This is one in a series of excerpts from the Advanced Energy Now 2019 Market Report, prepared for AEE by Navigant Research.

Advanced Fuel Delivery revenue – here quantified for just Fueling Stations serving natural gas and hydrogen vehicles – remained essentially flat globally in 2018, at $991 million, after 4% increase in 2017. (For Charging Infrastructure for electric vehicles, see Electricity Distribution and Management.) In the United States, the market for Advanced Fuel Delivery grew 5% in 2018, after three years of declines. Overall, spending on natural gas and hydrogen fueling stations has shrunk by more than half worldwide since 2011, and by one quarter in the United States, and by even more compared with the peak years of 2014 and 2012, respectively. The Compound Annual Growth Rate (CAGR) for Advanced Fuel Delivery revenue was -11% from 2011 to 2018 globally and -4% in the United States.

Investments in natural gas refueling equipment for larger vehicles dropped 36% last year worldwide, perhaps influenced by increasing interest in the electrification of medium- and heavy-duty trucks. Natural gas infrastructure for light duty vehicles, which accounts for the bulk of revenue in this segment, increased 2% to $920 million. Hydrogen fueling station revenue grew by $1 million to $33 million.

In the United States, spending on Fueling Stations rose 5% in 2018 to $168 million. This was due to higher spending on light-duty natural gas fueling – surprising, given that there are currently no light duty vehicles available for purchase. CNG vehicles continue to be driven in the United States, with CNG models for  the  Honda  Civic  and  Chevrolet Impala, which GM stopped producing in 2016. Commercial natural gas fueling infrastructure, for larger vehicles, dropped by nearly a third in 2018 to $27 million, even farther from a peak of nearly $100 million in 2014, even though the commercial price per thousand cubic feet fell to $7.36 late in the year, according to the Energy Information Administration.

Despite growing interest in hydrogen as a fuel for passenger cars and heavy-duty vehicles, investment in hydrogen fueling stations dropped from $8 million in 2017 to just $5 million. This falloff is likely short term, as investment in hydrogen refueling is expected to increase in the coming years, especially in California.

Natural Gas Fueling Stations Follow Fleet Growth

Outside of North America, natural gas as a fuel for passenger cars continues to grow, along with fueling stations, with revenue of $920 million globally in 2018. (Figure 15) The ECO-GATE (European COrridors for natural GAs Transport Efficiency) consortium, which was established in 2017, is propagating natural gas fueling stations. In June 2018, the European Union approved €10 million for an ECO-GATE project to develop and implement 21 gas stations that will be installed in Spain, France, Portugal and Germany. The program developers tout a significant reduction in the unit cost of new fueling stations.

In 2019, a new branding scheme for natural gas fueling stations was announced. Co-financed by the European Union and led by NEDGIA (Naturgy Group’s gas distributor), the ECO-G brand was designed to convey ”smart ecology” for its environmental benefits and cost savings when compared to diesel. The ECO-G brand will be standardized across natural gas fueling stations for light, medium, and heavy-duty vehicles, as well as maritime refueling.

The new fueling stations are welcome news as more CNG car models are re-entering the market in Europe. Volkswagen is reintroducing the Polo and Golf TGI vehicles with increased driving range. Automaker Seat, which uses the same vehicle platform as the Polo and Golf, is bringing three refreshed CNG vehicles to market: the Ibiza, Arona, and Leon.

Italy has more than 1 million natural gas vehicles and more than 1,100 fueling stations. The Lombardy region is incentivizing drivers to purchase a new natural gas vehicle, offering a three-year abatement on the regional automotive ownership tax if a polluting vehicle is also exchanged, or a 50% reduction in the tax for new vehicle purchases.

Further east, in India, the government established a dealer-owned and operated model for CNG stations across the country. More than 1,500 CNG stations are presently operational in the country, with more than 4,600 new CNG stations expected in the next eight years. The gas pipeline infrastructure is expected to be nearly doubled during this time.

In Brazil, transportation network company Uber is encouraging drivers to convert their vehicles to CNG. Through a partnership with Landi Renzo Group, Uber drivers can get access to low-interest financing for Landi Renzo’s natural gas conversion kits.

In the United States, CNG continues to be pursued alongside electrification as a viable option for transit buses, if not for light duty vehicles, resulting in Fueling Station revenue of $136 million in 2018. For example, the Santa Clarita, CA, bus fleet is now more than 90% CNG vehicles, and the fleet will soon move to 100% CNG. Bio-methane digesters will increase the fuel supply to natural gas pipelines in California. A pilot project will connect six locations in central California with pipelines to demonstrate how waste from dairy farms can augment existing natural gas supplies. Similarly, waste management company CR&R Environmental is feeding bio-methane into pipelines operated by SoCalGas.

In Lebanon, PA, outside of Harrisburg, 29 CNG fueling stations are being installed to provide infrastructure for the fleet of buses, which is expected to reach 1,600. The infrastructure is provided through a $84.5 million public private partnership between the Pennsylvania Department of Transportation and natural gas fuel supplier Trillium.

Global Efforts Are Driving Hydrogen Fuel Stations

Automotive and transportation companies are divided over hydrogen fuel cells versus batteries for long range electrified driving. While hydrogen fueling infrastructure has existed for decades, growth has been much slower than electric vehicle (EV) charging infrastructure. Global hydrogen fueling infrastructure revenue is 32% lower in 2018 than it was in 2011. However, a resurgence of interest in hydrogen, particularly for trucking, could lead to stronger investment in the coming years.

The Chinese government, which has focused primarily on incentivizing EVs as part of its New Energy Vehicle plan, is now promoting hydrogen as well. Wan Gang, a senior government advisor who was instrumental in the country’s EV strategy, wrote in December that the country should now focus on hydrogen fuel cell vehicle development. In 2018, Chinese light truck manufacturer Great Wall joined the International Hydrogen Council and established a hydrogen research and development center. The company also invested in H2 Mobility Deutschland, a German hydrogen refueling company, as well as Shanghai Fuel Cell Powertrain Co. The first commercial-scale liquid hydrogen fueling station in China is being developed in Guangdong Province, using technology from Pennsylvania-based company Air Products.

Automakers in Korea and Japan are continuing to support hydrogen infrastructure and fuel cell vehicles. In Japan, 80 new hydrogen refueling stations are planned to be built through 2022 by a consortium of companies including automakers Honda, Nissan, and Toyota. Meanwhile, Korea’s Hyundai plans on spending $6.7 billion through 2030 to increase hydrogen vehicle production. Hyundai is launching its Nexo fuel cell vehicle and a fleet of heavy-duty trucks in Europe in 2019, which will require new investment in hydrogen refueling infrastructure. 

In Europe, a new hydrogen refueling station in Wuppertal, Germany, will power a fleet of fuel cell buses. Hydrogenics Corp. will build the system to extract hydrogen from water via electrolysis. Hydrogenics is also part of the Haeolus consortium, which is building a 2.5 MW electrolyzer-based hydrogen production facility in Norway. When complete, the facility will be directly connected to a 45 MW wind farm to turn excess renewable energy into hydrogen fuel.

These global efforts to expand hydrogen infrastructure will further refine the production process and narrow the cost gap between hydrogen fuel and other transportation fuels.