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President of Russia Vladimir Putin: Good afternoon, colleagues,

Today our agenda focuses on expanding the use of natural gas as a vehicle fuel, which will lead to increased energy efficiency, lower transportation costs and better environment, especially in big cities.

This is a highly relevant issue today, and we have already discussed it several times, including at the meetings of the previous Cabinet, and the new Government has inherited this task.

The consequences involved are both economic and environmental. Natural gas is cheaper than petroleum or diesel fuel, and in addition, its use reduces emissions. Experts estimate that only in Russia cars emit a huge amount of harmful substances daily, and the annual volume amounts to 14 million tonnes of harmful emissions. 14 million tonnes! Switching to natural gas reduces emissions by two to three times.

Natural gas as a vehicle fuel is used in more than 80 countries worldwide. It should be noted that each year the world's fleet of vehicles that run on natural gas increases steadily. Unfortunately, Russia holds the 20^th place in the number of natural gas cars, despite our sizeable reserves, which amount to 20% of the world's reserves of natural gas, and I will come back to this point later. Undoubtedly, we have every opportunity, both in terms of the resources and technology available to us, to take up the leading positions in this sector.

Suffice it to say that as I said, 20% of natural gas is concentrated in Russia, and this in itself is a good stepping stone and gives us a clear competitive advantage in this area. We have established a network of filling stations and are gradually increasing the fleet of natural gas vehicles. The Russian Railways have shown an interest in using natural gas fuel. Many regions are ready to start using natural gas vehicles for public transportation. The Navy can use natural gas fuel. However, in order for natural gas fuel to become widely used and for it to become profitable for the transportation sector, we must address a whole range of issues.

First, we must speed up the adoption of a comprehensive legal framework governing the production, storage, transportation and use of natural gas fuel, including the development of modern technical requirements in this area.

Second, it is essential to raise the interest in natural gas vehicles among consumers, actively promote their technological and economic advantages, and encourage both individuals and government agencies to purchase such vehicles by providing various benefits and incentives.

Incidentally, many countries where natural gas fuel is used have such a system of support measures and incentives. It is important that the domestic auto industry responds to the demands of the time and offers modern and advanced vehicles that run on natural gas. The industry already has projects in this area.

Third, we must create the conditions for expanding natural gas fuel infrastructure and special service stations so that the owners of natural gas cars have no trouble with the refuelling and repairs. Therefore, we must offer support for the companies that operate in this market, remove the existing administrative barriers, which, as I have already mentioned, is normal practice all over the world.

Yesterday, the Government issued an instruction on this issue and approved a set of measures to promote the use of natural gas as a vehicle fuel. There are a few points I would like to make in this regard. I have already mentioned that the previous Cabinet began work in this area, and about six months ago the current Government discussed the need to move forward. Yesterday the colleagues issued an instruction to draft a set of measures.

If we take another six months to draft and agree on a set of measures (I know that this happens sometimes), if we debate all the different options, we can draw out the job unnecessarily. I ask the colleagues to bear this in mind and speed up all these approvals. This is the first point.

Second, I didn’t see anything there. We must work with consumers on this issue – not just with motor fuel suppliers, but also with consumers. We are to look closely at the problems that they encounter in this area.

Finally, the third and very important point is the safety issue. This requires special attention. We must envision ways to monitor the use of natural gas vehicles. As you know, there was an accident in Moscow just recently involving a bus that ran on natural gas. Another incident, though one that did not involve transport, occurred yesterday when a gas cylinder was being unloaded in a café. It is necessary to pay close attention, bearing in mind that if we expand the network of natural gas vehicles and build filling stations, this issue will become very serious. The most modern equipment must be used.

Clearly, we must adopt the most stringent standards to ensure safety. In particular, this applies to the requirements of regular and quality maintenance. I draw your attention to the fact that the number of hybrid and electric vehicles is growing because they are becoming more affordable and easier to use thanks to a gradual reduction in charging time. We must take into account the growing market of such cars; otherwise we may fall behind global technological and business trends.

I hope we will also talk about the possible risks that arise here, that is, purely technological and business risks. We will also deliberate which vehicles it would be most expedient to switch to natural gas. Let's discuss all these matters.

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