The Autogas Market

Market trends

Autogas is the most widely used and accepted alternative to the conventional oil-based transport fuels, gasoline and diesel. A number of countries today have well-developed autogas markets. Global consumption of autogas reached 22.9 million tonnes in 2010 ( See table ), and is increasing rapidly. Demand increased by 8.7 Mt, or 60%, between 2000 and 2010, with growth coming from established and emerging markets ( See picture ). Demand nonetheless remains highly concentrated in a small number of markets: the five largest countries accounted for 53% of world consumption in 2010 and the top ten for 75%. The 18 countries surveyed in this report together accounted for 84% of world autogas use. The four largest consumers – Korea, Turkey, Russia and Poland – saw the largest increases in consumption in absolute terms over the ten years to 2010.

There are more than 23 million autogas vehicles in use around the world and over 57 000 refuelling sites. Autogas accounted for little more than 9% of global consumption of LP Gas, but this share varies considerably across countries. Among the countries surveyed, the share is highest in Poland, where it is 73%, and is lowest in the United States at 1%. A detailed breakdown of the global market and recent trends in consumption, numbers of vehicles and refuelling sites can be found in Annex 1.

Autogas characteristics

Autogas is the abridged name for automotive liquefied petroleum gas (LP Gas, or LPG) – that is, LP Gas used as an automotive transport fuel. LP Gas is the generic name for mixtures of hydrocarbons that change from a gaseous to liquid state when compressed at moderate pressure or chilled. The chemical composition of LP Gas can vary, but is usually made up of predominantly propane and butane (normal butane and iso-butane). Autogas generally ranges from a 30% to 99% propane mix. In some countries, the mix varies according to the season as the physical characteristics of the two gases differ slightly according to ambient temperatures.

LP Gas is derived either as a product from crude-oil refining or from natural-gas or oil production. At present, more than 60% of global LP Gas supply comes from natural gas processing plants, but the share varies markedly among regions and countries. With both processes, LP Gas must be separated out from the oil-product or natural-gas streams. LP Gas is generally refrigerated for large-scale bulk storage and seaborne transportation as a liquid, but it is transported and stored locally in pressurised tanks or bottles (cylinders).

LP Gas has high energy content per tonne compared to most other oil products and burns readily in the presence of air. These characteristics have made LP Gas a popular fuel for domestic heating and cooking, for commercial use, for agricultural and industrial processes, including as a feedstock in the petrochemical industry, and increasingly as an alternative automotive fuel.

Largest autogas markets, 2010
CountryConsumption (thousand tonnes)Vehicles (thousands)Refuelling sites
Source: WLPGA (2011).
Korea 4 450 2 300 1 611
Turkey 2 490 2 394 8 700
Russia 2 300 1 282 2 000
Poland 1 660 2 325 5 900
Italy 1 227 1 700 2 773
Japan 1 202 288 1 900
Australia 1 147 655 3 200
Thailand 922 473 561
China 909 143 310
Mexico 837 535 2 100
Rest of the World 5 723 5 379 28 094
World 22 866 17 473 57 150

Global autogas consumption, 2000-2010

* The data shows a large increase in consumption in 2010, which is thought to be due to a recategorisation of LP Gas demand in the residential sector.
Source: WLPGA (2011).

The make-up of the autogas vehicle fleet by vehicle-type differs by country, reflecting mainly differences in government policies. In the two largest Asian markets – Korea and Japan – taxis and other light-duty fleet vehicles account for a large share of autogas consumption. In both countries, the overwhelming majority of taxis run on autogas as a result of a combination of incentives and government mandates requiring the use of alternative fuels. In Europe, private cars comprise the main market. In most countries, vehicles that run on autogas are gasoline-powered vehicles that have been converted to use either autogas or gasoline. Gasoline vehicles can usually be converted at moderate cost (see section 1.2.2). Korea, where most vehicles are Original Equipment Manufactured (OEM) vehicles, is the main exception.

At present, there are relatively few heavy-duty vehicles that run on autogas, since costly alterations to the diesel engine are needed. In recent years, however, a number of heavy-duty LP Gas engines (mostly adaptations of their diesel counterparts), have been commercialised by several of the larger engine manufacturers. These engines are used mainly in buses and mid-sized trucks, mainly in the United States, Korea and China. Conversion technology is less advanced for diesel vehicles than for gasoline vehicles and diesel conversions are rarely competitive.

 

Drivers of autogas use

The emergence of autogas as an alternative to gasoline and diesel is the direct result of government policies to address energy-security and/or environmental concerns. Autogas has been far more successful than any other alternative automotive fuel because of its practical and cost advantages over other fuels.

Alternative automotive-fuel policies

The oil-price shocks of the 1970s provided the initial impetus for the development of alternative automotive fuels, as countries sought to reduce their dependence on imports of crude oil and refined products. Environmental concerns have since overtaken energy security as the principal driver of government policies to promote such fuels, as they are generally less polluting.

The initial focus of policy action was air pollution in major cities, which is caused mainly by automotive fuels. Since the 1990s, attention has shifted to the threat of global climate change due to rising concentrations of greenhouse gases in the atmosphere resulting primarily from the burning of fossil fuels. As a result, governments are looking to fuels that emit less carbon dioxide (CO2), methane (CH4) and N2O – the main energy-related greenhouse gases.

Research and development of alternative automotive-fuel technology in recent years has focused on fuels based on oil and natural gas, biofuels derived from vegetable matter such as ethanol or bio-diesel, electric vehicles and hydrogen-based fuel cells. Electric vehicles are approaching the commercialisation stage, but their uptake is likely to be slow due to their high cost and limited mileage. The supply of ethanol and bio-diesel has risen sharply in recent years, but both fuels are usually blended with conventional gasoline and diesel for sale to end users. The scope for further increases in biofuel production using conventional technology will be limited by competition for land to grow food crops.

The main non-blended alternative fuels in use in the world today are autogas (LP Gas), compressed natural gas (CNG) and methanol. Autogas has established itself in many countries as by far the most important of these fuels, because of its favourable mix of inherent practical and cost advantages and environmental benefits. Air-borne emissions of regulated and unregulated toxic gases from autogas use are among the lowest of all the automotive fuels commercially available today. In addition, greenhouse-gas emissions from autogas are generally lower than those from gasoline, diesel and some alternative fuels. The comparative environmental performance of autogas is discussed in more detail in the next section.

From an energy-security perspective, autogas has advantages over conventional fuels. There is an abundant supply of LP Gas from many sources around the world. In addition to proven reserves in oil and gas fields, the flexibility of modern refining processes offers considerable potential for expanding supply to meet demand from the transport sector. LP Gas supply is expected to rise briskly in the next few years with growing natural gas production and associated liquids extraction – already the primary source of LP Gas worldwide. And field and refinery supplies will also increase as wasteful flaring and venting practices, which are still common in many parts of the world, are eradicated. In addition, there is considerable scope for diverting supplies from relatively low-value petrochemical uses, where LP Gas can easily be replaced by other feedstock such as naphtha, ethane and distillate.

Autogas use has generally responded much better to government policies to promote alternative fuels than CNG, methanol or electric vehicles. Despite some environmental advantages over conventional fuels, the development of CNG has been slow because of cost and practical considerations associated with the fuelling infrastructure. Methanol also has appealing environmental attributes, especially if produced from renewable biomass, but its use as a motor fuel remains limited in most parts of the world, largely because of technical problems associated with its corrosiveness. In contrast, the technology for installing autogas systems in vehicles or converting existing conventional-fuel vehicles is proven, greatly reducing the financial risks to investors. The costs of establishing the distribution infrastructure and converting vehicles to run on autogas are generally much less than for other alternative fuels.

Practical considerations

In most cases, an existing conventional-fuel vehicle is converted to run on autogas by installing a separate fuel system that allows the vehicle to switch between both fuels. This equipment can be installed at the time the car is manufactured (in which case, the car is known as an OEM). For mainly technical reasons, most light-duty vehicle conversions involve gasolinepowered engines, which are particularly well-suited to run on autogas. Specialist companies, using standardised kits involving a parallel fuel system and tank, typically carry out conversions. The tank is usually installed in the boot/trunk. Some large, multinational OEM vehicle manufacturers have become involved in the development, design and manufacture of autogas systems. Several OEMs are now producing and marketing dedicated autogas vehicles with under-floor fuel tanks. For example, Ford and General Motors market an extensive range of autogas cars in Australia, as does Hyundai/Kia in Korea .

The performance and operational characteristics of autogas vehicles compare favourably with other fuels. Autogas has a higher octane rating than gasoline, so converted gasoline-powered spark-ignition engines tend to run more smoothly. This reduces engine wear and maintenance requirements, including less frequent spark plug and oil changes. Autogas causes less soot formation than both gasoline and diesel, reducing abrasion and chemical degradation of the engine oil. In addition, autogas does not dilute the lubricating film on the cylinder wall, which is a particular problem with gasoline engines in cold starts. The higher octane of autogas also allows higher compression ratios, which can deliver increased engine-power output and better thermal efficiency, reducing fuel consumption and emissions. Acceleration and top speed using the latest generation of autogas-fuel systems are comparable to gasoline or diesel. Autogas has a lower energy density than gasoline and diesel. Although this has no effect on engine performance, it does mean that a larger volume of fuel and a bigger tank are required to achieve the same overall driving range.

In practice, however, converting a vehicle to be able to run on autogas involves some operational inconveniences. The most important of these are the loss of boot/trunk space to accommodate the fuel tank and, in some cases (depending on the equipment installed), the marginal loss in acceleration and speed mainly due to the extra weight of the tank. This is more of a problem for CNG vehicles. The development of new technologies, including ring-tanks and lightweight composite tanks, has helped to alleviate these problems. This inconvenience is offset to some extent by the lower weight of autogas fuel compared to gasoline and the increased flexibility provided by the dual-fuel capability of converted vehicles. The refuelling process can also be a little trickier than for gasoline and diesel depending on pump facilities, which can be off-putting for some motorists. Nonetheless, practical experience has shown that vehicle owners are often willing to convert their vehicles to autogas if the savings in running costs are sufficiently attractive.

Safety concerns with regard to the handling and on-board storage of autogas are a barrier to conversion in some cases. Yet many years of operation worldwide have amply demonstrated the integrity and safety of bulk LP Gas/autogas transportation and storage containment systems, as well as onboard vehicle tanks. In fact, the safety record of autogas use in practice is at least as good as, if not better than, gasoline or diesel. A good example is Hong Kong, where the autogas taxi fleet has accumulated over 20 billion kilometres since 1990 without a single major accident. Autogas is fully contained under pressure in solid tanks, which limits the danger of leakage. Being stored in liquid form, gasoline is prone to leaks or vapour escapes. Nonetheless, widely-publicised accidents, often resulting from poor installation, the absence of a safety valve on the fuel-tank or the illegal use or cylinder gas, have undermined the safety image of autogas in a few countries.

Cost factors

The cost of autogas supply and infrastructure is generally lower than for other non-blended alternative fuels. On an energy-content basis, the cost of bulk LP Gas delivered to service stations is roughly comparable to gasoline (Section 4.1.2). Rising demand for autogas is not expected to raise significantly the cost of LP Gas on the international spot market relative to gasoline given the abundance of supplies.

The costs incurred in establishing or expanding an autogas distribution network essentially relate to investments in service-station storage and dispensing facilities. The plants and equipment that already exist to handle the importation, production, storage and bulk distribution of LP Gas for traditional uses are exactly the same as for autogas, although some additional investment may be needed to cope with higher bulk throughput. Since autogas generally makes use of the existing service-station infrastructure for distribution of conventional fuels, additional costs for autogas dispensing are low relative to some other alternative fuels. For example, the cost of installing a standard tank, pump and metering equipment for autogas alongside existing gasoline and diesel facilities is typically around a third that of installing dispensing facilities for CNG with the same capacity. This is because of the added cost of dedicated supply pipelines, high-pressure compression, storage cylinders and special dispensers for CNG. In addition, the fuelling rate for CNG is much lower than for autogas and often noisier.

Vehicle-conversion costs vary considerably from one country to another, depending on the sophistication and quality of the equipment installed and local labour costs. Conversion costs for older cars with less sophisticated engines tend to be much lower. On average, the cost of conversions and the cost installation of dual-fuel systems in OEM vehicles has risen in recent years as fuel-injection engine technology has become more sophisticated, Worldwide, costs vary from about $500 in developing countries to $3 500 in the United States. The premium for an OEM vehicle is typically at least $1 000 for a light-duty vehicle.

Despite the favourable environmental attributes of autogas compared to other alternative fuels, the rate of switching to autogas and overall consumption is highly dependent on the financial benefits to end users. A publicly-owned bus company may take account of the local environmental benefits as well as relative costs of different fuel options in deciding whether to switch to autogas. But for most private fleet operators, truckers and individual motorists, the sole factor is cost. As a result, private vehicle owners must be given an adequate financial incentive to switch to autogas.