Summary

Natural gas vehicles are being edged out, amid a lack of policy support and shrinking economical advantages over other fuels. [Gas in Transition, Volume 2, Issue 1]

China’s natural gas vehicles (NGVs) – once touted as a future driver of domestic gas demand – are being edged out of the conversation on how to decarbonise transport by more popular electric vehicles (EVs), which are proving to be more cost-competitive and have snatched policy momentum away from NGVs. China has the world’s largest fleet of passenger vehicles running on gas, with 7.32mn on the road in 2020, but development of the market has slowed significantly since 2014. Lack of policy support and shrinking economic advantages over other fuels have stalled consumer uptake and limited infrastructure expansion. Passenger EV adoption has continued to accelerate while NGVs have lost ground. Passenger NGVs grew at a compound annual growth rate (CAGR) of 5% in the three years between 2017 and 2019, a fraction of the 76% CAGR enjoyed by EVs. In 2020, the Chinese compressed natural gas (CNG) vehicle fleet shrank for the first time in its 32-year history, by 100,000 vehicles to 6.62mn, according to a PetroChina-affiliated oil industry newspape...