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Fit-for-55 Package ambitions in light of prospects of decarbonising the Hungarian heavy-duty transport sector

Last year in March, I wrote a similar article here on CEENERGYNEWS, but regretfully only very minor steps have been taken so far towards decarbonising the heavy-duty transport sector.

The Fit-for-55 Package (FF55) is creating further uncertainties regarding this situation with its declared aims, such as:

  1. Phasing out internal combustion technology to make space for electrification in an arguably too short timeframe;
  2. By being overly ambitious in establishing a new electricity and hydrogen-based economy, without adequate attention to already existing and proven LNG (Liquefied Natural Gas) based technology;
  3. Creating multiple green quotas, taxation, price-cap burdens for market players along the supply chain without clear connection to how these practically support step-by-step implementation of new technologies.

Talking to major transport companies and appreciating their customers’ (major shippers) greener transportation demand, there are no obvious solutions available today. The entire transport industry is still running on diesel – and as everybody recently was painfully reminded – using AdBlue. Recently energy prices skyrocketed, further creating discomfort for end users, companies and taxpayers.

I would like to make it very clear: I am a big supporter of hydrogen technology and would love to see demonstration projects, early adopters, especially in those sectors where technology is ready, competitive and most importantly safe. H2 powered forklifts, buses, specialised municipal vehicles are very close to this stage and hope we will see them implemented in Hungary among other EU countries.

However, long-haul transport has only one, credible alternative to diesel today – LNG. Hungary has a huge potential for producing local, even CO2-negative bio LNG from waste. By estimates, the current production cost would be around 1.5 euros per kg, which could be blended to fossil LNG easily thus creating a solid, well-to-wheel alternative to diesel. Having the Croatian LNG terminal close by and MVM as a capacity holder there, the country has a chance to access fossil LNG via road transport from the Krk terminal. Hungary needs to establish a bio LNG industry, based on: manure, agricultural waste, etc. By taking a bold step towards establishing a bio LNG industry it would fit well into the government’s circular economy ambitions and turn waste into renewable energy supporting the local economy. However, it is very important that fossil-sourced LNG also requires a build-up of a refuelling infrastructure alongside, forcing shippers and trucking companies to make the right, timely decisions on tenders and fleet replacements.

Major truck OEMs are ready to sell LNG trucks, but having non-supportive (for example, non-competitive for market players) legislation in place, this activity is still seen rather as green marketing than based on a solid, sustainable business case.

Let me offer my short and subjective list of what needs to change to secure FF55 ambitions in the heavy-transport sector now:

  • Truck OEMs need to focus and offer competitive options for natural gas  – followed later by fuel cell and even BEV based light and – heavy duty vehicles. To place this in context: LNG powered trucks are still approximately 40 per cent more expensive than their diesel equivalents, while a BEV truck could be up-to 300 per cent more expensive (H2 powered  trucks not yet available in Hungary). Direct state support for these fleet replacements are required (best practices from EU: up to 20,000 euros in subsidy offered in Belgium, Spain, Italy).
  • Refueling Infrastructure is a must, all parties agree and the action is very simple: governments should support companies to install these expensive, but necessary refueling sites, along major EU corridors across Hungary. Without these pilot networks, the decarbonisation efforts are paralysed and this missing infrastructure is also a major competitive disadvantage to our national and transit haulers and delaying FF55’ goals.

How can these goals be achieved quickly and practically via legislation changes? We do not need to reinvent the wheel, just implement best practices from other countries that are ahead in these efforts. For example, Germany’s (zero road toll incentive boosted LNG sales significantly); Poland’s (zero excise tax, refuelling infrastructure support helped truck replacements) incentives in line with the European Union’s incentive mechanism for zero- and low-emission vehicles (ZLEV). In the long run, it is critical to differentiate fossil and green solutions (LNG vs bio LNG, H2 vs green H2) as this would intensify green liquefaction and electrolysis deployments. Currently, blending fossil and renewable molecules might offer a pragmatic approach.

Let me quote from a recent position paper on FF55 from NGVA (Natural Gas Vehicle Association Europe):

“NGVA Europe is convinced that the only way of doing so is to support all existing clean solutions, including biomethane (both in compressed and liquified forms – bio CNG and bio LNG), in accelerating the decarbonisation of road transport. The FF55 package should focus on massively decarbonising fuels rather than on the underlying drivetrain technology, by including all available options within a coherent pathway towards carbon neutrality of road transport.

Restricting our options to a limited set of still developing and costly technologies, while excluding others that are already contributing to decarbonisation thanks to increasing blends of renewable fuels, is not the right approach to ensure that Member States and consumers have immediate access to affordable and clean solutions. This risks instead to delay the necessary fair transition towards clean mobility. FF55 should go beyond the pure tailpipe approach when measuring CO2 emissions from vehicles, and concretely acknowledge the contribution of biogas in drastically reducing GHG emissions on a Well-to-Wheel basis.”

All in all, extensive incentive mechanisms for heavy-duty vehicles should be implemented immediately that would allow solutions to be brought forward which are not only FF55 compliant but also have the potential to boost the local economy. The benefits along with the extensive list of market beneficiaries of such actions (for example, bio LNG producers, transport companies, fuel retailers) would allow us to reduce emissions significantly almost immediately – all by using technology that is safe and available today.



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