Burgeoning alternative fuel firms in Israel grow fivefold in less than three years

Government encouraging international collaborations

September 30, 2015 00:25
4 minute read.

A man points as he stands on a tanker carrying liquified natural gas, ten miles off the coast from Hadera. (photo credit: REUTERS)

As Israelis continue to research and develop alternative fuel technologies at home, the entrepreneurs working in this emerging field have an increasing opportunity to make a global impact, according to the country’s top official in the sector.

“Slowly, we started to take the companies that we have and introduce them to multinational [firms],” Eyal Rosner, director of the Alternative Fuels Administration in the Prime Minister’s Office, told The Jerusalem Post on Tuesday.

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Since the approval of the government’s Fuel Choices Initiative program in January 2013, the number of companies active in the alternative fuels sector in Israel has jumped fivefold to about 300, while associated research groups have risen fourfold to about 190, new data from the Alternative Fuels Administration show. Rosner recently presented these figures to the government as part of a comprehensive review of the progress made by the program, which received a NIS 1.5 billion budget for 10 years.

Critical to the ongoing progress in the sector is encouraging cooperation among Israeli companies and academics with those in the “main countries” advancing the field around the globe, Rosner explained. Some of the countries that Israel is focusing on include the United States, many European nations, China, India, Japan, and Canada – each of which has different specializations, he said.

Industry representatives from these countries have been coming to Israel frequently to both look for new technologies being advanced locally, as well as to explore opportunities to open or expand their operations on the ground here, Rosner added. For example, the Ford motor company recently decided to open a full office for research in Israel, while Porsche will also be launching a research center, he said.

Meanwhile, many delegations from all over the world will be coming to Tel Aviv in early November for the third annual Fuel Choices Summit.

As far as advancements at home are concerned, Rosner acknowledged that the country is slightly lagging behind its initial goals in the alternative fuels sector, but stressed that the industry is moving forward.

Among the main goals of the January 2013 Fuel Choices Initiative was reducing petroleum’s weight as an energy source for Israel’s transportation by 30 percent in 2020 and by 60% in 2025. Due to the onslaught of regulatory requirements necessary toward achieving these targets, Rosner said that Israel might not achieve these percentages precisely by these years, but should not be very far behind.

To meet the targets, however, the Fuel Choices Initiative called for simplifying regulatory processes associated with promoting technological developments in the alternative transportation field, as well as lowering the cost of living by reducing fuel prices.

In addition to decreasing the burden of petroleum on the fuel market, the program mandated that the government establish a comprehensive action plan about alternative fuel integration in the future. This action plan, the 2013 decision said, tasked the Transportation Ministry with defining safety requirements for compressed natural gas (CNG) use and formulating regulations for vehicles operating with multiple, “flex” fuel options, among other policy measures.

As part of the comprehensive action plan, the Finance Ministry and Tax Authority were assigned to cooperate with the Transportation Ministry on formulating regulations for new types of transportation.

The Economy Ministry, the Environmental Protection Ministry and the National Infrastructure, Energy and Water Ministry also received various responsibilities, such as removing industrial barriers, overseeing demonstration projects, and performing analyses of certain fuel sources.

At this point, Rosner said, most of the regulations stipulated in the comprehensive action plan have been approved, aside from a few specific cases. Regulations on tax benefits for CNG use are complete but have faced slight delay, and still require Finance Ministry approval, he explained. The Energy Ministry also still has a few issues that need solving, such as regulations related to CNG use at fueling stations, Rosner added.

“At the end of the day, we are pretty much there,” he said. “Now we need to see how the implementation is taking place. We hope to make some progress by putting some support in the initial phase and then see more and more people adopt these technologies.”

Particularly important is the transition of heavy-duty trucks and buses to CNG and electricity, as these vehicles consume about half the fuel used in Israel, Rosner explained.

“It’s all about the economics,” he said. “Our belief is that we will see the growing demand based on the fact that it’s actually cheaper.”

As the alternative fuels sector continues to surge forward and Israeli firms strive to enter the global market, Rosner said he is confident that the country will see more technology breakthroughs, particularly linked to energy and the smart mobility field. He pointed to companies like navigation app Waze and anti-collision technology Mobileye, both of which are now international giants.

The Alternative Fuels Administration, meanwhile, operates a fuel substitutes accelerator program in conjunction with Tel Aviv University’s Porter School for Environmental Studies – hosting up-and-coming entrepreneurs in two cycles annually, he added.

Rosner stressed that while the government’s role will remain critical in future advancements, ultimately the innovators themselves will need to choose their own directions.

“We are facilitators,” he said. “At the end of the day companies will have to work with companies and do what’s good for them. Our ability is to open doors.”

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