China is notorious around the world for its coal consumption and frighteningly high carbon emissions. However, changes in regulation to dramatically cut these emissions and tackle the serious air quality problems has led to a huge increase in the number of LNG powered vehicles being sold particularly in the heavy truck market. Sales of LNG powered heavy trucks was up 540% in the first seven months of this year and imports of LNG are up 45% so far this year. Other projects to bring down emissions include piping gas to around 1.4million homes in the north of the country as an alternative to coal for heating. Although international pressure and trends have played a role in this switch, there are other factors involved.
Smog
Earlier in the year, the Chinese government issued a red alert for ‘severe fog’ as a thick smog sat over Beijing. It was so severe that farmers feared for their crops due to lack of light and it was estimated that this sort of smog, created by burning coal, caused 366,000 premature deaths in 2013. Research suggests that charred dust particles smaller than 10micrometers can damage lungs, aggravate asthma and cause heart attacks in some cases. It can certainly prove fatal in people suffering from problems in these areas prior to the smog inhalation. As this is a regular occurrence in winter months, the Chinese government are taking action.
Regulations
Some northern ports in provinces like Hebei and Shandong and in the city of Tianjin are restricting the use of diesel powered vehicles in an effort to curb emissions and further restrictions taking effect soon will see factories in northern China moving away from diesel trucks and switching to more rail freight or LNG powered vehicles. A further boost to the sale of LNG heavy trucks is new regulations around truck overloading which have come about due to safety concerns. This has lead hauliers to buy bigger trucks and many are choosing LNG to power their new fleets. Sinotruk, the China National Heavy Duty Truck Group, sold 5,200 LNG trucks in the first half of this year, up 650% year on year.
Cost
Clearly, these new regulations are a major factor in hauliers choosing LNG powered trucks but the cost of LNG over diesel is another. Currently, in China, diesel costs between 15 and 30% more than gas in petrol stations. One owner driver, who regularly makes very long haul journeys, stated he paid about 60,000 yuan more for a brand new LNG heavy truck than he would have done for a diesel powered one but he believes he can save around 3,000 per return journey on fuel by using LNG so can recoup that extra cost within a year of operation.
Even though China is still the number one consumer of coal in the world, they are embracing the cleaner option of LNG to power transport and heat while saving money in the process as many other countries are doing. Many Chinese hauliers believe they will see even more restrictions on the use of diesel powered trucks in the future. If you have an LNG related business, speak to one of our team about the versatility of our flow measurement computers and how it can help your operation, call +44 (0)1243 554920 or contact us here.