Conversion of 1.5m Public Transport Vehicles Into CNG Hybrids Launched in Iran

EghtesadOnline: A nationwide scheme has been launched to convert 1.5 million gasoline-powered public transport vehicles to compressed natural gas hybrids.

News ID: ۷۴۹۷۰۰

16 February 2020

Started by the National Iranian Oil Refining and Distribution Company on Thursday, the scheme offers subsidized conversion services to drivers of public transportation vehicles. The drivers are only charged $300-400 for the tanks, depending on the type of car and size of CNG tank, ISNA reported.

Drivers can visit the website Irngv.ir to submit their application and undergo the process, according to Financial Tribune.

Navid Khassebaf, a senior official at the CNG Tank Producers’ Association, told reporters that the current domestic capacity of CNG tank production is over 700,000 per year.

“Therefore, the 1.5 million target can be reached through proper planning in two years,” he said.

He also emphasized that by maximizing the local capacity for the production of CNG tanks, the figure will reach 900,000 and the scheme will most probably be implemented in time.

Khassebaf added that over 230 certified conversion centers are currently active throughout the country and emphasized that car owners are recommended to only visit authorized centers for a guaranteed and standardized result.

The scheme is estimated to require a budget of 650 billion rials ($4.8 million), which can be supplied through savings made from the reduction of gasoline consumption [by raising fuel price and setting a quota], he added.

Khassebaf called on the industries and oil ministries to join hands for implementing the project.

Demand for CNG Hybrids

Following the government's decision to raise fuel prices on Nov. 15, compressed gas consumption has risen by 2 million cubic meters per day, the head of CNG Department at the state-run NIORDC said.

“CNG consumption is growing rapidly. It surpassed 21 mcm/d, up 11% in late November 2019. The figure is expected to exceed 24 mcm/d by the end of the current Iranian year [March 19],” Hamid Qasemi added.

In the last two months, close to 30,000 car owners have applied to convert their vehicles to CNG hybrids at authorized centers.

“Due to the large number of applicants, the authorized centers [supervised by NIORDC and the Industries Ministry] will follow the policy of first come, first served,” Ali Mahmoudian, the head of Alternative Fuels Union, said.

“Much-needed parts and equipment to convert cars to CNG hybrids have been indigenized and centers will be working round the clock to meet rising demand.”

According to NIORDC, of the 19 million vehicles in Iran, over 5 million have hybrid CNG engines.

The number of active conversion centers in the country has reached 250 and could rise to 380 on demand.

Long-Term Plan

Motivating people to switch to natural gas has long been on the Iranian government’s agenda. However, these efforts have mostly been limited to major cities like Tehran.

Long before the free services became the topic of debates, NIORDC started to offer low-interest loans to owners of all commercial and passenger vehicles running on gasoline and diesel to convert them to CNG hybrids

With the introduction of various incentives, CNG consumption in the country has reached 21 million cubic meters per day, but the government aims to further increase the use of this clean fuel.

Its endeavors have been aimed at curbing fossil fuel consumption and reducing toxic emissions released into the air by diesel engines that are considered heavy polluters.

However, according to the latest report, CNG consumption can increase to over 40 million cubic meters per day.

The NIORDC reports that in the last Iranian year (ended March 20, 2019), gasoline consumption reached 90 million liters per day, although gasoline is costlier than CNG.

One cubic meter of CNG costs 4,140 rials (3 cents), while a liter of gasoline is sold at 30,000 rials (22 cents).

CNG is projected to comprise 35% of Iran's total fuel consumption by the end of the Sixth Five-Year Economic Development Plan (2017-22). To achieve this goal, the government recently launched an initiative to motivate more drivers to convert their gas-burning vehicles to CNG hybrids.