With hotter temperatures a threat to numerous life forms on Earth, many nations have pledged to reduce their carbon footprint. Transportation accounts for 15 percent of greenhouse-gas emissions, third after the power and industry sectors. Currently, almost 92 percent1 of the world's transportation energy is derived from gasoline and diesel. As a result, the search for cleaner forms of energy for transport is imperative.
The transport sector is looking for energy sources that are safe, clean, affordable, easy to store and transport, and require a minimum of additional investment. Which fuels are capable of decarbonizing road, rail, marine and aviation transportation? What scale of investment will be required? Can companies expect investments to break even? If yes, over how many years?
To encourage a shift, governments have extended support in the form of favorable policies and tax benefits, for environmental and strategic reasons (e.g., increasing self-reliance for ensuring national fuel security, reducing fuel import bills, promoting local industry).
Natural gas is already enabling diversification due to cost advantages, along with the potential to reduce greenhouse-gas emissions and improve air quality. Natural gas releases carbon dioxide and nitrogen dioxide in small amounts: 117,000 pounds and 92 pounds per billion BTU of natural gas, and almost negligible amounts of Sulphur dioxide.
In addition, natural gas has safety advantages. Leakage that occurs dissipates into the air. Compared to diesel, the flammability rating of natural gas is low, thereby reducing fire risk in case of leakage.
Demand for natural gas, which is on the rise, is forecast to account for 11 percent of transport fuel by 2040 (up from 3 percent currently), with annual growth estimated at 1.6 percent.2 Global regions have varying motivations for increasing consumption: low prices in the United States, high diesel taxes in Europe and low incremental truck costs in China. For several years, China has been the world’s most important market for liquefied natural gas (LNG) heavy vehicles, and natural gas is expected to become the primary fuel for transportation in the next few years.By 2040, consumption of natural gas is forecast to rise:
Even if most of the developed world recognizes the need to diversify away from oil, few nations seem prepared to transition to economies fueled by renewable energy supplies. The transport sector remains highly dependent on fossil fuels, with infrastructure throughout the supply chain developed over a hundred years.
Energy diversification, however, is no longer a choice but a necessity for sustainable global development. While renewable-energy supplies continue to be explored and developed, natural gas is already a workable option in the transport sector, particularly for fueling vehicles on roads and vessels on waterways.
We have already begun to experience the paradigm shift in fuel mix throughout the world, and are excited to explore the growing impact of natural gas in the transportation sector.