Merigo, Assogasmetano: “Identifying different technological solutions is vital” in order to bring the fleet of vehicles in circulation up to date

  Fuels, NEWS & INTERVIEWS, Sustainable Mobility, Technical innovation

President Merigo hopes for a realistic approach to alternative sources of power to ensure benefits in economic and environmental terms alike and highlights the strategic contribution that bio-methane can provide

 

Interview with FLAVIO MERIGO, President of Assogasmetano

 

The economic crisis in the wake of the coronavirus pandemic will also have repercussions on conversions of cars in circulation. This topic was discussed by Flavio Merigo, engineer and President of Assogasmetano, while taking stock of the situation as regards sustainable mobility and its prospects for the near future, as well as highlighting the need for an open-ended approach to various technological solutions. The association he represents – together with the Italian Biogas Consortium (CIB) – is organising, among other things, one of the conferences during the coming edition of Oil&nonOil at Veronafiere: “The strategic role of bio-methane in transport” (scheduled 23 October) seeks to analysis the topic across the board by involving all exponents in the supply chain, from production to use, while also analysing not only the well-known advantages but also the problems that still restrict its development in order to draw up a common strategy.

Merigo opened with a critical premise: “Over the last year, alongside the generalised criminalisation (at all levels, including public decision-makers) of vehicles with internal combustion engines, there has also been a systematic campaign sanctifying electric mobility as the panacea solving all transport problems (goods and people), in terms of sustainability (a fashionable often used inappropriately) as well as environmental, economic and even social spheres, that seek to convince the public that the number of vehicles in circulation must be reduced.” However, the President of Assogasmetano points out that “in order to outline reliable future scenarios as regards mobility (private, public and heavy duty), we must give priority to two markets: BEVs (battery-powered electric vehicles) and NGVs (natural gas powered vehicles).”

Merigo added: “In 2019, about 68 million cars were registered worldwide (about 18 million in Europe). Out of these, according to ‘EV Sales Blog’, before the spread of the coronavirus made its impact felt, 1,635,400 BEVs were sold all over the world. The most important market in the world is China, where more BEVs were sold in 2018 than in the rest of the world combined.” “I refer to absolute values since percentage values are only used for propaganda but do not reflect the reality of the market,” Merigo points out.

“Many commentators, who have always envisaged rapid growth in electric traction, are now beginning to suggest that, once the corona virus emergency is over, it will take a great many years to reach the expected levels of growth because of the rampant economic crisis. This confirms, as is by now clearly proven, that BEVs depend (and grow) on the basis of massive incentive campaigns. When incentives fall away, so do registrations,” the President of Assogasmetano went on. In this context, Merigo mentioned a number of examples: “The BEV market in China, the first to be hit by the spread of the corona virus, immediately fell by 72.6% and continued its decline thereafter when the government decided to end its massive incentive campaign. Things are following the same logic throughout the rest of the world: for example, 329,528 BEVs were sold in the USA in 2019. A market share down by 9% compared to 2018.”

Merigo also mentions a recent comment by Carlos Tavares, CEO of PSA, who admitted certain scepticism over electric cars, since sales are still modest given underdeveloped re-charging facilities, rather small range of choice and doubts about long-term electricity costs. “It must also be mentioned, Merigo added, “that the concept of ZEV (Zero Emission Vehicles) is misleading (albeit culpably and tacitly accepted) as regards consumers since, by convention, it only takes into consideration Tank-to-Wheel (Ttw) exhaust emissions (evidently non-existent for BEVs) but does not consider the emissions arising from generating the energy needed to charge their batteries (to a small extent even derived from burning coal).”

“Progressively transforming a country’s fleet of vehicles to use alternative sources of power is a complex process that involves very high costs and requires the implementation of many collateral conditions. One such condition is economic convenience, that will continue to be decisive over and above any other reason, especially in the kind of stagnant economic climate we are experiencing today,” warned the President of Assogasmetano. “As far as NGVs are concerned, the main problem limiting their market penetration is that as of 2021 car builders will be subject to heavy fines for vehicles with internal combustion engines exceeding the 95 g/km threshold. This benefits electric vehicles (not only BEVs but also PHEVs, HEVs and E-REVs) and is encouraging all car-makers to direct available resources towards the ‘electrification’ of their models, which is also rewarded by EU policy,” he added. NGVs, like all vehicles powered by alternative sources of energy, must first and foremost be acceptable to users. To earn approval among users, in addition to economy of use, the existence of all the other complementary aspects must also be demonstrated that help reduce operating costs, such as the availability of a well-developed supply network distributed uniformly all over the country, an appropriate offering of vehicles, consolidated and reliable technology proven over time, the ability to access vehicle maintenance, repair and overhaul services easily,” Merigo summed up.

The President of Assogasmetano then focused on the situation as regards the distribution network in Italy. “The development of the grid involves very high systemic costs associated not only with land and equipment but also everything needed to ensure effective operation (supply of raw materials, electricity, etc.). Developing the network responds to the chicken/egg dilemma only at first sight. Taking methane as an example, it has been shown that there is a reciprocal ‘impetus’ effect between the number of vehicles and the number of service stations. This, once again, matches a precise economic requirement. Briefly, not only should investment costs be considered but, above all, the time span for return on investment itself. It is therefore essential that service stations can rely on a user base (number of vehicles) capable of ensuring appropriate margins for livelihood in the longer term. On the other hand, if the number of vehicles increases, it would be possible to find investors for new service stations with more continuity,” Merigo went on.

“In the case of methane,” Merigo explained, “Italian statistics are perfectly aligned with statistics on a worldwide scale and roughly indicate 1,000 vehicles as the basic limit for each point of sale. In Italy, the possibility of ensuring that this limit can be reached has so far helped continuously increase the number of natural gas service stations, currently standing at more 1,400 and consequently sufficient to provide high quality service for a fleet of about 1,400,000 vehicles. Currently, approximately 1,200,000 light vehicles powered by compressed natural gas(GNC) are on the road in Italy, joined by about 2,500 heavy vehicles using liquefied natural gas (LNG). Once again, the market growth logic followed the criteria outlined above: the increase in service stations is in keeping with the increase in the number of vehicles. Italy was the last major European country to invest in liquid methane but, after only three years, is already the country with the largest number of service stations (65 public and 13 private) and vehicles in circulation.”

Merigo then mentioned that the Ministry of Economic Development recently set up the Automotive Table in order to set goals for 2030: “development targets were set starting from current data and hypothetical development scenarios. Ministry experts estimate that electric vehicles could grow from 20,000 in 2018 to 6,100,000 in 2030, while natural gas-powered vehicles are expected to rise from 950,000 in 2018 to 2,400,000 in 2030. As a result, the electric vehicle distribution network is also expected to grow from 10,000 recharging points in 2018 to 3,410,000 in 2030, while natural gas should improve from almost 1,500 current outlets to 3,200 in 2030. The scenario for natural gas more or less matches the situation seen in 2016 when planning activities and strategies for the application of the DAFI Directive; current estimates confirm the validity of the scenarios hypothesized at that time.”

“Over the last year, Italy also saw a massive incentive for electric mobility, supported by a very well-funded economic programme. The problem lies in the fact that this incentive will be unable to resolve the environmental issue and, at the same time, ensure the right to mobility of families (at the lowest possible cost),” Merigo pointed out. The President of Assogasmetano also described the current situation with reference to some data: “There are 39 million vehicles in Italy. Considering all possible alternative fuels and assuming that all the scenarios envisaged actually arise, by 2030 there will still be around 20 million vehicles running on petrol and diesel fuels. Currently, Italy has about 13 million vehicles running on petrol and more than 10 million on diesel in circulation from Euro 0 to Euro 4 (data for vehicles in circulation in 2019). These vehicles, in the best hypothesis (Euro 4), are at least 11 years old but, at worst (Euro 0, Euro 1), much more than 20 years old. These vehicles have a massive impact on the environment and consequently should be converted/replaced as soon as possible.”

Merigo also points out, however, that data relating to scrapping of old vehicles “indicate a very low replacement dynamics for vehicles in Euro 0 to Euro 4 emission classes: only 5% for vehicles running on petrol and 6% for of diesel vehicles.” In his opinion, “it is quite clear that this huge mass of very old vehicles in emission classes that have a massive impact on the environment are owned by people who are unlikely to afford at least 25,000 euros to purchase an electric car and equally unlikely to afford high operating costs. This situation arises, with the same characteristics, in other countries, including many outside Europe – Argentina, Mexico, India, Pakistan to mention but a few – or in all those countries where, unsurprisingly, natural gas became a point of reference for combining environmental and energy strategies without penalising mobility overheads (public, private or freight),” he added.

“If Italy – in a context of technological neutrality that considers a mix of options to protect the environment and genuine sustainability in the transport sector, which thereby takes into account not only future but also current needs, as well as the country’s energy realities/requirements country – is to achieve the objectives for 2030 it must identify different technological solutions capable of combining all the needs of stakeholders,” said the President of Assogasmetano. In particular, “a reasonable solution” might well be retrofitting vehicles belonging to emission classes with high environmental impact”.

Merigo added: “Identifying the advantages for our economy (as well as the environment) must include the strategic and indispensable contribution offered by bio-methane (an area where Italy will become one of the largest producers in Europe) – a renewable source which, when used as a fuel for transport in gas (Bio CNG) and liquid (Bio LNG) forms, ensures zero environmental impact. And Italian production in 2030, in accordance with current calculations, will largely be able to cover all the needs of vehicles running on natural gas. We are therefore convinced that decision-makers should support NGVs through appropriate policies and also implement a policy encouraging conversions of older vehicles to gas, thereby ensuring significant benefits from economic and environmental points of view, as a realistic and immediate solution to a problem that is becoming increasingly critical,” Merigo concluded.