Australian autogas... past, present and future Ian Maloney GM for Strategy, Elgas Ltd, Australia Chair, WLPGA Climate Change Working Group 1
Presentation agenda Australian autogas history 1970 s to 2000 Australian autogas history 2000 to 2010 Current Policy Environment Industry Growth Objectives and Strategy Lessons from Australia 2
LPG as a Vehicle Fuel - The Fundamentals Community benefits of fuel security and lower emissions Benefits to motorists to offset the incremental investment in LPG POLICY DRIVEN MARKET 3
Australian autogas fundamentals Australia introduced policies in the 1970 s to promote the use of LPG due to the oil crisis. Australia is oil short, LPG & gas long International pricing for all petroleum fuels, including LPG Relatively low excise applied to petrol and diesel (currently 38 c/litre) Alternative fuels exempt from excise 4
Australian autogas 1970 to 2000 LPG autogas grew rapidly from taxi, small commercial vehicles to private vehicles. Retail network grew to 3000 sites by early 1990 s 500,000 LPG vehicles (5% of light fleet). All retrofit - cost paid by consumer, benefit of lower fuel costs Conversions and LPG usage rose when oil price high No other alternative fuel successful (CNG for some bus fleets only) MARKET DRIVERS ZERO EXCISE, EXTENSIVE CONVERSION & RETAIL NETWORKS 5
Australian autogas 2000 to 2010 Government announced in 2001 that alternative fuels would have excise applied. LPG Association won campaign to defer excise to 2011 LPG conversions returned to growth OEM involvement for first time 2006 Government rebate scheme for private motorists of A$2,000 towards cost of LPG Conversion LPG autogas conversions surged. LPG now available on half of all service stations MARKET DRIVERS ZERO EXCISE & GRANTS 6
New LPG Vehicle numbers (Total light vehicle population 10 million, LPG vehicle population 650,000) 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 OEM (V-Facts) LPG Retrofit Non- Scheme LPG Vehicle Scheme (LVS) grants 6,717 12,938 All LPG Autogas Vehicles Per Annum 2003-2010 7,775 23,931 8,281 34,201 Rebate introduced in August 2006 13,709 47,075 21,460 12,900 11,094 79,597 13,378 10,780 96,401 10,473 7,500 8,035 4,391 52,955 27,976 2003 2004 2005 2006 2007 2008 2009 2010 19
Fuel Price Differential acpl LPG Grant Vehicle Conversions vs LPG-petrol price Differential 100.0 90.0 LVS Grants vs. ULP / LPG retail price differential (Source FUELtrac data and Aus Industry Grants) 12,000 10,500 80.0 70.0 60.0 50.0 9,000 7,500 6,000 4,500 Grants 40.0 30.0 20.0 Monthly LVS Grants Paid Includes OEM Price Difference ULP v LPG acpl 3,000 1,500 0 LPG Australia Commercial-in-Confidence 8
ULP retail price acpl LPG Grant Vehicle Conversions vs Retail Petrol Price 180.0 160.0 LVS Grants vs. ULP retail price (Source FUELtrac data and Aus Industry Grants) ULP at 140 acpl 12,000 10,500 140.0 120.0 100.0 80.0 9,000 7,500 6,000 4,500 Grants 60.0 40.0 20.0 Monthly LVS Grants Paid Includes OEM Av National ULP Price 3,000 1,500 0 LPG Australia Commercial-in-Confidence 9
Current Policy Status Application of excise from end 2011 proposed 2.5c/l, growing to 12.5c/l in 2015 Grants being phased out Government fiscal objective revenue, plus reluctance to see any fuels outside the tax regime Australian Greenhouse policy in disarray Government fuels policy incomplete 10
G r e e n h o u s e E n e r g y S e c u r i t y Recognised Strategic Policy Imperatives for Australia Drivers of Alternative Fuel Policy Australia s oil self-sufficiency was 54% in 2007 Forecasts say will be below 20%by 2030 The net trade deficit will increase five-fold by 2030 Increased fuel prices impacting the economy i n c r e a s e d n a t i o n a l r i s k Transport accounts for 14.0% of national GHG emissions 84% of the GHG emissions from transport are road transport Over the last 10 years GHG emissions from road transport grew 16.6% They are forecast to grow by 37% between 2005 06 and 2025 26 11
Challenging Time for Autogas Industry, now 40 years old Low vehicle conversions below sustainability Flat autogas sales Policy uncertainty and threat KEY STRENGTH INDUSTRY HAS MAINTAINED STRONG AND WIDESPREAD POLITICAL AND POLICY RELATIONSHIPS 12
Future directions 2030 A roadmap for the Australian LPG vehicle industry 13
Australia s transport fuel outlook 14
Industry Strategy The ROADMAP: 1. Demonstrates energy security & greenhouse benefits 2. Promotes Industry-Government Partnership 3. Advocates that transport fuels policy has objective for LPG to be 10% of light vehicle fuels 4. Advocates reduced or delayed excise 5. Advocates investment in OEM LPG vehicle production, upgrading of LPG vehicle filling technology, public education 15
Our Task Establish 10% by 2030 objective in policy (doubles current volumes) Vehicle part of industry to deliver our potential for low emissions and efficiency Fuel part of industry to maintain plentiful infrastructure, quality fuel, and upgrade filling and dispensing technology 16
Lessons from 40 years of Autogas in Australia Always have a clearly enunciated policy Always understand the community v s motorist benefit equation. Differs country to country. Maintain strong political and policy relationships, even if all seems well Ensure good quality conversions/oem engines Make sure claimed emission benefits are delivered Have both OEM and retrofit sectors 17
Australian autogas... up, up and away 18