Monday, October 25, 2021
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What role could (bio)LNG have in decarbonising heavy-duty transport in Hungary?

In the past years, we have seen positive developments in Hungary supporting decarbonisation efforts like installing solar panels for households and various subsidies available for electric cars, e-bikes and even for electric-buses alongside the very first baby steps for the setup of a hydrogen-based economy.

However, the heavy-duty trucking sector is still seeking legislative help from the government in the form of state subsidies in support of initiating change towards decarbonisation. Electric or hydrogen-powered trucks today do not yet offer an economic or even pragmatic replacement for diesel-powered vehicles. In my article, I would like to draw the attention of decision-makers to the urgent need to start decarbonising the heavy-duty transport sector and at the same time also increase the sector’s competitiveness.

A great example of establishing a competitive advantage would be a Polish haulier that today may operate much cheaper and greener due to the German zero road toll for LNG trucks and the Polish zero excise tax on LNG schemes. These policies create a significant disadvantage for non-local hauliers like their Hungarian competitors. Major shippers like IKEA, Amazon, UNILEVER or VW all have a strong drive for selecting hauliers who operate environmentally-friendly vehicles as opposed to diesel-powered ones, allowing them to report around 20 per cent CO2 savings for their respective supply chains.

LNG
Photo: courtesy of Shell.

The question is: what should we do to support and accelerate the decarbonisation efforts in the transport industry? Essentially, we need a supportive, long-term legislation environment to build up the LNG infrastructure in Hungary with also a clear view to support local, bio LNG production from waste. Offering HU-GO road toll exemption for trucks, infrastructure subsidies for building about 10 pilot LNG refuelling sites and supporting the piloting of bioLNG liquefaction plants would be quick and easy solutions, which would also be in line with the European Union’s Incentive mechanism for zero- and low-emission vehicles (ZLEV).

Currently, LNG filling stations cost about 5 times more than truck diesel sites with a similar capacity which makes a market-based investment unviable. Since cheap supply sources of LNG (from the coasts of Belgium, the Netherlands or Poland) are all at great distances from Hungary, the construction of a pilot station or establishing a national infrastructure is not attractive to market-based companies. Therefore, government subsidies for approximate 10 locations should address the issue and boost investment.

Every year over 200,000 transit trucks are crossing the three major European transport corridors, which are offering obvious choices to deploy the first LNG network sites. The construction of these sites would also compliment the country’s mandatory EU low carbon refuelling infrastructure development obligation (400 kilometres for LNG). Major automotive factories are also offering unique opportunities to connect to Western European LNG refuelling networks and address the transport companies’ need to drive between these factories using low-carbon fuels.

LNG trucks are already available today. Various truck manufactures such as IVECO, SCANIA and VOLVO have already successfully launched LNG-powered heavy-duty trucks across Europe and are currently offering numerous models with the LNG-powered versions costing around 30-40 per cent more than their diesel-powered counterparts. Due to the higher sales and leasing prices for LNG-powered trucks, trucking companies’ Total Cost of Ownership models will be economical if their cost profiles are compensated with lower road toll or fuel costs.

LNG-powered trucks have very similar technical torque characteristics, horsepower and specifications as their diesel equivalents. The current driving range is up to 1,600 kilometres, which makes them perfectly suitable for long haul deliveries. Spark ignited technology also has additional benefits in terms of significantly lower noise emissions that could allow these vehicles to perform nighttime deliveries to city centres.

For the road transport sector, the transition to alternative powertrains is quite complex as the need to store large quantities of on-board fuel safely is essential. There are also additional important considerations such as gross vehicle weight vs load, vehicle range, as well as the drivers’ safety and comfort.

Against the backdrop of the EU’s ambitious objective of being carbon neutral by the middle of the century, the obvious question is whether fossil LNG is the right choice towards the decarbonisation of the transport sector. We all know that net-zero emission is our long-term goal, but for this to happen we need a portfolio of various clean technologies that meet two main conditions: the rapid acceleration of the decarbonisation process and meeting shippers’ needs for affordability, today. Therefore, we urge legislative solutions to recognise the real environmental benefits of fossil LNG as transport fuel today and build the required infrastructure to accommodate bio LNG, when it is available on an industrial scale.

Bio LNG – or liquefied biomethane – is purified biogas produced by anaerobic digestion – essentially organic waste that rots and produces gas from feedstock like food or green waste or gas from landfills, methane from manure. Like conventional LNG, bio LNG can be used as a transportation fuel and can be also mixed with fossil one (CH4). BioLNG – whether used in trucks, ships or buses- is a future-proof fuel for which vehicles and infrastructure are already largely available. Most importantly, it can positively impact our environment contributing this way to kick-start transport’s transition towards carbon neutrality.

Bio LNG production could offer promising new horizons for Hungary as well. Although Hungary is a landlocked country far from existing LNG terminals, it has a huge potential to implement and scale-up circular economical model and turn biowaste to – RED II compliance – second generation, advanced biofuel. In the long run, bio LNG may also play a role to decarbonize agriculture and even the future Danube shipping fleet.

To conclude, we need an urgent call to action in order to support heavy-duty transport industries’ decarbonisation progress via supporting LNG and bio LNG infrastructure developments with targeted legislation, subsidies and investments. We must take action to make the transport industry competitive and able to fulfil its demanding environmental targets. This journey will create cleaner transport, support new technologies’ implementation and pave the way to a net-zero economy.

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