NGV Can Be the Axis of Mexico’s Energy Transition

At AMGNV, the Mexican Association of Natural Gas for Vehicles (NGV), we lead a team effort to encourage dependencies of the three government bodies, decentralized entities and businesspeople to participate in projects to renew their fleet and install infrastructure for the sale of NGV and its related services. These new lines of action will help mitigate global warming by replacing heavier fuels that affect the environment and people’s health.

In Mexico, we have a deficit in the production of gasoline and diesel from the  six refineries that make up the national refining system (SNR). Even with the entry of the new Dos Bocas Olmeca refinery in Tabasco, the ongoing improvements to the current facilities that operate inefficiently and the recent acquisition of Deer Park by PEMEX in Texas, Mexico will not achieve sufficient refining capacity to allow it to meet the growing national consumption. The implementation of a massive NGV program could substitute part of the necessary fuel for large transit and transport fleets, such as buses, cargo trucks, taxis and distribution vehicles in large cities.

Due to our access to the low prices of natural gas offered in North America, a region with the lowest natural gas prices in the world,  NGV users in Mexico today can obtain economic benefits of close to 50% by substituting traditional gasoline and diesel with this alternate fuel.

Added to the above, Mexico is an active participant in the Paris Agreement and in 2015 delivered its first commitments to reduce its emissions by 22% by 2030 according to its baseline.

The process of evolution toward alternate zero emissions fuels will take several decades for  full implementation. An option for current fleets is  NGV, which is used globally  in more than 30 million vehicles as an alternate fuel in the ongoing energy transition process. In our country, we have used this fuel since the end of the 20th century.

During the last three years, NGV stations have doubled in Mexico, reaching almost 100 dispensing stations in 18 states by the end of 2022. For 2023 and 24, without any government incentives, we hope to install more than 60 new stations to serve CNG vehicles, expanding coverage to 24 states in Mexico.

With a potential of 50 million vehicles, or  mass use of this fuel, we need to define and accelerate a federal government policy that eases the introduction of new NGV projects in all regions and the conversion of current gasoline and diesel vehicles to natural gas. This policy should include the following main guidelines:

• Establish NGV as a strategic transition fuel due to its benefits for the environment, economy and safety.

• Allocate resources for a national program for financing NGV conversions, purchase of new OEM NGV units, preferred interest rates and tax benefits that allow the use of NGV in transportation, including federal and municipal fleets.

• A single bureaucratic office for NGV projects that handles all documentation requested by SENER, CRE, ASEA and Civil Protection, with unified criteria, prioritizing their processing and reducing response times for new projects or modifications.

• Guides to standardize and unify criteria at the state and municipal level that ease the construction of infrastructure for NGV.

• Work teams between the government and private sectors for the exchange of information, knowledge and benefits that promote this ecosystem for the development of the country and the economy of Mexicans.

• Update Mexican Official Standards (NOMs) on the subject.

With the aforementioned government actions, NGV companies, together with trade unions, would be able to invest in this business and we could position ourselves as a solid economic sector with exponential growth, generating employment and multiple social benefits.

In three years, the NGV sector could achieve the following results, estimated by the AMNGV:

• Build 627 NGV stations that will serve 1% of the Mexican vehicle fleet and dispense 314,074,852 gasoline liter equivalent (GLE) of NGV monthly. Currently 13,248 gasoline and diesel stations are in operation across Mexico.

• Build cardinal NGV routes through Mexico, from the sea ports through the main cities and within these to serve trucks and buses on interstate routes or within urban centers with mass transportation powered by NGV-fueled fleets.

• Serve remote regions, which currently do not have this fuel, through pipelines, Gas Transport Modules (GTMs) (virtual pipelines) and the sale of NGV at mobile stations, allowing us to offer full coverage in our country.

We continue to be interested in maintaining an ongoing dialogue with the federal, state, and municipal governments to participate in the structuring, adjustment, and modernization of public policies, standards, regulations, and good safety, environmental, commercial, and industrial practices that benefit the development and growth of the natural gas for vehicles in Mexico, as well as creating healthy, competitive conditions that allow profitable and sustainable investments.

We are part of the solution, and the conditions exist to generate progress and well-being for more than 60 million Mexicans in the short term.

With the participation of government entities and civil society, we will achieve quick outcomes for the benefit of all.