In an effort to revolutionize its transportation sector and reduce environmental impact, Peru has been making significant strides in promoting the use of cleaner fuels such as Compressed Natural Gas (CNG), Natural Gas Vehicles (NGV), and Gasoline-LPG (GLP) blends. This initiative is part of the country's broader commitment to sustainable development and a greener future.
The Ministry of Energy and Mines (MINEM) has been at the forefront of this movement. Through the Energy Social Inclusion Fund (FISE), MINEM has been implementing the NGV Savings Program, which aims to encourage the conversion of vehicles to natural gas. This program has been particularly beneficial for motorcycle taxi drivers in various regions of Peru. Motorcycle taxis are a popular mode of public transport, especially for short journeys and in areas with complex geographies. The NGV Savings Program allows motorcycle taxis with gasoline and Liquefied Petroleum Gas (LPG) combustion systems to be converted to the CNG system. In provinces, drivers are granted a discount voucher of S/2,000, and the remaining cost of S/500 is financed over a 3-year period without interest. In Lima and Callao, the bonus is available for units switching from LPG to CNG. Regions like Ica, La Libertad, Cusco, Piura, Junín, Lambayeque, and Ancash are already reaping the benefits of this financial support, with plans to expand to Cajamarca, Arequipa, and Tacna in the near future.
In addition to motorcycle taxis, MINEM is also focusing on heavy vehicles. A new modality for converting heavy vehicles from diesel to NGVs has been introduced through the FISE NGV Savings Program. This initiative focuses on modifying the engine to adapt it to CNG use, with a maximum financing of S/50,000, no interest, and a repayment period of up to 5 years. This not only helps in reducing fuel costs by up to 50% for users but also has a positive impact on the environment. From November 2021 to April 2024, more than 2,402 tons of CO2 emissions have been avoided thanks to the conversion of heavy vehicles to CNG with the help of FISE.
The impact of these initiatives is evident in the numbers. According to the Peruvian Automotive Association (AAP), in the first half of 2024, 24,383 vehicles were converted to NGVs, although the number was 10.9% lower than the previous year. If the current pace continues, around 50,000 conversions are expected for the whole year, which is less than the 2023 figure of 56,000 and the 2022 record of 74,000. The AAP attributes the decrease in conversions in the first half of 2024 to the lack of comprehensive and effective public policies to encourage the shift to a more environmentally responsible energy matrix for vehicles. Another factor is the decline in the price of petroleum fuels, which has reduced the incentive for conversion. However, despite these challenges, NGV users saved a total of 1,443 million soles in the first six months of 2024 by using natural gas instead of petroleum derivatives. Since NGVs entered the Peruvian market, the cumulative savings have reached 25.226 billion soles, directly benefiting the owners of these vehicles and enhancing their purchasing power.
The use of CNG in Peru has also had a significant impact on reducing CO2 emissions. A study by the Supervisory Agency for Investment in Energy and Mining shows that between 2006 and 2019, the use of CNG in various sectors, including electricity generation, industry, and transport, mitigated a total of 13.5 million tons of CO2. If CNG had not been used, CO2 emissions would have accumulated to nearly 40 million tons during that period. Moreover, CNG is cost-effective, being on average 70% cheaper than diesel, 70% less than gasoline, and 33% less than LPG.
Peru's initiatives in promoting CNG, NGV, and GLP are not only contributing to a cleaner environment but also bringing economic benefits to its citizens. As the country continues to expand these programs and overcome the challenges faced, it is moving closer to achieving its goals of sustainable development and a healthier planet.
