An Outlook for Alternative Fuel Demand in Road Transport: The Case of the Irkutsk Region

The paper presents an approach to making projections of demand for alternative fuels in road transport with a focus on natural gas, electricity, and hydrogen. The proposed approach is based on chaining multiple simulation models (both econometric and deterministic) that capture the changes in the number of vehicles on the roads, sales structure, and energy efficiency. The models are tailored to available statistical data on the vehicle fleet in regions of Russia. We explore the main features of road transport in the Irkutsk region and project the demand for alternative fuels by the transport sector under the innovation-driven scenario of regional economic development. Despite recent vehicle purchases in the sector of municipal passenger transport and the increased motorization rate, today’s vehicle fleet is in need of renewal. The key takeaway from this study is that the growth of population will favor the market for vehicles running on alternative fuels; however, the market size depends on vehicle affordability, gas supply to the region, and government support.