Gas: a power source to drive European transport into the future
European Commission - SPEECH/14/535 08/07/2014
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Vice President of the European Commission
Gas: a power source to drive European transport into the future
Natural and Bio Gas Vehicle Association
Brussels, 8 July 2014
Ladies and gentlemen
Just a couple of months ago, Europe notched up another milestone in its work to develop a transport system fit for the 21st century.
I am pleased to see that clean fuels are now firmly in place at the heart of EU transport policy. This is a major step forward: for the travelling public, for business and industry. It encourages them to ‘think outside the box’ and appreciate that transport is more than just going from A to B, or moving goods.
Now that a reliable legal environment is agreed, the next step is to get things up and running on the ground.
With many projects moving ahead, deployment is well on the way.
That means making sure enough appropriate infrastructure gets built so that we create the conditions for alternative fuels to power transport into the future.
We all know that one of the reasons for Europe’s almost total dependence on oil as a transport energy source is customers’ hesitation to buy alternative fuel vehicles because of missing infrastructure for recharging and refuelling.
Today, Europe’s network to supply electricity, hydrogen and natural gas for transport is just not enough for these fuels to take off in the market.
Gas is a very important element in the whole initiative.
While the technologies are already mature, it is – again - the lack of infrastructure that is holding up a broader uptake of gas as a vehicle fuel.
As you know, EU countries will develop national policy goals and guidelines to provide the appropriate infrastructure for CNG and LNG refuelling. The first target coming up will be for CNG infrastructure in urban areas by 2020, then a 2025 infrastructure deadline for LNG for heavy duty vehicles and in ports.
Although the dates are not completely ideal, I think that the timeframe agreed is still reasonable and provides the necessary reliability for planning purposes. It is the signal that the industry was expecting in order to move forward.
The priority now is to stimulate private investment in a new market base. This is where industry can, and should, play a vital role - both at home and on the world stage – with investment so that Europe achieves its ambitious aims.
We are now in a position to make a real difference to Europe’s transport landscape, where everyone gains.
- It is also a good opportunity for EU manufacturers to raise their international competitiveness for all means of transport, involving the whole value chain: vehicles, components, fuel production and distribution.
- It is an opportunity for European industry to be a world leader in the wider transition from conventional to alternative fuels.
- That will stimulate economic growth in Europe and create more employment.
While the world market share of electric, natural gas and hydrogen vehicles is still limited, it is poised for huge growth in the next few years.
This is a market likely to develop into a customer base with great potential for European business and manufacturers.
The resulting domestic market is also likely to be large enough to allow companies to have some economies of scale, reducing their longer-term costs.
I hope that this initiative will encourage the EU car and truck industry to diversify its product range to include more efficient and less polluting vehicles.
We need to seize this chance now. Experts tell me there may only be a short window of time before the competitiveness gap becomes too great for EU industry to bridge.
The longer we wait, the more it will cost us in the longer term.
And just a word on technical standards: if there is to be a true single market for alternative fuels – not a fragmented one - there must also be common standards for the design and use of infrastructure.
I hope that the NGVA’s industry members can play an assertive role to develop and agree on the common standards that we need, both at the European and international standardisation organisations, and as soon as possible.
Ladies and gentlemen: there are other good reasons to focus on alternative fuels.
Firstly, there is the environmental aspect.
We know that natural gas, for example, will play a major part in both road and maritime transport as the most attractive option to replace oil-based fuels such as diesel, still used by most trucks in the EU today.
With its high energy density and low pollutant emissions, liquefied natural gas can be used in public fleets of buses, thereby promoting public transport in a cleaner urban environment.
LNG is widely seen as the only globally available fuel that allows ships and waterborne transport to meet their emissions targets, and the new EU requirements on maximum sulphur content in marine fuels.
No longer confined to pipelines, LNG can now be supplied by tankers from global markets. But ships still face a real challenge to get access to this fuel.
Europe urgently needs more LNG fuelling stations. This is why the new EU directive aims to make them available for waterborne vessels in Europe’s major sea, river and canal ports, and for trucks along the main motorways.
There are other aspects that we cannot overlook: securing our energy supply. And paying a lot less for it too.
We already pay about €1 billion a day for oil imports, increasingly often from unstable parts of the world. This is a massive and unnecessary bill, which gives the EU a deficit in its trade balance of 2.5% of GDP.
Our dependence on a small handful of suppliers is also a big concern. It makes us overly vulnerable. Gas imports represent 70% of European consumption.
In 2013, for example, 39% of the EU’s gas imports by volume came from Russia, 33% from Norway and 22% from North Africa – Algeria and Libya. Some EU countries rely on a single Russian supplier, often on a single supply route, for between 80 and 100% of their gas consumption.
It’s a worrying level of dependence – and we only have to look at recent events in Ukraine to see the kind of energy insecurity that we are up against.
There are some EU countries that are effectively an "energy island" because they do not have adequate infrastructure connections with the rest of the EU.
That makes them vulnerable to the whims of their suppliers.
The geopolitical energy balance in the world has changed.
And Europe needs to react to it.
How? We can start by making better and more use of our own renewable energy sources, to diversify energy supplies and gain more of a measure of energy independence.
Let’s go back to natural gas. As a fuel, it is ideally suited to integrate gas renewables such as biomethane which can be mixed in at any ratio.
So injecting biogas into the grid would improve our security of gas supply, and reduce dependence on pure natural gas – on fossil-based imports, in other words.
Biogas is, after all, a domestic as well as a cleaner product. Let us also not forget that transport as a whole has to play its part in helping the European Union meet its wider targets on reducing greenhouse gas emissions by at least 80% by 2050.
Around one-fifth of the EU's total CO2 emissions come from road transport, of which heavy goods vehicles account for around a quarter. HGV emissions are still rising, mainly due to increasing road freight traffic.
If we are to meet those targets, then the gradual replacement of oil sources by low-carbon fuels such as natural gas and biogas is more needed than ever.
Ladies and gentlemen
If we are to secure an uninterrupted and affordable supply of energy, we need to make significant investments in new and intelligent infrastructure. That will be important for jobs, for sustainable growth and will enhance EU competitiveness.
European industry should be a strong leader in the transition from conventional to alternative fuels: by investing in research, innovation and by building the right infrastructure – and enough of it.
That is how we can stoke demand for cleaner fuels and wean ourselves away from risky overdependence on oil-based imports.
There are many new commercial opportunities here – both in the construction and operation of new infrastructure, and from the huge new customer market base that we aim to create.
Everyone gains: European consumers, industry, business and the environment.
Let us work together to ensure that our transport industry is ready for these new challenges and stays a world leader in the years and decades to come.
Thank you for your attention.