Title: STRATEGIES FOR PROMOTION OF CLEAN AND ENERGY EFFICIENT TECHNOLOGIES IN THE URBAN TRANSPORT SECTOR
1STRATEGIES 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.
2TWO ISSUES
- Air Quality Impact of Selected Technological
Options
- Analysis of Measures to Overcome Barriers for
Wider Adoption of the Technological Options
3TECHNOLOGICAL OPTIONS
- Compressed Natural Gas (CNG)
- Liquefied Petroleum Gas (LPG)
- Coconut Methyl Ester (CME)
- DOEs Alternative Fuel Program
- Energy independence
- Fuel diversification
- Environment protection
4Compressed 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
5Compressed 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
6LIQUEFIED 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
7COCONUT 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
8EXPECTED 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
9AIR 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
10AIR QUALITY IMPACT ESTIMATION
- Pollutants TSP, PM10, CO, NOX, SOX, HC
- annual average 24-hour concentration levels,
except for CO, 8-hour
- Business-as-Usual (BAU) Scenario
- Least-Cost Scenario (LCS)
- optimal vehicle mix based on 30 PM10 mitigation
- Clean Technology Scenario (CTS)
- All diesel UV and trucks use 1 CME-diesel blend
11TSP Concentration BAU (2010)
TSP Concentration BAU (2020)
12TSP Concentration BAU (2010)
TSP Concentration LCS (2010)
13TSP Concentration BAU (2010)
TSP Concentration CTS (2010)
14NOx Concentration BAU (2010)
NOx Concentration BAU (2020)
15NOx Concentration BAU (2010)
NOx Concentration LCS (2010)
16NOx Concentration BAU (2010)
NOx Concentration CTS (2010)
17AIR 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
18HEALTH 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)
19HEALTH 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)
20BARRIERS 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)
- 40 off contract price for power sector (7 years)
- Distribution cost fiscal incentives to
investors of refueling stations
- Excise tax on transport fuel
21BARRIERS 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
- Convincing public about safety and reliability
of CNG vehicles
- Ensuring market competition in supply and
distribution of CNG
22BARRIERS TO ADOPTION LPG
- Users investment on vehicle engine conversion
- 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
23BARRIERS TO ADOPTION LPG
- 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
24BARRIERS TO ADOPTION CME
- 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
25BARRIERS TO ADOPTION CME
- 1 blend 5 of CNO production
- Only 3 manufacturers pass fuel standards set for
CME
- 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
26MEASURES TO OVERCOME BARRIERS
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
27MEASURES 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
28EVALUATION OF POLICY OPTIONS
- Analytical Hierarchical Process (AHP)
- qualitative quantitative factors
- Availability of funding for implementation
- Effectiveness of policy or users acceptance
29EVALUATION OF POLICY OPTIONS
- Policy-makers DENR, DOF, DOST, DOTC, DOE
- Bus 20 operators (2,967 buses)
- Taxi 9 operators (1,032 taxis)
- Jeepney 4 federation heads
30POLICY 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
31POLICY RANKING
CNG LPG
Low interest 3 4
Tax credit 4 3
Tax exemption 1 2
Low registration fee 2 1 traffic perks
32CONCLUSIONS
- 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
- Transport sector should not be made to shoulder
the burden of developing downstream market for CNG