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News Article

Natural Gas’ Potential for Mexico’s Trucking Sector

By Cas Biekmann | Tue, 06/15/2021 - 10:15

An oncoming environmental rule forcing Mexico’s trucking sector to only use cleaner diesel, which burns cleaner than gasoline, has been a cause for discussion. Transport companies argue that diesel is not available across all of Mexico. As the debate continues, Mexico could start looking at even cleaner burning fuel for long-distance transport: natural gas.

Reuters reported it has seen a letter to the Ministry of Environment sent by the trucking sector, in which it is asking to delay the rule. New trucks running on gasoline can also prevent the pollution the government is trying to avoid, but forcing companies to switch to low-sulfur diesel could prevent such investments into new vehicles, truckers say. What is more, the supply of diesel is somewhat of an uncertainty.

Another option already exists that could address both pollution and the shortage of diesel, even though it has not yet fully taken off in Mexico. Through natural gas vehicles (NGV), the country’s transport could switch to either compressed natural gas (CNG) or liquefied natural gas (LNG). Natural gas production within Mexico is mostly destined for the use of state-owned oil giant PEMEX, but the country has another major advantage: it is close to the US, and therefore close to some of the cheapest natural gas available world wide through importation. With Mexico’s pipeline growing on a yearly basis, wider access to CNG and LNG could become more feasible as well.

Using these fuels for heavy duty vehicles has become increasingly attractive in recent years. Costs for LNG and CNG are relatively low. There are clear environmental benefits and the fuels also run very silent when burned. “Natural gas reduces CO2 emissions by 70 percent in comparison to diesel and is 50 percent cheaper per kilometer than traditional fuels,” said Luis Echavarría, Director General at Enco GNV, in an interview with MBN. After frontrunner Iveco, other truck manufacturers such as Scania and Mercedes have joined the fold. Companies such as Nissan see great potential in conventional car applications as well. Alternative fuel congress Altfuels estimated last year that 15,000 CNG-based vehicles already operate in Mexico, but access to new LNG vehicles has been proven to be difficult. Furthermore, the number of refueling stations is somewhat limited.

Nevertheless, Mexico’s landscape is changing, despite this lack of access. “The issue is that much of the present infrastructure needs to be changed to accommodate NGV. Our company takes care of helping and promoting the search for investors looking to spend on these stations. The door to so-called multimodal stations has been opened. We have worked for many years to make sure that PEMEX allows the construction of such stations. Now, the government is working on regulations to make this business possible,” Andrés Bayona, CEO Promotora Energética E3 told Mexico Business News in a 2020 interview.

The data used in this article was sourced from:  
Altfuels, Reuters, MBN
Cas Biekmann Cas Biekmann Journalist and Industry Analyst