Strategies for development and implementation of NGV in Italy Gabriele Gozzi NGV Italy, Responsable Relaciones Asociaciones

Natural Gas International Scenario The natural gas market is undergoing a period of profound change. In a scenario of steady growth in the consumption - grew in the period with an average annual rate of 2.7% and expected to expand by 1.7% annually in the horizon from 2012 to a number of factors contribute to redefine substantially the global geopolitical balance, current and future. In general, the removal of the fields of production from the centers of consumption makes it increasingly necessary to resort to international trade to meet the needs of gas in individual national markets. In this global context, the transportation of gas by ship is better able to respond quickly to the emergence of new demand components, thanks to its characteristics of flexibility. This circumstance is particularly significant in some areas such as the Far East, North and South America where the location of the fields on the one hand, the relative scarcity of other pipelines, likely to partition the markets, hindering the meeting of demand. Furthermore, it is important to highlight that the Liquefied Natural Gas (LNG) can contribute, in perspective, to overcome the regionalization that still distinguishes the international gas market. the natural gas is still a cornerstone for the growth of the system, covering more than a quarter of final energy consumption. Looking ahead, however, this role is intended to consolidate also by virtue of the environmental impact relatively small, and due to the decline in the use of oil and nuclear. In this scenario, it should be emphasized the importance of the infrastructure for a strategic asset development

Natural Gas International Scenario The old concept of infrastructure is still based on huge pipelines, although recently there is a new and strong attention to LNG terminals, ships on LNG and very important projects are going on for LNG. New investments in the segments of the transport, storage and regasification ensure the complete independence of network access and to focus the development of the necessary infrastructure in a competitive and diversified way. The potential of natural gas. A very important role for the potential of natural gas is the role of NGV (CNG + LNG). Regardless of the different possible scenarios in terms of international energy policies, natural gas is the only fossil fuel for which demand worldwide is destined to grow significantly. The development prospects of the market, however, vary depending on the region concerned and the investment on infrastructure, which remain the main pusher for the NGV development, with investments in R&D, safety, training. NGV infrastructures being much more widespread combines more people than any other infrastructure, see goods transport in Eurosai, different blue corridors, TEN-T, DAFI, etc. NGV Italy aim is to pass this message, we deal with just this - to unite people through the development, transfer of best practices in the field NGV where we are pioneering and where Italy has a leading position in Europe being the first country that believed and developed to an OEM level the use of natural gas as automotive fuel.

Natural Gas Strategies for Transport and Mobility NGV System Italia is the association representing the natural gas for transport ation and gas Industry in Italy. Established in 1996, it assembles the most important manufacturers of natural gas and Bio-methane related products and promotes the use of this alternative friendly fuel for transport and applications. A strategic alliance of Companies which: Embodies LDV and HDV OEMs highly qualified Italian system and equipment manufacturers and gas suppliers Collaborates with National, European and International certification bodies in the development of standards. Is an exclusive and privileged platform for information and knowhow exchange. Is the major stakeholder representing all parties interested in the future growth of the NGV market segment.

Why Natural Gas Fuel choice drivers ENVIRONMENTAL SUSTAINABILITY  INDEPENDENCE FROM OIL AND OIL EXPORTER COUNTRIES  BALANCED MIX BETWEEN ENERGY SOURCES  INDEPENDENCE FROM OIL AND OIL EXPORTER COUNTRIES  BALANCED MIX BETWEEN ENERGY SOURCES  PARTICULATE (PM)  GASEOUS POLLUTANTS (NO X )  GREEN HOUSE GAS: CO 2  NOISE REDUCTION  FUEL AVAILABLE AS RENEWABLE SOURCE (BIO- METHANE)  PARTICULATE (PM)  GASEOUS POLLUTANTS (NO X )  GREEN HOUSE GAS: CO 2  NOISE REDUCTION  FUEL AVAILABLE AS RENEWABLE SOURCE (BIO- METHANE)  FUEL COST  OVERALL COST / KM  100% MATURE TECHNOLOGY  FUEL COST  OVERALL COST / KM  100% MATURE TECHNOLOGY REDUCTION OF TOTAL COST OF OWNERSHIP (TCO) ENERGY SECURITY 6

Italy – The Natural Gas Industrial Business HUMAN RESOURCES NATIONWIDE  employees ON ROAD FILLING STATIONS  CNG + 1LNG + 8L-CNG NG CARS and LDV  NG FLEET TRUCKS and BUSES  DEDICATED WORKSHOPS  SME MANIFACTURERS with WORLDWIDE RECOGNITION  50 TURNOVER IN COMMERCIAL and INDUSTRIAL SEGMENT  Million €

New NGVs in Italy

AN INCREASING NG MARKET: PUBLIC TRANSPORTATION 9 YEAR NG BUSES Total public Buses Total Buses A New Law (2015) states EURO 0 buses shall be put out of order starting from 1/1/ 2019 Almost 8,500 Buses shall be replaced in the next 5 year NGV Italy estimates almost 80% of new Buses will be NG fuelled Total investment in 5 years: 1,87 Billion €

% OF NG BUSES 10

CNG Consumption in Italy - Future scenario

DAFI Directive Deployment of Alternative Fuels Infrastructure: CNG & LNG

Implementation of Directive on the Deployment of Alternative Fuels Infrastructure (DAFI)

Natural Gas value chain Pipelines Vs. LNG ships Today, approximately two thirds of international gas trade is by pipeline, one third as LNG

Main Advantages of LNG for Transport Fuel capacity D range = km Refuelling timing in 4-5 minutes Specific use for long haul missions on road Mature technology already available 1

17 LNG Potential Market and Environmental Impacts 2025 SCENARIO Current fuels taxation Current rules and regulations for transport system Availabilty of LNG filling stations to ports and logistic platforms according the max distances disposed by DAFI 2025  Fleet rate 8% HDV >19 t. Euro IV with LNG HDV - 4% CO2- 7,2% NOx - 26,1% PM moves/day ( 25% of total market of road freight transport ) Potential fuel market 3,2 Mton (4 Mtep). Modelling Tool Comprehensive Road Network Italy (source: csst-iveco)  IVECO Stralis LNG vs. Diesel on mission Roma-Genoa - 4% CO2- 49,4% NOx - 93,4% PM10

The LNG Fuelling Station in PIACENZA LNG vertical cryogenic tank for liter LNG dispenser single - capacity: 130 l/min - «full» for HDV in 4 minutes LNG dispenser double - capacity: 960 kg/h. Current filled fleet : 105 HDV LNG Iveco Stralis (330 hp). Truck Tanks: n 1 LNG tank cap. 725 liters; n 4 CNG tanks cap. 70 liters (spare alimentation) The Italian Infrastructural System

19 Interaction Between Stakeholders Opportunities in Italy POLICY MAKERS / LEGISLATOR / ASSOCIATIONS  INVESTMENTS ON INFRASTRUCTURE  STABLE POLICY ON TRANSPORTATION  MEDIUM-LONG TERM POLICY ON FUEL TAXATION  DEFINE THE STANDARD / PROCEDURES  SUPPORT THE DEVELOPMENT OF INFRASTRUCTURE AND RESEARCH  STABLE POLICY ON TRANSPORTATION  MEDIUM-LONG TERM POLICY ON FUEL TAXATION  DEFINE THE STANDARD / PROCEDURES  SUPPORT THE DEVELOPMENT OF INFRASTRUCTURE AND RESEARCH  AFFORDABLE TRANSPORT SOLUTION  ENLARGE THE PRODUCT OFFER IN ORDER TO BETTER FULFILL CUSTOMERS’ REQUIREMENTS  DEMONSTRATE NG TECHNOLOGY 100% MATURITY AND SAFETY  AFFORDABLE TRANSPORT SOLUTION  ENLARGE THE PRODUCT OFFER IN ORDER TO BETTER FULFILL CUSTOMERS’ REQUIREMENTS  DEMONSTRATE NG TECHNOLOGY 100% MATURITY AND SAFETY OEMs OIL GAS COMPANIES  TEST THE ALREADY AVAILABLE TRANSPORT SOLUTIONS LOGISTICS AND ENVIRONMENTAL SERVICE PROVIDERS  AFFORDABLE TECHNOLOGY TECHONOLOGY PROVIDERS SYSTEM MANUFACTURERS  PROVIDE NEW TECHNICAL AND AFFORDABLE SOLUTION  PROMOTE AND IMPROVE COMPETENCE OF OPERATIVES  PROVIDE NEW TECHNICAL AND AFFORDABLE SOLUTION  PROMOTE AND IMPROVE COMPETENCE OF OPERATIVES

The National Strategic Plan for LNG System NGV Italy has been appointed to prepare a study for Ministry strategic plan for Heavy Duty on road transportation.

The National Strategic Plan for LNG System

The Planned Scenario for Italy For the year 2030 Italy estimates a NG share of 10% on the total fuels consumption. This estimation is based on several inalienable factors: -Current fuels taxation -Current rules and regulations for transport system -Availability of LNG filling stations to ports and logistic platforms according the max distances disposed by DAFI -Competitive prices of LNG HDV The growth of infrastructures needs relevant investments (around 4÷5 Billion €). - Eni in progress with a business plan to the development of LNG infrastructures, forecasting the opening of 20 new stations along the Ten-T network in Italy The CNG filling stations are growing (average +50 new stations every year), pushing up the potential development of LNG facilities - This growing trend is estimated until 2020, according the implementation of DAFI Directive. The outlook of 2020 scenario: 10% of new CNG facilities will be L-CNG, suitable to satisfy the future demand of LNG for long distance haulage

The Natural Gas International Academy (The NGIA) - NGV Italy Advocancy 23 Experience and Professionalism – In 1939 the first gasoline to natural gas converted vehicles roll on. More than 25 years HD and LD OEM experience, Italian was the first OEM dedicated engine. Ensuring NGV safety is a critical Scope of the NGA training program Courses dedicated to potential investors in the natural gas business and to government decision makers to explain the high potentiality of natural gas alternative fuels and all advantages to pursue the scope fixed by UE for the next 30 years on enviroment policy. Marketing and sales training can deliver significant business benefits. Training employees in better sales technique of alternative fuels vehicles, customer service skills and marketing expertise helps boost sales and improve customer satisfaction. Training programs to cover both compressed and liquefied natural gas, vehicles technology, worshop conversion systems, workshop maintenance, fueling practices, fueling stations, and overall fleet management. Safety special training.fueling stations Our team is well known globally as most experienced in natural gas business: ISO Tech. Committes and Standards, OEM and CNG engine, electronic and System industry experts, natural gas companies, all with more than 25 years’ experience.. Traning courses personalized on customer request.

The Natural Gas International Academy (The NGIA) - NGV Italy Advocancy 24 NGIA Vehicle Training Mission Statement NGIA aims to provide accurate and relevant technical training to prepare technicians to safely and competently install, inspect and service NGVs by utilizing professionally facilitated instructional techniques and certified performance based assessment.. Who should attend Technicians who will perform installation of equipment, maintenance and service on NGVs All employees involved in NGV fleet operations Decision Makers, Fleet managers and supervisors Corporate/agency safety managers Risk management staff Ensuring NGV safety is a critical responsibility for every fleet manager operating compressed natural gas (CNG) vehicles or liquefied natural gas (LNG) vehicles. Safety is the most critical training need for NGV technicians because of their daily contact with the fuel delivery system, storage and fueling equipment. Certification Will be released by a certification body accredited accordingly with ISO/IEC 17024, and member of the International Personnel Certification Association.

Obstacles and Opportunities for Natural Gas in Europe and Italy Aged vehicles and technologies / Infrastructures Lagging customer demand Cost of regulation Integrated fleet renewal effort Circulation restriction & implementation of DAFI Easy access to (EIB) credit in relation to clean vehicles Extension of the Green Public Procurement principle Coordination among EU member states, cities Integration and harmonisation Address add-up effect of individual measures International standards for infrastructures and vehicles Flexibility instead of rigidity Introduction in relation to customer demand and economic environment OBSTACLESOPPORTUNITIES/RECOMMENDATIONS

Thank you for your attention