Blue Corridor: Successfully marketing natural gas for vehicles

Andre Schumann, Head of Department for Technical Cooperation and Project Support, E.ON Ruhrgas AGDetlef Weßling, Head of Cooperation and Business Development for Gas, E.ON Ruhrgas AG

The original version of this piece was published in Gazprom Export’s global newsletter, Blue Fuel.

It’s no secret that vehicles fueled by diesel and petrol remain the biggest polluters of our atmosphere. Yet this burden on the environment can be eased significantly by switching to compressed or liquefied natural gas as a fuel source. Using natural gas reduces carbon dioxide emissions by almost 25% compared with petrol, while smog-forming nitrous oxide emissions are 95% lower in comparison to diesel. And there is one further advantage for the customer – natural gas is significantly cheaper than petroleum. This has special relevance for Europe in these times of austerity.

Gazprom and E.ON have been working together for many years to establish these answers, to research the markets and to bring the issue to public attention. One aspect of this collaboration is the Blue Corridor road rallies with natural gas-powered vehicles (NGVs), which have been held since 2008 and are now a regular tradition.

Blue Corridor launches in Russia to promote natural gas for vehicles 

Gazprom’s management has recognized that campaigns of this nature are ideal for raising the necessary public awareness and for popularizing the use of natural gas for vehicles in Russia. The route from St. Petersburg to Moscow was chosen for the first rally in 2008, while the 2009 rally ran from Moscow to Sochi on the Black Sea. In 2010 the rally took participants to leading Russian motor vehicle plants, and a team from E.ON Ruhrgas driving a VW Passat became the first foreign team to take part in the tour.

The involvement of E.ON Ruhrgas in this event follows many years of productive collaboration with Gazprom on scientific and technical projects. Today, this collaboration can look back on 20 years of history and currently encompasses some 40 different topics in seven technical fields – one of them being the use of natural gas for vehicles.

A rally is much more than just a trip with standard OEM gas-powered cars running from one natural gas refueling station to another. Exhibitions are held to present modern gas vehicle technology to visitors, while roundtable discussions and meetings are held with interested parties in major towns and cities along the rally route, inviting entrepreneurs and representatives of businesses and local councils, regional governments, public transport operators, logistics firms, fleet operators and agricultural companies to get involved. The rallies were given a the name “Blue Corridor” in an echo of the Russian Vernadsky Foundation initiative to support the launch of environmentally-friendly fuels.

Blue Corridor 2012 - PragueBlue Corridor goes international

Following the positive experience of 2010, E.ON Ruhrgas and Gazprom decided to organize a joint tour outside Russia. In June 2011, the route took participants from Prague via Leipzig and the Volkswagen plant in Wolfsburg to Berlin, finishing at the point where the Nord Stream Pipeline comes ashore in Lubmin near Greifswald. Apart from the organizers, teams were fielded by Kamaz, Vemex from Czech Republic, Gasum from Finland and Beltransgaz from Belarus.

The same year also saw a 4,000 kilometer natural gas rally run through Russia – the longest ever up to that time. The route ran from Yekaterinburg via Chelyabinsk, Ufa, Orenburg, Samara, Saratov, Volgograd, Tambov, Voronezh, and Tula to Moscow. “Team E.ON Ruhrgas” of course competed with its now legendary VW Passat.

The sustained success of these rallies prompted the creation in 2012 of a new “Blue Corridor” project, this time taking teams all the way from Moscow to Western Europe. This was the longest route to date, taking participants over 6,700 kilometers and through seven European capitals, from Moscow through Minsk, Warsaw, Prague and Paris to Brussels and Berlin.

The 2012 rally combined the efforts of major European gas companies, vehicle manufacturers and national natural gas fuel associations including NGV Russia, NGVA Europe, and NGV Polska, the German ERDGAS mobil, Dena, E.ON Gas Mobil, the Czech E.ON Česka and Vemex, the Franco-Belgian GNVERT, and, of course, the team from Gazprom: Belarussian Beltransgaz, Gazprom Marketing & Trading SAS France, Gazprom Germania, Gazprom Export and Vemex.

Direct participants included teams from energy companies such as GDF SUEZ, E.ON Ruhrgas, Verbundnetz Gas, Gazprom Germania, Vemex and motor manufacturers LiAZ, KAMAZ, MAN, Mercedes-Benz, Volkswagen, SOLBUS and IVECO. Four natural gas vehicles started the rally in Moscow, with more vehicles joining as each new country was reached. Ten cars took part on average, with each car carrying two to three team members representing the participating organizations.

The rallies aimed to show that it is possible to journey the well-travelled route between Yekaterinburg-Moscow and Western Europe with NGVs, and therefore the potential to reduce the pollutant emissions from the huge volumes of traffic passing between Western and Eastern Europe. This is, of course, only possible with Blue Corridors to provide the necessary refueling infrastructure along these routes.

“Blue Corridors” throughout Europe

The infrastructures supporting natural gas vary widely in standard from country to country. In Germany there are now more than 900 multi-fuel service stations where motorists can choose to fill up with petrol, diesel or CNG, and these types of stations are available broadly to the public. The picture in France is different – here, natural gas refueling points are not only separate from conventional service stations, most are on company premises to which the motoring public has no access. If we want to motivate people to switch to natural gas then we must offer them the same level of refueling convenience across the whole of Europe.

In order to market natural gas as a fuel, market players have joined forces to create a consortium and set up a company (natural gas mobil) with the task of expanding the network of outlets. An expansion program in Germany has cost 200 million euros, with all of the money coming from private investors.

In Europe, all leading motor manufacturers include NGVs in their fleet as standard options. VW, for example, offers the Passat, Touran and Caddy; Mercedes Benz its E Class and B Class; while FIAT has the Multipla and Kombi. KAMAZ offers a range of 15 different purpose communal vehicles that run on CNG and LNG. Other models of natural gas vehicles, including commercial vehicles and buses, are also available.

Incentives of the kind offered by firms such as Wintershall, E.ON Ruhrgas, Gazprom Germania, Vemex and Gazprom Export are also important. A range of concessions are available to assist with the purchase of NGVs, although much depends on the market strategy of the companies operating in a country’s gas market. Government policy too has a role to play – fiscal policy in particular. In Germany the tax on natural gas as a fuel is lower than in many other countries, so prices are correspondingly lower and there are also cheap loans available to small and medium enterprises looking to acquire natural gas technology, including vehicles. These programs are supported by the German government.

There are a number of pathways that might be taken to establish natural gas successfully in the fuel market. As well as CNG, for example, liquefied natural gas (LNG) can also be used as a fuel. This sector may not yet be so well developed as the use of CNG, but the potential here is substantially greater.

Today we can already say that LNG as a fuel is very economical. Greater distances can be covered with a tankful of LNG than with compressed natural gas. LNG does not require large gas tanks that take up a lot of space on the vehicle. A change in engine technology compared with the technology for CNG is not necessary, as a compact regasification unit is perfectly adequate and manufacturers like Iveco, Mercedes or Kamaz already have such developments.

A combination of CNG and LNG at the same ‘gas station’ is also possible, so both types of fuel could easily be offered side by side. Natural gas can be liquefied or converted from LNG to CNG with the right equipment.

Natural gas as a fuel can only look forward to a successful future if businesses and government agencies act in concert and take the necessary steps, internationally as well as domestically.

The objective  of the rally from Russia to Europe was to highlight the need for international action. Motorists, road transport companies, local authority agencies, motor manufacturers, gas equipment producers and gas companies – each of these interest groups represents a different aspect of one overarching issue of international importance which deserves to be resolved jointly.

 

Andre Schumann is the Head of Department for Technical Cooperation and Project Support for E.ON Ruhrgas AG
Detlef Weßling is the Head of Cooperation and Business Development for Gas, E.ON Ruhrgas AG

 

 

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