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 Australia2

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

3

POLICY DRIVEN MARKET

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)

5

MARKET DRIVERS – ZERO EXCISE, EXTENSIVE

CONVERSION & RETAIL NETWORKS

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

6MARKET DRIVERS – ZERO EXCISE & GRANTS

New LPG Vehicle numbers

(Total light vehicle population 10 million, LPG

vehicle population 650,000)

21,460

79,597

96,401

52,955 27,976

12,93823,931

34,201

47,075

11,094

10,780

7,5004,391

6,717

7,775

8,281

13,709

12,900

13,378

10,473 8,035

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2003 2004 2005 2006 2007 2008 2009 2010

All LPG Autogas Vehicles Per Annum 2003 - 2010

OEM (V-Facts)

LPG Retrofit Non-Scheme

LPG Vehicle Scheme (LVS) grants

Rebate

introduced in

August 2006

19

LPG Grant Vehicle Conversions

vs LPG-petrol price Differential

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

0

1,500

3,000

4,500

6,000

7,500

9,000

10,500

12,000

Gra

nts

Fu

el P

rice D

iffe

ren

tial

acp

l

LVS Grants vs. ULP / LPG retail price differential(Source FUELtrac data and Aus Industry Grants)

Monthly LVS Grants Paid Includes OEM

Price Difference ULP v LPG acpl

8

LPG Australia Commercial-in-Confidence

LPG Grant Vehicle Conversions vs

Retail Petrol Price

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

0

1,500

3,000

4,500

6,000

7,500

9,000

10,500

12,000

Gra

nts

UL

P r

eta

il p

rice a

cp

l

LVS Grants vs. ULP retail price(Source FUELtrac data and Aus Industry Grants)

Monthly LVS Grants Paid Includes OEM

Av National ULP Price

9

LPG Australia Commercial-in-Confidence

ULP at 140 acpl

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

Recognised Strategic Policy Imperatives for

Australia – Drivers of Alternative Fuel Policy

11

En

erg

y S

ec

uri

ty

Gre

en

ho

use

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

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

i n c r e a s e d n a t i o n a l r i s k

Challenging Time for Autogas

Industry, now 40 years old

• Low vehicle conversions – below sustainability

• Flat autogas sales

• Policy uncertainty and threat

12

KEY STRENGTH – INDUSTRY HAS

MAINTAINED STRONG AND WIDESPREAD

POLITICAL AND POLICY RELATIONSHIPS

13

Future directions 2030

A roadmap for the Australian

LPG vehicle industry

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

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