Oil's slump stalls Merkel's push to expand natural gas in cars

[BERLIN] Chancellor Angela Merkel's drive to push sales of natural gas vehicles in Germany is getting off to a bumpy start after a slump in oil prices cut the cost of driving with traditional fuels such as gasoline and diesel.

Sales of cars powered by natural-gas fell almost a third last year, Dena, the government's energy-efficiency agency, said just two days after the Ministry of Economic Affairs and Energy said it wanted methane-powered vehicles to capture a 4 per cent market by 2020.

Natural gas cars "won't stand a chance" without government support to compete against conventional fuel, said Kristina Haverkamp, the managing director of Dena, said in a statement.

Sales of methane-run vehicles fell 30 per cent in 2015 to 6,520 and reduced the overall number of natural gas vehicles on Germany's roads by 2 per cent, to 98,000, or just 0.15 per cent of registered cars.

Lagging sales of natural-gas vehicles is only the latest in a line of struggles affecting German transportation and climate policy. Lackluster sales of electric and hybrid vehicles have put the goal of reaching one million units on the road by 2020 at risk.

Failing to achieve those goals in transportation, which is responsible for about a fifth of greenhouse gas emissions, could impact German commitments to cut carbon dioxide emissions.

The ambition of Ms Merkel's government to cut annual carbon dioxide output to 750 million tons by 2020 from 925 million tons today is "unrealistic", McKinsey & Co wrote in a report on Sep 8.

Diesel-fueled cars had a 48 per cent share of all car sales in Germany last year compared with only 1.7 per cent for alternative fuels including methane, liquid natural gas, hybrids and battery-only cars.

Dena blamed sustained low crude prices for the setbacks that are persuading motorists to forgo cleaner alternatives to traditional fuels. Super octane gasoline averaged 136.9 euro cents (S$2.09) a litre last year, the lowest since 2009 when Germany plunged into a recession, according to Germany's Adac motoring federation.

The bad news for natural gas cars, which burn cleaner while costing only about 55 US cents a litre operate, isn't getting any better. Sales were again down 31 per cent last month.

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