Sector: CNG

Luciano Rizzi, Oil&nonoil-S&TC

Oil&nonoil is an event dedicated to the fuel sector in general. We took the opportunity to talk to Mr. Luciano Rizzi, the fair's brand manager, particularly about Italy's CNG and LPG market. And here's what he told us.
Luciano Rizzi© Oil&nonoil-S&TCOil&nonoil 2015 is coming on October 28-29. Mark your calendar and be sure not to miss it

When was the first edition of Oil&nonoil held? How did it go?
The first edition of Oil&nonoil took place 10 years ago, in 2004. The event was focused on service station and car wash markets. Car wash was considered the only “non-oil” business in Italy and in many cases service station managers ran it directly. The positive results in terms of visitors and support of industry associations confirmed that we had identified the right drivers to develop a successful trade show. The event has grown year after year and, in 2012, Veronafiere, a major Italian trade show organizer, purchased Oil&nonoil-S&TC in order to create synergies with other owned events dedicated to automotive and logistic markets (such as Transpotec and Automotive Dealer Day).

Oil&nonoil takes place in Veronafiere in even years and in Rome in odd ones. The 2015 edition will take place on October 28-29 at the Palazzo dei Congressi in Rome, the heart of the Italian “oil district”.

What prevailed among the fair exhibits – systems, cars powered with LPG or CNG, hybrids, electric vehicles or something different?
The event is devoted to the entire fuel and gas depot/transport industry and to the activities/services associated with service station business (nonoil business). At the beginning the exhibition was made by companies producing car wash plants, accessories and detergents and by those dealing with equipment for diesel and petrol stations (10 years ago you could most find these two fuels only). In 2008 we launched S&TC (Fuel Storage and Transport), a section devoted to fuel tank manufactures and related equipment for measurement and storage. In the last three editions there was a substantial increase in the number of companies offering products and systems for the design and construction of compressed natural gas service stations (CNG stations). This fuel, always considered minor, is today a vital sector that shows a positive trend, both in terms of cubic meters sold and with regard to the sale of vehicles. Simultaneously, the distribution network more than doubled in the last 10 years.

How does the fair exhibition look like now? What has changed? How do companies prepare for the event?
As I’ve just said, over the years the event has gained new sectors, becoming a not-to-be-missed appointment. Oil&nonoil is not only business, it’s an opportunity to keep up with market dynamics, legislation, activities of institutions, associations and companies.

Many companies have by now scheduled Oil&nonoil in their annual event program and they invest significant resources in the fair: booths (often big ones) are carefully designed to welcome customers, workshops are organized to present new products and corporate communication begins months before the show opening.

Who is the average visitor?
Oil&nonoil is aimed primarily at service station independent owners (52% of the stations are owned by private investors). Other important categories of visitors are oil companies, large retailers (“newcomers” that are increasing the number of stations owned), fleet managers and car wash operators.

What does the Italian market of autogas (LPG, CNG) look like in comparison with hybrids and electric cars?
CNG has always been present in Italy, where there is a great tradition dating back to the 1930's. Until the mid-50s there were more than 1,300 CNG filling station. Then diesel and gasoline prevailed on the market and they were cheaper. This (together with car manufacturer production choices) made the use of CNG less popular. Over 10 years more than 90% of CNG distributors were closed and in the mid 60s there were only 95 left, mostly located in Northern Italy. The oil crises of '73 and '78 revived interest in CNG. At the end of the 70s there were 217 distributors. The high taxation introduced by the government in 1976 penalized CNG until the early 90s, when a better economic, commercial and political environment allowed development of the sector.

Currently in Italy we have 1034 CNG service stations (as of November 2014), including 19 along highways. 77% of natural gas vehicles circulating in the EU are in Italy (according to NVGA Europe), which means that of about 1,1 million CNG vehicles, almost 850 thousand are in Italy. That's nearly 10 times more than in Germany, second in the standings with fewer than 100 thousand CNG vehicles. More and more car manufacturers are investing in CNG models, not only Fiat, but also Volkswagen, Audi or Mercedes.

The electric car market is, at least in Italy, still in its infancy. A few hundred cars are sold per year and charging stations are still not widespread and not evenly dispersed. The European Union is pushing for the development of this market, but it will take a few more years and there are some issues to deal with, such as battery life and purchasing costs.

What are the biggest issues and challenges the CNG sector faces today?
CNG vehicles and the service station network should grow simultaneously to meet the growing demand. CNG cars are nowadays safe and have better performance, so people are more willing to buy them as they can save money on refueling and CNG is less polluting than other fuels. But more models are necessary to make the market grow.

On the other hand, CNG service stations are not universally present and the network needs to be widened. This takes time because of the heavy investment required and red tape for the opening. Another issue is delay in the approval of the regulations for self-service fueling (not yet allowed in Italy), which would encourage consumption. Then there’s the debate within the EU on CNG taxation that is on average lower than taxation of other fossil fuels. This has been justified by the lower pollution generated from CNG, but that, according to supporters of the free market, introduces elements of competition distortion on the fuel distribution market.

Does the government support development of gas fuels? How?
Periodically the Italian government allocates funds to finance incentives for the purchase of CNG cars that usually cost more (as they carry CNG tanks). It is a direct stimulus for the automotive sector and more CNG cars mean more cubic meters of fuel sold and higher demand for methane suppliers. The network of service stations grows accordingly. Support comes from many regional regulations, too: a “third fuel” (LPG or CNG) is mandatory when opening a new service station.

Why is it worthwhile to participate in Oil&nonoil?
Oil&nonoil is a major event for all professionals in the sector, both Italian and foreign: the wide range of products and services allows you to see and “touch” the latest products and services and to find the most suitable solutions for your business simply and quickly. The numerous conferences and workshops are an opportunity to keep up with market developments, such as the recent development of liquid natural gas (LNG) that will become increasingly important for the long-haul freight.

Above all, attendees come to meet the people with whom they do business, to shake their hands, look in their eyes, and assess whether a company’s product matches the company’s hype. They come because relationships matter in business and, despite the worldwide reach of the Internet, a relationship cannot only be electronic. It must be personal.

Thank you for the conversation.
My pleasure. All the best to all readers!


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Ewa Litwińska
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