Iran to Convert 1.5 Million Vehicles Into CNG Hybrids

EghtesadOnline: A nationwide scheme has been launched to convert 1.46 million gasoline-powered public transport and commercial vehicles to compressed natural gas hybrids.

News ID: ۷۵۰۰۵۵

17 May 2020

Hamid Qasemi, the head of CNG Department at the National Iranian Oil Refining and Distribution Company, said at a press conference on Wednesday that the scheme offers free of charge conversion services to drivers of taxis and commercial vehicles in the first phase, YJC reported.

To sign up for conversion, cab and pickup owners are required to register at Gcr.niopdc.ir, where their personal ID and vehicle information are checked to confirm their eligibility.

The first phase will only cover a part of vehicle types. A public call will be issued for the drivers of online taxis and other public transport vehicles in the next phases.

Qasemi noted that dilapidated vehicles cannot use the facility.

“The plan is expected to be executed in 14 months, curbing gasoline consumption by 12 million liters and adding the same amount to the CNG consumption rate” he said.

The official added that the Ministry of Industries, Mines and Trade has prepared and certified over 400 conversion centers in 25 provincial centers to help implement the scheme. He 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 $570 million, which is being supplied through savings made from the reduction of gasoline consumption [by raising fuel price and setting a quota], he added.

Two local banks are handing NIORDC in accomplishing the task,” he said.

Qasemi also told reporters that the total process will be free of charge for applicants and local CNG tank producers have already received 65 trillion rials ($382 million) to do their share of work.

“The current domestic capacity of CNG tank production is over 700,000 per year,” he said.

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

Demand for CNG Hybrids

Following the government's decision to raise fuel prices on Nov. 15, 2019, compressed gas consumption has risen by 4 million cubic meters per day, Qasemi said.

“CNG consumption is growing rapidly. It surpassed 21 mcm/d, up 11% in late November 2019. The figure exceeded 25 mcm/d at the end of the last Iranian year [March 19, 2020],” he added.

In the first two months after fuel rationing, close to 30,000 car owners 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 Industries Ministry] initially followed the policy of first come, first served,” Ali Mahmoudian, the head of Alternative Fuels Union, said.

However, thanks to the web page specified for registration of applicants in the conversion scheme, turn taking will be followed in conversion centers as the only criterion.

“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.

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 25 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.

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 has launched the initiative to motivate more drivers to convert their gas-burning vehicles to CNG hybrids.

Iran has over 2,500 CNG stations and ranks fifth in global CNG consumption.

Boosting the CNG share in the fuel basket can have multiple advantages, especially as it reduces gasoline demand and air pollution.