissions over a time period of 10 years. The LNG truck emits 700 tonnes of CO2 over 10 years compared to 785 tonnes of the conventional diesel truck. In other words, the LNG truck saves 10% of CO2 emissions. This result is also supported by the analysis of DENA. Depending on the type of gas used for LNG the savings can be even higher. For example if fluid bio-methane is used the reduction can be up to 60% and in case of synthetic methane the carbon emission savings can increase to 90% according to DENA numbers.

Figure 10: CO2 Savings LNG truck vs. Diesel truck

3.4. Key Drivers

The next two charts illustrate the sensitivities on driven kilometres, Fuel Efficiency and the delta between the purchasing costs of a LNG truck versus a conventional diesel truck. When varying all three variables by plus/minus 15% the results indicate that the LNG consumption has the highest impact on the overall costs. A reduction or increase of the driven kilometres is playing a slightly more important role than the reduction of additional purchasing costs. Calculations show that a more efficient LNG consumption by –15% would leverage the net present value up to EUR 30,000 which would reduce the pay-back period immediately from 5 to 3 years compared to the previously described “base case”. The Net Present Value would be increased by 300%. A reduction of the additional purchasing costs by -15% from EUR 20,000 to EUR 17,000 would increase Net Present Value by up to 40% which is much smaller than the effect from higher fuel efficiency. Furthermore the pay-back period would be reduced to 4 years instead of 5 years. Looking at the driven kilometres the picture is different. A reduction by -15% resulting in a range of 85,000 km instead of 100,000 km per year would decrease the Net Present Value by -53% and increases the pay-back time to 6 years.

Figure 11: Sensitivities on Net Present Value

Figure 12: Sensitivities on Payback period

3.5. Conclusions

So a first conclusion from the perspective of a transportation company is, that the longer the driven kilometres per year are the shorter becomes the pay-back period of their investment. Another fact is that the topographic area is crucial for the fuel consumption. The flatter the terrain the better for the LNG truck also from the perspective of driving performance as mentioned earlier. A further increase in the technology which reduces the consumption to below 25kg/100 km would help the most to increase the attractiveness for logistic companies to change their fleets towards LNG fuelled trucks. The

purchase price which is currently higher than for the conventional truck is playing as well an important role. For example, if a logistic company utilizes its fleet up to 150,000 km per year the pay-back period would already decrease from 5 to 3 years. But if the additional costs for LNG trucks would be reduced by half the pay-back period would even decline from 5 to 2 years without any further technological advancement on fuel efficiency. If those two effects are combined the additional costs of the LNG truck would be earned back already after the first year of operation. Afterwards the fleet operator would save money every year compared to the usage of a conventional diesel truck. So for long distance transportation the fuel efficiency resulting in fuel costs will be the key cost driver once the purchasing costs and repair and maintenance costs are at parity with a diesel truck. That information leads to another important conclusion. From the view of economics the LNG trucks should be used especially in the long-haul transportation business. From the view of environmental and social implications the LNG truck might also have a role in the distribution business due to the far lower noise emissions by -70% and the lower particulate emissions compared to a diesel truck. For the distribution business a reduction of purchasing costs down to cost parity is of greater importance. The fuel efficiency is of minor importance as the mileage per year is lower than in the long-haul transportation segment. Besides that the repair and maintenance costs which are currently assumed to be 15% to 20% higher are also playing a role. Cost parity there would further increase the competitiveness of LNG trucks in the distribution business. Looking forward to an introduction of LNG trucks in Austria with a fleet of 40,479 trucks beyond 12 tonnes the results are as follows. Assuming that 10% of the fleet would be replaced by LNG trucks with an average yearly mileage of 60,000 km, 73 mn litres of diesel are substituted by 61,000 tonnes of LNG on a yearly basis. 200,000 tonnes of CO2 emissions could be saved over a period of 10 years.

4. Results and Conclusions

The paper discussed from different perspectives the topic LNG in the mobility sector with a focus on road transportation for heavy duty vehicles. The various application options of LNG in the mobility segment, the technological status of the vehicles itself, the infrastructure, the current status in Europe, the regulatory development as well as a simplified total cost of ownership analysis was presented.

4.1. Framework Conditions

The best fit for LNG in mobility is in on one hand in the long range transportation sector due to the economic advantages and on the other hand in the distribution business due to the environmental effects. Besides the road transportation business LNG can play its role also in the shipping sector for sea-going vessels and inland waterway vessels. But there are still several requirements which need further development.

Politics and industry need to develop implementation strategies to support the roll-out of LNG fuelled trucks and ships throughout Europe

LNG could be positioned as the fuel of choice for heavy duty trucks and waterway transportation

There is still a lack of EU-wide harmonization of standards for trucks, ships and infrastructure, especially when looking at regulations for LNG filling stations and LNG truck technology

Transportation companies will require long-term security about infrastructure spending, capital and operational expenditures to support their willingness to switch their fleets to LNG

During the ramp-up phase incentives for logistic companies to reduce the delta between the purchase price of conventional and LNG truck would allow for a quicker amortization of investments

Stricter regulations for inner city transportation with regards to emissions (CO2, NOx, particulates, noise) could drive the application of LNG fuelled trucks as they are currently the only available technology to reduce such emissions already today

The small scale industry and manufacturer of LNG trucks need to strive for improvements in fuel efficiency and purchase costs of LNG trucks and corresponding small scale LNG infrastructure to increase competitiveness

4.2. Implications

Especially the transportation business could benefit from such a technology as the higher costs for the purchase of trucks are more than offset by lower operating costs as calculations indicated before. Of course the economic value added depends strongly on the specific deployment area of the technology. In flatter countries like the Netherlands with a direct sea access the calculations will give a different economic picture than in a more mountainous region like Austria or Switzerland without any sea harbour. But once cost parity is achieved for purchase price and repair and maintenance costs the key driver for logistic companies active in the long distance transportation segment will be the fuel efficiency and the corresponding fuel costs. Logistic companies active in the distribution business with a shorter mileage per year might profit mainly from the environmental performance of LNG trucks due to stricter regulations for inner city transportation. With regards to the environment the CO2 emissions are roughly 10% lower compared to conventional trucks and even larger savings are possible for NOx emissions (-35%) and particulate emissions (-95%) compared to a Euro VI diesel truck. Furthermore, the technology could also extend the distribution time for trucks in inner cities as the noise level is reduced by up to 70%. If the above mentioned framework conditions on standardization of technologies for trucks and filling stations as well as security on incentive schemes for logistic companies will be met in future, there is a case for a large scale application of small scale LNG throughout the European Union.

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lng for mobility implications on heavy duty … 4 locally at demand centres through small scale...

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