Yufu Cheng & Feng An

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1 LCFS, FE and Transport CDM, Leading the Way towards GHG Emission Reduction in China Yufu Cheng & Feng An Innovation Center for Energy and Transportation (icet) Carbon Forum America San Francisco, Feb.27, 2008

2 Outline Introduction to icet GHG Emission at China s Transportation Sector Introduction to Low Carbon Fuels and Policies CDM in China s Transportation Conclusion and discussion

3 icet A non-profit, non-governmental organization (NGO) dedicated to promoting clean, sustainable, low carbon policies and technologies for vehicles and fuels in China. Projects: Environmentally Friendly Vehicle Rating System Vehicle Fuel Economy Standards in China Low Carbon Fuel Standards Climate Changes Supported by US Foundations, United Kingdom.

4 Reduce GHG Emission at Transportation Sector Annual growth in new car sales averaged about 30% since 92, trucks 11%, buses 17%. China is likely to catch up US in 5-8 years.

5 China is the world's second-largest consumer of oil behind the United States China's Oil Production and Consumption, (Thousand Barrels per Day) In 2006, according to EIA estimates, China has consumed 7.4 million barrels of oil per day, while its production was only 3.8 million barrels per day. This makes the country the third largest netimporter of oil after the US and Japan. Source: U.S. Energy Information Administration (EIA), International Petroleum

6 Transport Sector currently emits about 400 million ton of CO2, and projects to reach beyond 1200 million tons in 2030 by IEA

7 Reducing GHGs from Transport Increase Fuel Efficiency of Vehicles Better Transport Management/Demand-side management Reduce Fuel Carbon Intensity Could CDM to spur technology/policy transfer and innovation?

8 Fuel Policy in China Emission/Carbon taxation for transportation fuel political reality? Bio-fuel targets & incentives government picks winners? Brown or Green Alternative Fuel coal to liquid?! Low Carbon Fuel Standard Fuel and technology neutral

9 Low Carbon Fuel Standard in China Low carbon fuels emit less GHGs over their life cycle than traditional, petroleum-based fuels like gasoline and diesel. Low carbon fuels include many forms of alternative fuels, including most biofuels (depending on feedstock and pathways), compressed natural gas (CNG), electricity from renewable sources, hydrogen etc.

10 LCF-Life Cycle based approaches Greenhouse gas emissions occur at many stages of fuel production, transportation, and consumption. Life cycle emissions per unit of fuel energy may be drastically altered by changing the inputs at any one stage of the process!

11 Transportation Fuel Prospects in China Fuel Category Feedstock processing methods Production and company Fossil fuel Diesel Petroleum Petro-China, Sinopec, CNOOC Gasoline Petroleum Petro-China, Sinopec, CNOOC Coal-to-liquid DME Coal Indirect/ Methanol Coal direct coal to liquid technology Biofuel Bio-diesel Waste oil, algae, rapeseeds, oil plants Bio-ethanol Corn, grains, Cellulosic Natural Gas LNG Natural Gas CNG Natural Gas Acid/Alkali/Enzyme catalyzed 7 big projects(shenhua Group,Shenhua Ningmei Group,Inner Mongolia Yintai Group, Shandong Yunkuang Group,Shanxi Lu'an Group). About tons in 2008 About 50000tons in 2005.(Gushan Group and so on) Dry/wet method 1.02million in 2005 Mainly in 4 company (Tianguan Group,COFCO,Fengyuan,Jinlin )

12 Policy Partners icet (project leader and facilitator) LCFS Leadership Committee (implementation)

13 Multi-Agency Working Group The State Council of China National Development and Reform Commission (NDRC), Energy Bureau NDRC Office of National Climate Change Coordination Committee (N4C) Standardization Administration of China Pollution Control Department of SEPA Ministry of Finance, Department of Economy and Construction Ministry of Agriculture, Department of Development and Planning Ministry of Science and Technology, Hi-Tech Department State Forestry Administration, Energy Office

14 International partners

15 Transport CDM in China Source: World Business Committee for Sustainable Development, WBCSD, 2004

16 Transport CDM Projects in China Currently non-exist, future design: Sectoral approach Policy oriented (e.g. LCFS, vehicle Fuel Economy standards etc.) Boost Financing for Sustainable Transport (mass transit, BRT ) Local support and partnership Coordinated Policies and Implementation

17 Conclusion and Discussion China needs effective policies and standards for the development of alternative fuels. Low carbon fuel standard and policies are key to support governmental decisions in deciding the green alternative fuels. Transportation sector in China is surging, develop transportation CDM is very important to reduce GHG emissions in China. Challenges remain.

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