STRATEGIES FOR PROMOTION OF CLEAN AND ENERGY EFFICIENT TECHNOLOGIES IN THE URBAN TRANSPORT SECTOR

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STRATEGIES FOR PROMOTION OF CLEAN AND ENERGY EFFICIENT TECHNOLOGIES IN THE URBAN TRANSPORT SECTOR

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... 40% below diesel's for 7 year ... motivation: CME as diesel-fuel quality enhancing ... Mandatory use of at least 1% of CME in all government diesel vehicles ... – PowerPoint PPT presentation

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Title: STRATEGIES FOR PROMOTION OF CLEAN AND ENERGY EFFICIENT TECHNOLOGIES IN THE URBAN TRANSPORT SECTOR


1
STRATEGIES FOR PROMOTION OF CLEAN AND ENERGY
EFFICIENT TECHNOLOGIES IN THE URBAN TRANSPORT
SECTOR
The Case of Metro Manila, Philippines
Society for the Advancement of Technology
Management in the Philippines
Research paper prepared under the Asian Regional
Research Programme in Energy, Environment and
Climate Phase III (ARRPEEC III) funded by the
Swedish International Development Cooperation
Agency and coordinated by the Asian Institute of
Technology.
2
TWO ISSUES
  • Air Quality Impact of Selected Technological
    Options
  • Analysis of Measures to Overcome Barriers for
    Wider Adoption of the Technological Options

3
TECHNOLOGICAL OPTIONS
  • Compressed Natural Gas (CNG)
  • Liquefied Petroleum Gas (LPG)
  • Coconut Methyl Ester (CME)
  • DOEs Alternative Fuel Program
  • Energy independence
  • Fuel diversification
  • Environment protection

4
Compressed Natural Gas
  • 1 July 2005 PGMA launched 2 CNG buses
  • 35 CNG buses by August Batangas-Manila route
  • 200 CNG buses between December 2005 March 2006
  • HM Transport to run 80 CNG buses
  • ADB to fund 50 CNG buses (P4 to 6 million)
  • CNG fuel to P14.52 per diesel liter equivalent
    50 of diesel price

5
Compressed Natural Gas
  • Natural Gas Vehicle Program for Public
    Transport, 2002
  • Construction of Batangas-Manila gas pipeline by
    2007
  • Exclusive franchise and bus routes to CNG users
  • CNG retail price 40 below diesels for 7 year
  • Lower tariff from 20 to 1 for NGV OEMs, parts,
    etc.
  • Income tax holiday for bus operators, refilling
    stations, conversions shops, NGV assemblers
  • Fast-track issuance of Environmental Clearance
    Certificates for NGV facilities and refueling
    stations

6
LIQUEFIED PETROLEUM GAS
  • Emerson taxi operating autogas vehicles in Cebu
    City since 1984
  • Nine major LPG suppliers in RP Thailand has 7.
  • 171 independent refillers nationwide
  • 29 refilling plants in Metro Manila
  • DBPs US150 million lending facility under
    Clean Alternative Transport Fuel Financing Program

7
COCONUT METHYL ESTER
  • Economic motivation RP as major supplier of
    coconut oil in world market
  • Technical motivation CME as diesel-fuel quality
    enhancing additive
  • 2001, Biodiesel Development Project was launched
  • 2003 National Clean Diesel Task Force was
    created
  • MC 55 (Feb. 2004) Mandatory use of at least 1
    of CME in all government diesel vehicles

8
EXPECTED ENVIRONMENTAL BENEFITS
Reduction in emissions relative to Diesel (CNG
CME) Gasoline (LPG)
CNG1
LPG2
CME3
60
-
20 39
PM
50
20
NOx
90 95
75
CO
20 40
50 70
HC
85
1DOE 2PLPGA 3Senbel
9
AIR QUALITY IMPACT ESTIMATION
  • Hanna (1971) ambient pollutant concentrations
    estimated at various receptor locations under
    typical wind conditions
  • Modeling Urban Air Quality (MUAR) developed by
    AIT
  • Metro Manila 103 cells, 3 x 3 km
  • Year 2000 traffic data on 400 intersections
  • DENR-EMB 2001 emissions inventory of 134
    establishments
  • 1996 hourly wind data monitored at the NAIA
    station

10
AIR QUALITY IMPACT ESTIMATION
  • Pollutants TSP, PM10, CO, NOX, SOX, HC
  • annual average 24-hour concentration levels,
    except for CO, 8-hour
  • SCENARIOS
  • Business-as-Usual (BAU) Scenario
  • Least-Cost Scenario (LCS)
  • optimal vehicle mix based on 30 PM10 mitigation
  • Clean Technology Scenario (CTS)
  • 50 of cars on LPG
  • All diesel UV and trucks use 1 CME-diesel blend
  • All public buses on CNG

11
TSP Concentration BAU (2010)
TSP Concentration BAU (2020)
12
TSP Concentration BAU (2010)
TSP Concentration LCS (2010)
13
TSP Concentration BAU (2010)
TSP Concentration CTS (2010)
14
NOx Concentration BAU (2010)
NOx Concentration BAU (2020)
15
NOx Concentration BAU (2010)
NOx Concentration LCS (2010)
16
NOx Concentration BAU (2010)
NOx Concentration CTS (2010)
17
AIR QUALITY IMPACT
Number of Grid Cells with Unsafe Pollution Levels
TSP
NOx
24-hour
One-year
24-hour
Base (Y2000) 11 39
91
BAU
Y2010 29 56
97
Y2020 32 62
100
LCS
Y2010 15 40
93
Y2020 9 34
96
CTS
Y2010 4 7
92
Y2020 4 11
96
18
HEALTH IMPACT Cases due to PM10
BAU
URBAIR 1992
2000 2010 2020
Excess Death 1,300
2,027 4,692 12,189
Chronic bronchitis 12,000
19,433 44,979 116,849
Restricted activity days 11.0
18.3 42.3 109.8 (million)
Respiratory symptom days 35.0
58.1 134.5 349.4 (million)
Value of lost man-days 3.5
5.9 13.5 35.1
(2005 prices billion pesos)
19
HEALTH IMPACT Cases Prevented
CTS
LCS
2010
2020
2010
2020
Excess Death 1,261
7,806 4,482 11,388
Chronic bronchitis 12,092
74,827 42,966 109,168
Restricted activity days 11.4
70.3 40.4 102.6 (million)
Respiratory symptom days 36.2
223.7 128.5 326.4 (million)
Value of man-days saved 3.6
22.5 12.9 32.8 (2005
prices billion pesos) (27) (64)
(96) (93)
20
BARRIERS TO ADOPTION CNG
  • Infrastructure for CNG distribution
  • Critical gas transmission pipeline from
    Batangas to MM network of gas refilling stations
    in MM
  • Mother-daughter system (South Luzon tollway by
    August 2005)
  • Pricing of CNG
  • Target is 50 price wedge
  • 40 off contract price for power sector (7 years)
  • Distribution cost fiscal incentives to
    investors of refueling stations
  • Excise tax on transport fuel

21
BARRIERS TO ADOPTION CNG
  • Investment in CNG vehicle
  • Conversion vs. OEM P300,000 vs. P4 6 million
  • 7 accredited bus operators (185 buses) 6
    pending applications
  • wait-and-see attitude bus operators
    prospective investors of refilling stations
  • Estimated cost of refilling station US110,000
  • Other issues
  • Convincing public about safety and reliability
    of CNG vehicles
  • Ensuring market competition in supply and
    distribution of CNG

22
BARRIERS TO ADOPTION LPG
  • Users investment on vehicle engine conversion
  • Conversion cost P25,000
  • Savings in maintenance expenses
  • Oil filter change at 20,000 km instead of
    10,000 km
  • Spark plug replacement after 75,000 km instead
    of 18,000 km
  • Engine overhaul at 400,000 km instead of 200,000
    km
  • Upfront investment cost

23
BARRIERS TO ADOPTION LPG
  • Pricing
  • June 2004 40 price difference between
    unleaded gasoline and LPG
  • LPG for domestic, commercial and industrial use
    subject to excise tax if used in transport
  • Cross-subsidy among petroleum products
  • Safety concerns and distribution network
  • Estimated cost of LPG refueling station
    US35,000

24
BARRIERS TO ADOPTION CME
  • Cost of CME-diesel
  • additional P0.30 per liter at 1 blend P0.60 at
    2 P1.50 at 5
  • price of copra in world market
  • PCIERD financial feasibility study Tablas,
    Romblon
  • critical price of copra P7/kg actual average,
    P23/kg
  • PCA estimates saving from fuel efficiency P0.92
    to P2.85 per liter

25
BARRIERS TO ADOPTION CME
  • Supply of CME
  • 1 blend 5 of CNO production
  • Only 3 manufacturers pass fuel standards set for
    CME
  • Technical Concerns
  • Impact on engine may void vehicle warranty
  • Worldwide Fuel Charter allows up to 5
    vegetable ester blend
  • Handling and distribution
  • Stability of fuel mix in bulk storage
  • Where to blend depot, retail station, lorry

26
MEASURES TO OVERCOME BARRIERS
  • PRICING

a) Exempt alternative fuel from excise tax
b) Impose pollution tax on conventional fuel
c) Combine excise tax exemption on alternative
fuel with pollution tax on conventional fuel
d) Mandate use of alternative fuel
27
MEASURES TO OVERCOME BARRIERS
  • Users investment on vehicle

a) Low-interest loan
b) Tax credits for cost of vehicle acquisition
c) Exemption from import duty and value-added tax
d) Discount on vehicle registration fee and
traffic perks
28
EVALUATION OF POLICY OPTIONS
  • Analytical Hierarchical Process (AHP)
  • qualitative quantitative factors
  • Criteria
  • Policy cost
  • Ease of implementation
  • Availability of funding for implementation
  • Macroeconomic impact
  • Political acceptability
  • Effectiveness of policy or users acceptance

29
EVALUATION OF POLICY OPTIONS
  • Survey respondents
  • Policy-makers DENR, DOF, DOST, DOTC, DOE
  • Potential users
  • Bus 20 operators (2,967 buses)
  • Taxi 9 operators (1,032 taxis)
  • Jeepney 4 federation heads

30
POLICY RANKING
CNG LPG CME
Excise tax exemption 1 1 2
Pollution tax 4 4 4
Mandate use 2 2 1
Excise tax exempt 3 3 3 pollution tax
31
POLICY RANKING
CNG LPG
Low interest 3 4
Tax credit 4 3
Tax exemption 1 2
Low registration fee 2 1 traffic perks
32
CONCLUSIONS
  • Ratings are too close and depend on weights
    assigned to criteria
  • No one policy ranks consistently high in all
    criteria
  • Strong dislike for pollution tax
  • If government were to prioritize, then
  • (1) LPG, (2) CME, (3) CNG
  • Fewer hurdles in LPG
  • RD support for CME
  • Transport sector should not be made to shoulder
    the burden of developing downstream market for CNG
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