Several countries and major automakers have agreed to set up a goal for going all-electric by 2040, such that the number of electric vehicles will exceed 1.1 billion by 2050, making the automotive sector needless of compressed natural gas and liquefied petroleum gas, a member of the Iran Chamber of Commerce, Industries, Mines and Agriculture's Exports Commission said.
“EVs are moving from niche to mainstream, and fossil fuels, including CNG and LPG, will not be used as car fuel anymore, sooner rather than later,” Hamidreza Salehi was also quoted as saying by ILNA.
Natural gas and its variants (CNG and LPG) will only be used as feedstock to generate electricity in the near future and modern car manufacturing technology will not accept fossil fuels as a source of power, he added.
Salehi stressed that the more EVs are produced, fewer potential customers will exist for LPG and CNG in global markets.
As a dominant energy source, oil causes a wide range of environmental and transportation problems, while an electric vehicle offers a cleaner and better mode of transportation.
“The increase in electric vehicles will reduce demand for millions of barrels of oil in the future,” he said.
The global market for EVs is growing constantly at a compounded annualized growth rate of 21.7%. It is expected to grow from 8.1 million units to 39.21 million units by 2030.
This exponential growth is being driven by various factors, including concerns for global warming and pollution.
CNG Consumption
Referring to the very low consumption of CNG in Iran, Salehi noted that the CNG industry development law was approved by the previous parliament, but neither the previous nor the current administrations have taken any measure to increase CNG sales.
“There are 2,600 compressed natural gas stations across Iran with a capacity of supplying 50 million cubic meters per day, although they are working at 44% of their capacity,” he said.
“Automobile manufacturers have also failed to produce high-quality CNG hybrids, and the contract signed last year between the Oil Ministry and Iran Khodro to produce 45,000 such vehicles did not bear fruit.”
The manufacture of CNG hybrids has no place in the policies of domestic automakers. Despite having one of the most expanded natural gas networks in the world, CNG demand in Iran is only about 24 million cubic meters per day.
According to estimates, the current gasoline demand in Iran (95 million liters per day) will surpass supply (105 ml/d) in the foreseeable future and the most effective strategy to help prevent the National Iranian Oil Company from becoming a gasoline importer is by developing the CNG sector.
Unlike gasoline, eco-friendly CNG minimizes harmful carbon emission. This helps engines run more efficiently and increases the life of spark plugs.
Abundant gas deposits and cost-effective production justify replacing gasoline with CNG, but the price difference between gasoline and CNG is so low that most motorists still prefer to burn the inexpensive gasoline.
One cubic meter of CNG costs 6,000 rials (3 cents), which is about four times cheaper than gasoline. A liter of subsidized gasoline costs 15,000 rials (7.5 cents) and non-subsidized fuel 30,000 rials (15 cents).
A nationwide plan is now underway for retrofitting 1.4 million gasoline-powered public transport vehicles and private cars to CNG hybrids.
However, since the start of the program three years ago, only about 200,000 gasoline-powered public transportation and commercial vehicles have been converted into compressed natural gas hybrids.
