Industry Trend Analysis - CNG Opportunity Best In Freight, Heavy-Duty - DEC 2017

BMI View: Increasing corporate focus on ESG as well as stringent national emissions targets will favour a growing adoption of CNG in the transport sector, particularly in freight and heavy-duty vehicles. The technology will fa ce competition from EV adoption; however , there is scope for the technology to be used in tandem to improve performance.

Compressed natural gas (CNG) as an alternative fuel in the transport sector remains significantly underutilised despite the relative maturity of the technology and its substantially lower emissions profile than conventional fuels. Use of CNG in the transport sector remains highly fragmented globally, with countries such as Iran, Pakistan and Argentina using CNG vehicles much more prevalently, compared with a number of developed markets where CNG-fuelled vehicles make up a tiny proportion of the overall vehicle fleet, such as in the US.

Given the abundance of gas in the US, where we forecast hub prices to remain subdued over the coming years, more favourable economics may help to provide the impetus for a greater uptake of CNG-fuelled vehicles. In the long term, and as the conventional business model for oil & gas companies comes under threat from a transition away from traditional hydrocarbon fuels, technologies such as CNG will become increasingly viable to both producers and consumers (see ' 2C Transition Series: Applying Technology To Clean Up Emissions ' , August 16).

Pakistan An NGV Outperformer
Top 10 NGV Markets By Fleet Size
Source: Natural Gas Vehicle Knowledge Base, BMI.

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