Use of gas as fuel falters on lack of transparent pricing

The lack of transparent and comprehensive fuel price information is a main obstacle holding back more widespread use of alternative fuels, in particular, natural gas and biomethane. 

This is the conclusion of an analysis carried out by the German Energy Agency (Dena), broadly supported by the natural gas vehicle industry and NGVA Europe.

The position paper examines the current price information for alternative fuels and how it is perceived by customers. The lack of transparent pricing has already been identified as a major market obstacle by NGVA Europe.

While fuel options and prices were clear in previous times as both petrol and diesel are charged as liquids in litres, the situation has changed with the increased availability of alternative fuels charged in different sales units, such as natural gas, biomethane and hydrogen (kg), and electricity (kWh).

For pricing to become more effective it, should adapt to the changing fuel market and industry recommends using sales units that are based on the energy content of each fuel, such as the energy comparison unit ‘petrol litre equivalent’ that is already used in Switzerland and the United States.

The energy agency points out that the different sales units currently used are confusing car and van drivers, making it impossible to reliably compare prices at pumps. But not only are understandable and comparable prices essential for consumers when refuelling, they also have a strong steering effect when it comes to buying a car, Dena says. Customers make a long-term commitment when opting for a particular source of propulsion, and the fuel price is a key factor in the decision making process.

More transparent indication of prices can encourage vehcile buyers to choose alternative drives, especially when these fuels are less expensive, and in order to diversify the energy sources in transport and reduce emissions through an increased share of alternative fuels, a reform of pricing is needed.

European decision makers have addressed the lack of transparent price information for alternative feuls in Article 7 para. 3 of Directive 2014/94/EU on Alternative Fuels Infrastructure, which states: “Where appropriate, and in particular for natural gas and hydrogen, when fuel prices are displayed at a fuel station, a comparison between the relevant unit prices shall be displayed for information purposes. The display of this information shall not mislead or confuse the user. In order to increase consumer awareness and provide for fuel price transparency in a consistent way across the Union, the Commission shall be empowered to adopt, by means of implementing acts, a common methodology for alternative fuels unit price comparison.”

The European Commission is about to start the implementation process of the Directive and NGVA Europe will push for its rapid adoption, in order to establish transparent pricing policy allowing natural gas and biomethane to unfold its full potential as a main source of propulsion for sustainable mobility.

Source: NGVA Europe