World Autogas Market

In his new position as autogas manager for the World LP Gas Association (WLPGA; Paris), Alexander Stöhr is working to plot an autogas strategy for the association through marketing, communications, and lobbying. Having taken on his new role as a shared asset with AEGPL in Brussels, he hopes to see autogas do as well in other countries as it has in countries such as Italy and Poland.

“Italy was one of the first countries to put up sufficient infrastructure to be recognized by potential customers,” said Stöhr, who came to WLPGA in June after serving as autogas manager for Deutscher Verband Flüssiggas e.V., the German LP-gas association. Italy, he said, models LPG as a “cost-conscious fuel.”

In Poland, the number of new vehicles sold versus used ones is much smaller than in other countries. People will often buy a used car, sometimes even from another country, bring the vehicle back to Poland and perform the conversion to autogas, Stöhr noted.

The propane industry in the UK is also showing great promise, he added, having improved the quality of its LPG retrofitting systems and done a good job with infrastructure.

“Now they’re waiting for the politicians to react and give them a longer tax reduction on LPG, securing an attractive LPG price for a mid-term future. So the UK LPG industry has done everything right. Now only the customers need to actually start buying cars.”

Stöhr added that although Germany got a late start into the autogas market, that market has grown exponentially. But challenging issues such as quality problems with conversions arose with that high rate of growth. That created a public perception of poor product quality. Other issues included a struggle to build enough infrastructure to keep up with the growth, which he said the industry tackled successfully.

“There was misinformation sometimes provided to the public, misperception of propane’s advantages, and exaggerations, so it was about information management and quality management.”

Analyzing the rise of the LPG market in Germany, he believes a series of political and economic events caused the change. A sharp increase in gasoline prices around 2006 and politicians’ decision that same year to continue a lowered excise duty for propane until 2018 got the ball rolling toward LPG. That helped people determine that if they buy a propane vehicle, they would get the payback inside that period of time, providing a strong case for autogas.

“So people said, ‘Even if for any reason the payback time is longer, an eventual increase in excise duty is not going to affect me,’” Stöhr noted. “In Europe, much of the retail fuel prices are made up of taxes and thus depend on political decisions. To prevent people from becoming unsure and failing to invest in alternative energies, politicians need to provide long-term support for technical solutions. Transferring large numbers of customers to new fuels makes a gradual approach imperative.”

Now with WLPGA, Stöhr says his goal in a nutshell is “to help the right people make the right decisions.” That means helping auto manufacturers see the opportunity from a growing autogas market supported by a growing price gap between gasoline and LP-gas. It also means informing decision makers in countries all over the world about the different ecological benefits of giving the customer a vision of autogas as a quality fuel with a future bright enough to convince them to consider buying a propane vehicle.

“We need to communicate to people that autogas is going to be here, it’s going to be stable, and it’s going to be available at a reasonable cost for at least two decades.”

While “you can’t force anyone to switch to autogas,” enough fuel stations will show that this fuel is available and it’s here to stay. “It’s about taking away insecurity.”

Government grants can help make that happen, and countries such as Italy recognized that early on, Stöhr stated. Monetary grants from the Italian government incentivizing the purchase and conversion of vehicles to LPG was one factor that helped Italy’s autogas vehicle population grow by more than a million cars. On the downside, these grants lose effect very quickly if all other factors, infrastructure in particular, are not taken into consideration.

He is working on developing marketing documents to send to stakeholders such as auto manufacturers, promoting how using autogas will have a strategic impact on lowering petroleum use and cutting emissions.

“If you speak to politicians about retrofitting in some countries, they say ‘That has nothing to do with the future,’” he noted. The international propane industry must paint a picture of autogas that shows it as a fuel of the future if national government support is to continue.

—Daryl Lubinsky