Mongolia CLEAN AIR INITIATIVE

Transcription

1 Mongolia CLEAN AIR INITIATIVE Operational Framework for Fuel Substitution Presentation to NCC Ulaanbaatar, 23 rd June 2009

2 Overview of Presentation Introduction Fuel Supply Producer Switching Incentives Fuel Composition Analysis Fuel Performance in Selected Stoves Legal Framework Public Communications Strategy Next Steps

3 Introduction EBRD - invited by the President of Mongolia to provide assistance in addressing Ulaanbaatar s air quality issues. EBRD - provided technical cooperation based assistance to target the elimination of raw coal usage and substitution with cleaner, smokeless fuel. All work has been undertaken in conjunction with current Government initiatives and in consultation with NCC and other donors. Outcome: An Operational Framework for Fuel Substitution in Ulaanbaatar City.

4 Fuel Supply Fuel supply chain: mining and processing, transportation, wholesaling, and retailing. Three main coal supply chains: Baganuur Alag Tolgoi Nalaikh Baganuur Alag Tolgoi Nalaikh Depot Depot Mine MNT 15,000 MNT 25,000 MNT 15,000 Wholesale yards Wholesale yards Wholesale yards Wholesale yards Depot MNT 35,000 MNT 55,000 Wholesale yards MNT 60,000 MNT 90,000 MNT 70,000 Wholesale direct to ger districts residents Wholesale for bagging Retail bags MNT 130,000 MNT 105,000 Retail purchases Profit margins consistent with developing country norms and comparable with margins in retail sector in developed countries.

5 Fuel Supply To enable a shift to cleaner fuel distribution, need to: Achieve and maintain an efficient supply chain for cleaner fuel products Ensure competition in supply chains continue Utilise other existing supply chains e.g. Mini Supermarkets Manage the transition process Licence fuel providers / progressively designate wholesale yards as cleaner fuel only. Reduce price fluctuations. For example stockpile cleaner coal products in springsummer to ensure adequate supply in autumn/winter

6 Producer Switching Incentives Switching incentives payments Aim is to achieve Price Equalisation Payments to Producers based on output not capital subsidy/low interest loans Payments based on benchmark of raw coal prices Payment calculations would be clear enabling producers to optimise their production techniques Delivering payments through producers rather than households has many advantages including: Administratively simpler & can be introduced quickly; Avoids supply-demand issues Any withdraw/reduction in payments would be less politically sensitive

7 Sources of Funding Preferred source - Environmental Tax on raw coal; introduced as flat rate (Tg/t) on sales of coal, including coal used in CHPs Collection of taxes at the mine level (similar to Value-Added Taxes) Revenue calculated to be $15M increasing to $40M Funds would be held in a fund independent of Government into which Donors could contribute Short term funding gap until necessary laws in place

8 Legislative Framework Core law (a Cleaner Fuel Law ), fitting with Mongolian Air Law and Government Resolutions complemented by : Amendments to the existing draft Air Pollution Tax Law A Clean Air Fund law or regulation Amendments to the City s existing zoning resolution; Cleaner fuel standards Stove emission standards and specifications regulation.. Cleaner Fuel Law Air Pollution Tax Law Ulaanbaatar City Resolution on Raw Coal Ban Zoning Clean Air Fund Charter and By-Laws Cleaner Fuel Standard Cleaner Fuel Certification & Labelling Stove Standards

9 Fuel Composition Undertook independent assessment of composition of fuels and their performance Analysed 10 fuels through independent laboratory Fuel tests with traditional stove, GTZ Stove and improved TT-03 Stove using five fuels: Stoves monitored for: CO, CO 2, O 2, NOx, SO 2 Particulates (PM), temperature

10 Fuel Assessment Analytical results demonstrated: Significant variations in composition and calorific value of fuels on market Semi-coking increase calorific value by 10%+ High ash content of briquette products (50% in Korean Briquettes) and lower calorific value (up to 50% less than Nalaikh coal) Semi-coking reduces volatiles and moisture Initial fuels testing in stoves indicates: Improved fuels and coal alternatives can reduce emissions Improving stoves reduces emissions Ignition period has highest PM levels Training users critical Improving Fuel Combustion Improving Stove performance Reducing Particulate Certified Stoves Certified Fuels Traditional Stove Raw Coal

11 Public Awareness Campaign The successful implementation of the fuel substitution programme will require: Clear and positive public private consultation; and a long-term public awareness campaign The public awareness campaign will use a mix of communications vehicles, including: television, word of mouth, print materials and direct outreach Critical this is tied to clear product branding/certification which is legally enforced Campaign funding by the Clean Air Fund, and directed by Clean Air Fund Committee Importantly needs to be coordinated with other initiatives

12 Next steps Outline Timetable Milestone June 2009 July 2009 August 2009 August 2009 August 2009 August/September 2009 September/October 2009 Action/Task Final presentation of the Operational Framework. NCC compile comments on Operational Framework from Ministries NCC Submission to Government Decision on Operational Framework in the form of a Government Resolution Where Government approves - start implementation of the framework, including legislative changes and setting up the clean air fund Public awareness campaign begins. Begin rolling implementation of Operational Framework (certain elements may be piloted during Summer 2009).