It is possible to place the Auto CNG and Oto LNG refueling stations under the canopy, such as LPG refueling units, or under a separate canopy within the station boundaries. In this way, three different market activities can be carried out under the same canopy.
The definition of auto CNG and auto LNG and the requirements of auto CNG – auto LNG license have been added to the legislation in recent years with the amendment made to the natural gas market Licensing Regulation. With this change, interest has been turned to the auto CNG and auto LNG market, which is already widespread and continuing to expand in Europe and which is promising in parallel with the developments in Europe in our country.
The supply of natural gas to vehicles takes place in the form of compressed CNG (Compressed Natural Gas) and liquefied LNG (Liquefied Natural Gas). The number of vehicles consuming CNG and LNG in Turkey is less than in Europe due to the lack of a widespread network of stations. Creating a widespread station network has not been possible as of today. However, in the light of the latest developments, the legislative amendment that defines the said activities and introduces new regulations in the Natural Gas Market Licensing Regulation has been made by the Energy Market Regulatory Authority with the establishment of the stations, which started to be supplied by CNG and LNG, which started under the leadership of the private sector, and the number of them increased.
In Europe, the number of station infrastructure and vehicles is increasing day by day, in line with the directives and policies issued by the European Union, both due to policies aimed at reducing carbon emissions and energy costs, as well as threats to depletion of Petroleum types. With the introduction of Clean Fuels stream across the European Union and the use of sources such as electricity, biofuels and hydrogen as fuels, as well as LNG and CNG, which are included in the “Europe 2020 Strategy Document” widespread has accelerated.The European Union’s numbered 2014/94/EU and dated 22 October 2014 directive on the expansion of alternative fuel supply infrastructure set out the targets for auto LNG and auto CNG supply planned to be reached by the end of 2020, 2025 and 2030 and required member states to establish a CNG-LNG supply station network. As a result, the number of Auto CNG and Auto LNG refueling stations and vehicles has risen to a remarkable point within the scope of the policies towards turning to alternative energy sources that described, especially in countries where Italy and Germany are the leading ones.
While the number of auto CNG supply stations installed in Turkey is quite limited, according to the report released in 2019, there are 1324 Auto CNG stations in Italy and 921 in Germany. Together with Italy and Germany, which are the leading companies in this field all across the Europe, the total number of CNG stations is around 3000. The number of vehicles powered by CNG-LNG or dual fuel system (CNG/LNG + diesel) is still very low in Turkey compared to Europe.
In Italy alone, more than a million vehicles operate with CNG, while in Turkey it is still around a few thousand. Only when working with more than one million CNG vehicles in Italy, yet several thousand in Turkey. Nevertheless, it is a pleasing development to see that hundreds of CNG buses have been purchased, especially by the municipalities. As can be easily acknowledge from the data, especially Italy and Germany, in technical terms, natural gas supply stations, compressors and other technical equipment specialized in the production and support arms are leading in this field as well. In addition, South Korea and China are able to produce in this field with advanced technologies. In our country, there are companies that produce in this field and they increase their production and sales day by day in parallel with the developing market.
Due to the strategic market support in Europe and also the market development trend in Turkey, it is inevitable to follow the developments in the fuel sector in terms of both distributor and franchisee license market players and to evaluate this situation in the face of current developments.
Entrepreneurs who wish to engage in auto CNG or auto LNG activities need to know that firstly, they have to obtain a license under the Natural Gas Market legislation, as well as they have to fulfill other obligations specific to the Natural Gas Market. License terms and principles are regulated within the scope of Natural Gas Market License regulation and other market-specific legislation. In the auto CNG and auto LNG market, where there is no dealership system, unlike in the fuel and LPG market, the licensed companies provide the supply personally and sell it to the final consumer.
CNG; According to the usage area, it is priced in two different categories as Auto CNG and Industrial CNG. This pricing differs according to the SCT (Special Consumption Tax) load that each product is subjected to. The CNG Sales License was granted to the tenderers who shall be engaged in CNG activities, Auto CNG and Industrial CNG activities were carried out under the same license. However, with the amendment published in the Natural Gas Market License Regulation on 24.05.2017, while CNG Sales License authorizes only for industrial sales, Auto CNG license has been issued for Auto CNG activity. In case the companies that are holding CNG sales license wants to engage in auto CNG activity in the said facility, they are obliged to change their license and convert their license to auto CNG license by paying the license modification price by applying to EMRA. Likewise, companies wishing to perform LNG sales activities until the change of the regulation in question are obliged to obtain a Wholesale (auto LNG) License for auto LNG after this change while they are continuing their activities under the natural gas Wholesale License. The requirements for obtaining a license are regulated under the Natural Gas Market Licensing Regulation. The documents that must be submitted by the applicant legal entity in the application file to be prepared for any license to operate in the natural gas market are as follows:
- License application petition
- Trade Registration Certificate, signature circular, documents such as partnership structure
- Financial statements, participation and activity information,
- Market experience file
In addition, the information and documents to be included in the auto CNG and auto LNG license files and the explanations related to them are as follows:
Business and Operation License (GSM)
The obligation to offer GSM license in license applications within the scope of the Natural Gas Market License Regulation was introduced with the regulation change dated 19.03.2015.
Before that, GSM license requirement was not required for license applications by the Natural Gas Department. As of this date, it is obligatory to present a notarized copy of the 2nd class GSM license, which has been taken in the license application files within the scope of the Regulation on Business and Work License entered into force with the Cabinet decree dated 14.07.2015 and numbered 2005/9207.
TSE Service Competence Certificate
In order to obtain Service Competence Certificate (SCC), it is necessary to apply to the Turkish Standards Institute. Compliance of the station is audited by TSE according to TS 13612 standard for Auto CNG stations and 13772 standard for Auto LNG stations and SCC is arranged for the facilities deemed appropriate. It should be noted that the prerequisite for obtaining a GSM License is the SCC submission. As such, these two requirements are linked.
In the natural gas market, it is imperative that the capitals of license holders are above the lower thresholds determined for each license. In case the same legal entity is to acquire more than one license, it is essential that each license has more capital than the sum of its minimum thresholds. The minimum capital amounts set for 2020 are TL 1,736.146 for auto LNG wholesale licenses and TL 939,256 for CNG sales licenses.
Master Agreement Requirement
In accordance with the Natural Gas Market License Regulation, the provisions that must be included in the articles of association of the legal persons applying for licenses are specified in the Regulation. The articles of association shall need to be amended to include these essential statements. However, it is worth reminding that all direct and indirect share transfers of ten percent (five percent in publicly held companies) and above of legal entities licensed in the Natural Gas Market will be subject to the permission of the Energy Market Regulatory Authority.
Technical information related to the facility
In the license application file, technical information such as the capacity of auto CNG and auto LNG supply equipment and detailed information about the facility are also requested. It is necessary to remind that the Energy Market Regulatory Authority, in case of missing information in the license application file, gives 10 days to complete them and returns the file if it is not missing for the duration. It shall also be useful to consider that additional information and documents shall be requested by EMRA.
If we look at the history of the fuel sector, considering how the number of LPG supply stations increased rapidly in parallel with the number of vehicles and those who first adapted to this change in the market took a few steps forward, the auto CNG and auto LNG market should also be looked at in this way. For the moment, due to primarily transformations that generates savings for heavy commercial vehicles retained for these tools, factory CNG or LNG for vehicle manufacturing companies to produce passenger cars and light commercial vehicles to the domestic market will become increasingly attractive tools for consuming and bringing it Market. It should be reminded that passenger cars and light commercial vehicles consuming CNG are currently produced by some vehicle manufacturers in our country and, as expected, due to the supply station restrictions, are imported to Italy and Germany rather than to the domestic market.
Finally, it should be noted that it is possible for auto CNG and auto LNG supply stations to be placed under the canopy at fuel stations just like LPG supply units or under separate canopy within the station boundaries. In this way, three separate market activities can be carried out under the same canopy. However, with the installation of solar panels for the production and sale of electricity on the canopy, which has been frequently talked about in the market recently, the Electricity Market legislation will also have entered the life of the station operators. In this way, it will not be a remote possibility to see the stations where four market activities are carried out simultaneously under and above a canopy.