KEY CONCLUSIONS
The natural gas reserves situation is beneficial for Russia, though it does not use its potential to the full
“We are capable of fuelling more vehicles with natural gas, while the gas-filling infrastructure is using only 36% of its capacity on average in Russia. <…> To take all the natural gas fuelling stations up to full capacity, we need to fuel half a million vehicles. Our objective is to have 1 thousand methane fueling stations by 2024, which is realistic. It will depend on the development of the automobile network itself, because as of now we operate at a loss. <…> Out of all countries in the world, we find ourselves in the most beneficial situation. We have a cheap resource, but we use it poorly,” Viktor Zubkov, Special Representative of the President of the Russian Federation for Cooperation with the Forum of Gas Exporting Countries.
“Russia is the richest country in natural gas reserves, but we do not use it. We demonstrate zero efficiency. Our natural gas fueling stations are 36% efficient. Their profitability is zero. They are running at a loss,” Yury Borisov, Deputy Prime Minister of the Russian Federation.
“Natural gas is our treasure. The strategy of low-carbon development strategy must be implemented with extensive use of natural gas in all spheres, including transport,” Nikolay Shulginov, Minister of Energy of the Russian Federation.
“Natural gas is something we can use to bail the economy out of trouble. We have enough natural gas reserves for a hundred years. Our neighbours – Azerbaijan, Uzbekistan and other countries – are running their reserves low and will have to buy natural gas from us to run their transport on natural gas. <…> It will bail out Russia’s economy out of trouble through making things cheaper, more environmentally friendly and through using natural gas in all spheres of life,” Viktor Zubkov, Special Representative of the President of the Russian Federation for Cooperation with the Forum of Gas Exporting Countries.
Russia will need to start using gas-engine machinery
“Introducing gas-engine machinery is the right and the most natural of all possible ways for us. <…> Gazprom has spent over 30 billion to create an infrastructure. In total, all our manufacturers have spent RUB 10 billion more to master the production of gas-engine machinery. Now we do not have to spend a single extra rouble to start mass production,” Yury Borisov, Deputy Prime Minister of the Russian Federation.
PROBLEMS
Insufficient government support measures to stimulate transport to switch to natural gas
“The development of the natural-gas-based motor fuel in the world is only possible, when the government supports this industry. <…> There are subsidizing efforts, but they are insufficient. <…> We have invested almost RUB 100 billion in the development of this industry. Car manufacturers have invested in developing new model lines. A lot of money has been invested. We need real government support, while it is small,” Viktor Zubkov, Special Representative of the President of the Russian Federation for Cooperation with the Forum of Gas Exporting Countries.
“Subsidies to switch vehicles to natural-gas-based motor fuel are insufficient. They definitely need to be higher,” Nikolay Shulginov, Minister of Energy of the Russian Federation.
SOLUTIONS
Regions should have equal opportunities to develop the natural-gas-based motor fuel infrastructure
“We need to give every region the right to build fuelling stations and get a subsidy for that. For some reason, only 25 out of 80 regions have been selected. Regions need to have equal opportunities. <…> The Government needs to adopt a decree that will say that all regions have the right to join the programme for building natural gas fuelling stations and get support,” Viktor Zubkov, Special Representative of the President of the Russian Federation for Cooperation with the Forum of Gas Exporting Countries.
“We need to support the regions and put them to equal conditions, so that the regions that have not demonstrated change yet, would start it,” Vasily Golubev, Governor of Rostov Region.
Government support for developing infrastructure will stimulate switching to natural-gas-based motor fuel
“A decision was made to increase the subsidies for natural-gas vehicles three times, though we do not have natural gas fuelling stations. We basically do not have natural gas. We need to build natural gas plants and fuelling stations, while the subsidies are already up. We need to even out subsidies for natural gas and methane. <…> We need to allocate about RUB 10 billion of subsidies for car manufacturers that produce vehicles running on natural-gas-based fuel. Reequipment will take up to RUB 1.5 billion instead of RUB 700 million,” Viktor Zubkov, Special Representative of the President of the Russian Federation for Cooperation with the Forum of Gas Exporting Countries.
“Allocating RUB 3.3 billion for preferential subsidies for credit organizations is nothing for a market of this kind. This amount should be tripled. We need RUB 10 billion to stimulate consumer demand for natural-gas transport,” Yury Borisov, Deputy Prime Minister of the Russian Federation.
“Reequipment of existing machinery to switch to natural-gas-based fuel makes no sense, as in municipalities the rate of rundown is nearing 100%. When we say we need a government programme, we need to supply natural-gas transport at the cost of the federal budget, while regions need to be assigned with creating an infrastructure and services,” Andrey Bocharov, Governor of Volgograd Region.
“We have the technical conditions for producing this type of equipment. We need to boost the demand, because small businesses and companies are not prepared for that in the times of uncertainty. Our task is to stimulate the demand. We will hope that the first RUB 3.3 billion of government support will help us boost the demand and take the number of natural-gas vehicles up,” Albert Karimov, Deputy Minister of Industry and Trade of the Russian Federation.
“There is not enough support or balance. Support measures must ensure that the infrastructure is utilized at 60% capacity minimum. It will make its creation and selling gas as motor fuel profitable and cost-effective,” Pavel Zavalny, Chairman of the Committee of the State Duma of the Federal Assembly of the Russian Federation on Energy; President, Russian Gas Society.
We need to increase the natural-gas vehicle fleet
“We will drive diesel and petrol vehicles off the market through technical regulations and making them stricter. It concerns the vehicles of housing and utilities, law enforcement, etc.” Yury Borisov, Deputy Prime Minister of the Russian Federation.
“To use 2.7 billion cubic metres of natural gas by 2024, we need about 530 thousand natural-gas vehicles. It means that in three years we need to increase the fleet by 280 thousand vehicles. It can only be achieved through government support measures for car manufacturers and companies reequipping vehicles for natural gas,” Vitaly Markelov, Deputy Chairman of the Management Committee, Member of the Board of Directors, Gazprom.
Lower cost of natural-gas-based fuel will be the best motivation to switch to it
“My experience shows that the cost of natural-gas-based fuel should be up to 50% less than that of diesel fuel. It cannot be 20–30%. It should be 50%. It will make this work effective,” Andrey Bocharov, Governor of Volgograd Region.
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