Israel plans to cut oil use in transportation by 60 percent by 2025, an aggressive target by world standards, and will tap into its newfound natural gas deposits to make it happen.
It is also investing heavily to help start-ups developing battery and biofuel technologies, and is offering an annual $1 million (R10.34 million) prize to innovators in the field, almost on par with winning a Nobel.
Eyal Rosner, spokesman for the project in prime minister Benjamin Netanyahu's office, said: “The intent is to make Israel a power centre that has knowledge and industry in the field, and from there to serve as a catalyst for the rest of the world in making the switch.
The Fuel Choices Initiative programme has a 10-year budget of 1.5 billion shekels (R4.44 billion).
Rosner switching from oil would bring consumer savings and tax income that, together with environmental benefits, would add more than a percentage point to gross domestic product.
No single fuel will replace oil.
The government will draft regulation and help with tax benefits and infrastructure, but says it is up to the market to decide which succeeds.
Rosner forecast that the next five years would be dominated by compressed natural gas and natural-gas based methanol, with battery and biofuel technology penetrating the market as technologies improved.
Francois Cuenot, a transport and energy analyst at the Paris-based International Energy Agency, said: “Israel is certainly showing some great will, and certainly this is a very ambitious target to be achieved in a bit more than a decade.”
Israeli officials are confident; two of the world’s largest offshore gas fields, Tamar and Leviathan, were recently discovered in Israeli waters. With combined estimates of 810 billion cubic metres, the fields turned import-dependent Israel into a potential energy exporter.
Gas, like oil, is a fossil fuel, but burns cleaner.
In a best-case scenario, 70 to 90 billion cubic metres of the reserves will be used in transportation in the coming decades.
Delek Israel, a unit of conglomerate Delek Group that owns and operates 250 petrol stations, will complete Israel's first compressed natural gas station in 10 months. It signed this month a seven-year deal to buy $105 million (R1.1 billion) worth of natural gas from the Tamar field.
Chief executive Avi Ben Assayag said: “In the next five years there will be at least 40 CNG stations in the Israeli market.”
The cost of each station could reach $1 million (R10.3 million), and he expected Delek to keep its market share of about a third.
Compressed natural gas, he said, maked the most sense for heavy vehicles and would cost about half the price of diesel or petrol.
Delek has signed a deal with Italy's NGV Motori, an industry leader, to help convert Israeli fleets to CNG engines. A single truck would cost about €15 000 euros (R213 000) to convert, he said.
METHANOL MIXES
In a separate pilot at a small filling station in the northern port of Haifa, about a dozen cars have been running for months on various mixtures of gasoline diluted with methanol. The idea is to reduce costs and pollution.
Some of the cars are powered by a blend called M15, which contains 15 percent methanol, already used widely in China. Others run on a more concentrated M70, which pilot manager Yossi Antverg said had never been tried before.
Optimistic about the results, Dor Chemicals, which has spent $2 million (R20.7 million) on the pilot, plans to build a $700 million (R7.25 billion) plant that, according to the Dor Group website, will be able to produce a million tons of methanol a year. The facility will be the first of its kind in Israel.
CONVERTING CO2 INTO FUEL GAS
Start-up conpany NewCO2fuel, one of more than a dozen being promoted in the government initiative, is developing a technique to turn the common greenhouse gas carbon dioxide into a useful fuel gas mixture called syngas. Among other things, syngas can be made into methanol.
Their chemical reactor receives sunlight reflected by a large mirror that is concentrated at a temperature of 1000 degrees Celsius, hot enough to create syngas.
The two-year-old energy firm, half owned by Australia's Greenearth Energy and Erdi Fuels, plans to sell systems that would be built next to factories or power stations to collect carbon dioxide emissions and turn them into fuel.
CEO David Banitt said the company planned to start building a $50 million pilot in Australia within two years. The technology, he said, would be commercial in about four years. - Reuters