About our Guest
In this episode we have the amazing opportunity to talk with Edoardo Di Giamberardino. The interesting thing about Edoardo is that he has developed a great eye to technically understand the trends on natural gas vehicles, hydrogen and renewable fuels hedged on his specialty in market valuations, company research and stocks knowledge. We got a deep dive on several topics including CNG, LNG, Fuel Cells and more. Here is what we learned.
The China study case for LNG
Edoardo did a great job mentioning the big plans of China since as early as 2011 for developing a massive transportation system based on LNG to reduce the pollution of densely populated cities which experience a huge peak in 2017.
It’s clear to say that if you want to know where are we going in our future, is good to have a look to what’s happening in China. As we knoe, other alternatives include electric powered heavy-duty trucks and hydrogen (fuel cell) trucks. However, both still need quite a bit of time to overcome technical challenges before they can be commercialised and reduce the cost of the vehicle as well as the fuel to be attractive. Even though, the investment in electric buses is still growing.
The Natural Gas Vehicle recap in the USA
As Edoardo reminds us, in early 2010’s low oil prices was the main trigger to develop CNG stations in the United States, and that’s what moved the industry for a while. Later in the years 2014-2015 there was a big oil price collapse, and the price difference disappeared, and with that, curiosity disappeared, and the attention of fleet owners for CNG.
But what has changed? Today, we have very strict regulations in many important markets. Places like China, the EU, India, and also the US, are very strict with their emissions policy, which makes it impossible for all versions of Diesel Trucks to operate without incurring in severe penalties. The big regulatory framework that was so much expected in our industry, is already here.
So when you have increasing labor costs, stable but increasing fuel costs -because oil price is not that cheap anymore- and when you have strict regulations incoming, the only thing you can do is to look for the cheapest solution and the one that can bring you easy operability. The Natural Gas proposition is simply essential at this point in time.
About Germany and LNG transportation
Germany is an interesting case to analyze for Edoardo. They have been at the forefront of the energy transition for the past 20 years, they have decarbonized a lot the electricity sector. But even existing a lot of incentives for electric and hydrogen, there are no real executions of electric and hydrogen trucks. Also, in 2020 new incentives were granted in the form of exemptions of motorway tolls for LNG and CNG trucks until 2023. These are decisions that put really in perspective the position of Natural Gas Vehicles for the upcoming years. The government is saying that this is the only way to decarbonize trucks at the moment.
And Biomethane in Germany also gets incentives
Another decision that Edoardo tells us is the incentive in Germany on Biomethane producers. For the year 2021 Biomethane users, like fleets, will not pay any CO2 tax that will be in place for any fossil fuel. This will explain the growth of CNG and LNG in the region.
You can read one of the latest articles by Edoardo with the link below:
What about Westport Fuel Systems
It’s clear that Westport is for sure the most important Company in the Natural Gas Vehicle market. Today they’re solving the biggest issue with regard to natural gas trucks through their HPDI engine which enables natural gas trucks to equate with Diesel trucks when it comes to torque comparison.
From the perspective of Edoardo he could spot a stock price growth trend since 2019, that was correlating with income growth. There was a huge growth that could very soon become in actual profits net income positive, and that was uncommon. For Westport it was supposed to be 2020, but COVID happened. But still for Edoardo 2021 can be turned into their first profitable year.
Westport Net Margin for 2020 was -2.91%
Today, Westport is even working in delivering a H2 internal combustion engine, which would be very interesting to look at. They have already completed the initial startup of H2-HPDI engine, and early test results validate modelling, demonstrating that HPDI has comparable efficiency to fuel cells in heavy-duty applications which could signify a breakthrough. It is estimated that a Hydrogen power train could be priced at about 3x less that fuel cells at this moment.
About Solid Oxide Fuel Cells and Natural Gas
Almost at the end of the episode, we talked to Edoardo about fuel cells and Solid Oxide Fuel Cells that can actually be fueled with methane, even renewable natural gas (RNG). Here the efficiency is about 60%, which is much higher than an Internal Combustion Engine, and the CO2 emissions could be cut between 50% or 60% and zero particle emissions.
The trick here is that fuel cells have been known for being expensive and not much reliable. But now there is a very interesting company that found a way to miniaturize SOFC, and this company is called Ceres Power. But the most interesting part is that they are partially owned by Weichai Power, and partially owned by Bosch, and those two names together would probably develop vehicle solutions. And rightly so, they have already begun trials on buses in China, on vehicles in Europe, and also on ships in South Korea with their partnerships that are currently developing these solutions.
This can be huge. This could mean that eventually the whole natural gas infrastructure could be used for transportation operations with electric powertrains on trucks, buses, and ships, with a lot fewer emissions than those of internal combustion engines. There’s a long path to follow still. Products like these take time, we are maybe 4-8 years behind to see those readily available.
Also take a look to Advent Technologies
The case for Advent is that they manufacture PEM fuel cells, but they don’t need pure hydrogen and probably can be fueled with non-pure hydrogen, natural gas or methanol through the use of reformers. Another appealing use case for trucks in the future.
In the end, a very illustrative episode with Edoardo, always at the vanguard of the technologies that will guide the future of the alternative fuel industry. Hopefully we will have a new episode with him very soon.