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WPRT: The Developing Global Liquified Petroleum Gas (LPG) Market

IN FOCUS: WESTPORT FUEL SYSTEMS AND THE DEVELOPING LPG MARKET

The alphaDIRECT Insight

This alphaDIRECT Management Series focuses on Westport Fuel Systems and its role as a global leader in gaseous fuels for transportation, including LPG and its comprehensive set of products and systems. The report also touches on the European LPG market, along with regulatory issues and key economic drivers for LPG fuel versus gasoline. Liquified petroleum gas (LPG) fuel is the most common unblended alternative vehicle fuel, with an estimated 27 million LPG vehicles in use globally, according to Management. LPG is used in passenger vehicles since it is relatively easy to store in cylinder tanks or toroidal tanks under the vehicle or in the spare wheel compartment. When compared to other fuels such as compressed natural gas (CNG) and liquified natural gas (LNG), LPG has a lower cost structure and conversion costs. Key LPG market drivers includes fuel cost savings, wide availability, relatively low investment for infrastructure, low installation costs and reduced GHG emissions. Markets with government support such as Turkey, Poland and Italy have a long-term deployment strategy and taxation benefits, which have encouraged growth and high penetration rates.

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Shawn Severson: First, I’d like to thank you, Bart, for taking the time to speak with us today. The last time that we spoke with Westport Fuel Systems we discussed the European heavy-duty carbon dioxide emissions standards and regulatory environment with CEO, David M. Johnson. Today, our focus will be on the global LPG market. I understand you’ve been working in the alternative fuel systems industry since 1998. Can you share a bit about your background and your insights on how the global markets of alternative fuels have evolved over time?

Bart van Aerle: I started working in the alternative fuel industry directly out of school and I completed my thesis with a small company in the Netherlands who was importing propane/liquified petroleum gas (LPG) systems. In 1999 I started working for Prins Autogas Systems in Eindhoven, the Netherlands.  And in 2014 Prins was bought by Westport Innovations and became Westport Fuel Systems in 2016. In North America, we use the term propane but in Europe people refer to LPG or GPL or even Autogas when talking about the transportation fuel.

Technology has changed a lot over time. When I started, there were still cars with carburetor engines and then we moved on to cars with single-point injection fuel systems and then to multi-point injection (MPI) systems.  Now, we are using direct injection engine technology as well as direct injection with MPI technology. Actually, the new direct injection engines are better suited for LPG than for gasoline because LPG has a higher-octane number than gasoline which enables us to create better efficiency in the engine.

We are reducing both emissions and fuel costs, which is a unique investment proposal. When you are investing money in a propane system, you’re not only saving money, but you’re also contributing positively to the environment. I cannot think of anything else that works like that and this is what has kept me in the business for approximately 22 years.

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