LNG as transport fuel in heavy vehicles India

According to World Health Organization (WHO), seven cities in India are positioned among the most polluted cities in the world. In these circumstances, the need of the hour, among other solutions, is to switch to a cleaner and more sustainable fossil fuel, for instance, liquefied natural gas (LNG). The combustion of natural gas does not emit soot, dust or fumes, and thus it makes it one of the cleanest fossil fuels with high energy to carbon ratio.

Apart from being sustainable, LNG is also safe to use, it does not burn in its liquid state and rapidly vaporises when it comes into contact with air. This makes chances of it catching fire highly improbable. It is easy to transport large quantities of LNG because it takes a fraction of space compared to natural gas.

Two methods of transporting LNG from its origin are through pipelines and vessels. While pipelines are preferred when it comes to transportation and distribution inside the country, vessels are used to transport LNG across long distances through sea routes, for instance, between countries. LNG is liquefied at liquefaction plants and transported across in double-hulled ships specifically designed to handle the low temperature of LNG with cryogenic tanks.[1] These carriers are insulated to limit the amount of LNG that boils off or evaporates. Upon reaching the destination, the LNG is regasified at regasification plants and distributed across the country through pipelines.[2]

LNG as an Efficient Fuel in the Indian Transport Sector

Because of its non-toxic and non-corrosive nature, LNG can extend the life of a vehicle for up to three times longer than those that are diesel fuelled. Due to LNG’s extremely low boiling point, a very small amount of heat is required to convert it into a gaseous form at high pressure with use of little to no mechanical energy. LNG is, therefore, an efficient fuel.

It’s extremely low boiling point, however, also means that when stored, it can boil and vaporise at the slightest increase in temperature leading to wastage of fuel. This makes the use of LNG in passenger cars far less viable, because on average, passenger cars stand idle more often, leading to reduced annual mileage that cannot compensate the high evaporative losses of the fuel.

The existing vehicles running on compressed natural gas (CNG) can use the same tank to run on LNG with some minor modifications; however, the technology has not been commercially exploited to its full scale because it is not as economically efficient.

Use of LNG as a Fuel in Heavy Vehicles

Use of LNG in trucks and buses is gaining momentum around the world. Europe, China and the United States have already started using LNG powered trucks for long-distance freight carriage. It is also an attractive option for commercial buses plying over long distances.

In India, the Supreme Court’s order in MC Mehta v Union of India[3] paved the way for mainstream use of CNG vehicles to curb pollution in Delhi and the surrounding region. However, it was only recently, in 2016, that Tata Motors launched India’s first LNG powered bus in Kerala on a trial run.[4] Petronet LNG Limited has planned to launch around 20 LNG fuel stations on a 4,000km route running from Delhi to Thiruvananthapuram as part of its larger scheme in association with oil marketing companies and state roadways of Rajasthan, Gujarat and Kerala.[5] The Government of India is proactively working towards making LNG vehicles a viable mode of transport in India.

Government’s Support to LNG in the Transport Sector

The Indian Government’s move to allow LNG to be used as an automotive fuel is a positive step.

The 2017 Amendment to the Central Motor Vehicles Rules, 1989, to include LNG as a fuel for automobiles, is the first giant step forward to revolutionise the use of LNG in the transport sector in India. The inclusion of LNG as an auto fuel legitimises its use and subjects it to Government emission standards and regulation. Further, the amendment to the Petroleum and Natural Gas Regulatory Board (Authorising Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Networks) Regulations, 2008 has included LNG fuel stations under the definition of natural gas stations.

It is significant to note that the 2018 Amendment to the Gas Cylinder Rules, 2016, (Amendment Rules) has also included Auto LNG (LNG meant for automotive fuel) under its regulatory framework. This change has extended the Amendment Rules to storage of LNG in cylinders, its possession, import and transport. The Amendment Rules also specify the quality standards for a cryogenic cylinder.

All of these regulatory changes exhibit the Government’s intent to support LNG as an economically viable transportation fuel.

However, LNG, though cleaner than other fuels available, still leaves some carbon footprint. At present, the following limitations pose a hurdle to LNG becoming the mainstream fuel used in vehicles:

  • Due to its extremely low boiling point, LNG is required to be stored in cryogenic containers that increases investment and requires sophisticated technology.
  • There is limited availability of infrastructure for delivery and distribution of LNG at fuelling stations. Setting up fuelling stations is in itself a huge investment on the part of the Government.

To further give impetus to use of LNG as a transportation fuel, the Government needs to invest intensively in establishing the necessary infrastructure for its use. With proactive government support, technological innovation and joint ventures with the private sector, LNG as an automotive fuel can soon be commercially viable for a wide range of heavy duty vehicles.

Further, there is a need to regulate LNG as a fuel, covering its transportation, storage and dispensation to commercial vehicles with specific standards for the fuelling stations and storage containers, a task which has been entrusted to Petroleum and Explosives Safety Organization (“PESO”)[6]. The Government has already notified regulations to govern LNG’s use as a fuel and is in the process of drafting more such regulations. A little foresight while drafting these rules and regulations to take into account the use of LNG in different modes of transport, and future technological advances shall lead to easier implementation in diversifying the portfolio of LNG usage in trucking, State / privately operated road transport, railways and inland shipping.


[1] LNG, Petronet LNG Limited, <https://www.petronetlng.com/NaturalGasLNG.php

[2] Transportation of liquefied natural gas, Energy Education,

<https://energyeducation.ca/encyclopedia/Transportation_of_liquefied_natural_gas

[3] AIR 1998 SC 2963.

[4] First LNG fuelled bus in the country launched by Shri Dharmendra Pradhan in Kerala, Press Information Bureau, Government of India, Ministry of Petroleum and Natural Gas, <http://pib.nic.in/newsite/PrintRelease.aspx?relid=153376

[5] Petronet plans 20 LNG stations for buses from state roadways, Financial Express, <https://www.financialexpress.com/economy/petronet-plans-20-lng-stations-for-buses-from-state-roadways/1076299/

[6] Petronet LNG Limited: LNG as an Automotive Fuel (March, 2018) ; India Energy Forum, < http://indiaenergyforum.org/15th-petro-india/presentations/Current-scenario-&-future-prospects-for-LNG-as-a-transport-fuel-March-2018.pdf>

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Photo of Jatinder Cheema Jatinder Cheema

Partner in the Projects, Energy and Natural Resources practice at the Delhi office of Cyril Amarchand Mangaldas. Jatinder has extensive experience of more than 20 years in advising project developers, investors, lenders, regulators and suppliers & contractors on diverse commercial/ transactional, litigation and arbitration issues. Jatinder is qualified to practice law in multiple jurisdictions, i.e. India, Canada and Africa. He can be reached at jay.cheema@cyrilshroff.com.

 

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Senior Associate in the Projects, Energy and Natural Resources practice at the Delhi office of Cyril Amarchand Mangaldas. Akshat has a wide range of experience in advising clients on litigation/ arbitration and commercial/ transactional issues across various sectors including, Oil & Gas, Financial Institutions, Ports, Hydro, Warehousing, Aviation, etc. He can be reached at akshat.razdan@cyrilshroff.com

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Associate in the Projects, Energy and Natural Resources practice at the Delhi office of Cyril Amarchand Mangaldas. Parikalp has advisory experience in general corporate and transactional matters, and has been involved in litigation matters. Parikalp graduated from the National Law University, Jodhpur in 2018. He can be reached at parikalp.gupta@cyrilshroff.com