Number Crunching in Transport

Friday, June 25, 2010


Sudhir Gota
  1. Can only rich countries afford to clean fuels?

Stringent emission standards do not depend on economic growth. Countries like India are switching over to EURO-4 at a low GDP/Capita of 1000$. This is significant as it debunks any theory that suggests that only rich countries can afford to consume clean fuels. Investigations suggest that the incremental costs of meeting the recommended level of fuel sulfur in Asia average 0.2–0.8 US cents per liter for gasoline and 0.5–0.8 US cents per liter for diesel. Latest reports from India suggest an increase of only 1 US cents per liter of gasoline and 0.6 US cents for diesel to shift from Euro-3 to Euro-4 fuels.

Notes – NP- Nepal, PRC-China, EU- European Union (average values), HK- Hong Kong, VN – VietNam, PH- Philippines, PK-Pakistan, IN – India, ID – Indonesia, SK – South Korea, TH- Thailand, MY- Malaysia, BD – Bangaldesh, SG – Singapore. 1,2,3,4 – indicates Euro standards 1,2,3,4 etc.

2. Can we leapfrog intermediate emission standards like EURO-III?

Many Asian countries have learnt the lesson of making faster evolution. Countries like India and China have made quick strides in getting more efficient vehicles on the roads and making the fuel cleaner. Within a decade they have progressed from standards 1 to 2 then3 and finally 4. Other Asian countries which have been slow can chart a different course and in fact can leapfrog as Philippines and VietNam intend to do. The solution lies in getting all the stakeholders to agree on a roadmap. The faster one sets the target and provides legal backing, better the chances of implementation as vehicles last for 15 years on an average.

3. Why it is important to clean up the fleet early?

Asian countries have a greater chance of cleaning the fleet as the motorization index is still low. The following table indicates that the Asian countries have initiated steps at an early stage thus ensuring introduction of better vehicles. Indonesia, Srilanka and Pakistan needs to make concrete plans for EURO-4 before the fleet starts accumulating on roads. Slow implementation would increase the fleet before effective measures are put in place for example – Thailand and Malaysia.

4. Can improving only LDV’s guarantee success?

Improving LDV’s is not the silver bullet. It’s only a part of solution. Majority of the Asian fleet is dominated by Non-LDV vehicles and the trend would remain the same even with high LDV growth rates. Vehicles like two wheelers and trucks need similar attention. Approximately only 30% of the fleet is composed of LDV’s.

% of LDV’s in the total fleet

In spite of rapid evolution in standards in some of the countries, majority of Asian cities have not yet ensured clean air. One of the main reasons for this is the inefficient management of in-use vehicles. Inspection and Maintenance is as important as cleaning future vehicles. This aspect has been neglected by the authorities thus allowing proliferation of old polluting vehicles.

5. Why Demand management measures are equally important?

The tail pipe policies need to be complemented by Non-tail pipe measures such as demand management measures. Singapore is an ideal example which does not have very stringent emission standards for new vehicles, but has effective vehicle ownership, usage control and good inspection and maintenance for pollution control of in use vehicles. This ensures better air quality.

6. How are countries accessing roadblocks in implementation?

Countries are trying to clean diesel faster than gasoline (example – Singapore), big cities faster than small cities (example – India and China). This is a very interesting development as it offers incentives and allows stakeholders to assess roadblocks in progression. The industry also has time to adjust to the changing fleet specifications. Contrary to the trend, Bangladesh and Pakistan are trying to clean gasoline faster than diesel.

7. Why target Fuel subsidies?

Translating quicker progression lies in removing fuel subsidies. Countries like Malaysia and Indonesia shell out 2.6-2.7% of GDP to provide artificial low cost fuels. This acts as a disincentive for refineries to pledge more support for cleaner fuels. It is to be noted that subsidized fuels cannot be considered as the service policy of the country but a product which is optimally priced.

8. Why Link Fuel Economy with Vehicle Emission Standards?

Fuel Economy- Vehicle Emission Standards – linking these two measures requires a new approach and it has the potential to provide huge benefits to the society. Currently countries are charting out different strategies rather than thinking of a modality to benefit from both by uniform application. Most often the institutions working out both the policies are nearly the same and thus two issues can be combined to maximize benefits by early implementation. For example, concept of Eco Cars in Thailand -– An Eco car meets minimum pollution standards of EURO4 or higher, emitting no more than 120 g CO2/km. To promote the sales of fuel efficient cars, the Ministry of Finance put in place a tax incen¬tive scheme which reduces the excise tax rate on standard passenger cars that meet fuel-efficiency criteria, and qualify as so-called “eco cars.” . Similar integrated system exists in Japan.

The other reason for linking these two standards is the impact of vehicle emission standards in reducing “Black Carbon”. Experts believe that reducing black carbon (BC) offers biggest impact on immediate climate mitigation. Black carbon is formed through the incomplete combustion of fossil fuels, biofuel, and biomass and switching to stringent emission standards can reduce the BC emissions.

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