Report on the Trinidad and Tobago CNG Programme (2011 August 25)
Government in the 2011 Budget proposed the development of Compressed Natural Gas (CNG) as a major alternate vehicular fuel in Trinidad and Tobago. The major benefits of this project are as follows:
- Reduction of the total petroleum subsidy on transportation fuels sold in the domestic market and consequently GORTT’s share of the petroleum subsidy.
- Availability of the displaced fuel for export to earn revenues at international market prices.
- Increased usage of an environmentally friendlier fuel that offers reduced Green House Gas (GHGs) emissions; as much as 15 to 20 percent less Carbon Dioxide than liquid fuels – gasoline and diesel.
It is targeted that 20% (approximately 100,000 vehicles) of the projected 2015 vehicular population in T&T will be converted to use CNG. High mileage vehicles will be targeted for conversions e.g. maxi taxis, taxis, buses, commercial vehicles, GORTT and state vehicles etc.
Critical factors for successful implementation of the programme include:
- Establishment of adequate refuelling stations – Cabinet has approved the development of seven (7) new to industry multifuel service stations that will all have CNG refuelling capability. The first new station is expected to be opened by November 2011 with a number of the others coming on-stream by Q1 2012. Additionally, CNG Marketing licences will soon be granted by the MEEA for the development of dedicated CNG stations. CNG refueling stations will be geographically spread in high visibility and easily accessible locations and will have fast fill (1.5 to 3.0 minutes) state of the art CNG refueling equipment.
- Establishment of conversion centres – The development of an adequate network of CNG vehicle conversion centres is also essential. The use of conventional steel cylinders for CNG storage will be replaced by the light weight composite cylinders in order to decrease the weight of the storage cylinder in the vehicle. Type II and above conversion kits will be used in order to minimize power loss in vehicles. A number of CNG Service licences will soon be granted to qualified conversion companies that have applied.
- Fiscal Incentives - A number of fiscal incentives for CNG were announced in the 2011 Budget Statement. The passage of the Finance Act No. 13 of 2010 gave approval to the amendments in the relevant Acts. The incentives for Compressed Natural Gas (CNG) that were incorporated through the amendments to the Finance Act No. 13 of 2010 included the following measures:
- MVT and VAT removed on imported new and used (less than 2 years old) OEM natural gas vehicles
- Removal of duty on components for the retrofit of vehicles
- For non-business - 25% tax credit for conversion cost up to a limit of $2,500 per vehicle
- For business - Capital uplift of 130% for wear and tear allowance
The CNG Task Force is currently evaluating several other fiscal incentives which can be offered in the upcoming 2012 Budget to further encourage the development of natural gas as a vehicular fuel. These new fiscal incentives are geared towards making CNG a more affordable fuel compared to the cheapest liquid fuel (diesel), making the conversion to CNG more affordable to the consumer and facilitating an attractive case for investors intending to set up CNG service stations.
Benefits of natural gas:
CNG is considered the most viable alternative to traditional liquid transportation fuels in T&T.
- CNG is Cheaper: CNG is currently less than half the price of Super gasoline resulting in substantial savings in fuel costs.
- CNG is Cleaner: CNG contains no additives and burns cleanly leaving no by-products of combustion to contaminate the spark plugs and engine oil. The combustion chamber parts therefore function at peak output for longer periods before requiring service. The engine oil also remains clean which minimizes engine wear.
- CNG is Greener: Harmful emissions such as Carbon Dioxide CO2 and Nitrogen Oxides (NOx) can be reduced by as much as 35% and 30% respectively when compared to traditional liquid transportation fuels.
- CNG is Safer: CNG components are made to international standards and are tested to ensure safe performance. CNG fuelling systems are sealed and Natural gas is lighter than air so if released, rises quickly & dissipates, thus reducing the risk of ignition.