Grant awarded for LPG conversion study

THE Victorian government has allocated $60,000 for a feasibility study that will investigate if a new Geelong-based LPG vehicle conversion centre is viable.

The centre, which is being promoted by the Victorian Automobile Chamber of Commerce (VACC) and Gas Energy Australia (GEA), has been proposed to utilise some of the workforce laid off when Ford's engine plant closes in 2016.

A large number of newly created roles could also soak up some of the other redundancies created by the closure of all local automotive manufacturing in 2017.

If approved, a new centre would convert freshly imported cars to run on the cheaper liquid petroleum gas, while maintaining the original car-maker's build quality and the vehicle warranty.

However, for a new centre to work, significant interest in LPG-fueled vehicles would need to be rekindled, reversing the declining trend of LPG cars on Australian roads.

Attracting new customers to the fuel is included as part of the strategy, as is the construction of a research and development centre to set quality standards for the conversion industry in a bid to improve its reputation.

It is also hoped that the increased use of Australian LPG will help reduce CO2 emissions by the transport fleet, while cutting Australia’s burgeoning energy import bill.

The decision to put the funding towards a study to gauge the potential demand for LPG conversions was welcomed by Elgas, the country’s largest supplier of LPG under the Autogas brand.

“Reinvigorating the new and retrofitted Autogas small and heavy vehicles market in Australia will provide a significant boost to the regional skilled workforce, and reduce vehicle emissions by 15 per cent,” said Elgas general manager Cameron Ure.

The Victorian move comes after the expiration of Federal Government rebate incentives for conversion of vehicles to LPG.

Under that agreement, a total of almost $600 million was paid out, with owners of converted new vehicles receiving $1000, while $2000 was paid back to owners who had converted a used vehicle.

Despite the incentive, conversions had fallen steadily in recent years with analysts blaming competition from efficient diesel engines, a big swing to smaller vehicles and a reputation for LPG of being a cheap fuel used for taxis.

Mr Ure said Government support for the Autogas industry was critical if it was to justify the $3 billion invested in 3000 refuelling stations and Autogas distribution systems.

He said the Government support provided a new opportunity “to reinvigorate a high-value industry”.

“On-road testing and research tells us that Autogas saves motorists money and reduces emissions, all without compromising vehicle performance,” he said.

Australia has an abundant supply of LGP, which could potentially offset liquid fuels imported from Asian refineries, in the wake of almost all of Australia’s petrol refining capacity being decommissioned.

Mr Ure said Elgas, the Victorian Government, the VACC and Gas Energy Australia were committed to arresting the downturn of a significant and viable Australian industry.

The decline in the public’s use of LPG as a fuel coincides with an increasing use of gas by the freight industry, and In 2014, AGL signed a long-term deal with Toll Holdings to provide compressed natural gas to its fleet of interstate trucks.