Energy Forum 40: Natural gas for transportation in Israel

Cite As:
Grossman Gershon, Shapira Naama. Energy Forum 40: Natural gas for transportation in Israel Haifa Israel: Samuel Neaman Institute, 2017.

The problem of air pollution, resulting from the emission of pollutants in exhaust gas from motor vehicles, is growing worse, in the world and in Israel - especially in city centers. Compressed natural gas (CNG) is currently considered the most promising alternative fuel because of its availability and ecological advantages. Globally, there are millions of vehicles operating on Natural Gas (NG). In Israel there are still no vehicles operating on NG (except for 2-3 vehicles with an experimental status), but the discovery of the gas and the increasing use of gas for the production of electricity and industry constitutes an opportunity for the NG market Transport.

The NG has many advantages for use in transportation: it is cheaper than Diesel, it is a "clean" fuel that meets the requirements to reduce air emissions and reduce noise, does not contaminate the soil and water, is lighter than the air and therefore very volatile and safe to use, in contrast to Liquefied Petroleum Gas (LPG). An existing car can be converted to work with gas or two fuels (bi-fuels), and most manufacturers offer vehicles specially designed for use with NG (up to 400 hp).

The Government of Israel adopted a decision in 2010 to encourage the use of alternative fuels for transport, primarily NG, and the government ministries have joined the mission: The Ministry of Transport has announced that it will grant 150,000 NIS per bus that will be fueled by NG (November 2015). The Ministry of Environmental Protection allocates resources to encourage the reduction of air pollution in heavy transportation (2016). The Ministry of National Infrastructures encourages the use of NG for transportation and issued a tender for the encouragement of the construction of NG fueling stations at a cost of NIS 65 million (October 2016). The Ministry of Finance will determine the tax rate on NG for transportation.

In spite of all this, as transport has encountered many obstacles in the regulatory aspects, which hinder the development of the NG-driven transport economy. Among the barriers are the lack of fueling infrastructure, high construction costs for a refueling point with unique problems due to the need to connect to the gas distribution / transmission system, and the costs of conversion of Diesel engines to gas. In addition, it is still not possible to determine the cost of transportation gas in Israel due to uncertainty regarding Excise Tax which will be imposed.

The total gas market in the world includes 23 million vehicles and more than 28,000 fueling stations. In California, where the price of various fuels is similar, the state has decided that student transport buses will be driven by gas, while in Europe and the United States there are high penetration rates in fleets with relatively short circular routes, such as city buses and garbage trucks. The widespread use of CNG for vehicles in Europe requires the deployment of a network of thousands of CNG stations in all the countries of the continent (a new EU directive was published last January). The Forum participants unanimously agree on the expected benefits from the conversion of heavy transportation in Israel to NG. NG is beneficial both for the economy and for the consumer for many reasons. The State of Israel aspires to energy independence, with electricity generation from NG currently amounting to 60% -70% of total production, and striving to achieve a similar situation in transportation. In addition, NG has a clear advantage in reducing air pollution.


  1. Proper information and explanation are crucial for advancing the issue. The government must use all possible channels: Create field focal points, talk to each and every factory, municipality, truck fleet operator, explain and market the economic and environmental advantages of switching to NG in heavy transportation. In addition, it is important to emphasize the essential differences between NG and LPG.
  2. The government should stop supporting LPG and release the money in favor of NG. LPG, which is a distillate of crude oil, does not represent diversity in Israel's energy sources and does not contribute to the issue of reducing pollutants.
  3. Focused activity is required to remove statutory barriers in order to enable shortening of the times for the deployment of the transmission and distribution network of the NG and for the construction of fueling stations.
  4. Synchronization - All the incentives (excise tax, setting up fueling stations and upgrading the distribution networks) must be synchronized, and synchronized with the real timetables, so that the excise tax increase will occur not before 2030. This will give the economy breathing space and will create certainty.
  5. It is recommended to approve technologies for use during the transition period, such as a tanker / mobile filling station, until permanent fueling stations are established.
  6. In order to expand and optimize the information on air emissions and air pollution from transportation in Israel, it is recommended to promote tests by means of a dedicated apparatus for measuring actual emissions from vehicles, rather than relying on manufacturers' declarations.

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