What is the Government doing to assist motorists by fostering the development of Compressed Natural Gas as a fuel for Australian vehicles.

The Government has introduced a number of initiatives to promote Compressed Natural Gas (CNG) as an alternative fuel.

The Australian Government’s Energy White Paper outlines a generous framework for the alternative fuels sector to develop and promote their products in the marketplace. CNG is excise free until 2011. There will be a transitional introduction of effective excise rates from 2011 to 2015. However, the final excise rate for CNG in 2015 will still be 50% lower than other transport fuels of similar energy content reflecting a range of industry, regional and other factors.

Natural gas fuels require specialised tanks and specialised refuelling equipment. As a result, CNG in Australia to date has primarily been used in heavy vehicles such as buses, trucks and in garbage collection, which have the advantage of centralised refuelling depots and sufficient storage space in the vehicle to facilitate the additional fuel tank. CNG is used in around 1,100 public transport buses in Australia, mainly Sydney, Perth, Brisbane and Adelaide. Of these, 718 have been funded under the Australian Government’s $33.6 million Alternative Fuels Conversion Programme (AFCP).

The AFCP was launched in January 2000 and provides grants for the purchase of CNG, LNG and LPG powered heavy vehicles, and the conversion of diesel-powered heavy vehicles to these fuels.

Through the AFCP, I am advised that Government officials have worked in partnership with transport operators and gas industry stakeholders on seven demonstration projects in an attempt to identify the conditions under which natural gas heavy vehicles could be developed to deliver greenhouse benefits to the community and economic benefits to vehicle operators. The results of these projects will be made available to all interested parties following completion of the trials.