Slow diffusion of LPG vehicles in China—Lessons from Shanghai, Guangzhou and Hong Kong

Compared with other alternative fuel vehicles (AFV), LPG vehicles (LPGV) have lower economic and technological barriers, leading to its faster growth in some developing countries in recent years. By means of regulation, Shanghai managed to have nearly all taxis converted to LPGV in the early 2000s, and all taxis and 80% of buses in Guangzhou are LPGV. Nevertheless, LPGV diffusion in China (excluding Hong Kong) has been slow and even showing signs of retreating. By 2008, less than 5% of taxis in Shanghai were LPGV. This paper looks into the problem by comparing the LPGV development of Shanghai, Guangzhou versus that of Hong Kong where the LPGV development seems to be running well. The obstacles of LPGV development in China include a lack of policy coherence between the central and local governments; insufficient price advantage of Autogas; not enough fueling stations; and high maintenance costs due to immature technology and poor quality control. Bi-fuel system has further magnified the problems in China. In order to facilitate the use of alternative fuel, efforts should be made to increase the number of AFVs as well as to ensure the availability and price-competitiveness of the alternative fuel concerned.

► LPGV development and policies of Guangzhou, Shanghai and Hong Kong are compared.
► Policy incoherence was a key factor to the slow diffusion of LPGV in China.
► Other obstacles include insufficient price advantage of LPG and high maintenance costs.
► Bi-fuel system (though flexible) magnified the problems of LPGV development in China.
► Other than acquisition of AFV, efforts are needed to promote use of alternative fuel.