Clean Air Initiative for Asian Cities Center
ROAD MAP FOR CLEANER FUELS AND VEHICLES IN ASIA Bert Fabian and Sudhir Gota CAI-Asia Center 7th Asian Petroleum Technology Seminar “Advancement of fuel quality and refining technology for the next generation” February 18-20, 2009 New World Hotel Saigon, Ho Chi Minh City, Vietnam
Urban Air Quality Levels in Asia Aggregated Annual Ambient AQ Trends, μg/m3 (1993 to 2007)
• Air quality in Asia is improving but still far above WHO limits • PM is main pollutant of concern • Ozone becoming a problem WHO (1979) TSP guideline, 60-90μg/m3 WHO (2005) SO2 24-hour guideline, 20μg/m3 WHO NO2 guideline, 40μg/m3 WHO (2005) PM10 guideline, 20μg/m3
Source: CAI-Asia, 2008
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CO2 Emissions in Asia – Road Transport
Source: 2008. ADB, CAI-Asia, and Segment Y Ltd
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PM Emissions in Asia – Road Transport
Source: 2008. ADB, CAI-Asia, and Segment Y Ltd.
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Increasing Motorization
Source: 2008. ADB, CAI-Asia, Segment Y Ltd., and IEA
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Vehicle Age Distribution Projections for 2015 Vehicle age as of 2005
Projections for 2025
Projections for 2025
Projections for 2015
Vehicle age as of 2005
%
Euro 2 Euro 2
Years – Indicates age of Vehicle w.r.t .2005,2015 and 2025)
Indonesia
Vietnam
Important to introduce stricter standards as early as possible as today’s new vehicle is tomorrow’s old vehicle Source: 2008. ADB, CAI-Asia, Segment Y Ltd
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What can be done? Drive based Measures Try to reduce the VKT, Increase occupancy etc Try to reduce emissions by better maintenance of vehicles Try to reduce emissions by using clean fuels such as CNG etc. By using clean Vehicleswhich adhere to emissions standards, which use vehicle technology etc.
Individual Action
Transport Planning and Demand Management Inspection & Maintenance
Sustainable Transportation Framework
Clean Fuels
Emissions Standards & Vehicle Technology
Clean Fuels is an important issue which is linked with Emission Standards and Vehicle Technology
Government Action www.cleanairnet.org/caiasia
CAI-Asia Center
Emission Standards for New Light-Duty Vehicles
Source: CAI-Asia. 2008, Emission standards for new vehicles (light duty). Available: http://www.cleanairnet.org/caiasia/1412/articles-58969_resource_1.pdf
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CAI-Asia Center
Fuel Quality Standards in Asia (levels of sulfur in diesel) 1996
1997 1998 1999 2000 2001 2002
Bangladesh
2003
2004 2005 2006 2007 2008 2009
2010 2011 2012
5000
Cambodia
2000
Hong Kong,
1500
500
10a
50
India (nationwide)
5000
2500
500
350
India (metros)
5000
2500 500
350a
50a
Indonesia
5000
Japan b
500
Malaysia
5000
Pakistan
10000
Philippines
5000
PRC (nationwide) e,f
5000
2000
PRC -
5000
2000
Singapore
3000
South Korea
500
430
Sri Lanka
10000
5000d
Taipei,
3000
500
Thailand
2500
500
Viet Nam
10000
3500 50 500c
3000
Source: CAI-Asia, 2008
10 50a
500d
7000c 2000
500 2000 & 500 500
500
350
50 50
350
100
30
15(10)f
500 100 350
50 150
50 500
European Union United States
350
50(10)f
500 500
10
15
> 500 ppm
51 – 500 ppm
< 50 ppm
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Road Map Process • Outcome of a long process that began with the CAI-Asia – Oil Dialogue for Cleaner Fuels in Asia, a meeting in July 2003 in Singapore, where 12 major regional and national oil companies • Consultations with various organizations • Preparation of the report by key experts • Consultation workshop – May 2006, ADB HQ, Manila • Revision based on comments and additional chapter on octane-enhancing additives • Finalization with inputs from various organizations • Road show in cooperation with the UNEP Partnership for Cleaner Fuels and Vehicles www.cleanairnet.org/caiasia 10
CAI-Asia Center
Developing Fuel&Vehicle Road Maps •
Fuel quality is seen as not only essential for directly eliminating or reducing pollutants such as lead, but also as a precondition for introducing many important pollution control technologies
•
Air Quality Management efforts will usually also include activities aimed at reducing emissions from stationary sources and area sources
•
Emission reduction from mobile sources will also have to include I/M and transport demand oriented measures
•
The absence of detailed emission inventories and source apportionment studies should not prevent Asian countries from developing cleaner fuel roadmaps
•
Fuels and vehicle engines and emission control devices are an integrated system. The main benefits of reducing emissions will be realized through the coupling of cleaner fuels with advanced emission control devices. www.cleanairnet.org/caiasia CAI-Asia Center
Fuel Specifications (1) • Supportive research for fuel specifications has been well established and generally there is no need for Asian countries to replicate such research • Because most Asian countries have adopted European vehicle (Euro) emission standards, European fuel parameters are an important reference point, especially as the fuel quality and emission standards in Europe represent an integrated approach to reducing air pollution from the transportation sector. • Asian countries should aim to implement fuel parameters as defined in fuel specifications linked to European emission specifications – Asian countries with warm climate can apply variation in RVP – In some cases the adoption of a comprehensive set of fuel properties will delay the introduction of cleaner fuels substantially. In such the reduction of sulfur first may be prioritized. – Asian countries with large domestic refining capacity can consider applying US flexibility principle. Importing countries should avoid doing so. www.cleanairnet.org/caiasia CAI-Asia Center
Fuel Specifications (2) • Almost all Asian countries will be adopting increasingly stricter Euro emission standards, which require reduced sulfur fuels, with an ultimate goal of 50 ppm or less sulfur in diesel and gasoline. • The refining technology needed to produce cleaner fuels that meet Euro 4 or equivalent standards is well understood and has been successfully implemented in the United States and Europe • Leapfrog from Euro 2 to Euro 4 emission standards makes good technical and financial sense • Some Asian countries where air pollution from transport is severe should consider Euro 5 standards • Fuel quality monitoring is essential, especially where different fuel standards exist in the same country • The economic benefits of an integrated system of clean fuels and vehicles far outweigh the costs. The estimated benefit cost ratios of these programs are 15:1 in the United States, and 20:1 in the PRC. www.cleanairnet.org/caiasia CAI-Asia Center
Use of Octane Enhancing Additives • Serious concerns regarding the potential adverse health effects of metallic additives such as MMT and ferrocene, along with their potential adverse impacts on vehicle emissions and emission control system components. • Vehicle industry has raised concerns on the impact of metallic additives on vehicle emissions due to effects of these additives on emission control devices • Other additives, such as ethanol, MTBE, ETBE, and TAME, have not been shown to cause significant health effects • The environmentally responsible approach for Asian countries is to apply the precautionary principle for these metallic additives and to not use them until and unless the scientific and health studies show that they are safe • Longer-term solutions applied by many refineries to meet the gasoline octane requirements are capital investments in enhanced refining capacity and blend-stock selection, and the use of certain oxygenates www.cleanairnet.org/caiasia CAI-Asia Center
Short-term recommendations on use of Octane Enhancing Additives o Use of MTBE, ETBE and TAME should be limited to maximum allowable concentrations to 2.7% (mass O2) and respectively 15%, 17.1% and 16.6% by volume o Ethanol blending should be limited to 10% by volume and 3.7% by mass o Precautionary Principle to be applied for the use of metallic additives and use of MMT and Ferrocene should be discouraged. Criteria for use precautionary principle: Threat of serious or irreversible damage. Potential health concerns and impacts on vehicle emissions and emissions systems components Lack of full scientific evidence. The scientific evidence on health impacts of metallic additives from the developed world is not conclusive. Postponing cost-effective actions: High quality gasoline is being achieved across the world using a combination of refinery configurations, refining processes, and oxygenate-based additives but without metallic additives. Prevention. A strong signal should be sent to Asian regulators to ensure that the construction of new refining capacity minimizes the need for the use of octane enhancing additives, especially metallic-based additives
o If Asian countries do decide to authorize the use of MMT, ferrocene, or other ash forming metal based additives to raise octane, they should make this decision on a refinery-by-refinery permit basis, ensuring that they are used in limited concentrations and with a clear time table for phase out
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Timing of Introduction of Cleaner Fuels • Technology for fuel improvement is well established and can be applied in Asia on a norisk basis • Euro 4 Vehicle technology well established in Asia • Maximum lead time to move to Euro 4 or stricter is 4-6 years but in many cases can be shorter • Import of Euro 4 fuels can be considered pending the construction or modification of refineries to shorten the lead time for introduction of cleaner standards • Refinery expansion in Asia should be based on Euro 4 or stricter standards www.cleanairnet.org/caiasia CAI-Asia Center
Introduction Scenarios • Uniform introduction across country: o Advantages in terms of AQ impact provided specifications are strict enough o High short term costs to refining sector o Avoids misfueling o Flexibility provision for special markets (off-road and stationary)
• Prioritized introduction in selected cities: o o o o
Can be considered for large countries, e.g. India and China Requires availability segregated fuel marketing and distribution system Price differential whereby cleaner fuel should be cheaper Fuel quality monitoring important to ensure misfueling
• Harmonized standards across Asia: o Security of availability of cleaner fuels o Reduction in complexity for the vehicle industry
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Facilitation of Introduction of Cleaner Fuels • Experience worldwide indicates that governments can accelerate the introduction of cleaner fuels and their uptake in the fuels market through a balanced and thoughtful combination of tax and pricing policies. • Fuel quality regulations, combined with emission standards should be the backbone of any policy or strategy on cleaner fuels • Government policy to accelerate production or uptake of cleaner fuels o Public outreach and consensus building o Combination of tax and pricing policies o Temporary incentives can be used to speed up acceleration of market uptake of cleaner fuels • Cost for producing cleaner fuels needs to be passed on to consumer o Controlled pricing, still prevalent in some Asian markets precludes the opportunity to pass on costs o Increasing Asian markets are being deregulated opening up the possibility to pass on costs www.cleanairnet.org/caiasia CAI-Asia Center
Fuel Prices – Maximize the opportunity
• Take advantage of price/ tax differentiation schemes to finance fuel quality improvement and other SUT schemes • Move from ad-hoc pricing to formula-based automatic price adjustment to liberalized pricing systems – “decouple fuel prices with politics” Source: 2008. GTZ and others compiled from different sources by CAI-Asia
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Fuel Subsidy – Who pays ? Removing world energy subsidies - estimated at US$230 billion - could reduce global carbon emissions by 9 percent- World Bank (1992)
Government Subsidy ( in BILLION USD) Country
2006
2007
2008 (P)
Bangladesh
0.81
0.73
1.50
China
0.68
NA
1.79
India
0.64
0.74
17.50
Indonesia
5.90
9.31
19.60
Malaysia
4.00
4.70
10.83
Nepal
NA
NA
0.30
Pakistan
NA
2.70
6.90
Philippines
NA
NA
NA
Singapore
NA
NA
NA
Srilanka
0.09
0.15
0.28
Thailand
NA
NA
NA
Vietnam
0.61
0.73
3.20
Source :- Compiled from different sources by CAI-Asia
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Fuel Subsidy – Who benefits ? Figure 2: The fuel subsidy accruing to richer deciles larger than Indonesia's Total Public Health Spending 25,000
50,000 45,000
Diesel
40,000 35,000
Gasoline
30,000
B illio n R p . I n 2 0 0 5 p r ic e s
Per Capita Monthly Subsidy Transfer (2005)
Figure 1 The Fuel Subsidies were Regressive in Targeting
Kerosene
25,000 20,000 15,000 10,000
15,000 10,000 5,000
5,000
Indonesia's Total Health Spending in 2004 (in 2005 prices)
0 Poorest
20,000
2nd
3rd
4th
5th
6th
7th
8th
9th
Fuel subsidy to Richest 20% of population in 2005
Richest
Note: 2004 Health spending in inflated to 2005 prices using mid-year CPI index in June 2004 and 2005. Source: MOF, APBN and APBD I+II health spending in 2004, SUSENAS 2004 for incidence of fuel subsidy assuming no price hike in 2005.
Source :- In the Study - Fiscal Leakages & Poverty Impacts - The Case of Indonesia’s Fuel Subsidy and http://www.lankabusinessonline.com/fullstory.php?nid=653536714
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CAI-Asia Center www.cleanairnet.org/caiasia Sophie Punte, Executive Director
[email protected] Bert Fabian, Transport Program Manager
[email protected] Sudhir Gota, Transport Specialist
[email protected]
Unit 3510, 35th Floor, Robinsons-Equitable Tower, ADB Avenue, Pasig City, Metro Manila, 1605 Philippines
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