Alternative Fuels for Commercial Vehicles: Asia-Pacific Setting Global Market Pace

May 04, 2016

Wellesley, Mass., May 4, 2016 –Asia-Pacific will represent the majority of all the new value in alternative fuels for commercial vehicles by 2020. BCC Research reveals in its new report that the region’s aggressive pursuit of reducing air pollution is spurring big market growth.

The global market for alternative fuels for commercial vehicles, estimated at $52.6 billion in 2014, declined in value terms to $39.3 billion in 2015 due to the major drop in energy prices. Based on a $40/bbl case scenario, the market would reach $54.3 billion in 2020. In a $80/bbl case scenario, the market would reach $80 billion in 2020. In a $120/bbl case scenario, the market would reach $107.8 billion.

By 2020, the end year of the five-year forecast, LPG (autogas) as a fuel type segment should remain the global market leader in all three oil price scenarios. It holds a 36% alternative fuel market share in 2015 and would retain a share of 29% to 34% by 2020 despite the significant growth of the other alternative fuels. This results in an increase in the value of alternative fuels in 2020 vs. 2015 of $1.3 billion even at $40/bb oil, and $22 billion in the $120/bbl scenario.

Compressed natural gas (CNG) as a segment fuel type, which currently holds the second-highest share at 23%, would retain its standing by 2020 in all three oil price scenarios. It is expected to hold a 24% to 27% share by 2020. The 27% share would occur if oil prices remain low because CNG is the most competitive fuel against diesel fuel, even at low diesel/oil prices. The 24% share would occur if oil rises to $120/bbl because at that diesel/oil price, many of the other alternative fuels that are non-competitive at $40/bbl become competitive with CNG. In value terms, the market for CNG should increase from $5.3 billion in 2015 to $17.2 billion by 2020, depending on the price of oil.

Biodiesel holds the third-highest share due to substantial government incentives and policy objectives. It has a 20% share in 2015, which would decline to 17% by 2020 at $40/bbl oil, and to 14% by 2020 at $120/bbl oil. The decline in share is due to the higher growth rates of all of the other more recent alternative fuels, and biodiesel’s frequent lack of economic competitiveness, even with government incentives. In value terms, the market for biodiesel should increase from $1.4 billion in 2015 to $7.1 billion by 2020, depending on the price of oil.

The Asia-Pacific region leads the world in the use of alternative fuels and will expand its lead considerably over the next five years, mostly due to governments’ cleaner air mandates. Asia-Pacific has 49% of the global share for alternative fuels for commercial vehicles in 2015, which should increase to between 54% and 56% by 2020.

“In 2015 the European, Middle Eastern and African (EMEA) region has two-thirds as much share, 33%, as Asia-Pacific. But by 2020, it will have only half as much share as Asia-Pacific, with 26% to 29%, even though EMEA is growing at a healthy 16.2% CAGR,” says BCC Research analyst Jon Gabrielsen. “By 2020, Asia-Pacific will represent 70% of all the new value in alternative fuels for commercial vehicles in the $40/bbl scenario and 61% in the $120/bbl scenario ($10.1 billion to $41.7 billion).”

The Global Market for Alternative Fuels for Commercial Vehicles (ENV033A) identifies and describes the numerous alternative fuels for commercial vehicles and their variants, estimating the breakeven oil price points for each fuel for each region at which they produce a favorable payback for commercial vehicles. Analyses of global market drivers and trends, with data from 2014, 2015, and projections of CAGRs through 2020 also are provided.

Editors and reporters who wish to speak with the analyst should contact Steven Cumming at steven.cumming@bccresearch.com.

The Global Market for Alternative Fuels for Commercial Vehicles( ENV033A )
Publish Date: Apr 2016    

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