SIEW 2014: Alternative fuels must gain traction in the transportation sector

Panellists (L-R) Gal Luft, Lucky Nurafiatin, Anthony Dixon, Dom Lavigne, Lynette Cheah, Francisco Pereira, address delegates while participating in the Transportation Fuel Choices for Asia roundtable at SIEW 2014.

By Rachel Su

Asian countries have different levels of dependency on imported fuels to meet their electricity needs but share a similar issue in the transportation sector – they must diversify away from fossil fuels to lessen exposure to oil price spikes and cut down on carbon emissions, panellists said on Thursday at Singapore International Energy Week 2014.

Experts at the Transportation Fuel Choices for Asia roundtable noted that the options available to consumers include methanol, compressed natural gas and biofuels such as ethanol.

“None of them is a perfect alternative,” said Gal Luft, senior adviser to the U.S. Energy Security Council. “The ideal situation is to have a market in which several fuels can compete against each other on the merits, on the economics and on the environmental attributes and let consumers decide what they want to put in their tanks.”

Luft and other panellists stressed the need to move towards a “free market environment” and “break the monopoly that oil has over transportation fuel”. Asia stands to gain with the rise of alternatives as they will make the region less susceptible to oil price spikes and help to address heavy pollution in many countries, the experts said.

“The transport sector currently contributes to about 27 percent of total CO2 emissions annually,” said Anthony Dixon, a former chief executive officer of ASB Biodiesel Hong Kong. 

“The challenge of decarbonising the transport sector” will only become more difficult as populations and incomes grow over the next 35 years, Dixon said, emphasising the importance of fuel options amid concerns about global warming. 

Asia collectively makes more than half of the world’s vehicles, with the transport sector set to expand enormously as most of the region’s economies are only “at the beginning of their growth trajectory”, Luft said. In China, he said, vehicle sales are expected to grow by 12 to 14 percent a year from the current 90 million cars to about 200 million – roughly the number in the United States. 

“Asia is really in the position to make a difference”, Luft said, with better coordination between government and industry to reach fuel and vehicle manufacturing standards that would create the economies of scale for implementation. After Brazil adopted ethanol as its alternative fuel choice, nearly 90 percent of vehicles sold there are now flexible fuel models, compared with just 5 percent in 2003, he said.

“Many of these alternatives are economically superior to gasoline at the current prices” and are “competitive fuels”, Luft said. 

The panellists said policy options include creating a Corporate Average Fuel Economy (CAFE) credit for automakers that open at least half of the vehicles in their fleet to competing fuels, improving regulations around fuel certification to include a broader range of feasible alternatives and deregulating the secondary market to enable safe but low-cost retrofitting of vehicles. 

About Singapore International Energy Week (www.siew.gov.sg)

The 7th annual SIEW 2014 is the foremost platform for top policymakers, energy practitioners and commentators to discuss energy issues, strategies and solutions. SIEW brings together a robust line-up of world's leading conferences, exhibitions, roundtables and networking events to provide insights and perspectives on the emerging trends and innovations across the energy spectrum of oil & gas, clean and renewable energy, and energy infrastructure financing – in one week, one location. Please visit www.siew.gov.sg for further information.