Study on International Best Practices and Trends in Truck Freight Energy Use and its Linkages to the Context of Pakistan

Transcription

1 FINAL REPORT CIU-T/3/2015/Study (a) Study on International Best Practices and Trends in Truck Freight Energy Use and its Linkages to the Context of Pakistan CIU-Trucking PAKSTRAN Dr. Mudassar Hassan Arsalan Geo-informatics and Sustainable Development Research Lab Institute of Space and Planetary Astrophysics University of Karachi Karachi - Pakistan i

2 TABLE OF CONTENTS TABLE OF CONTENTS.,,..... i LIST OF TABLES..... iv LIST OF FIGURES... vi LIST OF ABBREVIATIONS... vii EXECUTIVE SUMMARY. xi ACKNOWLEDGEMENTS... xviii 1 INTRODUCTION PROJECT BACKGROUND PAKISTAN SUSTAINABLE TRANSPORT PROJECT SCOPE OF THE STUDY APPROACH AND METHODOLOGY REVIEW OF LITERATURE KEY ELEMENTS AND CRITERIA OF BEST PRACTICES THE CONTEXT OF PAKISTAN GEOGRAPHY THE HIMALAYAS WESTERN MOUNTAINS THE SALT RANGE AND THE POTWAR PLATEAU THE INDUS PLAIN CLIMATE ADMINISTRATIVE SETUP PUNJAB SINDH KHYBER-PAKHTUNKHWA BALUCHISTAN DEMOGRAPHY AND URBANIZATION ECONOMY AND LEVEL OF DEVELOPMENT ECONOMIC GROWTH MAJOR SECTORS TRANSPORT SECTOR AND TRUCKING TRANSPORT SECTOR HIGHWAY INFRASTRUCTURE TRUCK FREIGHT GREEN HOUSE GASES EMISSION LAWS, STRATEGIES AND PLANS ON ENVIRONMENT QUALITY AND DEVELOPMENT PAKISTAN NATIONAL CONSERVATION STRATEGY PAKISTAN NATIONAL ENVIRONMENTAL QUALITY STANDARD (NEQS) PAKISTAN ENVIRONMENTAL PROTECTION ACT

3 2.8.4 PAKISTAN NATIONAL ENVIRONMENTAL POLICY PAKISTAN TRANSPORT PLAN PAKISTAN ROAD FREIGHT STRATEGY PAKISTAN TRUCKING POLICY PAKISTAN NATIONAL CLIMATE CHANGE POLICY INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE GENERAL AREAS FOR IMPROVEMENT TECHNOLOGY PERSONNEL SMART/STRATEGIC LOGISTICS REVIEW OF SELECTED BEST PRACTICES CLEAN AND LOW CARBON FUELS FOR IMPROVED ENVIRONMENTAL PERFORMANCE AND ENERGY EFFICIENCY ADVANCED TRUCKING TECHNOLOGIES OPERATIONS AND MANAGEMENT OF TRUCKING SECTOR IMPROVEMENTS IN THE TRANSPORT INFRASTRUCTURE SYSTEM TRAININGS FOR DRIVER OPERATIONAL PRACTICE IMPROVEMENTS IN POLICIES AND INSTITUTIONAL ARRANGEMENTS WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES UNITED STATES SMARTWAY TRANSPORT PARTNERSHIP PROGRAMME CHINA GUANGZHOU GREEN TRUCKS PILOT PROJECT CHINA GREEN FREIGHT INITIATIVE EGYPT SUSTAINABLE TRANSPORT PROJECT EUROPE GREEN FREIGHT PROGRAMME TURKEY AUTOMOTIVE FUEL ECONOMY POLICY INDIA GREEN FREIGHT INITIATIVE GREATER MEKONG SUB-REGION GREEN FREIGHT INITIATIVE BEST PRACTICES LINKAGE TO THE CONTEXT OF PAKISTAN FUEL CONSUMPTION, EMISSION AND FUEL STANDARDS FUEL CONSUMPTION STANDARDS EMISSION STANDARDS FUEL STANDARDS ALTERNATIVE FUELS FUEL EFFICIENCY TECHNOLOGIES AND MANAGEMENT STRATEGIES VEHICLE PHASE OUT PROGRAMME INTER-CITY FREIGHT LOGISTICS URBAN FREIGHT LOGISTICS ii

4 5.7 INTERMODAL FREIGHT TRANSPORT CAPACITY BUILDING ACTION FOR CLIMATE CHANGE MITIGATION LEVELS OF CAPACITY BUILDING FOR MITIGATION TO CLIMATE CHANGE QUALIFIED AND TRAINED TRUCKS DRIVERS CONCLUSIONS AND RECOMMENDATIONS REFERENCES iii

5 LIST OF TABLES TABLE 1-1: TYPICAL CONTRIBUTION OF SELECTED GREENHOUSE GASES TO TOTAL GREENHOUSE GAS EMISSIONS TABLE 2-1: THE KOPPEN CLIMATE CLASSIFICATION SYSTEMN BASED ON KOPPEN CLIMATE CLASSIFICATION SYSTEM TABLE 2-2: HISTORICAL GROWTH OF ECONOMY IN PAKISTAN TABLE 2-3: TABLE SHOWING PAKISTAN RAILWAYS BASIC FREIGHT RATE SCALES TABLE 2-4: TRADE AND INFRASTRUCTURE RANKINGS FOR ASIAN COUNTRIES TABLE 2-5: TABLE SHOWING PAST TREND OF ROAD TRANSPORT SHARE IN FREIGHT MOVEMENT TABLE 2-6: COMPOSITION OF TRUCKS BY AXLE CONFIGURATION TABLE 2-7: TABLE SHOWING NATIONAL INVENTORY OF GHG BY ACTIVITY SECTOR TABLE 3-1: COMPARATIVE ANALYSIS OF DIFFERENT FUEL OPTIONS. 3-5 TABLE 3-2: FUEL CONSUMPTION LIMITS FOR LIGHT-DUTY TRUCKS 3-41 TABLE 3-3: FUEL CONSUMPTION LIMITS FOR DIESEL HEAVY-DUTY TRUCKS TABLE 3-4: ENERGY SAVING PRODUCTS (TECHNOLOGIES) OF THE MOT RECOMMENDED LIST TABLE 3-5: TABLE SHOWING HISTORICAL DEVELOPMENT OF EMISSION STANDARDS FOR PASSENGER CARS TABLE 3-6: TABLE SHOWING EU EMISSION STANDARDS FOR HD DIESEL ENGINES TABLE 4-1: FUEL AND EMISSIONS REDUCTION POTENTIAL FOR HEAVY DUTY TRUCKS REGISTERED IN GUANGDONG PROVINCE TABLE 4-2: FUEL AND EMISSIONS REDUCTION POTENTIAL FOR ALL TRUCKS REGISTERED IN GUANGDONG PROVINCE TABLE 4-3: EXPECTED BENEFITS FROM PILOT PROJECTS TABLE 5-1: TABLE SHOWING FUEL CONSUMPTION FROM TRANSPORT SECTOR: TABLE 5-2: LIMITS OF VEHICLE COMPULSORY AND RECOMMENDED SCRAPPAGE IN CHINA TABLE 5-3: GUIDANCE FOR THE IMPROVEMENT OF URBAN DISTRIBUTION iv

6 TABLE 5-4: ESTIMATE OF GHG EMISSIONS FOR INDIVIDUAL MODE 5-12 TABLE 5-5: SUMMARY OF PRIORITY CAPACITY BUILDING ACTIONS FOR MITIGATION v

7 LIST OF FIGURES FIGURE 2-1: TOPOGRAPHY OF PAKISTAN FIGURE 2-2: PAKISTAN 30-YEAR ( ) ANNUAL TEMPERATURE ( C) SPATIAL DISTRIBUTION FIGURE 2-3: PAKISTAN 30-YEAR ( ) ANNUAL RAINFALL (MM) SPATIAL DISTRIBUTION FIGURE 2-4: PAKISTAN CLIMATE CLASSIFICATION MAP BASED ON KOPPEN CLIMATE CLASSIFICATION SYSTEM FIGURE 2-5: POPULATION GROWTH IN PAKISTAN FIGURE 2-6: ECONOMIC ACTIVITIES IN DIFFERENT REGIONS OF PAKISTAN FIGURE 2-7: HISTORICAL GROWTH RATE OF GDP IN PAKISTAN FIGURE 2-8: RANKING OF SELECTED DEVELOPING COUNTRIES ON QUALITY OF TRANSPORT INFRASTRUCTURE (OUT OF 142 COUNTRIES) FIGURE 2-9: NATIONAL HIGHWAYS OF PAKISTAN FIGURE 2-10: MOTOR VEHICLES ON THE ROAD (IN THOUSANDS) IN PAKISTAN, FIGURE 2-11: PROPOSED CHINA-PAKISTAN ECONOMIC CORRIDOR2-31 FIGURE 2-12: IDENTIFIED PAKISTAN TRUCKING STAKEHOLDERS FIGURE 3-1: A B20 BIODIESEL REFILLING STATION IN US BY PROPEL 3-8 FIGURE 3-2: COMMON WIND DEFLECTORS ON TRUCK CABIN FIGURE 3-3: COVERING THE GAP BETWEEN THE CABIN AND TRAILER FIGURE 3-4: AN AUTOMATIC TYRE INFLATION SYSTEMS INSTALLED ON A TRUCK FIGURE 3-5: WIDE-BASED TYRES FIGURE 3-6: EFFICIENT AND INDEPENDENT FROM THE ENGINE FIGURE 3-7: TRUCK STOP ELECTRIFICATION FIGURE 3-8: HYBRID PICKUP TRUCK FIGURE 3-9: DAF HYBRID TRUCKS FIGURE 3-10: HOW A DIESEL RETROFIT DEVICE WORKS FIGURE 3-11: TELEMATICS: COMMUNICATE WITH ONBOARD VEHICLE SYSTEMS vi

8 LIST OF ABBREVIATION AC ADB ALICE APU APU ASEAN ASTM ATA B.C.E BTU CAA CAI-Asia CBA CBU CCAC CDL CDM CFC CGFI CH4 CNG CO CO2 CO2 e COFRET COP CPEC CRTA CVT DOC DPF DPL DRTPC EC EEAA EGR EIA EPA ESC ESCOs ESIA ESL ESMAP Air Conditioner Asian Development Bank Alliance for Logistics Innovation through Collaboration in Europe Auxiliary Power Unit Auxiliary power units Association of Southeast Asian Nations American Society for Testing and Materials American Trucking Association Before the Common Era British thermal unit Clean Air Asia Clean Air Initiative for Asian Cities Collective Bargaining Agents Complete Built Unit Climate and Clean Air Coalition Commercial Driving License Clean Development Mechanism Chlorine-fluoro carbon China Green Freight Initiative Methane Compressed Natural Gas Carbon monoxide Carbon dioxide Carbon dioxide equivalent Carbon Footprint of Freight Transport Conference of the Parties China Pakistan Economic Corridor China Road Transport Association Continuously variable transmission Diesel Oxidation Catalyst Diesel Particulate Filter Development Policy Loan Development Research and Technological Planning Centre European Commission Egyptian Environmental Affairs Agency Exhaust Gas Recirculation Environmental Impact Assessment Environment Protection Agency European Shippers Council Energy service companies Economic and Social Impact Assessment Energy Standards and Labelling Energy Sector Management Assurance Program vii

9 EST EU Euro FDC FERTS F-gases FREVUE GCF GDP GEF GEPB GFCF GFI GFIWG GHG GIL GM GMS-CEP- BCI GNL GoP Gt GTC GTT GVW GWP HD HDTs HFC HSD HTV HVAC I/M ICS IEE IESIA IM IMF INR IPCC K2 Km Kmpl KPH KPK kwh Energy Saving Trust European Union European emission standards Fixed displacement compressors Fuel Efficiency in Road Transportation Sector Fluorinated gases Freight Electric Vehicles in Urban Europe Green Climate Fund Gross Domestic Product Global Environmental Facility Guangzhou Environmental Protection Bureau Gross Fixed Capital Formation Green Freight Initiative Green Freight India Working Group Greenhouse Gas Ghandhra Industry Limited General Motors Greater Mekong Subregion Core Environment Program Biodiversity Conservation Corridors Initiative Ghandhara Nisaan Ltd. Government of Pakistan Giga tonnes Guangzhou Transport Committee Green Truck Toolkit Gross Vehicle Weight Global Warming Potential Heavy Duty Heavy-duty trucks Hydro fluoro carbon High Speed Diesel Heavy Traffic Vehicle Heating, ventilation or air conditioning Inspection/Maintenance Industrial Classification Schedule Initial Environmental Examination Integrated Environmental and Social Impact Assessment Indus Motors International Monetary Fund Indian Rupees Intergovernmental Panel on Climate Change (Mount Godwin-Austen Kilometres Kilometres per litre Kilometres per hours Khyber Pakhtunkhwa Kilowatt hours viii

10 LDV Light Duty Vehicles LNG Liquefied Natural Gas LRR Low Rolling Resistance LTV Light Transport Vehicle MDGs Millennium Development Goals MeTHF Methyl tetrahydrofuran MIT Ministry of Industry and Trade MMCL Master Motor Corporation Ltd MOT Ministry of Transport Mt Megatonnes MTDF Medium-term Development Framework MVE Motor Vehicle Examination MVR Motor Vehicle Registration MW Mega Watts N2O Nitrous oxide NCS National Conservation Strategy NEAPSP National Environmental Action Plan Support Program NEDC New European Drive Cycle NEP National Environment Policy NEPRA National Electric Power Regulatory Authority NEQS National Environmental Quality Standards NGO Non-governmental Organization NHA National Highway Authority NHSO-2000 National Highway Safety Ordinance, 2000 NKCPL Naresh Kumar and Company Private Limited NLC National Logistics Cell NMHC Non-methane hydrocarbons NMVOCs Non-methyl Volatile Organic Compounds NOX Nitrogen Oxides NTC National Trade Corridor NTCIP National Trade Corridor Improvement Programme NTRC National Transport Research Centre O3 Ozone O-D Origin and destination PACO Pakistan Automobile Corporation PAKSTRAN Pakistan Sustainable Transport Project Pb Lead PBS Pakistan Bureau of Statistics PEPA Pakistan Environmental Protection Act PEPC Pakistan Environmental Protection Council PEPO Pakistan Environmental Protection Ordinance PKR Pakistani Rupees PM Particulate Matters PM10 Particulate Matters less than 10 micrometre diameter PM2.5 Particulate Matters less than 2.5 micrometre diameter PMO Project Management Office ix

11 PPP PPP PSDP PTN RIOH SCALE SEA SEL SIAM SO2 SOCL STP TDM THC UD Trucks UK UN UNDP UNESCAP UNFCCC US EPA USD VDC VKT VMS VOC VPL WAPDA WB XWBL Purchasing Power Parity public-private partnership Public Sector Development Programme Perfect Transport Network Research Institute of Highways Step Change in Agri-Food Logistics Ecosystems Strategic Environmental Assessment Sindh Engineering Ltd Society of Indian Automobiles Manufacturers Sulphur dioxide Star of the City Logistics Sustainable Transport Project Transport demand management total hydrocarbon Uniflow Diesel Engine Trucks United Kingdom United Nations United Nations Development Program UN Economic and Social Commission for Asia and the Pacific United Nations Framework Convention on Climate Change United States Environment Protection Agency U.S. Dollar Variable displacement compressors Vehicle km travelled Variable Message Parking Volatile Organic Compounds Volvo Pakistan Ltd. Water and Power Development Authority World Bank Xinbang Logistics x

12 EXECUTIVE SUMMARY EXECUTIVE SUMMARY BACKGROUND The struggle to preserve our environment has gained momentum over the years and is now part of the planning and development strategies. The ongoing effort against climate change owing to GHG emissions has also come to the fore in policy and business alike. Recently, at 2015 United Nations Climate Change Conference as a 21st yearly session of the Conference of the Parties (COP 21), on 12 December 2015, the final wording of the Paris Agreement was adopted by consensus by all of the 195 UNFCCC participating member states (United Nations Framework Convention on Climate Change) and the European Union to reduce emissions as part of the method for reducing greenhouse gas [1]. Transport services appear to be one of the biggest sources of CO2 emissions and some of the transport emissions are also pollutants. This is, however an industry, which is, on the one hand, indispensable for growth and employment and yet on the other hand has enduring difficulties freeing its dependence on fossil fuels. The strategic location of Pakistan, its role in the trade of landlocked countries, and its influence as a crossroads of political and religious ideologies have kept it at the forefront of world events. Geographically, Pakistan has long been a gateway between Eurasia and the subcontinent and between East and West. Its culture and history have been enriched by the countless invaders, traders, and settlers who have been a part of the region s past. Pakistan's estimated population in 2015 is over million, making it the world's sixth-mostpopulous country. This population is around 2.57% of the world population [2]. During , Pakistan's urban population expanded over sevenfold, while the total population increased by over fourfold. In the past, the country's population had a relatively high growth rate that has been changed by moderate birth rates. Its growth rate is reported at around 1.49%, which gives an annual increase of more than 3 million. The expected population of Pakistan would be around 251 million in 2025 and 277 million in 2050 [2]. Overall CO 2 emissions in Pakistan are estimated to have risen from million metric tons in 2003 to million metric tons in 2012 [3] and are expected to more than double by 2020 to 250 million tonnes in a business-asusual scenario [4], with a 3.3% annual growth rate. In , the entire xi

13 EXECUTIVE SUMMARY transport sector was responsible for 49% of the total energy consumption in Pakistan [5]. As such, it is also a significant contributor to GHG emissions with an estimated 26.7 million tonnes CO 2 in 2003 and 71.9 million tonnes CO 2 in By 2020, GHG emissions from the entire transport sector could be more than 100 million tonnes CO 2 if there are no GHG mitigation interventions in the sector and assuming 5% growth in the transport sector. Use of CNG in the transport sector, as cleaner fuel, has been the priority of the government and Pakistan, but due to shortage this source has become less available. Recent scarcity of the indigenous gas available is one of the major constraints in this regard. Freight transportation is comprised of five major modes: truck, rail, air, water, and pipeline. The contributions of truck freight to total freight transportation GHG emissions is more than 60 percent. Energy use for all modes could increase manifolds from 2015 to 2035, based on existing energy use trends. Since energy use for freight transportation is expected to increase significantly in the next 20 years, and because GHG emissions are largely based on energy use, GHG emissions will also increase significantly. Pakistan's economic growth has led to significant increases in road freight traffic [6, 7]. Pakistan's freight transportation system can be characterized as: Dominated by road transport with a share of 94% of all the freight, while the opportunities for more energy efficient rail transport are clearly underutilized; Being comprised mainly of trucks that are more than 30 years old that are highly energy inefficient; and A trucking industry that is highly competitive leading to dangerous transport practices and overloading that damage Pakistan's road assets. Up till 2014, there were over 251,300 cargo trucks operating in Pakistan [8]. The increase in road freight transport has been one of the primary causes of the country s congested transport system, especially in urban areas, adversely impacting Pakistan s trade competitiveness and impeding sustainable economic growth. Governments and the freight industry recognize the need for solutions to meet future challenges for GHG emissions reductions. There are a growing number of technological and operational strategies, existing or developing, that could reduce GHG emissions. Disseminating information regarding these xii

14 EXECUTIVE SUMMARY technological and operational strategies can facilitate decision making to achieve reductions in energy use and GHG emissions. The Government of Pakistan (GOP) and United Nations Development Program (UNDP) have entered into an agreement for a project titled Pakistan Sustainable Transport Project (PAKSTRAN) in The PAKSTRAN project is designed to supplement Provincial Government initiatives in Punjab and Sindh, to improve transportation systems [9]. The project is aimed at institutional strengthening and capacity development to support regulatory frameworks addressing Pakistan s environmental challenges in the transportation sector. The main objective of the PAKSTRAN project is to reduce the growth of energy consumption and related greenhouse gas (GHG) emissions from the transport sector in Pakistan. The other objectives are to improve urban environmental conditions and Pakistan s trade competitiveness by: creating an enabling investment environment for sustainable urban transport creating and institutional and policy framework that is supportive of urban transit development improving the fuel efficiency of the trucking freight transport, and increasing awareness and capacity in Pakistan for sustainable transport The study intends to gain benefit from best practices and trends in truck freight energy use at the international level for their possible replication in the trucking sector of Pakistan. Therefore, the study is an extensive review of best practices and trends in the countries at different stages of development to meet the challenges of the trucking sector, and improving its performance. METHODOLOGY The methodology for characterizing and evaluating potential best practices includes: reviewing literature to identify existing or developing potential best practices and to develop a preliminary list of potential best practices; categorizing and characterizing potential best practices; assessing their reductions in GHG emissions, and energy use; and summarizing and reporting evaluation results in the context of Pakistan. The potential best practices identified here are often of potential future applicability, since many of them have not been implemented widely and some are preliminary concepts. xiii

15 EXECUTIVE SUMMARY A potential best practice is an existing or developing strategy or technology that is expected to lead to reductions in energy use, refrigerant use, and greenhouse gas emissions. The potential best practices are categorized by subgroups based on the factors that the practices can improve, or the technologies that vehicles or devices may apply, to reduce GHG emissions. Based on a review of literature, key elements of the best practices in the road freight transport sector have been identified, which include low carbon fuels, advanced technologies; vehicle efficiency; improved truck fleet composition, operations & management, improvement in infrastructure, policies and institutional arrangements. CONCLUSIONS There is an urgent need to improve the efficiency and reduce adverse social and environmental impacts from freight movement in Pakistan, especially for road freight. A balanced mix of proven strategies exists and can be applied in Pakistan, aimed at trucks improving freight logistics and transfer of road freight to intermodal and rail. Avoid strategies reduce the need for transport or the travel distance for road freight vehicles and mostly relate to improved logistics. Logistics solutions for road freight, including the use of articulated trucks, loading on return trips, matching vehicle's capacities to load, logistics information platform, joint venture trucking companies, and freight villages (consolidation centres). Broader regional and transport planning can also be counted among effective avoid strategies; Shift strategies aim to transfer freight movement to more energy-efficient and environmentally friendly modes. This relates to shifting road freight to rail and fluid cargo to existing and new pipelines. Improve strategies enhance the energy efficiency of vehicles and trucks through technologies and integrated management. Technologies for trucks, including tyres and wheels, aerodynamics equipment, idling reduction technologies, emissions control technologies, fuel and oil, and engines and vehicles. Existing plans and policies provide a solid mandate and basis for government agencies and other stakeholders to focus on green freight. The most relevant national policies and plans are the Pakistan Road Freight Strategy 2006, Pakistan Trucking Policy 2011, PAKSTRAN Project (2011), and China- Pakistan Economic Corridor Development (2015). Policy and institutional barriers must be addressed to achieve national targets relevant to Green Freight concept. In general, the national institutional framework comprises ministries that are responsible for the formulation of strategies, plans and xiv

16 EXECUTIVE SUMMARY policies. The national institutional set up is also reflected in the institutional arrangements at the provincial and local levels. Ample international best practices exist on which Pakistan can draw to design its own policies and strategies and fill gaps. The best practices described in this report that are of most relevance to Pakistan s gaps are as under: A supply and distribution network is needed for modern trucks that is required for Euro 4, 5 and 6 vehicle emissions standards and exists in Europe, the US and several other developed countries; The technology verification system of the US EPA in support of the SmartWay Program, covering a wider range of truck technologies, detailed and specific test protocols, financing mechanisms to promote certified technology adoption, and a recognizable certification logo for public recognition of companies that apply certified technologies; Eco-driving schemes in the UK and Japan that involve training, electronic driver monitoring systems and incentive schemes; Consideration of alternative schemes for compulsory vehicle scrappage. Where scrappage schemes exist, for example, in the Port of Seattle, the decision to retire vehicles is based on emissions tests rather than age limits; Combining drop-and-hook by using articulated vehicles with other measures to reduce empty runs, especially load-matching services ( online freight information exchange ); Small freight company joint ventures to pool resources and strengths in order to win and manage larger and more lucrative logistics business for upcoming CPEC; Measures to stimulate a shift from road freight to other modes, (especially in Europe), through truck road charges, capital investments in railway infrastructure and connected networks; RECOMMENDATIONS IN THE CONTEXT OF PAKISTAN Tyre quality is a key issue in fuel efficiency gains and emissions reductions. Low rolling resistance (LRR) tyres ease the rolling resistance on the road and thus reduce fuel use. Single wide LRR tyres would have provided the largest savings, but need to take extra care of safety risk on the road in case of accidents. Dual LRR tyres appear to generate enough savings to be economically feasible, especially due to the longer life span compared to normal tyres. Even improving the quality of conventional tyres used on trucks could result in significant savings. Aluminum wheels could be considered as part of the tyre package especially if they are factory installed, replacing existing steel wheels. Tyre pressure monitoring systems have a good potential to reduce fuel and emissions, but depend on proper installation of the system and instruction of the drivers on how to operate them. Before selection of technology, local conditions should be considered for successful testing, especially speed limits, traffic congestion, weather conditions and road quality. The weight of truck loads also plays an xv

17 EXECUTIVE SUMMARY important role, as overloading of trucks is common and renders driving at high speeds unsafe. Any green freight project or programme should have a stronger focus on domestic truck assemblers/manufacturers. These truck manufacturers could be involved in a project by installing selected technologies while trucks are being assembled, thus providing financial support in return for the use of recommended technology to promote their trucks. Outreach to Global engine manufactures through agreements with local manufacturers could also be made to financially support to test new technologies. Fuel consumption is strongly connected with vehicle driving pattern in realworld operation. Drivers can be trained to follow fuel-saving driving habits or keep their highway speed within efficient range. Driver training, including eco-driving and equipment handling training can greatly add to fuel and emissions savings. For example, drivers mistakenly switched off pressure monitoring sensors while increasing tyre pressure, because instructions on handling the equipment had not covered the subject. Technology training of the drivers of pilot trucks directly by the technology supplier would be preferable. Reducing speed on highways to a level where fuel consumption is most efficient and reducing overloading can reduce fuel consumption. The total activity can also be reduced by better logistics management, such as increasing returning load and reducing empty trip. Vehicle activity is linearly correlated with total fuel consumption. Truck condition can affect not only operational performance, but also fuel economy and emission. A routine inspection/maintenance (I/M) is barely enough to ensure good condition. Special training and improved fleet management can help contractors to improve the condition of their trucks. Engine rebuilding is considered the strongest enhanced maintenance strategy. Several strategies based on vehicle body improvement can be applied to reduce diesel consumption by reducing the drag such as truck weight reduction and improved aerodynamics. Reduced idling. Several technological options, including auxiliary power units (APUs), automatic engine idle systems, and truck stop electrification can assist drivers in reducing truck idling. Low-sulphur diesel can reduce emissions of in-use trucks immediately. It is also a precondition for a successful emission retrofit programme. Similarly, use of Low viscosity lubricant can also help improve fuel economy. Emission retrofit - In-use diesel retrofit with emission control devices, including EGR (Exhaust Gas Recirculation), DPF (Diesel Particulate Filter) and DOC (Diesel Oxidation Catalyst) systems have been widely applied in the United States and Europe. The selection of target trucks and technology verification is crucial for a successful retrofit. The oil by-pass filtration system improves oil life performance and indirectly contributes to fuel efficiency due to reduced engine wear. Scrappage schemes for outdated trucks should be adopted to convert into modern energy efficient technology. Financial support should be offered to the volunteers. xvi

18 EXECUTIVE SUMMARY Fleet and engine modernization - Fleet modernization can introduce much cleaner engines into the fleet to lower PM and NO X emissions. Engine replacement is also a type of fleet modernization strategy There are many well-known worldwide green freight initiatives, which have resulted fuel efficiency and reduced GHG emissions. China Green Freight Initiative and Egypt Sustainable Transport Project are very similar in nature. Interestingly, the objectives and components of the Egypt Sustainable Transport Project are same as those of PAKSTRAN project-trucking Component. Moreover, the travel pattern and other conditions in Egypt are also similar to those in Pakistan. For example, in Egypt also 95% freight is carried by road like in Pakistan. It is therefore necessary to keep a closer eye on the outcomes of the project in Egypt so that lesson should be learned from their successes and failures. xvii

19 EXECUTIVE SUMMARY ACKNOWLEDGEMENTS The report on the study of International Best Practices and Trends in Truck, is a teamwork effort to prepare a useful document. In this connection, I am, being the independent consultant for the study, would like to pay the gratitude to the individuals, who have advised and contributed in any form. I am grateful to Mr. Saleem Janjua, National Project Manager, PAKSTRAN Project- UNDP, for his guidance and very relevant concerns about the appropriateness of the applied and feasible choices of the best practices in the context of Pakistan. I am also thankful to Mr. Hameed Akhtar, Director Road (Ministry of Communication, Government of Pakistan / Component Director, CIU Trucking), for his support to comprehend the national transportation priorities, the role of government for infrastructure development and publicprivate initiatives to improve the road freight system of Pakistan. I am very thankful to the CIU Trucking Component Management team including Mr. Irfan Hyder Component Manager, Mr. Azfar Ali Research Officer, and Mr. Majid Rashid AFA, for the continuous support, especially for the provision of the previous plans, reports and stocktaking related to the national transportation, freight and road logistics. At last, appreciations are due for the reviewers and my colleague scholars who directly contributed to the shaping up of the report. Their identified gaps, encouragements, compliments and valuable suggestions made this report more meaningful and a presentable document at the national level. xviii

20 INTRODUCTION 1 INTRODUCTION In today s world mitigation of human induced environmental impacts has become a major concern. Many businesses are influenced and characterise by this challenge. The struggle to preserve our environment has gained momentum over the years and is now part of the planning and development strategies. The ongoing effort against climate change owing to GHG emissions has also come to the fore in policy and business alike. Transport services appear to be one of the biggest sources of CO 2 emissions and some of the transport emissions are also pollutants. This is, however an industry, which is, on the one hand, indispensable for growth and employment and yet on the other hand has enduring difficulties freeing its dependence on fossil fuels. The need to decrease emissions, but also to save energy and money, should be at the heart of logistic companies thinking. Luckily, these needs lessening emissions, decreasing the use of energy and saving money are connected and may respond to the same drivers. Not only the logistics service providers, but also the transport users are likely to benefit from savings that may be environmental as well as economical. There is an abundance of possibilities and many nations worldwide have already found ways to improve their business models, which have the potential to be developed into best practices. Their experience is the source of the best practice models that benefit and encourage others to do the same. In other words, there is no need to re-invent the wheel; it is a better way to disseminate the best practices that can be managed to collect from different sources, and make them available to others, whether they are logistics service providers or users. Whilst this may appear a minimalist approach, it is believed that it can be extremely helpful in an area where sharing knowledge and knowhow is crucial. The adoption of best practices requires leadership primarily from the Government to ensure maximum return for the country. Provincial and local district government can then confidently operationalise the vision and goals via policy and procedure and measure performance. The solutions that add the most value are identified as best practice. Seeking out best practices transcends efficiency and addresses issues of sustainability in striving to attain the greater good for all freight industry stakeholders. Best practice activities, therefore, must be transparent, ethical and subject to public scrutiny. The step from compliance to best practice can be taken voluntarily by 1-1

21 INTRODUCTION business. Freight transportation is a key but often overlooked area for transport policy with the complexities of the freight market not well understood. The adoption of best practice systems and processes is voluntary; however leadership and direction from industry overview bodies can make the task simpler, more effective and increase the rate of adoption. Sometimes, it becomes a challenge to find the time and energy to review systems and performance, identify areas for improvement and invest the time and energy required to adopt best practice, even if that commitment will give them a long term advantage. Government policy enables large scale planning and representative organisations to assist their members understand and embrace changes that improve their operations. At the point where freight moves on the network, businesses provide employees with process and performance standards for route choice, safety and driver behaviour. 1.1 PROJECT BACKGROUND Overall CO 2 emissions in Pakistan are estimated to have risen from million metric tons in 2003 to million metric tons in 2012 [3] and are expected to more than double by 2020 to 250 million tonnes in a business-asusual scenario [4], with a 3.3% annual growth rate. In , the entire transport sector was responsible for 49% of the total energy consumption in Pakistan [5]. As such, it is also a significant contributor to GHG emissions with an estimated 26.7 million tonnes CO 2 in 2003 and 71.9 million tonnes CO 2 in By 2020, GHG emissions from the entire transport sector could be more than 100 million tonnes CO 2 if there are no GHG mitigation interventions in the sector and assuming 5% growth in the transport sector. Use of CNG in the transport sector, as cleaner fuel, has been the priority of the government and Pakistan, but due to shortage this source has become less available. Recent scarcity of the indigenous gas available is one of the major constraints in this regard. Pakistan's economic growth has led to significant increases in road freight traffic [6, 7]. Pakistan's freight transportation system can be characterized as: Dominated by road transport with a share of 94% of all the freight, while the opportunities for more energy efficient rail transport are clearly underutilized; Being comprised mainly of trucks that are more than 30 years old that are highly energy inefficient; and 1-2

22 INTRODUCTION A trucking industry that is highly competitive leading to dangerous transport practices and overloading that damage Pakistan's road assets. Pakistan's response to the challenges of global warming and climate change has been in the context, sustainable development, environmental protection, millennium development goals, sustainable development goals and objectives of the convention on climate change [10, 11]. As a result, several legal and institutional arrangements have been made at the national, provincial and local levels. Environmental protection and climate change have recognized in the National Long Range Plans, Annual Budgets, Public Sector Development Programme (PSDP) and Economic Survey of Pakistan [12, 13]. The specific activities and responsibilities relating to climate change concerns are coordinated by the Ministry of Climate Change at the federal level with corresponding support from the provincial and city governments. The Ministry of Climate Change also works in tandem with the other concerned Federal Ministries and Divisions, research organizations, universities and private sector. So far, following affirmative actions have been taken to meet the challenges of climate change in Pakistan [14]: After the submission of Initial National Communication of Pakistan on the implementation of the UNFCCC Convention in Pakistan, a Task Force on Climate Change was established in the Planning Commission of Pakistan in 2008 to take stock of country situation in relation to climate change, and to prepare a framework for the formulation of Climate Change Policy of Pakistan. This report was available to the government in 2010; The exiting Task Force on Climate Change established in the Planning Commission of Pakistan has been elevated to a permanent Prime Minister's Committee on Climate Change; A Disaster Risk Reduction Framework has been developed by the National Disaster Management Authority for implementation in the country in association with the provincial and metropolitan authorities; The National Climate Change Policy was approved by the Government of Pakistan and published in 2012; A Framework for Implementation or Climate Change Policy was prepared and circulated amongst all stakeholders in 2013; and An Inter-ministerial Inter-agency Committee was set up in the Ministry of Climate Change to steer the implementation of the National Climate Change Policy and its Framework. The Vision 2025 vehemently recognizes global warming and climate change as an explicit area of engagement in its long term planning and development and instituting project and non-project interventions in the vital areas of energy, 1-3

23 INTRODUCTION agriculture, water, and food security [10]. It also reaffirms that Pakistan will strengthen its relationships with UNFCCC to explore further opportunities for more cooperation and collaboration. The combination of objectives of reducing GHGs and improvement of urban air quality promises many co-benefits to the people of Pakistan [14]. The present initiative of the Government of Pakistan and UNDP in targeting the trucking sector to take a lead will be a role model for other road transport sub-sectors [9, 15]. The energy-mix of Pakistan is considered eco-friendly due to some reliance on natural gas, use of hydroelectric power source and low share of coal, even though it has vast coal reserves in the Thar region [16]. Vision 2025 and Development Plans of Pakistan also lay emphasis on low-carbon and low emission development [10, 17]. 1.2 PAKISTAN SUSTAINABLE TRANSPORT PROJECT The Government of Pakistan (GOP) and United Nations Development Program (UNDP) have entered into an agreement for a project titled Pakistan Sustainable Transport Project (PAKSTRAN) in The PAKSTRAN project is designed to supplement Provincial Government initiatives in Punjab and Sindh, to improve transportation systems [9]. The project is aimed at institutional strengthening and capacity development to support regulatory frameworks addressing Pakistan s environmental challenges in the transportation sector. The main objective of the PAKSTRAN project is to reduce the growth of energy consumption and related greenhouse gas (GHG) emissions from the transport sector in Pakistan. The other objectives are to improve urban environmental conditions and Pakistan s trade competitiveness by: Creating an enabling investment environment for sustainable urban transport Creating and institutional and policy framework that is supportive of urban transit development Improving the fuel efficiency of the trucking freight transport, and Increasing awareness and capacity in Pakistan for sustainable transport CIU-Trucking is one of the four components of PAKSTRAN approved for implementation in Pakistan with the financial assistance of the Global Environmental Facility (GEF). UNDP is the implementing agency of this project [9, 15]. 1-4

24 INTRODUCTION CIU-Trucking started its operations from May 2015 at National Transport Research Centre (NTRC), Ministry of Communication - Government of Pakistan. The need was felt because the trucking sector poses a major challenge for the environment and energy efficiency. CIU-Trucking is responsible to demonstrate international best practices for modernizing the trucking fleet through developing fleet strategies in addition to the strengthening of regulatory institutions, and to create an investment environment with widespread stakeholder acceptance to sustain modernization of trucking fleets. It is equally necessary that PAKSTRAN and CIU-Trucking project is also supported with massive education and awareness campaigns about the climate change issues. Newspaper, radio and television channels should also be encouraged to create awareness about the adverse impacts of climate change and how can they participate in promoting and building a low carbon society by opting for the use of low carbon products and avoid use of transport where they can use bicycles or walk. Some of the aforesaid objectives can also be achieved by introducing innovations in urban planning to mitigate and adapt to the adverse impact of climate change through the following actions [9]: Estimating the fuel and energy needs of the expanding cities; Designing transport corridors for fast and efficient urban transportation; Amending building laws to ensure that all new buildings are constructed using the architectural designs appropriate to the local climate; Promoting lifestyle choices that respect climate change mitigation and adaptation through civil society organizations; Advancing low-carbon pilots in provinces and cities; and Exploring diversified patterns of low-carbon growth. The realization of the above objectives will be facilitated by supportive actions like (a) preparation of greenhouse gas inventories at the provincial and subprovincial levels on a regular basis; (b) disaggregation of greenhouse gas emission data from major industrial units so as to institute appropriate response mechanisms at that level; and (c) maintaining greenhouse gas emissions data by major activity and sub-activity level. 1-5

25 INTRODUCTION 1.3 SCOPE OF THE STUDY The study intends to gain benefit from best practices and trends in truck freight energy use at the international level for their possible replication in the trucking sector of Pakistan. Therefore, the study is an extensive review of best practices and trends in the countries at different stages of development to meet the challenges of the trucking sector, and improving its performance. The study also covers the recommendations as how to consolidate already practices in the sector and to identify gaps to remove sector constraints and open it for investments in order to further its development and ultimately strengthen private sector development in Pakistan. 1.4 APPROACH AND METHODOLOGY The methodology for characterizing and evaluating potential best practices includes: reviewing literature to identify existing or developing potential best practices and to develop a preliminary list of potential best practices; categorizing and characterizing potential best practices; assessing their reductions in GHG emissions, and energy use; and summarizing and reporting evaluation results in the context of Pakistan. The potential best practices identified here are often of potential future applicability, since many of them have not been implemented widely and some are preliminary concepts REVIEW OF LITERATURE A list of key elements of trucking sector strategies identified and criteria of best practices were developed. Based on criteria, potential best practices were determined, mostly based on literature review. Most data and information regarding potential best practices were taken from published technical and policy reports, books, and engineering journal papers, although some information was collected from websites. Some information collected from personal communications with experts KEY ELEMENTS AND CRITERIA OF BEST PRACTICES Based on a review of the literature, key elements of the best practices in the road freight transport sector have been identified, which include low carbon fuels, advanced technologies; vehicle efficiency; improved truck fleet composition, operations & management, improvement in infrastructure, policies and institutional arrangements. 1-6

26 INTRODUCTION The goal for setting best practice criteria is the reductions in GHG Emissions and Energy Use, for individual best practices. Literature was searched out for quantification of reductions in GHG emissions. Where quantitative examples were not available, the resource implications of the practices are discussed qualitatively in a structured approach. The percentage contributions of CO 2, CH 4, N 2O and HFCs emissions to the total GHG emissions in terms of CO 2 equivalent (CO 2 e) for trucking sector is listed in Table 1-1. The total GHG emissions for the truck mode are mainly contributed by CO2 emissions from fuel use. A small fraction of the total freight truck GHG emissions is contributed by HFCs emissions from refrigerant use. The contributions of CH4 emissions and N2O emissions to the total freight truck GHG emission are insignificant. Thus, the opportunities to significantly reduce freight truck GHG emissions are based on reductions in CO2 and HFC emissions. Table 1-1: Typical Contribution of Selected Greenhouse Gases to Total Greenhouse Gas Emissions Greenhouse Gases Percentage Contribution to Freight Transport Modes Truck Rail Air Water Pipeline CO CH N 2O N/A HFC 2.4 N/A N/A N/A N/A Source: Frey and Kuo [18] N/A: data not available 1-7

27 THE CONTEXT OF PAKISTAN 2 THE CONTEXT OF PAKISTAN This chapter describes the physical, administrative and socioeconomic conditions of the study area. Pakistan has many unique characteristics which determine the local conditions either suitable or not for adopting any technology, practice and institutional changes for better transport management and fuel efficiency. Situated in the northwest corner of the Indian subcontinent, the Islamic Republic of Pakistan occupies a position of historic importance. Its strategic location, its role in the birth of civilization, and its influence as a crossroads of political and religious ideologies have kept it at the forefront of world events. Geographically, present-day Pakistan has long been a gateway between Eurasia and the subcontinent and between East and West. Its culture and history have been enriched by the countless invaders, traders, and settlers who have been a part of the region s past. Some, like Alexander the Great and his army, merely passed through, but left a lasting mark. Others, such as the Arab armies spreading the word of Islam and the British who imposed the ways of the West, became an integral part of the region s culture and character. Some of humankind s greatest works of art and architecture, of verse and word, were created here. Though an independent state only since 1947, its homeland has a history unique from the rest of the subcontinent it shares with India. Here the Indus Valley Civilization, one of the world s earliest and greatest, flourished contemporaneously with the Egyptian and Mesopotamian empires. The region has also been a cradle of spiritual awakening. Here Hinduism was born in the aftermath of the Aryan migration into the region that began about B.C.E. A scant distance away, the Buddha received enlightenment, founding a religion and philosophy that transformed the region. Islam, which would have an even greater impact, gained its foothold in Asia in what is today Pakistan. And the Sikh religion can trace its roots to the region as well. Few nations have as rich or complex a history as the Islamic Republic of Pakistan. Its destiny has been shaped first by its geography. The violent collision of continents that formed this land threw up great mountains that made this corner of the subcontinent a place apart. The sequestered, fertile environment of the Indus Valley nurtured one of the world s first great civilizations. Yet the passes that breached the guarding massifs served as 2-1

28 THE CONTEXT OF PAKISTAN funnels through which invaders both hostile and friendly have poured for millennia. These outsiders have been the second great ingredient in Pakistan s destiny. They brought their traditions, ideas, and ways of life, all of which have become part of the nation s identity. 2.1 GEOGRAPHY Before the continents the land that is now Pakistan and India were part of Gondwanaland, an ancient super continent. Some 200 million years ago Gondwanaland began to break apart, torn by tectonic forces. Over time the supercontinent s remnants formed landmasses including Africa, South America, Antarctica, Australia, the Arabian Peninsula, and the Deccan Plateau, or the Indian subcontinent. At the time the Eurasian landmass was separated from the disintegrating supercontinent by a long, shallow sea. The streams and rivers that drained what we know now as Asia deposited sandy runoff into this basin while the calcified remains of sea creatures likewise accreted. Over time these deposits became sandstone and limestone. After Gondwanaland splintered, the future Deccan Plateau moved north, toward Eurasia. As the two landmasses drove toward each other, the sandstone and limestone that had carpeted the sea floor between them was thrust upward. At least 45 million years ago the landmasses met. The submarine deposits ultimately became the fold mountains that now form a ridge across southern Asia from the Mediterranean to the Pacific. The contorted, visible bowing of the sedimentary rocks from which the mountains formed bears evidence of the compression caused by the slow tectonic collision. The peaks reach their highest point at the north end of the subcontinent. These are the Himalayan Mountains. Marine fossils found on Mount Everest, the world s highest peak, attest to its undersea ancestry. The Himalayas and its offshoots, which flank southward on the east and west sides of the subcontinent, have served as a natural barrier to both the elements and humanity, separating the lands that became Pakistan and India from the rest of Asia. The Arabian Sea forms Pakistan s southern border. Its western border is shared with Iran in the south and Afghanistan in the north. Along the Pakistan s northern border the slim arm of Afghanistan s Wakhan region separates Pakistan from Tajikistan. China s territories of Xinjiang and Tibet lie on Kashmir s border to the north and east. To Pakistan s east are the Indian states 2-2

29 THE CONTEXT OF PAKISTAN of Punjab and Rajasthan. The Thar Desert serves as a barrier between these Indian lands and Pakistan. Despite the absence of any other barriers between these two states, historically they developed independently. To its south, west, north, and northeast, natural barriers of mountains and sea have sheltered Pakistan. The Indus River, historically the lifeblood of what would become Pakistan, and its tributaries drain the plateau. Though its terrain varies throughout the country, Pakistan can be divided into three basic geographic areas: the northern highlands, the Baluchistan Plateau, and the Indus River plain. These areas can be further segmented into the Salt Mountains and the Potwar Plateau, north of the Indus Plain; the Western Mountain region (composed of the mountains in western Baluchistan); and the Upper and Lower Indus River Plain (roughly corresponding with the presentday provinces of Punjab and Sind, respectively) THE HIMALAYAS The Himalayas (meaning the abode of snow in Sanskrit) extend in a long bow some 1,500 miles across the north end of the subcontinent, from the Indus River in the west to the Brahmaputra River (which originates in Tibet and ends in the Bay of Bengal) in the east. Four major ranges comprise the Himalayas: The Outermost, or Sub-Himalayas, are the farthest south. Its low hills, known as the Siwaliks, rise to about 3,000 feet. To the north lie the Outer, or Lesser Himalayas, whose peaks average 14,000 15,000 feet. Behind the Pir Panjal Range of the Outer Himalayas rise the Central, or Great Snowy Himalayas. In the Karakoram Range, permanently snow-covered peaks average 20,000 feet in height and include Mount Everest, the world s loftiest peak (29,028 feet), and in Kashmir, K2, the world s second highest peak (28,251 feet). North of Pakistan s border is the Ladakh Range, or Inner Himalayas. In Pakistan s northwest is the Hindu Kush Range, extending from the high plateau of Pamir, sometimes called the Roof of the World, in Afghanistan. Tirich Mir is its highest peak (25,289 ft.). 2-3

30 THE CONTEXT OF PAKISTAN Figure 2-1: Topography of Pakistan Source: Wynbrandt [19] The Himalayas have had important historical and climatological effects on Pakistan and the entire subcontinent. They capture moisture-laden winds from the Arabian Sea (and to the east, the Bay of Bengal) and create rain that irrigates the region. In winter they block cold winds from North and Central Asia, keeping the subcontinent s climate mild. Spring melt-offs provide water. Historically the Himalayas and contiguous ranges have also formed a barrier protecting the region from the incursions of outsiders. Several passes along Pakistan s western and northern borders provide routes in and out of the nation and have been key transit points throughout recorded history. The famous Karakoram highway, a passage to China is passing through these mountains, which is now being developed more as China Pakistan Economic Corridor (CPEC). 2-4

31 THE CONTEXT OF PAKISTAN WESTERN MOUNTAINS In Baluchistan, west of the Indus Plain, three minor ranges run parallel south from the Hindu Kush to the Kabul River, their valleys draining the Swat, the Panjikora, and the Chitral-Kunar Rivers. The Safed Koh Range, which runs east west, has peaks averaging about 12,000 feet. The Khyber Pass, the most famous of the high-elevation gateways to the subcontinent, cuts through its mountains. About 33 miles in length, the pass extends from Jamrud, some 10 miles from Peshawar, Pakistan, to Dakka in Afghanistan. South of the range is the Kurram River. The Kurram Pass, which goes through Parachinar, Thal, and Kohat, has long been another favoured route to Afghanistan. To the south, the Waziristan Hills lie between the Kurram and Gomal Rivers. The Gomal Pass, named for the Gomal River, which feeds into the Indus, has been an important trade route between Afghanistan and Pakistan for nomadic tribes known as the Powindahs. South of the Gomal River the Sulaiman Mountains extend for 300 miles. The main peak, Takht-i-Sulaiman, is 11,100 feet. The Bolan Pass is the most noted transit point of these mountains and the Bolan their main river. The Pakistan city of Quetta guards the northern end of the pass. From here the land descends to the Kirthar Hills, low parallel ranges of some 7,000 feet in elevation. They get little monsoon rainfall and are barren. West of the Sulaiman and Kirthar Mountains the land descends to the dry hills of the Baluchistan Plateau, running northeast to southwest at an elevation of about 1,000 feet. The coastal Makran range borders the south end of Pakistan s western boundary THE SALT RANGE AND THE POTWAR PLATEAU The Salt Range extends from near Jhelum, on the Jhelum River, north-west to the Indus River and then south into the districts of Bannu and Dera Ismail Khan in the Khyber Pakhtunkhwa (KPK). Its peaks average 2,200 feet in height, though they reach about 5,000 feet near Sakesar. In addition to extensive deposits of salt, its steep rock faces in the north contain gypsum, coal, and other minerals. The Salt Range has also attracted the attention of geologists, as it contains one of the world s most complete geological sequences, from the Cambrian to the Pleistocene eras. 2-5

32 THE CONTEXT OF PAKISTAN The Potwar Plateau extends north of the Salt Range. The elevation ranges from 1,000 to 2,000 feet. The landscape is varied, shaped by glacial erosion. During the last ice ages glaciers that covered Kashmir and much of the northern subcontinent extended over this now semiarid region, creating the plateau s hills and hillocks THE INDUS PLAIN South of the Salt Range the vast Indus Plain, drained by the Indus River and its tributaries, stretches to the Arabian Sea. The plain is composed of fertile alluvial deposits left by the overflow of the rivers. Several rivers in addition to the Indus traverse the Himalayan ranges. Their enormous flows in the rainy season often flood the surrounding plains. The northern part is called the Punjab and gives its name to the province that occupies the land. Most of this area is in Pakistan. The elevation here ranges from 600 to 1,000 feet. The land between two rivers is referred to as a doab. The Indus has five major tributaries, and thus Punjab has four doabs. The combined waters of these tributaries, before joining the Indus near Mithankot, are called the Panjad, thus the name of the province. The Indus and its five major tributaries join in the Sind south of Mithankot. Here the land is flat, the river is slow and wide, several miles across in the wet season. Silt on its banks forms a natural barrier, but at times the river has broken through and caused vast flooding, and has changed course. Near the coast a delta and flood plain form the mouth of the Indus. A coastal strip five to 25 miles wide contains scattered mangrove swamps. Canals have been cut through the area, providing access for water traffic and trade. The Thar Desert occupies the southeast portion of the Indus Plain, spanning both Pakistan and India. 2.2 CLIMATE Generally arid, Pakistan lies in a warm temperate zone. The year is popularly regarded as having three seasons: summer, rainy season, and winter. Hot, summery weather lasts from April to September, and cold winters stretch from October to March. Monsoon rains drench the region from July to September. Within its borders, the country has four primary climactic regions. The northern and north western mountains have very cold winters with frequent frosts and heavy snowfalls. Summers are mild. On the plains to the south, the low elevation and absence of sea breezes cause very hot summers. During summer days, dry winds called loo blow. In the coastal areas to the south the 2-6

33 THE CONTEXT OF PAKISTAN Arabian Sea provides a moderating influence, and temperature variations are less extreme. The Baluchistan Plateau has a climate similar to that of the northern regions, though warmer in both summer and winter. Figure 2-2: Pakistan 30-year ( ) annual temperature ( C) spatial distribution Source: Sarfaraz, et al. [20] 2-7

34 THE CONTEXT OF PAKISTAN Figure 2-3: Pakistan 30-year ( ) annual rainfall (mm) spatial distribution Source: Sarfaraz, et al. [20] Table 2-1: the Koppen climate classification systemn based on Koppen climate classification system S. No Koppen Climate Categories Description 1 BWhw Desert hot with dry winter 2 BWhs Desert hot with dry summer 3 BShw Steppe hot with dry winter 4 BSh Steppe hot with fully humid 5 BSks Steppe cold with dry summer 6 Csa Temperate cold with dry summer 7 Cfa Temperate cold with fully humid 8 Cwb Warm temperate without dry season/fully humid 9 Dsa Cold snowy with dry and hot summer 10 Dsb Cold snowy with dry and warm summer 11 Dwa Cold snowy with dry winter and hot summer Source: Sarfaraz, et al. [20] 2-8

35 THE CONTEXT OF PAKISTAN Figure 2-4: Pakistan climate classification map based on Koppen climate classification system Source: Sarfaraz, et al. [20] 2.3 ADMINISTRATIVE SETUP A federal parliamentary republic state, Pakistan is a federation that comprises four provinces: Punjab, Khyber-Pakhtunkhwa (KPK), Sindh, and Balochistan and four territories: the Tribal belt, Gilgit Baltistan, Islamabad Capital Territory, and Kashmir. The Government of Pakistan exercises the de facto jurisdiction over the Frontier Regions and the western parts of the Kashmir Regions, which are organised into the separate political entities Azad Kashmir and Gilgit- Baltistan. In 2009, the constitutional assignment (the Gilgit-Baltistan Empowerment and Self-Governance Order) awarded the Gilgit-Baltistan a semi-provincial status, giving it self-government. The local government system consists of a three-tier system of districts, tehsils and union councils, with an elected body at each tier. There are about

36 THE CONTEXT OF PAKISTAN districts altogether, of which Azad Kashmir has ten and Gilgit Baltistan seven. The Tribal Areas comprise seven tribal agencies and six small frontier regions detached from neighbouring districts PUNJAB Punjab is the most populous and developed of the four provinces. Noted for its arts and crafts, it is considered the cultural capital of Pakistan. Covering an area of 97,192 square miles, Punjab is primarily a plain, though its north is bisected by the Salt Range, composed of the Murree and Kahuta hills on the north side and the Pubbi Hills of Gujrat in the south. The Potwar Plateau (1,000 2,000 feet) lies north of the Salt Range, between the Jhelum River in the east and the Indus River to the west. It is primarily an agricultural area and boasts one of the largest canal irrigation systems in the world. Punjab comprises eight administrative divisions. Its capital, Lahore, is linked to most major events and movements in Pakistan s history. Situated on the left bank of the river Ravi, it is bristling with monuments and buildings of great architectural and historical note. These include the Badshahi Mosque, Emperor Jahangir s Mausoleum, and the Shalimar Gardens. Islamabad, the nation s capital, lies some 170 miles north of Lahore. Its twin city, Rawalpindi, is a gateway to the hills and mountains of Pakistan s north, which draw hikers, trekkers, and mountain climbers from around the world. Taxila, another of the province s many points of interest, is an ancient city rich in archaeological sites and treasures SINDH The life and economy of Sindh flow in the current of the river Sindhu, or Indus, for which the province is named. Yet despite its aqueous spine, this is among the hottest areas of Pakistan. Jaccobabad, in the north of the province, is one of the hottest places on earth, with day-time temperatures in the summer rising to over 49 C. Comprising three divisions, the province covers 54,198 square miles. Sindhi, an ancient language, is spoken by a great majority of the population. The capital, Karachi, has been the nation s primary seaport since the 1700s and is the largest city in Sindh. In addition to its position as a trading centre, Sindh is also an industrial powerhouse, producing up to half the nation s goods 2-10

37 THE CONTEXT OF PAKISTAN in some manufacturing sectors. Rice, cotton, and wheat give the province a strong agricultural base. Thatta, the former provincial capital, was once a centre of learning and still contains notable historical architecture. About 60 miles east of Karachi, it is also the site of the famed Makli Tombs, a sprawling necropolis built between the 15th and 17th centuries. In the 18th and 19th centuries, Hyderabad was the capital of Sind, and today it is noted for colourful handicrafts including glass, lacquered furniture, and handloomed cloth, as well as several historic forts, buildings, and monuments. Crafts remain important throughout the province, which is noted for ajrak - local craftwork that includes pottery, carpets, leatherwork, and silk. Sind is also noted for its textiles in the form of blankets, gold and silver embroidery, and cotton cloth. As befitting the first outpost of Islam on the subcontinent, poetry has long been a part of Sindh s cultural heritage KHYBER-PAKHTUNKHWA The Khyber-Pakhtunkhwa (KPK) boasts the largest concentration of high peaks in the world. Containing the restless tribal areas and situated astride key mountain passes, including the Khyber Pass, KPK has long been an untamed and strategic corner of the region. Most of the invaders who swept into the area that is now Pakistan, including Alexander the Great, Timur, Emperor Babur, and Mahmud of Ghazni, passed this way on their journeys of conquest. The province in its present configuration, covering 29,808 square miles, was created in 1901 and divided into tribal and settled areas. The tribal areas are administered by the federal government, while the settled areas are ruled by the fairly autonomous provincial assembly, as are all the provinces. The province has five administrative divisions: Peshawar, Kohat, Hazura, Dera Ismail Khan, and Malakand. Each of these is divided into two or more districts. The provincial capital is Peshawar. This province was also the home of the Gandhara Civilization, noted for its art, which blended Greco-Roman and local traditions, often harnessed to glorify Buddha and the religion he brought to this region. The valley of Udiyana, in the Swat River valley, was important during the Buddhist era of this region. 2-11

38 THE CONTEXT OF PAKISTAN BALUCHISTAN The largest of Pakistan s four provinces, covers around 131,051 sq. miles. Its geography encompasses mountains, coastal plains, and rocky deserts on its high plateau. In the south, the Makran Range separates the coastal plain from the interior, a region of highland basins and deserts. Southeast Baluchistan is cut by narrow river valleys. With little room for alluvial deposits to settle, there is little agriculture. Archaeological research in the areas of Mehrgarh, Nausharo, and Pirak in the Kachi Plain indicates that settlements existed from the Neolithic period through the Iron Age, beginning in the early seventh millennium B.C.E. Dams were common to many settlements. The final settlement phase of this culture lasted until about 2600 B.C.E., the period when the Indus Valley Civilization of the river plains to the east of Mehrgarh was beginning to develop. Evidence from this time period points to mass production of pottery and increasing trade and exchange. Near the middle of the third millennium B.C.E., traces of human habitation end. Baluchistan became a full-fledged province only in It has six administrative divisions: Quetta, Sibi, Kalat, Makran, Loralai, and Nasirabad. Each of these is composed of two or more districts. The capital of Baluchistan is Quetta, located by the Bolan Pass. Three main languages are spoken: Baluchi, Pashto, and Brauhvi. Urdu, Pakistan s national language, is understood as well. The Baluchi, the language of the Baluchs, has Indo-Iranian roots. The strong national identity of the Baluchis, their tribes extend into Iran and Afghanistan. Though only about 1.2 million of its 85 million acres is under cultivation, the province s economy is based on agriculture. The production of fruit in Baluchistan gives the province the sobriquet Fruit Garden of Pakistan. With little rainfall in the region, irrigation depends mostly on wells, karezes (underground water conduits), and springs. Canals irrigate about 1,000 square miles. Livestock, primarily sheep and goats, are also a mainstay of the agricultural sector. In the Arabian Sea to the south, a fishing industry flourishes. Though rich in minerals including iron ore and copper, Baluchistan has lagged in development of these resources. Facilities for the textile, pharmaceutical, and gas industries have recently been constructed, and the government has established economic incentives to encourage investment in the province. 2-12

39 THE CONTEXT OF PAKISTAN 2.4 DEMOGRAPHY AND URBANIZATION Back in 2001, the estimated population was around million; the country, at that point, became the seventh most populated country in the entire world. Over the next ten years, the estimated population grew by about 34 million people. Today, the estimated 2015 Pakistan population is approximately million, making it the sixth most populous country. To break this down even more specifically, the population of Pakistan grew, on average, at a rate of 3 percent per year from 1951 until the middle of the 1980 s decade. From the mid 1980 s until the year 2000, the growth of the population slowed down to about 2.6 percent per year; and from 2000 to 2012, to about 2 percent per year. The reason for this slow population increase may be that the country spent a lot of time and effort to slow down the population growth [2]. Figure 2-5: Population Growth in Pakistan Source: WB [21] During , Pakistan's urban population expanded over sevenfold, while the total population increased by over fourfold. In the past, the country's population had a relatively high growth rate that has been changed by moderate birth rates. Its growth rate is reported at around 1.49%, which gives an annual increase of more than 3 million. The expected population of Pakistan would be around 251 million in 2025 and 277 million in 2050 [2]. Trends in social changes and economic pressures have led to rapid urbanization and the emergence of megacities in Pakistan [22-24]. During , Pakistan became the second-most urbanized country of South Asia with city dwellers making up 36 percent of its population. It is estimated that about 50 percent of Pakistanis now reside in towns of 5,000 people or 2-13

40 THE CONTEXT OF PAKISTAN more. As per 2014 estimates, the Life Expectancy in Pakistan is years; for male and for female [12]. Increase in population, expansion in trade and urbanization will greatly increase demand of passenger and road freight transport [25, 26]. While the benefits of urbanization are significant, a number of externalities, such as congestion and pollution, can offset them. As in the case of Pakistan, urbanization tends to occur during a country s development stage characterized by low income and nascent institutions [27]. Pakistan s urbanization, largely fuelled by migration, has accelerated over the last decades, during which the urban growth rate has been twice that of population growth. While recognizing that urbanization is desirable in general terms for Pakistan, this report focuses on the potentially mutually reinforcing social implications of urbanization and other social priorities associated with trade and transport sector reforms, particularly those concerning the most vulnerable groups (day laborers, youth, and women). Indeed, the share of Pakistan s urban population has continued to increase since 1996 and it is now estimated that 35.9 percent of the country s population lives in urban settings [28]. With economic motivations dominating rural-to-urban migration, it is not surprising to find Lahore and Karachi, the two most highly concentrated districts in large-scale manufacturing employment, among those facing the most challenges in relation to urban sprawl. Furthermore, the high geographic concentration of manufacturing industries in Pakistan reinforces spatial disparities, with investments being prioritized toward leading districts at the cost of lagging ones. While migration presents undeniable benefits for agglomerated industries (for instance, through expanded labour markets located near demand centres and input suppliers), without the corresponding infrastructure investments and public service delivery, those migrants, particularly in the case of daily wage workers, may continue to live in poverty. 2.5 ECONOMY AND LEVEL OF DEVELOPMENT Pakistan was a very poor and predominantly agricultural country when it gained independence in Pakistan's average economic growth rate in the first five decades ( ) has been higher than the growth rate of the world economy during the same period. Average annual real GDP growth rates] were 6.8% in the 1960s, 4.8% in the 1970s, and 6.5% in the 1980s. Average annual 2-14

41 THE CONTEXT OF PAKISTAN growth fell to 4.6% in the 1990s with significantly lower growth in the second half of that decade. Recent economy of Pakistan's with GDP of USD billion ranks 26 th largest in the world in terms of purchasing power parity (PPP), and 41 st largest in terms of nominal Gross Domestic Product. In terms of GDP, per capita income is USD 1,520 [2]. Economists feel that it has a potential to become one of the world's large economies in the 21 st century, if it overcomes the after effects of decades of war in the region and social instability [6, 7, 10]. Presently, it has serious deficiencies in basic services such as railway transportation and electric power generation, and low levels of investments in the social sector, like health, education, and social safety nets [29]. However, recent government's monetary policies has contributed to a reduction in money-market interest rates, and a great expansion in the quantity of credit, changing consumption and investment patterns [10]. Some recent reforms have resulted in many good changes. The revival of growth that started in has accelerated in as per latest indicators released by the National Accounts Committee of Government of Pakistan [13]. The policy rate decelerated at 7 percent, which was lowest in last 42 years, capital market created history, grading by international rating agencies improved, historical agreement with the Chinese Government on China Pak Economic Corridor (CPEC), successfully reviews with the IMF, issuance of Ijara Sakuk Bond after a period of 9 year, the decline in the unemployment rate from 6.2 to 6.0 percent etc. Primary export commodities include textiles, leather goods, sports goods, chemicals and carpets/rugs, while exports include industrial machinery, edible oil, petroleum and petroleum products [6]. The growth of Pakistan's economy is focused along the Indus River, coexisting with the lesser developed area in other parts of the country [6]. The economies have significantly diversified in Karachi and other major urban centres in the Punjab. Its challenges include internal political disputes, a fast-growing population, mixed levels of foreign investment, and frequent current account deficits [7]. 2-15

42 THE CONTEXT OF PAKISTAN Figure 2-6: Economic Activities in Different Regions of Pakistan ECONOMIC GROWTH Taking a long-run perspective, Pakistan's average annual real GDP growth rate of 5.3 since the 1960s has not been disappointing. Not only much higher growth rates have been achieved in certain sub-periods, however, but many East Asian countries, with economic conditions similar to Pakistan's in the 1960s and 1970s, have since then achieved much stronger growth and economic development [30]. Although less than the previous 5 year average of 7%, it would represent an overcoming of the present crisis wherein growth is a mere 3.5-4%. Today the Nominal GDP of Pakistan is USD billion, which is better than its last decades performance due to high growth rate (see Table 2-2). 2-16

43 THE CONTEXT OF PAKISTAN Figure 2-7: Historical Growth Rate of GDP in Pakistan Source: PBS [31] Historically, agriculture accounted for the major share of GDP. While per-capita agricultural output has grown since then, it has been outpaced by the growth of the non-agricultural sectors, and the share of agriculture has dropped to roughly one-fifth of Pakistan's economy [2, 13, 17]. In recent years, the country has seen rapid growth in industries (such as apparel, textiles, and cement) and services (such as telecommunications, transportation, advertising, and finance). The economy of Pakistan periodically suffers from high inflation rates. But it is now reasonably controlled at 8.7 percent in [2]. Table 2-2: Historical Growth of Economy in Pakistan Indicator GDP (USD) 75 billion 160 billion 170 billion 185 billion billion GDP Purchasing Power Parity (PPP) (USD) 270 billion billion 504 billion billion billion GDP per Capita Income Revenue collection PKR 305 billion 708 billion 990 billion 1.05 trillion 2.65 trillion Foreign reserves (USD) 1.96 billion 16.4 billion 8.89 billion billion 17.7 billion Exports (USD) 8.5 billion 18.5 billion billion billion billion ( est.) Textile Exports $5.5 billion $11.2 billion KHI stock exchange (USD) 5 billion at 75 billion at 46 billion at 9,300 (100-Index) 700 points 14,000 points points 26.5 billion at 9,000 points Foreign Direct Investment (USD) 1 billion 8.4 billion 5.19 billion 4.6 billion billion External Debt & Liabilities (USD) 39 billion billion 45.9 billion 50.1 billion 56 billion Poverty level Literacy rate (%) Development programs (PKR) 80 billion 520 billion billion 621 billion 758 billion Source: IMF [32] 2-17

44 THE CONTEXT OF PAKISTAN Unlike the areas of trade openness and government burden where significant improvements in recent years have moved Pakistan fairly close to the top 25 percent of the developing country distribution, the country lags substantially in the areas of education, public infrastructure, and financial depth. Bringing Pakistan to the same level of achievement as this group of countries would require a 228 percent improvement in education, 375 percent in infrastructure, and over 100 percent in financial depth. Only a 12-percent improvement in trade openness would be necessary. According to a research report, the size of the Pakistani middle class is conservatively estimated at approximately 70 million, out of a total population of about 191 million [33]. This represents 40 percent of the population of the country. Despite this, the poverty levels remain pervasive. The broad distribution of income and poverty in terms of Gini coefficient is The household income or consumption by percentage share is 4.1 percent for lowest; 27.7 percent for the highest; and 10.4 percent for the middle class [7, 33]. On the expenditure side, total yearly expenditure amounts to USD 37 billion. Out of which, about USD 5 billion is available as Public Sector Development Programme (PSDP) support to the federal and provincial governments. Private sector mobilizes resources for investment through private savings, banks and other commercial channels [34]. Pakistan receives economic aid from several sources as loans and grants. The International Monetary Fund (IMF), World Bank (W8), Asian Development Bank (ADB), etc. provide long term loans to Pakistan. Pakistan also receives bilateral aid from developed and oil-rich countries. About 93 percent of this assistance came to Pakistan in the form of loans, and remaining in the form of grants. These resources are utilized for support to finance development projects, budgetary support, and meeting debt repayment obligations [2]. Presently the debt burden of Pakistan stands at USD billion. Against this liability, there is a need for gross financing of about USD 10,8 billion in a fiscal year. In case, the country resources are short of this requirement, the government has to mobilize additional loans or grants. This situation often leads to shortage of financial resources for undertaking new and additional development projects in the country. 2-18

45 THE CONTEXT OF PAKISTAN The total size of the Federal Budget for is about USD 44.5 billion, with an estimated resource availability of USD billion. A Major portion of the allocated budget goes to meeting current expenditure, and about USD billion remains available for the Public Sector Development Programme (PSDP) at the federal level and in the provinces. Out of this allocation, about USD 8.14 billion is provided to the provinces, and USD 7.0 billion given to the Federal Ministries for their development projects [35]. Some portion of the federal share is allocated to Pakistan Millennium Development Goals (MDGs): Community Development Programme, Special Federal Development Programme, and rehabilitation programmes in earthquake affected areas of Kashmir and Northern Areas of Pakistan [17]. The country is presently in the midst of the serious energy crisis, which is affecting almost all sectors of the economy, especially the export oriented industries [5]. Likewise, frequent high floods add an additional burden on the economy. In the backdrop of these, huge investment needs in these sectors of the economy, financing of new projects and railways infrastructure and issues like pollution control and mitigation and adaptation to climate change in key sectors of intervention (agriculture, energy, and water) remain a challenge. It is also precisely the reasons that in the absence of domestic financial resources, Pakistan has not been able to sequester potential of about substantial amount of greenhouse gases (GHG) through appropriate investments in clean energy, clean transportation and forestry etc. [36] MAJOR SECTORS AGRICULTURE Majority of the population, directly or indirectly, dependent on agriculture sector. It contributes about 24 percent of Gross Domestic Product (GDP) and accounts for half of the employed labour force and is the largest source of foreign exchange earnings [2]. The economic importance of agriculture has declined since independence, when its share of GDP was around 53%. Following the poor harvest of 1993, the government introduced agriculture assistance policies, including increased support prices for many agricultural commodities and expanded availability of agricultural credit. From 1993 to 1997, real growth in the agricultural sector averaged 5.7%, but has since declined to about 4%. Agricultural reforms, 2-19

46 THE CONTEXT OF PAKISTAN including increased wheat and oilseed production, play a central role in the government's economic reform package [6]. The most important crops are wheat, sugarcane, cotton, and rice, which together account for more than 75% of the value of total crop output. Pakistan is a net food exporter, except in occasional years when its harvest is adversely affected by droughts. Pakistan exports rice, cotton, fish, fruits (especially Oranges and Mangoes), and vegetables and imports vegetable oil, wheat, pulses and consumer foods. The country is Asia's largest camel market, second-largest apricot and ghee market and third-largest cotton, onion and milk market. Pakistan's principal natural resources are arable land and water. About 25% of Pakistan's total land area is under cultivation and is watered by one of the largest irrigation systems in the world. Pakistan irrigates three times more acres than Russia. Pakistan agriculture also benefits from year round warmth. Agriculture accounts for about 23% of GDP and employs about 44% of the labour force. Zarai Taraqiati Bank Limited is the largest financial institution geared towards the development of agriculture sector through provision of financial services and technical expertise [7, 13] MINING SECTOR Currently about 52 minerals are under exploitation, although on a small scale. The major production is of coal, rock salt and other industrial and construction minerals. The current contribution of the mineral sector to the GDP is about 0.5% and likely to increase considerably on the development and commercial exploitation of Saindak & Reco Diq copper and gold deposits (world's largest gold mine), Duddar zinc lead, Thar coal and gemstone deposits. Pakistan is endowed with significant mineral resources and is emerging as a very promising area for prospecting/exploration for mineral deposits. The country's more than 6,00,000 km² of the outcrop area demonstrates varied geological potential for metallic and non-metallic mineral deposits. Except oil, gas and nuclear minerals regulated at the federal level, minerals are a provincial subject, under the constitution of the Islamic Republic of Pakistan. Recent discoveries of a thick oxidised zone underlain by sulphide zones in the shield area of the Punjab province, covered by a thick alluvial cover have opened new vistas for metallic mineral exploration. Pakistan has a large base 2-20

47 THE CONTEXT OF PAKISTAN for industrial minerals. The discovery of coal deposits having over 175 billion tons of reserves at Thar in the Sindh province has given an impetus to develop it as an alternate source of energy. There is vast potential for precious and dimension stones INDUSTRIAL SECTOR Pakistan's industrial sector accounts for about 24% of GDP. Cotton textile production and apparel manufacturing are Pakistan's largest industries, accounting for about 66% of the merchandise exports and almost 40% of the employed labour force. Other major industries include cement, fertiliser, edible oil, sugar, steel, tobacco, chemicals, machinery, and food processing. The government is privatizing large-scale industrial units, and the public sector accounts for a shrinking proportion of industrial output, while growth in overall industrial output (including the private sector) has accelerated. Government policies aim to diversify the country's industrial base and bolster export industries. Large Scale Manufacturing is the fastest-growing sector in Pakistani economy. Major Industries include textiles, fertiliser, cement, oil refineries, dairy products, food processing, beverages, construction materials, clothing, paper products and shrimp. In Pakistan SMEs have a significant contribution in the total GDP of Pakistan, according to SMEDA and Economic survey reports, the share in the annual GDP is 40% likewise SMEs is generating significant employment opportunities for skilled workers and entrepreneurs. Small and medium scale firms represent nearly 90% of all the enterprises in Pakistan and employ 80% of the nonagricultural labour force. These figures indicate the potential and further growth in this sector SERVICES SECTOR Pakistan's service sector accounts for about 53.3% of GDP.Transport, storage, communications, finance, and insurance account for 24% of this sector, and wholesale and retail trade about 30%. Pakistan is trying to promote the information industry and other modern service industries through incentives such as long-term tax holidays. 2-21

48 THE CONTEXT OF PAKISTAN 2.6 TRANSPORT SECTOR AND TRUCKING The Government of Pakistan s (GoP s) 2011 Framework for Economic Growth [37] seeks to place Pakistan on a sustained high economic growth path of 7 percent per year through measures to reduce the cost of doing business, improve the investment climate, and strengthen institutions. Improvements in trade and transport are central to achieve the Framework s goals. The transport sector constitutes 10 percent of Pakistan s gross domestic product (GDP) and provides 6 percent of the employment in the country [8]. The sector plays an important role in linking other sectors in the economy, contributes to both domestic and international trade, and helps facilitate the spatial transformation occurring in Pakistan. However, present patterns in transport and trade logistics generate inefficiencies that are costing Pakistan s economy roughly 4 6 percent of GDP per year, which is a major constraint on the aspirations set out in the Framework [37]. According to the logistics performance index, Pakistan s performance on most logistics indicators, including the quality of trade and transport infrastructure, is worse than that of other Asian countries [38]. The transport supply chain system is not providing the value-added services that have become the hallmark of modern logistics, such as multimodal systems that combine the strengths of different transport modes into one integrated system. While the transport sector is functional (figure O.1), it suffers from low quality, long travel ing times, and poor reliability (particularly rail transport), which hinder the country s economic growth. In addition, increased motorization and poor urban planning have resulted in significant pollution and traffic congestion in urban areas. Congestion in urban areas reduces the competitiveness of the country s exports, increases the cost of doing business, and constrains Pakistan s capability to integrate into global supply chains. 2-22

49 THE CONTEXT OF PAKISTAN Figure 2-8: Ranking of Selected Developing Countries on Quality of Transport Infrastructure (out of 142 Countries) Source: WEF [39] Geography endows Pakistan with the potential to reap huge economic gains from becoming a hub for regional trade that will have spill overs for economic growth. To the northeast is China, with a population of over a billion and the world s fastest growing economy, increasingly engaged in the development of its Western frontier that lies close to Pakistan. This link is going to be encouraged by the development of China Pakistan Economic Corridor (CPEC). To the northwest and west lie resource-rich economies of Central Asia and the Islamic Republic of Iran, eager to combine their mineral wealth with skills to generate higher income for their citizens. To the East is India, growing at 8 percent per annum, with large pools of skilled labour and savings looking for gainful employment and investment avenues. To reap economic benefits in this neighbourhood of growing opportunities, Pakistan needs to play its historical role of a connector of markets that lie in the North (China) and the West (Central Asia and the Islamic Republic of Iran), to markets in the East (India) TRANSPORT SECTOR The Road Transport Sector is fairly developed in Pakistan with 263,942 kilometres of highways, motorways, high type roads. The total length of the former categories of roads is 185,063 km. In addition, there are low type roads with a total length of 78,879 km. The present road density is 0.33 km per square 2-23

50 THE CONTEXT OF PAKISTAN km., which will be increased to 0.45 km per square km. As a result of this target, the exiting length road network will be increased from 263,942 km to 358,000 km. The roads within the cities and town limits are constructed and maintained by the city governments [25]. The transportation sector accounts for about 10.5 percent of the country's GOP and 27.4 percent of Gross Fixed Capital Formation (GFCF) in FY It provides over 6 percent of employment in the country and receives 12 to 16 percent of the annual Federal Public Sector Development Programme (PSDP). Government agencies dominate the sector [34]. The National Highways carry 80 percent of Pakistan's total traffic. Over the past ten years, road traffic has grown significantly faster than the national economy [26]. Currently, it is accounting for 91 percent of national passenger traffic and 96 percent of freight. Figure 2-9: National Highways of Pakistan Source: WP [40] 2-24

51 THE CONTEXT OF PAKISTAN Although the sector is functional, its inefficiencies with long waiting and travelling times, high costs, and low reliability are dragging the country's economic growth. These factors also reduce the competitiveness of the country's exports, increase the cost of doing business in Pakistan, and constrain Pakistan's ability to integrate into global supply chains which require just-in-time delivery [22]. The poor performance of the sector is estimated to cost the economy 4 6 percent of GDP each year [29]. The number of registered motor vehicles in Pakistan in 2014 is million, increasing at an annual rate of about 8 percent, much above the present GDP growth rate of 4.24 per annum [8]. Most of the vehicles are in the category of motorcycles (10.31 million) followed by motor cars/jeeps/station wagons/motor cab/taxis (2.5 million); 3-wheelers (429,300); trucks (251,000) and buses (223,600). The remaining registered vehicles for fall into the category of other vehicles with their number standing at 1.37 million. Figure 2-10: Motor Vehicles on the Road (in thousands) in Pakistan, Source: Sánchez-Triana, et al. [41] Road freight transport is one of the most important components of the transport sector in Pakistan. It accounts for about 96 percent of the inland freight ton-km, and in expenditure terms, it is between 3-4 percent of GDP [42]. It is, nevertheless, poorly regulated, and despite being deregulated and the overall structure of trucking in Pakistan remains informal and unorganized [29]. It is, therefore, operating in a highly competitive environment, and every effort is 2-25

52 THE CONTEXT OF PAKISTAN made by the owner and operators of trucks to recover their investment as soon as possible. With an increase in traffic, the present trucking fleets as well as the associated logistic systems are not in a position to handle the increasing domestic and international demands. Moreover, due to fuel inefficiencies of the old and obsolete trucks, fuel consumption per ton is higher as compared to the world average. And, even though Pakistan's freight cost is the lowest in the world, but in terms one ton per kilometre, expenditure is much higher as compared to the world primarily due to these inefficiencies. Survival in the business in therefore indeed very challenging. With a declining share of railways, and virtually non-existence of inland water transport in Pakistan, huge investments would be required in the trucking sector as well as the creation and maintenance of trucking infrastructure [42]. This can be only realized if reasonable return on investment is guaranteed. The limitation of basic statistics about the number and categories etc. of trucks has several implications for understanding specific problems of all relevant categories of trucks for matters relating to the investment required for the purchase of each vehicle, its financing, repayment modalities, operating income and profit, return on investment, state of technology available, quality of fuel available, estimates of toxic and gaseous emissions, pollutants and greenhouse gases. On the other hand, the Excise and Taxation Department in Pakistan had only one category for new registration of trucks at the rate of PKR 2.5 per kilogram of laden weight from filers of income tax returns, and PKR 4.0 per kilogram of laden weight from the non-filers of the income tax returns. The manufacturers and assemblers of trucks in Pakistan produce vehicles of different categories and engine capacities under the generic category of trucks, varying from 2 tons to 60 tons laden weight and this broad grouping makes it very difficult to understand the nature of the problem of each category of trucks and recommendations for their solutions. The availability of disaggregated data on trucks is, therefore, necessary to making any concrete recommendation, especially relating to their role and contribution to the problems of urban air pollution as well as the emission of GHGs [14]. The problem is also compounded as according to the Motor Vehicle Ordinance, 1965 and Motor Vehicle Rules, 1969 only two types of drivers' licenses are 2-26

53 THE CONTEXT OF PAKISTAN issued: One is Light Transport Vehicle Driving License (LTV) and second as Heavy Transport Vehicle Driving License (HTV). The HTV License entitles its holders to drive buses and trucks in Pakistan. No specific category of driving license for driving trucks is in practice in Pakistan. The above position is anonymous to practice in many other countries where the driver of a truck is required to have a Commercial Driving License (CDL) to drive a truck. And if, the truck is of complex configuration involving one or more trailers, special endorsements are required from the Traffic Police or the relevant Licensing Authorities. The National Highway Safety Ordinance, 2000 (NHSO-2000) is only specific to classify a freight vehicle if its laden, or Gross Vehicle Weight (GVW) is more than 5,000 kg (about 5 tonnes). The practical difficulty in this case is that some of the current manufacturers are freight vehicles are producing freight vehicles with capacity less than 5 ton GVW or exceed this limit. And other dichotomy adds to the complexity of the situation where, according to NHSO, 2000 where the allowable GVW enforced under the ibid ordinance varying from 17.5 tonnes to 61.5 tonnes. The lowest category of permissible GVW of 17.5 tonnes is applicable on 2-Axle Single Bedford Trucks. The allowable load limit proceeds to 6-Axle-Tendam-Single-Tendam at 61.5 tonnes. Another restriction enforced under the ordinance is Axle-Load limits: Single Axle 12 tonnes; Tandem Axle 22 tonnes; Tandem Axle 31 tonnes; Front Axle 5.5 tonnes. The tyre pressure for the Rear and Front Axle of trucks are prescribed at 120 and 100 psi respectively. These inconsistencies need to be streamlined [42]. Some time ago, on the request of Truck Associations, National Highway Authority (NHA) as relaxed allowable limits from 2.5 ton to 8 ton for National Highways. No relaxation is available on motorways. This concession owing to the enforcement of the restrictions and potential damage to road pavement on National Highways is under review for withdrawal by NHA. In many other countries where freight road transport by trucks have fairly advanced follow specific categories trucks type for regulation purposes. These include 'ultra-light trucks', 'light duty trucks', 'heavy duty trucks' and special purpose trucks (attached to the concrete mixers, trucks for carrying ores from mines to the processing factories) [43]. 2-27

54 THE CONTEXT OF PAKISTAN The above type of initiatives is equally desirable for Pakistan, if trucking has to play a meaningful role in the promotion of trade through international trade corridors with border countries of Afghanistan, China, India and Iran. In the presence of such a regulatory regime in the country, Pakistan can insist that trucks from other neighbouring countries also conform to our national regulations and performance. Currently, there are no fixed operations of freight trains in Pakistan. These are operated in intervals between running of passenger trains, and are frequently forced to stop and wait for the passing and exchanging of passenger trains. On the other side, the Pakistan Railways offer container transport services between Karachi Port/Port Qasim and dry ports in Lahore, Faisalabad, Rawalpindi, Peshawar and Quetta. Most of the containers transported by Railway are handled in the Lahore dry port. A high speed container transport service has also commenced with six pairs of trains per week. The freight fare on the railway is determined on a commercial basis of each commodity, taking into account the factors, such as volume, weight, form in terms of packing type, method of loading and susceptibility to transport losses. Pakistan Railways basic freight rate scale is as follows: Table 2-3: Table showing Pakistan Railways basic freight rate scales Distance (Kilometre) Rate (Paisa per tonne per kilometre) km km km km and Above Source: Elahi [29] From the above, it may be observed that Pakistan Railways freight rates are very favourable for bulk merchandise and at long distance. On the contrary, truck tariff per kilometre for a full load is estimated to vary from PKR 3.10 to 6.20, depending upon the distance travelled and the specification of truck chosen for the transportation of goods. The caveat, however, is that the merchandise should be for the full load of the vehicle. This condition may not be fulfilled in each consignment. Nevertheless, the truck transport remains to be preferable choice of the consignors. 2-28

55 THE CONTEXT OF PAKISTAN HIGHWAY INFRASTRUCTURE Highway transportation of freight is usually referred to as the truck mode [44]. Urban freight movements are predominantly by truck, while international freight is dominated by ocean shipping. The modal distribution of intercity freight varies greatly across regions and countries. Here the choice is amongst railways, trucking, and waterways [18, 45, 46]. Transport activity is expected to grow over the next several decades. Assuming about 2% increase per year in the energy use, a total transport sector will account for about 80% increase higher than current levels by 2030, unless there is a significant and rapid transition to alternative energy resources, such as biofuels, electricity and hydrogen [46]. In Pakistan, road transportation is the most important means for moving goods within the country and to neighbouring countries as they handle roughly 96 percent of total freight traffic [8]. The National Highways and Motorway network constitute 4.2 percent of the total road network and carries more than 90 percent of Pakistan s total traffic (96 percent of freight and 92 percent of passenger traffic). The majority of traffic moves along the north-south 1,760 kilometres of the N-5 Highway, which is Pakistan s longest highway and runs from Karachi to Torkham. The N-5 Highway carries 65 percent of intercity traffic and connects the key industrial centres in Punjab and neighbouring Afghanistan with international markets through the southern Karachi area ports. It serves over 80 percent of Pakistan s urban population, and contributes to percent of GDP [47]. In the recent past, different organizations have suggested investments in road construction, rehabilitation, and upgradation, as part of efforts to facilitate trade with Pakistan s neighbours. Some analysts have proposed evaluating these links as private-sector investments under long-term concessions. Other analysts propose increasing efficiency by giving priority to improving road/rail access to seaports and dry ports through urban road/highway improvements and removal of trade bottlenecks such as inefficient container handling and freight clearance procedures. The former argue that inefficient urban transport raises freight transport costs and increases unreliability. 2-29

56 THE CONTEXT OF PAKISTAN Logistics performance index (ranking out of 150 countries) a Customs (ranking out of 150 countries) a Infrastructure (ranking out of 150 countries) a International shipments (ranking out of 150 countries) a Logistics competence (ranking out of 150 countries) Tracking and tracing (ranking out of 150 countries) a Timeliness (ranking out of 150 countries) a Quality of overall infrastructure (ranking out of 133 countries) b Quality of roads (ranking out of 133 countries) b Quality of railroad infrastructure (ranking out of 133 countries) b Quality of port infrastructure (ranking out of 133 countries) b Quality of air transport infrastructure (ranking out of 133 countries) b Table 2-4: Trade and Infrastructure Rankings for Asian Countries Bangladesh China India Malaysia Pakistan Sri Lanka Thailand Sources: a. Arvis, et al. [38]; b. WEF [48] The quality of the road infrastructure in Pakistan has severe capacity constraints that obstruct the facilitation and efficient movement of goods to their destination. Poor road maintenance is due to factors such as insufficient funding and overloading of vehicles CHINA PAKISTAN ECONOMIC CORRIDOR DEVELOPMENT PROGRAMME The China Pakistan Economic Corridor (CPEC) is a USD 46 billion megaproject which is intended to upgrade and expand Pakistani infrastructure. The Exim Bank of China will lend the Government of Pakistan approximately $11 billion to overhaul the country's transportation infrastructure at heavily-subsidized concessionary loans with an interest rate of 1.6% [49]. CPEC will span the breadth and width of Pakistan, and will eventually link the Pakistani city of Gwadar Port in south western to China s north western autonomous region of Xinjiang via a vast network of highways and railways [50]. As part of the project, an 1,100 kilometre long motorway will be constructed between the cities of Karachi and Lahore, which will connect to the M2 Motorway which runs between Lahore and Islamabad. The Karakoram Highway between Rawalpindi and the Chinese border will also be completely overhauled and widened. The Karachi Peshawar main railway line will also be completely overhauled to allow for train travel at up to 160 kilometres per hour, with expected completion by December Pakistan's railway network will also eventually be further developed in order to connect it to the Chinese railway network in Kashgar. 2-30

57 THE CONTEXT OF PAKISTAN A network of pipelines to transport liquefied natural gas and oil will also be laid as part of the project, including a USD 2.5 billion pipeline between Gwadar and Nawabshah to transport gas from Iran, as well as USD 2 billion pipeline linking the cities of Karachi to Lahore which is to be built with Russian collaboration. An additional estimated USD 30 billion worth of energy infrastructure will also be constructed by private firms in order to help alleviate Pakistan s chronic energy shortages, with over 10,400 MW of energy generating capacity to be developed by March 2018 as part of the corridor's fast-tracked Early Harvest projects [51]. The main objective of the CPEC initiative is to reduce 'the cost of trade and transport logistics and bring it up to international standards in order to reduce the cost of doing business in Pakistan and ultimately enhance export competitiveness and the country's industrialization. The CPEC Program consists of key policy reforms along with a comprehensive investment program to be implemented in collaboration with China [52]. Figure 2-11: Proposed China-Pakistan Economic Corridor 2-31

58 THE CONTEXT OF PAKISTAN The key CPEC policies would: Lead to modern and streamlined trade and transport logistics practices; Improve port efficiency, reduce the costs for port users and enhance port management accountability; Create a commercial and accountable environment in Pakistan Railways and increase private sector participation in the operation of rail services; Modernize the trucking industry and reduce the cost of externalities for the country; Sustain delivery of an efficient, safe and reliable National Highway system; and Promote and ensure safe, secure, economical and efficient civil aviation operations and boost air trade NATIONAL TRADE CORRIDOR IMPROVEMENT PROGRAMME In August 2005, The Government of Pakistan took initiative around the National Trade Corridor (NTC) to reduce the cost of trade by improving transport logistics infrastructure and services. The Government aimed to bring the quality of transport services to international standards. The programme was to reduce the cost of doing business in Pakistan and enhance export competitiveness, accelerate industrialization and sustain the high economic growth achieved in recent years. The National Trade Corridor Improvement Program (NTCIP) hinges on a consensus building process with all stakeholders through informed consultation. Pursuant to the above, the World Bank extended a Development Policy Loan (DPL) to Pakistan for carrying out studies and other preparatory work to facilitate implementation of the NTC Improvement Program (NTCIP) in Pakistan [53]. Planning Commission was designated as the lead agency of the government for the implementation of the World Bank's DPL. The Planning Commission in turn requested the sector Ministries/Divisions to coordinate and facilitate the implement various components of NTC under DPL. Accordingly, the Ministry of Commerce was assigned the responsibility of finalizing of a report on the facilitation of cross-border trade; Ministry of Ports and Shipping on improving efficiencies of ports; Ministry of Communication on road and highway development; Federal Board of Revenue on rationalization of tariffs and duties; Ministry of Railway in implementing reforms in the functioning of railways. The task of improving and modernizing of trucking was assigned to the Ministry of Industries, Production and Special Initiatives. Engineering Development Board under the Ministry of Industries, Production and Special 2-32

59 THE CONTEXT OF PAKISTAN Initiatives vigorously pursued the s responsibility and finalized the National Trucking Policy [54]. It contained concrete recommendations on different aspects of trucking. Two key recommendations in this regard related to the declaration of Trucking as Industry, and standardization of Engines for Trucking [54] TRUCK FREIGHT The trucking sector carries 96 percent of the total freight traffic [8]. The presence of a small fleet of owners, who generally own less than five vehicles, characterizes the trucking sector. The bulk of trucking companies is cantered in the port city of Karachi [55]. According to the GOP, by 2007, inefficiencies of the trucking sector were estimated at USD 2.62 billion per year, consisting mainly of (i) USD 1.04 USD 1.57 billion per year in extra fuel costs and diesel subsidies, (ii) USD 0.52 USD 0.61 billion per year in additional road user costs, and (iii) a USD 0.44 billion per year contribution to the infrastructure deficit [56]. Over the past 20 years, revenues per kilometre have decreased in real terms by 1.4 percent on average per year [57]. Many trucks operate long hours and carry excessive loads while travelling at low speeds of kilometres per hour compared to kilometres per hour in Europe. Road freight takes an average of 3 4 days between ports and the north of the country (a distance of 1,400 1,800 kilometres), which is twice what it takes in some other countries of Asia and Europe [56]. Pakistan Economic Survey reported total number of registered trucks in Pakistan in at 105,200. Out of which 75,800 were on the road with 4,000 as oil tankers and 600 as water tankers. The total number of registered trucks in year 2014 is reported to be 251,300. Out of which 249,000 were on the road with 11,400 as oil tankers and 1,700 water tankers [8]. Assuming a growth in the demand of trucks at the rate of 6 percent per annum, the total requirements of the trucks would be in the range of 400,000 by the year National Transport Study of Pakistan carried out by JICA in 1983 first reported the number of privately registered trucks were 45,000. It also stated that in 1981 there were 26.1 billion ton-km of inland transport, out of which road transport estimated share was 70 percent. This gradually rose to 35.2 billion ton-km in and stood at billion ton-km in During this period the share of freight traffic increased from percent to percent [26]. A 2-33

60 THE CONTEXT OF PAKISTAN table showing the progressive increased in the share of road freight transport to is given in the following table: Table 2-5: Table Showing Past Trend of Road Transport Share in Freight Movement Financial Year Road Freight Transport (billion ton-km) Percentage This proportion will depend on the performance of railways. In the alternative, this burden will be (projected estimates) shifted to trucking (projected estimates) (projected estimates) Source: JICA and NTRC [26], Elahi [29] Most of this gain in freight road transport has been due to the declining share of freight transport by Pakistan Railways. There are several reasons for these trends, two of which are the flexibility of delivery at designated places and safety and security of the transported merchandise. In the coming decade, Pakistan Railways has to be enabled to increase its share in the freight transport; as otherwise, there will be a sizable increase in the level of local air pollution, increased emission of greenhouse gases, congestion on roads and traffic accidents. Another reason for the rise of trucking in Pakistan is attributed to an episode in , when there was a major crop failure in Pakistan and wheat was to be imported from abroad. It was then to be transported from Karachi to the other parts of the country, and Pakistan Railways had not enough facilities and 2-34

61 THE CONTEXT OF PAKISTAN logistics to manage this freight. National Logistic Cell (NLC) under the Pak Army was entrusted to arrange for the transport of the imported wheat to the north and other parts of the county. NCL imported 800 high capacity trucks for this purpose and successfully performed the task. Later on, for the transportation wheat and other essentials from Karachi to other parts of the country for Afghan refugees, another 600 vehicles were added to the fleet of NLC. Sixty-five to seventy percent of the total truck fleet consists of single- or doubleaxle trucks. The trucking sector is characterized by the presence of a small fleet of owners who generally possess fewer than five vehicles [55]. The trucking sector is highly competitive, characterized by low barriers to entry, many small operators, and low freight rates. Table 2-6: Composition of Trucks by Axle Configuration 2-Axle 3-Axle 3-Axle Trailer 4-Axle 5 & 6 Axle Numbers 53,864 16, ,076 1,503 Percentage 70% 21.5% 1.2% 6.5% 1.92% Source: EDB [54] EDB [54] identified the following stakeholders, who have their involvement, either directly or indirectly in the trucking sector and influence the operations and structure of the whole sector in one way or the other (see Figure 2-12). To maintain high revenues, trucks are overloaded, which damages road quality and increases the demand for higher road investment. Lack of enforcement of regulations on safe operation, crew hours, truck modification, and trailer manufacture increase the risk of accidents. The trucking fleet is largely outdated by several decades and runs on underpowered engines. High import tariffs on high-capacity multi-axle trucks protect local manufacturers producing low-capacity and low-powered trucks, and hence prevent the trucking sector from improving its fleet [55]. Over the past 20 years, revenues per kilometre accruing to operators have decreased in real terms by 1.4 percent on average per year [57]. Many trucks operate long hours and carry excessive loads while travelling at low speeds, ranging between 20 and 25 kilometres per hour compared to kilometres per hour in Europe. Journeys in Pakistan take three times longer than in Europe. Road freight takes an average of 3 4 days between ports and the north of the country (a distance of 1,400 1,800 kilometres), which is twice what it takes in some 2-35

62 THE CONTEXT OF PAKISTAN other countries of Asia and Europe [57]. While it might seem unfair to compare Pakistan with these more developed countries, it is with them that Pakistan competes in global markets. Transport time is often lost by trucks needing repairs due to overloading [26]. M/o IP&SI EDB M/o S&T. PSQCA M/o Comm. NHA CBR NLC M/o Defence MVRDE M/o Commerce Environment Protection Agency (EPA) Provincial Registration Authorities Planning Commission BOI Truck Body Builders Salvage Sale of Bedford Trucks MVE Enforcement M/s Hino Pak Ghandhra Industry Limited M/s Ghandhara Nisaan Local OEM s Manufacturers Old & Used parts Dealers Truck & Bus Owners NADRA M/o Petroleum Masters Motors M/s Adam Motors M/s Afzal Motors Sind Engg. PACO (Yasoob) Figure 2-12: Identified Pakistan Trucking Stakeholders 2-36

63 THE CONTEXT OF PAKISTAN Road crashes occur frequently as trucks crash with other vehicles (that is, twowheelers and three-wheelers), carts, as well as pedestrians. Pakistan ranks among the most hazardous countries in the world in road safety. According to estimates by the World Health Organization, in 2007 there were 41,494 road fatalities in Pakistan, which in relative terms implies a rate of 25.3 deaths per 100,000 inhabitants. In contrast, the observed rates in industrialized countries range between 5 and 10 fatalities per 100,000 inhabitants. Pakistan s rate is also higher than many other developing and middle-income countries around the world. 2.7 GREEN HOUSE GASES EMISSION The GHG Emission Inventory of Pakistan for the year 2012 has estimated total emissions of 369 Mt CO 2e. These have increased from Mt CO 2e in 1994 to Mt CO 2e in This corresponds to per capita GHG emissions from 1.54 to 2.06 tons of CO 2e in 1994 to Under Business as Usual Scenario, the projected GHG emissions are expected to be between 1045 to 1400 Mt CO 2 in 2030, even though our development needs during this period are enormous [58]. In terms of sectoral share of GHGs in Pakistan Energy Sector remains at the top at 45.9 percent, followed by agriculture (44.8 percent); Industrial Processes; Waste and Land Use, Land Use Changes and Forestry. Transport is a sub-set of Energy Sector and it is the dominant contributor of GHGs in the Energy Sector [58]. Table 2-7: Table Showing National Inventory of GHG by Activity Sector-2012 Activity Sector Total (Mt CO2e) Percentage Energy Industrial Processes Solvent and Other Product Use Agriculture Land Use Land Use Changes and Forestry Waste Total Source: Elahi [29] The share of transport sector in GHG emissions is MtCO 2 e which constitute about 11.7 percent of the total GHG emissions. In terms of total emissions in the energy sector, the share of transport is about 25.1 percent. Since transport sector covers vast area of activity (road, rail, marine, air), the 2-37

64 THE CONTEXT OF PAKISTAN share of road freight transport should not be more than 7-10 percent of the total emissions in the transport sector. Nonetheless, it would be substantial in the context of urban and regional road transport sector. This sector alone has a potential of increasing its share to between percent if we see the trends in other fast moving economies. According to the UN Convention on Climate Change (UNFCCC) the GHG Inventory is computed taking into consideration at least 5 gases, namely Carbon Monoxide (CO); Carbon Dioxide (CO2); Nitrous Oxide ( N2O); Methane (CH4) and Non-methyl Volatile Organic Compounds (NMVOCs). The respective quantities of these gases are converted into CO 2 by taking into account the global warming potential of each gas. It is done to maintain a uniform standard of reporting world-wide for comparison and aggregations purpose. The National Inventory of GHG in Pakistan has estimated emissions from the transport sector comprised of CO, CO 2, CH 4 and NMVO; and hence mitigation measures in respect of all these gases would be required from global warming and climate change point of view. Air Pollution controls on the other hand presently include not less than 9 parameters, principally sulphur dioxide (SO 2); Particulate matters of varying sizes (SPM, PM 2.5 and PM 10), lead and ozone. The three common gases controlled for both air pollution and reduction of greenhouse gases are Carbon Monoxide, Carbon Dioxide and Nitrous Oxide. This overlap of the contributing gases in these two separate phenomena are challenging on the one hand, they also offer an opportunity of making controls effective as there are many common sources of emissions under energy industries and transport subsectors, on the other hand. Both these phenomena too have many common areas of adverse impacts, such as air pollution in at local and urban scale and climate change at the national, regional and global levels. In view of the above, any discourse on air pollution and GHG reduction could not avoid overlap and duplications in the chapters on air quality and reduction of greenhouse gas emissions. It is especially critical in the context of performance of the engines of the road freight and passenger transport, fuel quality, efficiency of combustion of fuel in engines and exhaust controls. 2-38

65 THE CONTEXT OF PAKISTAN 2.8 LAWS, STRATEGIES AND PLANS ON ENVIRONMENT QUALITY AND DEVELOPMENT The apex environmental body in the country is the Pakistan Environmental Protection Council (PEPC), was first constituted in 1984 under section 3 of the Pakistan Environmental Protection Ordinance (PEPO), 1983, with President of Pakistan as its Chairman. In 1994, an amendment was made in the Ordinance to provide for the Prime Minister or his nominee to be the head of the Council. The Council was reconstituted after enactment of the new law, i.e. Pakistan Environmental Protection Act, 1997 [59]. It is headed by the Prime Minister (Chief Executive) of Pakistan. The council is represented by trade and industry, leading NGOs, educational intuitions, expert s journalists and concerned ministries. Other bodies include the Pakistan Environmental Protection Agency (Pak- EPA), provincial EPAs (for four provinces, AJK and Northern Areas), and environmental tribunals. The EPAs were first established under the 1983 Environmental Protection Ordinance; the PEPA 1997 further strengthened their powers. The EPAs have been empowered to receive and review the environmental assessment reports (IEEs and EIAs) of the projects, and provide their approval (or otherwise). Pakistan has developed its own legislation, policies and strategies for managing the transportation, protection of the environment, renewable energy and many other national business concerns which are to be followed in planning and development in different sectors PAKISTAN NATIONAL CONSERVATION STRATEGY The Pakistan National Conservation Strategy (NCS), which was approved by the Federal Cabinet in March 1992, is the principal policy document for environmental issues in the country [60]. The NCS signifies the country's primary approach towards encouraging sustainable development, conserving natural resources, and improving efficiency in the use and management of resources [60] PAKISTAN NATIONAL ENVIRONMENTAL QUALITY STANDARD (NEQS) The Pak EPA under the provision of Pakistan Environmental Protection Ordinance of 1983 issued the National Environmental Quality Standards 2-39

66 THE CONTEXT OF PAKISTAN (NEQS) for municipal and liquid industrial effluent, industrial gaseous emissions and motor vehicle exhaust and noise in With the legislation of PEPA the Pak EPA revised the NEQS with full consultation with the private sector, industrialist, trade and business associations, and NGOs. Revised standards cover discharges limits of effluents into inland water, sewage treatment plant and the sea. The NEQS for municipal and liquid industrial effluent standards cover 32 parameters, while for industrial gaseous emissions they specify limits for 16 parameters, and the standards for motor vehicles prescribe maximum permissible limits for smoke, carbon monoxide and noise PAKISTAN ENVIRONMENTAL PROTECTION ACT 1997 The Pakistan Environmental Protection Act was introduced in December 1997 to provide for the protection, conservation, rehabilitation and improvement of the environment, for prevention and control of pollution and for the sustainability of all development activities. The Act is the basic legislative tool that empowers the government to frame regulations to protect the environment. It broadly applies to air, water, soil, and noise pollution [59] PAKISTAN NATIONAL ENVIRONMENTAL POLICY 2005 The National Environment Policy (NEP) aims to protect, conserve and restore Pakistan s environment in order to improve the quality of life of the citizens through sustainable development [61]. In NEP, the further sectoral guidelines, Energy Efficiency and Renewable directly related to building energy code for newly constructed buildings were introduced PAKISTAN TRANSPORT PLAN 2006 JICA in collaboration with NTRC developed a detailed plan for transportation sector reforms with the background of the Medium-term Development Framework (MTDF) published in May, 2005 [26]. It is to: Support economic activities by connecting major economic centres with motorways or national highways A demand oriented project formation to avoid traffic congestion Establishment of stability by providing alternative mode or route Increase of urban bypasses Development or improvement of inter-modal facilities and strengthening of international routes Management and effective utilization of existing resources 2-40

67 THE CONTEXT OF PAKISTAN Development of the transport network to support balanced growth of the regional economy Harmonization of transport network development with regional development policies and plans Transport system to realize the optimal modal share Minimization of transport cost by multi-modal transportation Fare competition between road and rail Development and improvement of inter-modal facilities PAKISTAN ROAD FREIGHT STRATEGY 2006 In response to the preparation for participation in the National Trade Corridor Improvement Program (NTCIP), the Engineering Development Board, Government of Pakistan produced the Pakistan Road Freight Strategy in 2006 [42]. The objective of the road freight strategy is to: Reduce the transport cost of the trade through restructuring and modernization of infrastructure facilities under National Trade Corridor Improvement Program (NTCIP), which will contribute in terms saving of USD 2 to 2.5 billion per year. Modernize the existing trucking fleet planned under NTCIP to reduce the fuel import bill by 25 percent and road maintenance cost by USD 1 billion. Reduce travel time by 50 percent, traffic accidents by 70 percent, and road losses to the tune of USD 1.5 billion PAKISTAN TRUCKING POLICY 2011 In 2011, Engineering Development Board, Government of Pakistan developed the Pakistan Trucking Policy in response to a call to the Government of Pakistan to Implement NTCIP [54]. The objective of trucking policy is to reform and promote an integrated, enduring and sustainable modernization of the Trucking Sector in Pakistan with a holistic approach, instead of dealing with each subject and in isolation, the following cross sectional and cross cutting subjects relating directly or indirectly to modernization of the trucking sector in Pakistan have been incorporated in the policy: Industry Status for Trucking Sector Motor Vehicle Registration (MVR) Motor Vehicle Examination (MVE) Axle Load management Drivers Training & Re-training/Licensing & Re-licensing Trans Freight Stations/Modern Cargo Handling Facilities Trailer Manufacturing and Registration 2-41

68 THE CONTEXT OF PAKISTAN National Standards and Specifications for Trucks and Trailers Industrial Estates for Truck/ Bus Body Makers PAKISTAN NATIONAL CLIMATE CHANGE POLICY 2012 Government of Pakistan inscribed climate change policy [14], in which transport sector has been identified as a priority area. The transport sector has shown the highest emission growth rate of all sectors and accounts for about a quarter of carbon dioxide emissions in Pakistan [23]. Managing emissions in the transport sector are therefore crucial for tackling climate change. Hence, the Government of Pakistan shall take the following policy measures [14]: Sensitize the public to the importance of proper vehicle maintenance for fuel efficiency enhancement and reduction of emissions; Ensure the provision of a fuel efficient public transport system in the country; Set up and strictly enforce vehicle emission standards; Examine and implement actions required for the use of bio-fuel for local transport; Plan and develop mass transit systems in metropolitan cities; Promote the scope of CDM projects in the transport sector; Support the private transport sector by providing incentives for reducing emissions and environmentally friendly transportation services; Promote the development and adoption of environmentally friendly transport technologies and efficient management techniques; Promote greater use of Compressed Natural Gas (CNG) in the transport sector to the extent consistent with the availability of CNG in the market; Secure financing for technology innovations in urban planning and the transport sector, specifically to address mitigation issues; Promote the development of new pipelines for efficient transport of oil in the country; and Encourage non-motorized modes of travel, such as bicycle and walking for shorter distances. 2-42

69 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE 3 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE The challenge to mitigate the consequences of human activities on the environment has become one of the major concerns characterizing and influencing today's business world. The battle to preserve our environment has gained momentum over the years and is now part of the policy of a growing number of enterprises. The ongoing battle against climate change owing to GHG emissions has also come to the fore in policy and business alike. These two different, yet intertwined predicaments have not failed to impact upon logistics activities, questioning some of the basic principles of this discipline. Transport services appear to be one of the biggest sources of CO 2 emissions and some of the transport emissions are also pollutants. This is, however an industry, which is, on the one hand, indispensable for growth and employment and yet on the other hand has enduring difficulties freeing its dependence on fossil fuels. This being said, logistics is not only transport: a more wide-range view on what can be done to improve the environmental performance of logistics can contribute to our industry's footprint in an area where legislation is finding it increasingly difficult to step in. The need to decrease emissions, but also to save energy and money, should be at the heart of our thinking. Luckily, this needs, lessening emissions, decreasing the use of energy and saving money, are connected and may respond to the same drivers: not only the logistics service provider, but also the transport user are likely to benefit from savings that may be environmental as well as economical. There is an abundance of possibilities and many stakeholders have already found ways to improve their business models with individual solutions, which have the potential to be developed into best practices. Their experience is the source of the best practice models that benefit and encourage others to do the same. This chapter provides a detailed review of literature indicating and highlighting the best practices used in the trucking sector to improve the GHG emission and fuel efficiency. Based on review analysis of key elements of the best practices in the road freight transport sector, the criteria for the key elements of the trucking sector in organized form cover the major areas of interest in the following domains: 3-1

70 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE Clean and Low Carbon Fuels Advanced Technologies, Operations and Management Improvement in Infrastructure Policies and institutional arrangements The domains are characterized into potential best practices applicable to the truck mode. These best practices are divided into subgroups, including: Reduction in fuel use and emissions during extended idling, Air conditioning system improvement, Reduction in aerodynamic drag, Reduction in tyre rolling resistance, Hybrid propulsion, Weight reduction, Improved transmission efficiency, Improved diesel engine efficiency, Reduction in accessory load, Modifications in driver operational practices, Alternative fuels, and Improved policies and institutional arrangements On the matter of better truck technologies, many improvements can increase fuel efficiency, including improvements to truck shapes to reduce aerodynamic drag, reduction in truck weight, alterations to tyre tread and tyre configuration, and a range of improvements to engines, transmissions, cooling systems, and other components and systems, as well as alternative fuels and engine technologies. 3.1 GENERAL AREAS FOR IMPROVEMENT TECHNOLOGY There are various improvements in the area of technology, which can benefit enormously. Sometimes best practices will only bring minor changes and benefits in a business process, sometimes one can make heavy investments, which although will only pay off after some/long time of usage, the savings will build up over time and be very significant. Whether the amount of money saved from new technology justifies the (sometimes big) investment in new machinery/software or whether the economic benefits of introducing new technology sometimes remain a risk, all are ideas best evaluated case by case. 3-2

71 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE The environmental benefits on the other hand, are often clearly noticeable, but again, it often remains unclear which are the economic benefits, or even worse, which are the hindrances leading to the sad equation "good for the environment: bad for business". This can happen either directly, e.g. through less fuel consumption, or indirectly, e.g. because customers are looking for a CO 2 neutral transport and reward the positive efforts made by their service provider by selecting their services over and above others. Before starting with evaluating the benefits of any best practice, the stakeholder in question should define for itself what is to be considered "green" in their perception. As soon as it is clear what one wants to achieve, it is possible to research specific best practices, which best suit the business needs. The detailed business analysis can help to see what effects one can measure directly and what can only be measured indirectly. Transport related benefits will always be indirect, if a freight organization does not have its own fleet. It is a critical first step to take informed and intelligent decisions. Just to quote some of the most common measures that are advantageous in road transport logistics, new kinds of radial tyres technology, with proper maintenance, can run over 100,000 kilometres on the original tread. Another option is re-treadability, which means that truck tyres are produced so that they are capable of being re-treaded two or more times with careful and observant maintenance. Not only should a freight organization be trying to reduce waste during production, it can also recycle used tyres for energy production. After retaining re-treadable casings, burning whole tyres in cement furnaces and power stations is becoming more common overseas and particularly Australia - with tyres producing more power than coal. In principal, a freight company should keep its truck fleet up to date, because newer trucks will for example feature the latest emissions-control technologies. With new software, an organization may have the possibility to continually monitor engine performance. Investment in new technologies will help reduce emissions and energy consumption at the same time. Another idea would be to have primarily team-driven vehicles, which would result in fewer empty runs (by generating a lot more revenue per kilometre). For this strategy to be successful, there should be no imbalance between inbound and outbound freight: this means that one of the greatest efforts should also be made to adjust the commercial policy in order to achieve this result. 3-3

72 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE Transportation management systems can help analyse identifying profitable/unprofitable routes PERSONNEL In the area of personnel there are various possibilities to enhance both the economic and environmental performance at the same time. Thinking of logistics the most notable and well known is driver education and training, which focuses on making drivers aware of fuel-efficient driving, and contributes to enhancing the safety of both driver and goods. This generates savings in the form of lower insurance premiums, less energy consumption and better use of resources. Some examples of driver education: teaching drivers about tyre maintenance and optimal tyre pressures etc. This contributes to lifting the current low levels of tyre maintenance and prolonging the life-cycle of tyres. Driver training programmes can give incentives to drivers who perform efficiently in achieving fuel economy through reducing idle time and keeping speed limits within a certain range: engine control modules can be used to set speed limits, which again will help to diminish waste of fuel and accidents SMART/STRATEGIC LOGISTICS A third area of possible improvements, in addition to technology and personnel, is an area, which is called smart or strategic logistics, i.e. the improved management of the supply-chain. These have the great advantage over technology that the costs are limited and they will often remain as an integral part of the business process over a long period of time, while technology often has to be replaced after some years to have the newest or best available technology. The training of personnel is also producing long term effects, but personnel may leave (with the training it has received) and starting from scratch become necessary, once new employees are hired. Route planning enables a freight organization to identify less profitable (or more costly) routes, whose planning can be optimized. In commercial Route Planning less profitable routes can be abandoned to the competition, if no other solution is available. Modern computer programmes, in addition with tracking and tracing technology and reporting schemes, are able to calculate the best solutions and the best routes. Identifying a non-profitable route is the first step to amending the situation. Here software can also help, but often a forwarder 3-4

73 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE will need to look for solutions without the help of management software, once the problem is identified (e.g. find new customers to decrease empty running). Intermodal solutions can bring great benefits, because they combine the best of various modes of transport, possibly to improve the overall performance. When carrying goods from A to B, it is generally advisable to look for alternative solutions and compare them. It is thus possible to create geographical shortcuts in the trips, whilst reducing greenhouse gas emissions. The Consolidation of cargo is one of the best techniques to cut costs and emissions. It increases logistics service providers' revenues whilst offering lower costs to shippers and providing environmental advantages to all. Consolidation works both in transit (groupage services) and when goods are standing still (third party warehouses) Consolidation has only advantages: less freight traffic, less environmental damages, better utilization of the vehicle fleet, less space occupancy, etc. 3.2 REVIEW OF SELECTED BEST PRACTICES CLEAN AND LOW CARBON FUELS FOR IMPROVED ENVIRONMENTAL PERFORMANCE AND ENERGY EFFICIENCY Low carbon fuels, or clean fuels, are those that result in less carbon pollution compared to petroleum-based fuels and that are produced in a sustainable manner. Also called next generation or advanced biofuels, it can overcome the limitations of both fossil fuels and first generation predecessors by utilizing existing infrastructure, reducing emissions, and careful use of land when coupled with proper sustainability certification. Clean fuels generally have lower vehicle emissions that contribute to smog, air pollution and global warming Most low carbon fuels don t come from finite fossil-fuel resources and are sustainable Alternative fuels can help nations become more energy independent Table 3-1: Comparative Analysis of Different Fuel Options ETHANOL Description Advantage Disadvantage An alcohol-based alternative fuel made by fermenting and distilling crops such as corn, barley or wheat. It can be blended with gasoline to increase octane levels and improve emissions quality. Materials are renewable. Ethanol subsidies have a negative impact on food prices and availability. 3-5

74 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE NATURAL GAS Description Advantages Disadvantages Natural gas is an alternative fuel that burns clean and is already widely available to people in many countries through utilities that provide natural gas to homes and businesses [62-64]. Cars and trucks with specially designed engines produce fewer harmful emissions than gasoline or diesel. Natural gas production creates methane, a greenhouse gas that is 21 times worse for global warming than CO 2. ELECTRICITY Description Advantages Disadvantages HYDROGEN Description Advantages Disadvantages Electricity can be used as a transportation alternative fuel for battery-powered electric and fuel-cell vehicles. Battery powered electric vehicles store power in batteries that are recharged by plugging the vehicle into a standard electrical source. Fuel-cell vehicles run on electricity that is produced through an electrochemical reaction that occurs when hydrogen and oxygen are combined. Electricity for transportation is highly efficient, and we already have an extensive electricity network. In the case of fuel cells, they produce electricity without combustion or pollution. Much electricity is generated today from coal or natural gas, leaving a bad carbon footprint. Hydrogen can be mixed with natural gas to create a clean fuel for vehicles that use certain types of internal combustion engines. Hydrogen is also used in fuel-cell vehicles that run on electricity produced by the petrochemical reaction that occurs when hydrogen and oxygen are combined in the fuel stack. No bad emissions The cost and lack of fueling infrastructure and difficulty of putting it in place PROPANE Description Advantages Disadvantages Propane also called liquefied petroleum gas or LPG is a byproduct of natural gas processing and crude oil refining. Already widely used as a fuel for cooking and heating, propane is also a popular alternative fuel for vehicles. Propane produces fewer emissions than gasoline, and there is also a highly developed infrastructure for propane transport, storage and distribution [64-68]. Natural gas production creates methane, a greenhouse gas that is 21 times worse for global warming than CO

75 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE BIODIESEL Description Advantages Disadvantages Biodiesel is an alternative fuel based on vegetable oils or animal fats, even those recycled after restaurants have used them for cooking. Vehicle engines can be converted to burn biodiesel in its pure form, and biodiesel can also be blended with petroleum diesel and used in unmodified engines. Biodiesel is safe, biodegradable, reduces air pollutants associated with vehicle emissions, such as particulate matter, carbon monoxide and hydrocarbons. Limited production and distribution infrastructure. METHANOL Description Advantages Disadvantages Methanol, also known as wood alcohol, can be used as an alternative fuel in flexible fuel vehicles that are designed to run on M85, a blend of 85 percent methanol and 15 percent gasoline, but automakers are no longer manufacturing methanol-powered vehicles. Methanol could become an important alternative fuel in the future as a source of the hydrogen needed to power fuel-cell vehicles. Automakers are no longer manufacturing methanol-powered vehicles. P-SERIES FUELS Description Advantages Disadvantages P-Series fuels are a blend of ethanol, natural gas liquids and methyl tetrahydrofuran (MeTHF), a co-solvent derived from biomass. P-Series fuels are clear, high-octane alternative fuels that can be used in flexible fuel vehicles. P-Series fuels can be used alone or mixed with gasoline in any ratio by simply adding it to the tank. Manufacturers are not making flexible fuel vehicles. Clean Fuel Companies have their own proprietary process to convert a feedstock into a fuel. Companies producing ethanol, an alcohol based fuel, may use a process similar to alcohol distillation. Other companies producing jet fuel or diesel substitutes may gasify feed stocks into their basic chemical building blocks, and re-build the chemical components so the result is a hydrocarbon chain that looks like crude oil. Then traditional refining of the crude oil can produce gasoline, diesel, or jet fuel that can be used in existing pipelines, tanks and engines. Many companies are just beginning production of fuels or construction of facilities that will produce clean fuels. These fuels will be blended into the gasoline and diesel. There will be a huge impact on economy of oil importing 3-7

76 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE country Pakistan. As California consumers and businesses spent approximately $70 billion in 2012 on gasoline and diesel with over $40 billion of this being sent outside the state and overseas. It can be reinvested this in safe, domestic, cleaner energy sources like renewable fuels, electricity, and natural gas to fuel our cars and trucks. Advanced bio refineries encouraged to come online soon in developing countries like Pakistan. From these bio refineries Projects indirect jobs could be created BEST PRACTICE: B20 BIODIESEL FUEL An alternative fuel has the potential to reduce GHG emissions, although it may not lead to overall reductions in energy consumption. A fuel that is derived from renewable resources (e.g., biomass) can lead to reductions in the net amount of carbon dioxide released to the atmosphere. However, the substitution of one fuel for another leads to changes in emissions not only for the truck, but also for the entire fuel life cycle. Figure 3-1: A B20 Biodiesel refilling station in US by Propel Source: 3-8

77 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE Some alternative fuels that have a lower ratio of carbon-to-hydrogen can also lead to reductions in the net amount of carbon dioxide released while trucks are operating. However, these fuels may not have reductions in the net amount of CO 2 emissions on a life-cycle basis. For example, liquefied natural gas (LNG) contains less carbon per unit of heating value than diesel fuel, thereby reducing tailpipe CO 2 emissions by approximately 15%. However, when fuel recovery, processing, transportation, and distribution are taken into account, the life-cycle CO 2 emissions of LNG are estimated to increase by approximately 4% compared to that of petroleum diesel [69]. For this reason, LNG is not further considered as a useful alternative fuel for purposes of GHG emissions reductions. However, if the fuel cycle emissions are reduced, then LNG could be reconsidered in the future. Biodiesel fuels are produced based on vegetable oils or animal fats that have been transesterized in order to achieve a viscosity similar to that of petroleum diesel. B100 refers to a biodiesel blend stock comprised of 100% vegetable or animal fat derived fuel. The carbon in B100 is essentially from renewable resources, depending on the configuration of the fuel production process. Thus, resultant CO 2 emissions from combustion of biodiesel do not contribute to a net increase in ambient CO 2 concentrations, assuming that the amount of carbon sequestered to produce biofuels is equal to that emitted. However, under the current fuel infrastructure worldwide, a significant portion of energy consumed in the production of biodiesel is based on consumption of petroleum diesel (e.g., for transport) or emissions associated with electrical energy consumption. Furthermore, B100 is not practical for direct use because of issues with handling. Instead, a more common approach is to use a blend of 20% blend stock and 80% petroleum diesel, referred to as B20. This blend has many of the handling advantages of petroleum diesel, while also offering some reduction in net CO 2 emissions. The life-cycle CO 2 emissions coefficient is estimated to decrease by tons CO 2 e per 106 BTU for B20 versus petroleum diesel. This alternative fuel is commercially available in limited amounts, but interest in biodiesel appears to be increasing. The potential disadvantages of biodiesel fuel depend on the percentage of blend stock used, the source of the blend stock, and whether the blend stock complies with the ASTM standard for B100. For B20 biodiesel based on a 3-9

78 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE compliant B100 blend stock, the disadvantages to the vehicle operator are likely to be minor in warm climates, and include the need to replace and possibly enlarge the fuel filter and to manage fuel storage so as to avoid bio fouling. In colder climates, there are potential problems with coagulation of biofuel because of its higher cloud point compared to petroleum diesel. However, the severity of this problem also depends on the percentage of blend stock used. Because biodiesel has a lower energy density than petroleum diesel, vehicle operators may experience a modest (approximately 5%) reduction in maximum power ADVANCED TRUCKING TECHNOLOGIES AERODYNAMIC DRAG REDUCTION The difference in Truck size also affects fuel economy and fuel consumption, vehicle range and fuel storage requirements, and subsequent vehicle cost, and help guide the identification of the most appropriate technologies for reducing CO 2e. Typical heavy-duty trucks need to use a significant portion of fuel to overcome aerodynamic drag. Since higher speed causes larger aerodynamic drag, the effect of aerodynamic drag on fuel economy is higher at highway speeds compared to local road speeds. Thus, reduction of aerodynamic drag may significantly improve the fuel efficiency of trucks, especially during highway speed operations [70]. Aerodynamic drag can be significantly reduced by installing add-on devices to improve the vehicle profile, pneumatic blowing systems, and boat tail plates, or by improving vehicle load profile BEST PRACTICE: VEHICLE PROFILE IMPROVEMENT I - CABIN TOP DEFLECTOR, SLOPING HOOD AND CABIN SIDE FLARES Truck tractor aerodynamic drag reduction options, including cabin top deflector, sloping hood, and cabin side flares, have been introduced into the market. These add-on devices are estimated to reduce the aerodynamic drag of medium- and heavy-duty trucks and increase their fuel efficiency and reduce GHG emissions [71]. Taking into account that these devices reduce only a fraction of aerodynamic drag. Although this best practice increases truck weight slightly, the estimated reduction in fuel use and GHG emissions takes this into account [18]. 3-10

79 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE Figure 3-2: Common wind deflectors on Truck Cabin BEST PRACTICE: VEHICLE PROFILE IMPROVEMENT II - CLOSING AND COVERING OF GAP BETWEEN CABIN AND TRAILER Truck side and underside aerodynamic drag reduction options, including closing and covering the gap between a tractor and trailer (or van), aerodynamic bumper, underside air baffles, and wheel well covers, are commercially available technologies for medium- and heavy-duty trucks. Aerodynamic drag that results from the tractor-trailer gap can be reduced by installing gap covering add-on devices. Drag underneath the vehicle can be reduced by installing a lower bumper and underside air baffles. Wheel well covers enclose the open space between the wheels and the truck body, which streamlines the side of the truck. From the results of field tests, combining these options is estimated to reduce energy use and GHG emissions [71, 72]. Although this best practice increases truck weight slightly, the estimated reduction in fuel use and GHG emissions takes this into account [72]. 3-11

80 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE Figure 3-3: Covering the gap between the cabin and trailer BEST PRACTICE: VEHICLE PROFILE IMPROVEMENT III - TRAILER OR VAN LEADING AND TRAILING EDGE CURVATURES Truck trailer (or van) aerodynamic drag reduction options, including the improvement of their leading and trailing edge curvatures, are commercially available strategies. Aerodynamic drag can be reduced by the redesign of leading and trailing edges, such as rounded front corners and rounded aft corners [73] BEST PRACTICE: PNEUMATIC AERODYNAMIC DRAG REDUCTION Pneumatic blowing systems are being tested as add-on devices that reduce aft-end aerodynamic drag. This type of system blows air from slots at the rear of the trailers of heavy-duty vehicles in order to smooth air flow over the trailer surfaces and reduce aft-end aerodynamic drag. This results in reduction in vehicle fuel energy requirements. From the results of full-scaled tests, this system reduces energy use for an individual truck by 3.9% to 4.8% [71, 74, 75]. However, based on the results of field tests, some truck configurations, such as the dimensions of the tractor-trailer gap, may inhibit the reduction of aerodynamic drag achievable via this system [76]. This best practice is suitable for combination trucks that have van trailers, which are a portion of the total truck fleet BEST PRACTICE: PLANAR BOAT TAIL PLATES ON A TRACTOR- TRAILER Planar boat tail plates are being tested as add-on devices that reduce aft-end aerodynamic drag. These devices are rectangular plates mounted in the afterend of a trailer in an attempt to reduce the wake of trucks. The formation of a 3-12

81 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE wake requires energy; thus, reducing the wake can energy consumption. From a full-scaled test for a tractor-van trailer, this practice significantly reduces aerodynamic drag, and it was found to reduce the average energy use by approximately 8.3% over a 10,000 mile trip [77]. This best practice is suitable for combination trucks that have van trailers, which are a portion of the total truck fleet. The drawback of this practice is that it may interfere with loading and unloading operations, depending on the design BEST PRACTICE: VEHICLE LOAD PROFILE IMPROVEMENT Aerodynamic drag can be reduced by the use of a streamlined load profile for a trailer, which is a low-tech option. This practice keeps the load profile of a trailer as low as possible and secures tarpaulins to smooth airflow and reduce energy use [72]. The drawback of this practice is that extra work of loading and unloading operations may be required TYRE ROLLING RESISTANCE IMPROVEMENT Tyre rolling resistance refers to a frictional effect associated with the contact of the tread of the tyre with the road surface, and the flexing of the tread. Given that many trucks have a large number of tyres in contact with the road, this effect can be significant. Thus, rolling tyre resistance is an important component of the total engine power demand on a truck. Rolling resistance can be reduced by avoiding under-inflation of existing tyres (to reduce unnecessary flexing), substituting one wide-tyre for a pair of dual tyres (leading to a net reduction in total tread area, sidewall flexing, or both), use of alternative tyre materials to reduce rolling resistance, or use of pneumatic blowing. Each of these are discussed. To the extent that rolling resistance can be reduced, total engine power demand is also reduced. This, in turn, leads to reductions in fuel use and exhaust CO 2 emission from the truck BEST PRACTICE: AUTOMATIC TYRE INFLATION SYSTEMS With properly inflated tyres, tyre rolling resistance is decreased and fuel use is reduced compared to under-inflation. Automatic tyre inflation systems (ATIS) are commercially available and are intended to keep vehicle tyres properly inflated. These systems continually monitor and adjust the level of pressurized air in tyres [72, 77, 78]. 3-13

82 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE Figure 3-4: An Automatic tyre inflation systems installed on a truck BEST PRACTICE: WIDE-BASE TYRES Combination trucks usually have two sets of dual tyres at each end of an axle. Dual tyres are heavy and also produce high rolling resistance. Single widebase tyres, which are commercially available products, can replace these dual tyres. Wide-base tyres that have lower weight (e.g., there are only two sidewalls for one tyre, versus four sidewalls for two tyres) and produce lower rolling resistance reduce energy use. From the results of interstate field tests, using wide-base tyres can increase fuel economy for a typical long-haul combination truck by 3% [71, 72, 78]. This best practice is suitable for combination trucks that have van trailers, which are a portion of the total truck fleet. By using single instead of dual tyres, there is a need for increased attention to tyre inflation pressure for safety reasons BEST PRACTICE: LOW-ROLLING-RESISTANCE TYRES Compared to conventional tyres, lower rolling resistance tyres are commercially available from most tyre companies, and trucks with these tyres are more fuel-efficient because of the reduction of rolling resistance by the use of new materials, such as the combination of silica and synthetic elastomer [73]. Based on the results of interstate field tests, using low-rolling-resistance tyres can reduce energy use by 3% [71]. Such tyres could be used on any truck. The fuel saving advantage tends to be reduced when these low-resistance tyres wear down. 3-14

83 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE Figure 3-5: Wide-based Tyres BEST PRACTICE: PNEUMATIC BLOWING TO REDUCING ROLLING RESISTANCE Pneumatic blowing is a technology that can reduce aerodynamic drag and tyre rolling resistance. Since tyre rolling resistance is directly proportional to loaded weight on the wheels times the tyre friction coefficient, these air streams provide a slight lift that unloads the tyres and reduces tyre rolling resistance [79]. Based on the results of full-scaled tests, this technology reduce energy use for a combination truck by more than 1% when accounting for the energy to compress and deliver pressurized air versus the benefits of reduced rolling resistance [71, 75]. This best practice is suitable for combination trucks that have van trailers, which are a portion of the total truck fleet. However, this system may slightly increase dust pollution by dislodging particles on the road surface [18] WEIGHT AND ACCESSORY LOAD REDUCTION Truck auxiliary loads, such as the air-conditioning compressor, air compressor, fans, hydraulic pump, and coolant pump, are typically gear- or belt-driven and thus directly consume energy provided by the base engine. Full electrification of these mechanically driven auxiliaries can reduce engine load and use less energy [71]. Using fuel cell units as the electricity source for electric auxiliaries 3-15

84 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE can reduce more energy than using a generator to power electric auxiliaries [71, 80]. Reducing the truck weight could be very effective in China, with research indicating fuel savings of 3.5% to 4% for a 10% weight reduction in trucks [81]. Other 67 studies found that 4% reduction of weight by lightweight material substitution could offer energy savings of up to 4% BEST PRACTICE: LIGHTWEIGHT MATERIALS The energy consumed by a truck depends on many factors, including the tare weight of the vehicle itself. Substitution of lightweight materials for conventional materials can reduce the total vehicle weight. High-strength, lightweight materials include aluminium, plastics, high strength steel alloys, and others. Since fuel use is directly proportional to truck weight, trimming 3,000 pounds (about 4% of truck weight) from a heavy-duty truck by using lighter-weight components improve fuel economy by 3%, and every 10% reduction in truck weight is estimated to reduce fuel use by 5 to 10% [82]. In one study, mass reduction was estimated to reduce energy use by 4.8% or more [80, 83]. However, current light-weight materials are costly and with no satisfied material characteristics. Further research and development for advanced materials are needed [18, 80] BEST PRACTICE: ELECTRIC AUXILIARIES Most mechanical auxiliaries operate whenever truck base engines are running, which waste energy when the auxiliaries are not needed. The replacement of gear- or belt-driven auxiliaries by electrically driven systems can decouple mechanical loads from the base engine and reduce energy use. Since the average engine loads from mechanical auxiliaries are higher than those from a small generator that supplies electricity to electric auxiliaries, base engine fuel can be reduced. Based on a full-scale test of a prototype truck that used a small generator to produce electricity, full electrification of auxiliaries reduced fuel use by 2% [84]. The smaller generator for this practice may need pollution control devices in order to comply with future emissions standards BEST PRACTICE: FUEL-CELL-OPERATED AUXILIARIES Fuel cells are an emerging technology for converting chemical energy in a fuel directly to electricity [85]. The advantage of fuel cells over conventional engine and alternator technology is that they have substantially higher thermal efficiency. Among the barriers to practical use of fuel cells are the cost of precious materials used for their internal components and the need for conversion of readily available transportation fuels to a form that can be 3-16

85 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE processed by the fuel cell. This best practice is based on the use of a small fuel cell sized to provide the requirements of all of the electrical auxiliaries, and is complementary to a base diesel engine used to supply the energy requirements. This best practice uses electrically-operated auxiliaries. This practice has high thermal efficiency, but further R & D is needed in order to reduce cost. Figure 3-6: Efficient and independent from the engine Source: Schoppe [86] ANTI-IDLING Long distance truck drivers are required to take mandatory rest stops. These rest stops are intended to promote safety by reducing driver fatigue. Many longhaul trucks are equipped sleeper cabins. Sleeper cabins contain a small living environment with sleeping accommodations. The advantage of a sleeper cabin is that the driver can take rest stops at any location where the truck can be parked, rather than have to stay at a hotel. Such compartments require heating, 3-17

86 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE ventilation or air conditioning (HVAC). Conventionally, the heating, cooling, and power requirements for the sleeper cabin during driver rest time are supplied by the diesel-fueled base engine of the truck. These engines are run under extended idling conditions for continuous periods of many hours. According to the literature, a typical base engine may consume 0.85 gallons of fuel per hour during idle [87]. The actual amount of fuel consumption varies among different engines and depends on the HVAC and electrical loads. A number of so-called anti-idling techniques have been introduced. The objective of these techniques is to avoid the use of the base engine during extended idle by substituting alternative sources of HVAC and electricity during rest stops. Some techniques involve installation and operation of on-board systems, while others require connecting the truck to an external facility BEST PRACTICE: OFF-BOARD TRUCK STOP ELECTRIFICATION Off-board truck stop electrification is a commercially available system that can avoid the need for idling of the truck base engine while a truck is parked at a truck stop. This external system enables a truck driver to switch off the base engine by connecting the truck to a specially designed service module. This module provides heating, air conditioning and electricity to the truck cabin, and it is installed temporarily through a window of the truck. This system is reported to consume less energy than the base engine and emits less CO 2 [88-91]. A commercially available example of this is the Idle Aire system [18]. Trucks cannot use this alternative unless they are parked at a truck stop with this type of electrification system BEST PRACTICE: TRUCK-BOARD TRUCK STOP ELECTRIFICATION Truck stop electrification can be as simple as connecting the truck to an external power supply via an electrical cable. This type of system is effective in situations where the HVAC system of the sleeper cabin is entirely electrically operated and, thus, is independent of the base engine. This system is connected to the electrical grid. Thus, the energy use and emissions for this best practice are associated with those of the power grid. Compared to use of the base engine, this type of electrification is reported to consume less energy and emits less CO 2 [90-92]. Trucks cannot use this alternative unless they are parked at a truck stop with this type of electrification system. 3-18

87 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE Figure 3-7: Truck stop electrification Source: Underwood [93] BEST PRACTICE: AUXILIARY POWER UNITS Auxiliary power units (APU) are commercially available systems or can be imported that can avoid the need for idling of a truck s base engine. An APU is installed on a truck and consists of a small diesel engine that provides power for an HVAC system and electrical outlets that service the sleeper cabin. APUs are advertised as consuming less fuel under typical load conditions than the base engine. There are some practical questions regarding whether APUs are sufficiently quiet for use while a driver is sleeping, especially if they cycle on and off to meet intermittent AC compressor demand, regarding their ability to rapidly cool-down the cabin on very hot days, and their actual fuel efficiency relative to base engines. APUs are considered to consume less diesel fuel than the base engine and emit less CO 2 [92, 94]. One disadvantage of this practice is its high capital cost. The capital cost of this practice may be even higher if it requires tailpipe emissions control devices. There is uncertainty regarding the real world relationship between fuel use rates of APUs compared to those of a truck base engine, which confounds the ability to accurately estimate the fuel saving potential of this practice. 3-19

88 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE BEST PRACTICE: DIRECT-FIRED HEATERS Direct-fired heaters are commercially available systems for heating a sleeper cabin by burning diesel fuel. Heat from combustion gases passes through a heat exchanger that warms the air inside the sleeper cabin. In addition, these heater systems can be configured to provide heat for the base engine to maintain readiness for a base engine restart in cold weather. Unlike the previous three best practices described above, this system is only applicable to heating in cold weather and does not provide cooling in hot weather. Furthermore, this system does not provide electrical power; instead, electrical power is drawn from the truck s existing battery. Direct-fired heaters are reported to consume less diesel fuel than the base diesel engines and to emit less CO 2 [94] BEST PRACTICE: DIRECT-FIRED HEATERS WITH THERMAL STORAGE UNITS Thermal storage systems consist of a phase change material that can be heated or cooled from the truck cabin air conditioning unit or heating system while the base engine is operating. The thermal storage system can be used as a means of providing warm or cool air to the sleeper cabin via a heat exchanger and a blower unit when the base engine is off. In order to supplement the heating capability, thermal storage systems can be coupled with direct-fired heaters to store more thermal energy that is available for warming the interior cabin air even when the direct-fired heater is not operating. This system supplies heating and cooling, but no electrical power, to the sleeper compartment when the base engine is off. Furthermore, this system does not provide electrical power; instead, electrical power is drawn from the truck s existing battery. The combination of direct-fired heaters and thermal storage units is reported to consume less energy than the base diesel engines and to reduce CO 2 emissions. The disadvantage of this practice is that it supplies no electricity, and requires power from the vehicle s batteries [18, 94] AIR CONDITIONING SYSTEM IMPROVEMENT Mobile air conditioning systems cause "direct" and indirect GHG emissions. Direct GHG emissions are due to refrigerant leakage. Indirect GHG emissions are additional exhaust CO 2 emissions that result from the engine load due to the operation of the air conditioning system compressor. Refrigerant leakage rate reduction or use of low global-warming-potential (GWP) refrigerants can 3-20

89 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE reduce direct emissions. Increasing the energy efficiency of air conditioning system can reduce indirect emissions BEST PRACTICE: ENHANCED AIR CONDITIONING SYSTEM I - FOR DIRECT EMISSIONS Enhanced air conditioning systems, which are undergoing testing, can reduce direct GHG emissions by reducing the leakage rate of the commonly used HFC-134a refrigerant. The refrigerant leakage rates of these systems may be decreased through the use of low permeable hoses, improved hose ends and connectors, and improved compressor shaft seals [95-98]. There is not as yet a standard method for testing and certifying the leakage rate of an enhanced system is in the developmental stage BEST PRACTICE: ENHANCED AIR CONDITIONING SYSTEM II - FOR INDIRECT EMISSIONS Enhanced air conditioning systems for reducing indirect GHG emissions are commercially available. These systems can decrease base engine load requirements from mobile air conditioning systems by replacing fixed displacement compressors (FDCs) with externally controlled variable displacement compressors (VDC), using improved control systems, and using improved condensers and evaporators. By reducing the engine load requirements, exhaust CO 2 emissions can be reduced [96, 99, 100]. The benefit of reducing engine load is only available in hot weather when the A/C system is used BEST PRACTICE: ALTERNATIVE REFRIGERANTS - CO2 The global-warming-potential (GWP) of leaking refrigerant can be reduced by using an alternative low GWP refrigerant. The current widely used refrigerant, HFC-134a, has GWP = 1,300, whereas CO 2 has GWP = 1. Therefore, CO 2 is being investigated as an alternative refrigerant. Engineers are working to improve the reliability and efficiency of systems that use CO 2 refrigerant [95-97, 99]. Safety assessment and potential risk mitigation may be needed because of different safety characteristics of this alternative refrigerant compared to HFC-134a [18] BEST PRACTICE: ALTERNATIVE REFRIGERANTS - HFC-152a HFC-152a is another promising low global-warming-potential (GWP) refrigerant. HFC-152a has a lower GWP (120) than that of HFC-134a. The transition from one HFC to another, such as from HFC-134a to HFC-152a, would be relatively easy (compared a transition to CO 2) since these two 3-21

90 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE refrigerants have similar properties and A/C system components would need less modification [75, 88, 94]. The flammability of this alternative refrigerant, although moderate, motivates the need for additional safety assessment and potential risk mitigation BEST PRACTICE: ALTERNATIVE REFRIGERANTS - HC Propane has been proposed as an alternative refrigerant for vehicle air conditioners. Propane has a lower GWP (20) than that of HFC-134a [101]. This mobile hydrocarbon system has had more than 400,000 accumulated unityears of operating experience in Australia [18]. However, a propane-based refrigerant system uses more energy for operation and increases indirect GHG emissions, thus there is some trade-off [97]. Furthermore, there is concern regarding its safety [99]. The flammability of this alternative refrigerant motivates the need for additional safety assessment and potential risk mitigation. Release of propane to the atmosphere may also increase the tropospheric ozone formation TRANSMISSION IMPROVEMENT Traditional truck transmissions are designed to provide discrete engine-wheel speed ratios. Transmission operation is associated with mechanical losses, leading to additional fuel consumption of the vehicle. Improving transmission systems, such as by using advanced high-efficiency transmission technologies and low-viscosity transmission lubricants, have the potential to reduce mechanical losses and reduce energy consumption [71, 102] BEST PRACTICE: ADVANCED TRANSMISSION Advanced transmission technologies, such as the optimization of transmission engine-wheel speed ratios and reduction of mechanical losses, can reduce truck fuel use. A traditional transmission has a fixed number of gears that do not often achieve maximum efficiency. A continuously variable transmission (CVT) has belt-connected pulleys that can optimize transmission speed-load conditions and reduce fuel consumption. Mechanical losses in a transmission can be reduced by the reduction of gear surface roughness, the use of lowfriction coatings, the use of new gear materials, and the use of a lock-up torque converter that eliminates slip at cruising speed. In one study, advanced transmission and improved lubricants were estimated to reduce energy use by 2% [83]. Since improved transmission lubricants is estimated to reduce energy use by 1% [103], this practice is estimated to reduce fuel use by 1.0% on 3-22

91 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE average for all conditions. Driver training may be needed to avoid the confusion because the sound of the engine with traditional transmissions changes for acceleration operations, but the sound of the engine with improved transmission does not change in the condition of acceleration [103] BEST PRACTICE: TRANSMISSION FRICTION REDUCTION THROUGH LOW-VISCOSITY TRANSMISSION LUBRICANTS Lubricants can reduce gear contact friction in transmissions, but they also reduce fuel efficiency because of their viscosity [104]. Low-viscosity transmission fluid can be adopted to decrease transmission friction and also reduce fuel consumption. Assuming that all trucks can adopt low-viscosity transmission fluids, this practice is estimated to reduce energy use by approximately 1.0% [103]. Low-viscosity transmission fluid typically costs more than conventional lubricants HYBRID PROPULSION Stop-and-go truck driving includes a fraction of idling conditions during which the truck base engine consumes fuel but produces no economically useful output. Hybrid propulsion systems, which are in the development stage for trucks, shut off the engine under idling conditions or situations of low engine power demand. They also recover or recycle energy from braking and deceleration BEST PRACTICE: HYBRID TRUCKS Trucks that have high fractions of stop-and-go freight transport activities within their driving cycles, such as medium-duty package and beverage delivery trucks, are good candidates for hybridization. Most heavy-duty trucks and a fraction of medium-duty trucks are long-haul trucks. Long-haul trucks have a lower proportion of short-term idling or low engine power demand in their duty cycles because of traffic conditions or frequency stops compared to mediumduty trucks in local services. Based on the results of hybridization effects modelling, medium-duty trucks in local service (e.g., delivery) can reduce energy use by 41.5% [80, 105]. This best practice is considered to be more suitable for medium duty trucks because of the characteristics of their duty cycles. A key disadvantage is the initial capital cost and uncertainty regarding the life of the battery pack and battery replacement costs [18, 80]. 3-23

92 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE Figure 3-8: Hybrid Pickup Truck Source: GMC [106] Figure 3-9: DAF Hybrid Trucks Source: DAF [107] 3-24

93 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE DIESEL ENGINE IMPROVEMENT The overall fuel efficiency of a diesel engine of a Class 8 trucks with a typical long-haul driving cycle is about 40% [18, 103]. The remaining 60% of fuel energy becomes waste heat. Some factors limit diesel engine efficiency, such as engine friction, peak cylinder pressure, combustion efficiency, and engine thermal management [104]. Technologies that can improve the impacts of these factors can reduce fuel consumption significantly [71, 83, 102, 104] BEST PRACTICE: ENGINE FRICTION REDUCTION THROUGH LOW- VISCOSITY ENGINE LUBRICANTS Some energy losses in an engine are because of mechanical friction. Reduction in internal engine friction can be achieved using improved lubricants. Low-viscosity engine lubricants are made from synthetic or mineral oil blends for the purpose of reducing internal engine friction. Low-viscosity engine lubricants can reduce energy use by 2% [71, 103]. Low-viscosity engine fluid typically costs more than conventional lubricants BEST PRACTICE: INCREASED PEAK CYLINDER PRESSURES Diesel engine thermal efficiency is proportion to the peak pressures that can be achieved in the engine cylinders. However, the peak cylinder pressures are constrained by the strength and durability of the engine materials over the design service life of the engine. Measures that result in better materials that enable higher peak pressures can lead to higher engine efficiency [104, 108]. The development of new materials and associated new engine designs is an emerging area of work. This practice is commercially available and it is estimated to reduce energy use for heavy-duty trucks by 4% [83] BEST PRACTICE: IMPROVED FUEL INJECTORS Incorrect fuel injection causes a reduction of combustion efficiency and an increase of emissions. The improvement of fuel injection via better control is expected to reduce truck fuel use. For example, advanced fuel injection systems, such as electronic unit injectors or common rail injectors with increased fuel injection pressure, are estimated to result in better control of the fuel injection rate and injection timing, and to produce finer vaporization of the fuel spray [71, 83, 108, 109]. However, a drawback of higher injection pressures is the need to have stronger fuel-injection system and other engine components that withstand the higher pressures [108]. The improved high pressure injectors may have a leakage problem after a period of operation time. Regular diagnosis is needed to identify and address this problem [18]. 3-25

94 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE BEST PRACTICE: TURBOCHARGED, DIRECT INJECTION TO IMPROVED THERMAL MANAGEMENT Turbocharging utilizes the exhaust air flow from the engine to drive a turbine and then drive an air compressor to increase engine air intake. Advanced turbochargers that drive more air into the cylinder increase combustion efficiency and allow direct injectors to inject more fuel into cylinders. Most heavy-duty trucks have turbochargers, but medium-duty trucks do not. In one study, turbocharged, direct injection diesel engines was estimated to increase medium-duty truck fuel economy by 5 to 8% [83] BEST PRACTICE: USING THERMOELECTRIC TECHNOLOGY TO RECOVERY WASTE HEAT Overall engine thermal efficiency can be increased if new materials and technologies can be developed and implement for improved thermal management. An example is the conversion of engine waste heat to electrical energy. Such systems are not commercially available and are undergoing development. Combining thermoelectric materials and advanced heat exchangers may recover waste heat in order to produce electricity. Based on the results of laboratory tests, a thermoelectric generator with a heat exchanger is projected to reduce energy use by 6.5% [84] OPERATIONS AND MANAGEMENT OF TRUCKING SECTOR Low carbon freight transport can be achieved by adopting other alternatives. A number of measures are suggested here to achieve objective of environment protection. Some measures are quite distinct and can be effective even if implemented on their own, while others need to be introduced in conjunction with other measures in order to be effective. This will be explained. The suggested objectives are as follows: More freight carried by rail, and increased efficiency of rail freight More freight conveyed on water, and greater efficiency of water-based freight More Liquid Cargo conveyed by pipelines wherever possible Pipelines by using on the Rental / consignment basis for Fluid Cargo Effective linkages that enable multimodal freight transport to happen efficiently Less freight moved by road, but improved efficiency of road freight Better logistics and driving practices to reduce road trips and fuel used The use of appropriate small-scale and non-motorised vehicles and vessels to transport goods 3-26

95 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE Reducing demand for freight transport through urban planning and production processes BEST PRACTICE: DIESEL ENGINE RETROFIT PROGRAMME Diesel engines are important power systems for on-road and off-road vehicles. These reliable, fuel-efficient, high-torque engines power many of the world s heavy-duty. Diesel engines are easy to repair, inexpensive to operate, and extremely durable. It is common for a diesel engine to last years and achieve a one million-mile life. From the standpoint of greenhouse gas emissions, diesel engines can compete with other advanced technologies, like hybrid electric vehicles, due to a diesel engine s inherent fuel economy relative to conventional spark-ignited, petrol engines. Diesel-powered vehicles have demonstrated a 30-40% fuel economy advantage over their petrol counterparts. While diesel engines have many advantages, they have the disadvantage of emitting significant amounts of particulate matter (PM) and oxides of nitrogen (NOx) into the atmosphere. Diesel engines also emit toxic air pollutants. Health experts have concluded that pollutants emitted by diesel engines adversely affect human health and contribute to acid rain, ground-level ozone, and reduced visibility. Studies have shown that exposure to diesel exhaust causes lung damage and respiratory problems and there is increasing evidence that diesel emissions may cause cancer in humans. Companies that manufacture emission controls have responded to the challenge of reducing air pollution from the in-use diesel vehicle fleet by developing a large portfolio of retrofit emission control devices. These costeffective retrofit technologies were developed to reduce the entire range of regulated and unregulated harmful emissions. Some of these devices can significantly reduce the number of ultrafine particles that have been receiving much attention in recent years from both health experts and the regulatory communities. Many countries have established mandatory and volunteer retrofit programs for most in-use diesel-powered vehicles. For instance, the U.S. EPA has established a program with state and federal funding under its National Clean Diesel Campaign [110]. Similarly, in Europe, many projects are in progress related to the diesel engine retrofit for trucks as well as buses [111]. 3-27

96 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE Today, viable emission control technologies exist to reduce exhaust emissions from existing diesel vehicles. The major retrofit technologies are listed below. Retrofit technologies designed to control particulate matter (PM) include: Diesel oxidation catalysts (DOCs) Diesel particulate filters (DPFs) Flow through filters (FTFs) Closed crankcase ventilation (CCV) Retrofit technologies designed to control oxides of nitrogen (NOx) include: Exhaust gas recirculation (EGR) Selective catalytic reduction (SCR) Lean NOx catalysts (LNCs or HC-SCR) Lean NOx traps (LNTs) The retrofit of oxidation catalysts on diesel engines has been taking place for well over twenty years in the off-road vehicle sector. Oxidation catalysts installed on engines running 500 ppm or less sulfur fuel have achieved total particulate matter reductions of 20 to 50%, hydrocarbon reductions of 60 to 90% (including those HC species considered toxic), and significant reductions of carbon monoxide, smoke, and odor. The number of vehicles retrofitted with high efficiency, wall-flow diesel particulate filters (DPF) has grown significantly over the past few years. The operating and durability performance of DPFs has been very impressive. For example, a growing number of on-road DPF-equipped heavy-duty vehicles have been successfully operating for millions of miles. Today, second and third generation retrofit filter systems can reduce PM emissions from 85% to more than 90%. The majority of these installed retrofit DPF systems make use of high efficiency, ceramic wall-flow filters. Since 2007, every new diesel vehicle sold in the U.S. or Canada has been equipped with a high efficiency DPF as required by the U.S. EPA s 2007/2010 highway heavy-duty emission regulation [110]. Flow-through filter (FTF) technology or partial filters employ catalyzed metal wire mesh structures or tortuous flow, metal foil-based substrates with sintered metal sheets to reduce diesel PM. Technologies verified to date employ catalysts and/or fuel-borne catalysts to oxidize soot. This technology is more widely applicable on older, dirtier engines than wall-flow filters because it is 3-28

97 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE much less likely to plug and most often does not require ash cleaning. Flowthrough filters are capable of achieving PM reduction of about 30 to 75%, as well as trapping the sub-micron, ultrafine particles capable of penetrating deep into the lungs. FTFs can be catalyzed to offer co-benefits of reducing HC, CO, and toxics of up to 80-90%. Black carbon from diesel engines can be significantly reduced through emission control technology that is already commercially available. Highefficiency DPFs on new and existing diesel engines provide nearly 99% reductions of black carbon emissions [110]. During the regeneration of DPFs, captured carbon is oxidized to CO 2, but this filter regeneration still results in a net climate change benefit since the global warming potential of black carbon has been estimated to be up to 4500 times higher than that of CO 2 on a per gram of emission basis. Figure 3-10: How a diesel retrofit device works Source: ECTA [112] 3-29

98 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE As emission requirements have incorporated the need for NOx reductions as well as PM from the in-use diesel fleet, manufacturers have developed integrated PM + NOx retrofit technologies. Exhaust gas recirculation (EGR) and lean NOx catalysts combined with DPFs have been retrofitted on heavy-duty diesel vehicles. EGR is capable of achieving about a 40% reduction in NOx emissions [110]. Lean NOx catalyst (LNC) technology can achieve a 10 to 40% reduction in NOx emissions. This technology is more effective when a supplemental hydrocarbon reductant, such as diesel fuel, is injected into the exhaust stream. The hydrocarbons facilitate the conversion of NOx to nitrogen and water vapor over the catalyst [110]. LNC technology is attractive because the technology does not require any core engine modifications or additional reductant fluid such as diesel exhaust fluid (DEF or urea). Lean NOx catalysts can be combined with DPFs or DOCs to provide both NOx and PM reductions. One such system has been verified by ARB for a large variety of on-road and offroad diesel engine applications. This particular system combines a lean NOx catalyst with a DPF to reduce NOx emissions by 25 to 40% and PM emissions by more than 85%. Selective catalytic reduction (SCR), using diesel exhaust fluid (DEF) as a reducing agent, has been installed on over 1,000,000 new diesel-powered trucks in Europe and Japan [111]. Some manufactures are installing SCR technologies in China in the National 4 regulations (equivalent to Euro 4). Several manufacturers are demonstrating the same technology in combination with a DPF to retrofit on-road and off-road engines. SCR is capable of reducing NOx emissions from 70 to 90% while simultaneously reducing HC emissions up to 80% and PM emissions by 20 to 30%. In combination with a DPF, the PM reductions can be increased to over 85%. SCR systems retrofitted on line-haul trucks in Europe operated successfully over an extended period where mileage accumulations exceeded several hundred thousand miles [111]. SCR technology, available on new trucks in late 2009, has been selected by the majority of new truck manufacturers as the technology of choice to meet the U.S. EPA 2007/2010 on-highway regulation [110]. Although technologies exist to reduce emissions from in-use diesel engines, care must be exercised to plan and implement a retrofit program to ensure that 3-30

99 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE air quality benefits are realized. Successful implementation and operation of a diesel retrofit program depends on a number of elements. The program should define: which vehicles are suitable for retrofit the appropriate emission control technology for each vehicle the emission reductions that are desired or required fuel quality needs (e.g., sulfur level; ideally, ULSD should be used) operational and maintenance requirements training and education needs of vehicle operators and the public Factors that influence vehicle selection include, application, duty cycle, exhaust temperature and vehicle maintenance. Knowing this information will help in the selection of an appropriate technology for the vehicle. For optimum results the engine of a vehicle should be rebuilt to the manufacturer s specifications before a catalyst, filter system, or other emission control device is installed. Along with California s Diesel Risk Reduction Plan and U.S. EPA s Voluntary Diesel Retrofit Program, retrofit programs have been initiated worldwide, including those in Hong Kong, Japan, Sweden, United Kingdom, Switzerland, Korea, Mexico, and other countries throughout the world. In the U.S., six regional collaborative have been formed to bring together public and private funding and interests in reducing emissions from all diesel engines currently operating in these regions. Retrofit technologies, including DOCs, DPFs, FTFs, EGR, lean NOx catalysts, and SCR, have been successfully commercialized and/or demonstrated on both on-road and off-road vehicles. These technologies can greatly reduce particulate matter, oxides of nitrogen, and other harmful pollutants from diesel exhaust BEST PRACTICE: TRUCK SCRAPPAGE SCHEME It would be a clear winner and several factors point towards the introduction of a regulatory mechanism of mandatory truck scrapping. Trucks are relatively high contributor to transport emissions, and older trucks a high contributor to air pollution. China has introduced fuel economy standards for cars and trucks, which is tightening vehicle emission and fuel quality standards and several cities deploy a yellow label scheme that bans polluting trucks from city centers 3-31

100 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE [113] and the government aims to have yellow label trucks removed from the fleet all together by The Society of Indian Automobiles Manufacturers (SIAM) strongly advocates the need for the introduction of a ʻFleet Modernization Programʼ that puts an age limit of ten years for commercial vehicles. A financial incentive is suggested for operators through a 50% rebate of excise and sales tax, which could lead to a rebate per vehicle [114]. Removing old trucks from the fleet can help address air pollution and fuel efficiency BEST PRACTICE: TRUCK LOAD EFFICIENCY In China, Japan and the Philippines, 30-40% of truck trips are empty [81]. Reducing the numbers of empty or only partially full loads has a significant impact on greenhouse gas emissions. And research has shown that mixing light and heavy products in a load can maximize the load s efficiency. If the heavy products alone are packed, they soon reach maximum load weight while leaving empty space in the trailer, while the light products take up available space before reaching the most efficient load weight. A range of technologies can help to plan the shortest, quickest and least congested routes, match up the supply of and demand for freight carrying capacity so that loads are fullest (including on return journeys), keep track of and manage vehicles, and improve driving BEST PRACTICE: ROAD NET PROGRAM A transport company in Thailand is using a traffic flow database called Road Net Program, which calculates the fastest, most cost-effective route by processing traffic volumes, route restrictions, and other data. One analyst, writing in the context of Korea, has suggested subsidies and loans to switch to green logistics, the establishment of an integrated national information centre for logistics, and a green logistics certification plan. Pakistan Geo-Strategic location dictates that emphasis on the road freight sector in order to extend the facilities at its ports to other countries, especially the Central Asian States, can make it a regional hub for international trade by integrating it with the international transport system. Increasing trade volumes, both at the domestic and regional level, demands this sector to upgrade and equip itself. Thereby enhancing efficiency by reducing the cost to the economy incurring in the form of road damages, higher fuel costs. An efficient trucking 3-32

101 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE system is a pre-requisite to become a regional trade hub, for Pakistan. Hence the trucking fleet must be modernized in order to facilitate expanding trade activities and overcome losses arising out of sector inefficiencies BEST PRACTICE: GREATER PROPORTION OF FREIGHT CARRIED BY RAIL, AND INCREASED EFFICIENCY OF RAIL FREIGHT There can be large energy and emission reductions when goods are transported by rail or by water as compare to the road. In general terms, rail can be very competitive with road on price and delivery time over long distances. Internationally, a German food company reported saving 40% of its energy consumption by switching to rail for long-distance transport. Multimodal trips (those combining two or more transportation modes) can also be cost effective and reliable, as well as reducing greenhouse gas emissions. The aim should be to have as great a proportion of medium to long distance freight like one province to another be possible transported by rail or water, leaving road freight to handle just the local pick-up and delivery legs of the total freight journey. In order to shift a greater volume of freight to rail, a range of measures may need to be taken, including improvements to rail routes, improvements to train technology of Pakistan, the establishment or upgrading of multimodal freight terminals in each province of Pakistan, and the proper pricing of both rail and road freight so that the rail is advantaged, instead of disadvantaged as it is now. Improvements to rail routes include the separation of freight and passenger rail tracks as to avoid the delays. Otherwise, it will not be good options or alternatives for road freight transport. These measures enhance freight speed, which is important if rail is to compete with the speed of road freight. There will be a reduction in road accidents BEST PRACTICE: USE OF ADVANCED TECHNOLOGIES OF TELEMATICS There is a huge potential for advanced operation and management technologies, including telematics and logistics information systems for providing several benefits including truck tracking, route optimization, fuel expense reduction, accident response, stolen vehicle recovery and improved 3-33

102 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE safety through driver education. However, barriers lie with convincing truck operators of the need and the investment costs. Figure 3-11: Telematics: communicate with onboard vehicle systems India initiated a pilot project in Orissa and Goa with Essen RFID telematics to improve operational efficiency [115]. China started pilot projects in nine cities, including Guangzhou, Wuhan and Lanzhou with $2.35 million. It supported companies' efforts to update their logistics information systems and upgraded to use new technologies, including GPS real-time monitoring systems and RFID, or radio frequency identification systems [116] BEST PRACTICE: GREATER PROPORTION CONVEYED ON WATER, AND MORE EFFICIENT WATER-BASED FREIGHT Water freight, generally is more energy efficient than road freight. The factors that can make it more competitive with road freight are the same as those that advantage, rail freight: improved routes, improved technology, better freight terminals or centres, and more favourable pricing arrangements in relation to road freight. On the matter of routes, domestic water transport services can travel along coasts, rivers or canals, across lakes or between islands. In countries that have water transport routes, it is important that they are integrated, well-maintained and free of obstructions in the form of low bridges, and weirs or irrigation devices without locks. Water freight requires multimodal terminals so that freight can be transferred to or from rail or road, and such terminals are discussed in the next part. Containerisation offers big 3-34

103 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE advantages, and an efficient centre will have gantries or cranes to shift loads. The technology that is going to do this fastest and easiest is also likely to be more expensive and energy consuming. One large gantry, for example, can use as much energy as three buses, so it is preferable if the power source is low or zero carbon [ ]. On the question of technological improvements, major improvements identified included antifouling coatings to reduce drag, improved hull design, air floatation, propeller design, wind propulsion and the use of renewable energy in port [45, 46, 120]. The UN Economic and Social Commission for Asia and the Pacific (UNESCAP) has discussed Modernization of Inland Water Transport within a Multimodal Transport System, which provides much practical information on water-based freight transport (UNESCAP, 2004). It produces less greenhouse gas, in that boat emissions is proportional to the speed of the vessel squared. However, if the time required for water-based freight is planned for, delays can be avoided. In areas such as eastern Peru and the deltas of Bangladesh and Vietnam, water transport has an advantage in that roads are poor or non-existent, but this lack of competition can also be a disadvantage for passengers and those sending or receiving freight, as it is in eastern Peru, where the state of the vessels and the docks leave much room for improvement. So, water-based freight is also highly efficient, especially if containerised and using loading technology IMPROVEMENTS IN THE TRANSPORT INFRASTRUCTURE SYSTEM BEST PRACTICE: ROAD PRICING In order to reduce the proportion of road freight, and increase the proportions conveyed by rail and water, pricing issues have to be addressed. Road freight usually enjoys public subsidies because fees and taxes do not cover its full public costs, with trucks responsible for much more wear and tear on roads than are cars and other small vehicles. This needs to be reversed. Road freight should pay the full cost it imposes on society, the economy and the environment, or at least a much greater share of this. Pricing will also deter trucks from using certain roads, although simply banning trucks from these roads is an alternative. Pricing will also make road freight 3-35

104 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE less competitive in relation to rail and water, and thus lead a greater proportion of it to be carried by these alternative modes if the modes are available and if the balance of their benefits and costs make them at least as attractive as road transport. On the question of how road freight can be priced, the options are: Registration charges Fuel taxes Tolls on particular motorways, highways or bridges Congestion taxes in selected urban areas BEST PRACTICE: ADVANCED TECHNOLOGY IN COLLECTING TOLLS Tolls and congestion taxes (and bans on freight transport on particular roads) can be for all times or just for some times of the day or week, or there can be higher charges in busier periods. If tolls are to be imposed, electronic toll collection can avoid the generation of additional emissions that would otherwise result from stop-start traffic and vehicle idling when traffic banks up before manual toll collection points, and such technology can be financed out of the tolls. Fuel taxes will encourage better vehicle maintenance and use of more fuel efficient vehicles, and there can also be subsidies or tax concessions for electric or hybrid vehicles [121] BEST PRACTICE: PROCUREMENT POLICIES Governments can also give preference to lower carbon freight modes and technologies through its own procurement policies, directly generating business for these modes and technologies and setting an example for the private sector to follow BEST PRACTICE: DIFFERENTIAL PRICING Differential pricing for larger and smaller trucks, or bans on larger trucks in certain areas, will deter or prevent larger truck pickups and deliveries in busy city centres, and instead encourage larger trucks to deliver to or pick-up from freight centres further out, with smaller trucks undertaking the first or last leg. These extra stages also remove the door-to-door advantage that road freight can have over other modes. 3-36

105 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE BEST PRACTICE: FREIGHT EFFICIENCY The trend for businesses to keep reduced volumes of stock in storage, and to have more just-in-time delivery, unfortunately results in more freight deliveries with smaller loads. If road freight companies have higher costs of delivering these small loads costs that they can pass on to the businesses then these businesses can be encouraged to order in larger quantities, and to thus enable road freight to be more efficient [43, 72, 122, 123] BEST PRACTICE: MAINTENANCE AND MONITORING FOR FUEL EFFICIENT TRUCKS Trucks also need to be more fuel efficient and thus less greenhouse gas generating and this leads to the question of vehicle maintenance and the adoption of better technologies and fuels. Government needs to look at ways of encouraging or requiring vehicle owners to maintain their vehicles, and a range of measures are covered, precisely: Setting standards for vehicle fuel economy Setting standards for vehicle emissions Vehicle inspections Mandatory adoption of particular technologies in extreme cases Taxation and pricing measures relating to emissions, vehicle age and fuel economy Requiring the inclusion of emissions standards in vehicle warranties Schemes to get older vehicles off the roads Euro standards for fuel quality and their implementation at Oil refineries Driver or owner education about vehicle maintenance. There is an example of The Green Trucks Pilot Project in Guangzhou, China, which sought to improve fuel efficiency and reduce greenhouse gas emissions and local pollutants through the retrofitting of new technologies and driver training. Adoption of particular tyre and aerodynamic technologies alone paid for itself in 1.8 years through improved fuel efficiency, and, if adopted by all of the 826,000 heavy trucks in Guangdong Province, this would save 8.6 billion litres of fuel a year and reduce CO 2 emissions by 22.3 million tons a year, equal to the emissions of a large city. 3-37

106 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE BEST PRACTICE: FREIGHT VILLAGES OR CENTRES The truck mode is the biggest GHG emissions contributor, and it also has the highest GHG emissions reduction potential. If all identified best practices are implemented aggressively, GHG emissions could be reduced in next years by as much as more than percent compared to the 2015 levels. Rail and water transport cannot take freight from point of origin to destination, and so must rely on road transport for these first and last legs. Moreover, there may be one or more transitions from water to rail transport, or vice versa, in a freight journey. For this reason, and particularly in the context of competition with road transport that may not need these linkages, it is vital that there are efficient multimodal freight centres or terminals at which freight can be transferred from one mode to another quickly and smoothly. Such centres need to be carefully located so that road traffic to and from them does not constitute a social or environmental problem, as it would, for example, in a dense urban area. Even if a freight trip is entirely by road, freight centres located outside a city centre are needed to allow freight to be transferred from large long-haul trucks to smaller trucks for city or other local distribution. If properly planned especially through the use of logistics technology - this means reduced emissions, noise and congestion in city centres, better health and safety, and less fuel use and cost for the companies. Moreover, consolidation of freight deliveries within a limited number of centres increases the amount of freight that has the same origin and destination, and thus increases the chance of return loads and of different consignments in the one load, thereby reducing the number of vehicles used. There is also an argument for locating freight centres and production facilities near each other. Worldwide, in Japan, freight centres also function as wholesale markets, especially for food, from which the food is distributed to smaller wholesalers and retailers. Freight centres can benefit from both public and private investment, but experience indicates that they are much less likely to be viable if their development and location do not take into account market factors. 3-38

107 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE BEST PRACTICE: PLANNING AND MANAGEMENT IN TRUCKING SECTOR SELF-SUFFICIENCY Reducing demand for freight transport through planning, processes and design. If some areas are denser, have more mixed land use and greater selfsufficiency, then there will be less need for people to travel, and the same is true for freight. Self-sufficiency means more local production and this can be increased in both urban and rural areas, but the efficiency of the production process also needs to be considered. Economic orthodoxy argues that large scale production is more efficient, but this is increasingly being challenged in the age of decentralized, networked businesses and ICT. It may also be less relevant in developing countries where labour is more plentiful and capital is scarcer. In developed countries, the notion of buying locally has become popular, particularly in relation to food, and talk of food miles is common. However, it cannot be assumed that the use of locally produced goods generates fewer greenhouse gases because of the shorter distance transported. So attention has to be paid to the distance freight travels, the loadings, the energy efficiency of the mode of travel, and the carbon intensity of any kind of fuel used BEST PRACTICE: HIGH PRODUCTION-LARGE EMISSIONS SAVINGS Even if products are to be sold further afield, increasing the proportion of processing or production that occurs locally can produce large emissions savings by reducing the volume and weight to be transported. This particularly applies to agricultural, mining and timber industries. For example, if milk is to be turned into powdered milk, extracting the water at the individual dairy will result in dramatic reductions in the weight and volume of the product to be transported, and this also increases business and employment in regional areas BEST PRACTICE: MINIMIZED PACKAGING The volume of goods to be transported is also reduced if products are designed to be more durable, if packaging is minimized, and if attention is paid to what has been called reverse logistics, that is, the process of planning and implementing the efficient re-use or disposal of products and packaging once they have ceased to be used for their original purposes. We tend to focus on the transport of goods to producers, retailers and consumers, but an almost equal volume of matter, then has to be re-transported once it has been used. 3-39

108 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE TRAININGS FOR DRIVER OPERATIONAL PRACTICE Driving practices that increase fuel efficiency can be achieved through information provision, driver training and real-time performance monitoring technology. Eco-driving schemes in Japan have resulted in 12% savings in fuel consumption, through things like proper use of gears, switching off the engine when the vehicle is stationary, and avoiding heavy acceleration [124]. Owner drivers have a material incentive to improve their driving in these ways; companies can consider offering efficiency bonuses for employed drivers so they too can have such an incentive BEST PRACTICE: TRUCK DRIVER TRAINING PROGRAM The behaviour of truck drivers can significantly impact fuel efficiency. For example, unnecessarily frequent shifting, rapid acceleration and stops and starts increase fuel use [125]. Drivers can be encouraged to modify behaviours that unnecessarily increase fuel use via training programs that aim to convey better skills and habits. Furthermore, driver performance can be monitored and incentives can be provided to reward preferred behaviours. In one study, driver training and monitoring were estimated to reduce energy use by 3.8% [72]. In several other studies in Europe and Canada, the effect of driver training, monitoring and incentive programs was estimated to increase fuel economy by 5 to 20% [72, 126, 127]. The similar can be adopted in Pakistan by large freight handling companies such as NLC, PTN and Agility Pakistan; and small freight handlers IMPROVEMENTS IN POLICIES AND INSTITUTIONAL ARRANGEMENTS Most countries have adopted policies on trade facilitation and infrastructure development (e.g., improvement of ports and airports) to improve freight and cargo movement between countries and/or regions. However, policies dealing with the environmental performance of trucks and the trucking industry are often lacking or limited BEST PRACTICE: FUEL CONSUMPTION STANDARDS Many countries set heavy-duty vehicle emission standards, but often have trouble enforcing them. Policies for light-duty vehicles usually are introduced first and the standards for heavy-duty vehicles often follow years later. This applies to vehicle emission standards, fuel economy standards and most other environmental-related policies. In China, the government introduced light-duty 3-40

109 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE vehicle fuel economy standards in 2007, while the government fuel economy standards for heavy-duty vehicles were introduced only in 2011 [81] (see Table 3-2 and Table 3-3). In Pakistan, there is not any standard exist for fuel economy for light-duty or heavy duty vehicles [128, 129]. The Ministry of Industry and Information Technology (MIIT) of China has issued fuel consumption standards for new light-duty commercial vehicles and heavyduty commercial vehicles since For light-duty commercial vehicles(gvm 3.5 metric tons, and design speed 50km/h ), the fuel consumption limit standard, Limits of Fuel Consumption for Light-Duty Commercial Vehicles is a national binding standard, under which fuel consumption limits are controlled by the vehicle gross vehicle weight (GVW) and engine displacement for both diesel and gasoline vehicles as shown in Table 3-2 below. Table 3-2: Fuel Consumption Limits for Light-Duty Trucks Gross vehicle weight (GVW) (M in kg) Engine Displacement (V in l) Gasoline vehicles Fuel Consumption Limits (l/100km) M 2000 All 7.8 V <M <V <V V > V <M <V V > V M > <V V > Diesel vehicles M 2000 All 7.0 V <M <V V > V <M <V V > V M > <V <V V > Source: CA-Asia and WB [130] 3-41

110 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE China is the third country, following Japan and the United States, to adopt fuel consumption standards for new heavy-duty vehicles (GVW >3.5 metric tons). There are currently two standards in this regard. One is an industry standard, Fuel Consumption Limits for Heavy Duty Commercial Vehicles (first stage) (QC/T ).This standard is applied to trucks and semi-trailer tractors with GVW over 3.5 mt. The standard controls the fuel consumption limit for diesel vehicles based on the vehicle GVW as shown in Table 3-3 below. Table 3-3: Fuel Consumption Limits for Diesel Heavy-Duty Trucks Trucks (excluding dump trucks) Gross vehicle weight (GVW) (kg) Limits (L/100km) Semi-trailer Tractors Gross vehicle weight (GVW) (kg) Limits (L/100km) 3500 < M M < M < M < M < M < M < M < M < M < M < M < M < M < M M > < M < M M > Source: CA-Asia and WB [130] BEST PRACTICE: VERIFICATION SYSTEM AND RECOMMENDED LIST OF TRANSPORT ENERGY SAVING PRODUCTS China has established a systematic energy saving verification system and a recommended list of transport energy saving products (technologies). The verification system is established by MOT (Ministry of Transport) in 2007, and CCS (China Category Society) and CECP (China Certification Center for Energy Conservation Products) are responsible for receiving application, reviewing and issuing Certificate of Transport Energy Saving Products Verification. This verification is voluntary. Since the verification started in 2009, the verified products pertaining to vehicles only include vehicle additives. The recommended list of transport energy saving products (technologies) was first issued by MOT during the 7 th Five Year Plan period. This list is for 3-42

111 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE promotion of energy saving products, and enterprises can apply to it voluntarily. MOT releases the recommended list of reviewed energy saving products, and issues the Certificate of Energy Saving Product (Technology) of Operating Vehicles and Ships. This list is released 2 to 3 times in every Five Year Plan period. The recommended energy saving products has thus far concentrated on fuel additives, energy saving engine oils and fuel-efficient devices (devices which reduce fuel consumption through the control of fuel supply system of the engines) as shown in Table, and its energy saving effect is up to 1.5% to 3% [130]. Table 3-4: Energy Saving Products (Technologies) of the MOT Recommended List 11 th FYP Period 11 th FYP Period 12 th FYP Period Energy Saving 1 st batch 2 nd batch 1st batch Products (Technologies) Gasoline Diesel Gasoline Diesel Gasoline Diesel Vehicles Vehicles Vehicles Vehicles Vehicles Vehicles Fuel additives Energy saving engine Energy saving devices Total Source: CA-Asia and WB [130] BEST PRACTICE: URBAN POLICY FOR TRUCK MANAGEMENT Freight should be included in the design and planning of urban transport systems and policy development. Otherwise, ad hoc solutions are created to mitigate problems, associated with urban freight transport, as they arise. Some of the main issues are lack of dedicated trucking routes, limited parking facilities for loading/unloading of goods inside cities, and fragmented logistics centres BEST PRACTICE: GREEN TECHNOLOGY PROMOTION China had to face the same challenges to the wide-spread adoption of technologies by the road freight sector, as Pakistan is facing including: The availability of technologies in Asia is much lower than in the United States or Europe. A fragmented technology suppliers network adds to the problem. The high speed requirement for the aerodynamic technologies to work properly could not always be achieved. This is partly caused by traffic congestion and poor conditions of highways. Another factor, contributing to low speed, is long-haul trucks delivering in urban areas rather than transferring their loads to smaller trucks when entering urban areas. All this lead to slow urban traffic. 3-43

112 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE Limited case studies contain several examples that could help Asia build confidence in using technologies. Therefore, financing green technologies will represent a challenge for China for the following reasons: Limited tax policies exist in the road freight sector relevant to energy and emissions management and minimal experience of policymakers in applying economic instruments to the trucking sector. Initial investment costs are too high for many companies, even if potential savings are large and the payback period is short. High investment costs could be explained by a small number of technology suppliers and low technologies production and sales rates. Furthermore, the tariffs for imported truck equipment exceed 110 per cent. The trucking industry is not considered a reliable sector for lending, especially for small companies and individual truck driver owners. ESCOs (energy service companies), successfully operating in the industrial sector, have no experience working with trucking fleets. The local financial community lacks the knowledge and tools required for new technologies financial appraisal. This has, so far, prevented the introduction of innovative financial mechanisms, such as revolving funds. The Guangzhou Green Trucks Pilot Project in China has set a best practice to test the green technologies with proper financial assistance and institutional support [131]. The pilot project aimed to contribute to addressing three problems related to trucks in Guangzhou and the wider Guangdong province simultaneously: (a) fuel costs and security; (b) air pollution and associated health impacts, and (c) GHG emissions and climate change. The scope of the pilot was limited to Guangdong Province, focusing on diesel trucks accessing or passing through the city of Guangzhou and surrounding cities, like Shenzhen. Aside from GHG emissions, the scope includes black carbon and other air pollutants from trucks because of their potential interacting effects and contribution to climate change, and because air pollution is an important local concern. The pilot project consisted of the four components, each with its own output: Background Analysis Report, which analyses numbers, growth, operation, fuel use in Guangzhou; relevant institutions and policies in China; and available fuel economy and emissions reduction strategies and technologies. Guangzhou Truck Sector Survey Report, which summarizes the results of a survey of 1040 truck drivers and 43 companies. The survey intended to fill the gaps in information needed for the program design and for determining the potential fuel savings and emission reductions through a wider green freight program in Guangdong. It covered company details, 3-44

113 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE truck details (ownership, type/size, age, brand, replacement), and operation details (km travelled, average speed, number of trips, route, maintenance, training, record keeping). Smart Drivers for Trucking in China Training Course. Training materials for truck fuel efficiency were developed and tested, which can be the basis of a training component under a future green freight program. A 1 hour summary course in the form of 72 presentation slides in English and Chinese tailored to Chinese drivers based on feedback received from 20 drivers and operators from the Guangzhou pilot companies who took the course was prepared. Further information is provided in 6 supporting presentation modules based on an existing Smartway course (planning; truck specifications; components and accessories; maintenance and inspection; driving practices; smart driving summary). Technology Pilot Report, with results from the technology pilot, which tested a tyre equipment package (to reduce the weight and rolling resistance of the tyres) and an aerodynamics equipment package (to reduce air resistance and drag) on long-haul trucks (heavy duty trucks), short-haul trucks, and garbage trucks of three Guangzhou-based companies. It also presents recommendations for future pilots based on this pilot and estimates the potential for fuel and emissions reductions for Guangdong Province using heavy duty trucks as an example. A 10-minute video was produced of the technology pilot in English and Mandarin. Freight is not yet getting enough attention compared to other transport modes and the video thus allows results to be shared more easily with a larger audience BEST PRACTICE: USE OF ARTICULATED TRUCKS FOR DROP AND HOOK AND COMPANY CONSORTIA Partnerships, cooperation and alliances for sustainable freight are extremely useful as it reduces the empty trips. China has been promoting and supporting the use of articulated trucks or drop-and-hook transport. Several important policies have been made to promote the development of drop-and-hook transport in China. Especially, to overcome the obstacles to drop-and-hook implementation to be cleared, including: adjust trailer insurance charges; improve/adjust the customs supervision system of drop-and-hook vehicles; improve/adjust the toll collection of drop-and-hook vehicles; standardize tractors and trailers; improve the trailer permit management; encourage transport enterprises to expand the transport network; and, encourage logistics enterprises to strengthen cooperation [130] BEST PRACTICE: USE OF EURO STANDARDS European Union (EU) regularly formulates and issue Euro Engine standards for regulating the engine type and their specification to ensure that emission standards for vehicles are uniform throughout Europe. 3-45

114 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE Euro Standards are different for cars and light commercial vehicles that run on gasoline and those that run on diesel. These are numbered as Euro-1 to Euro- 6. For engines in installed in heavy duty vehicles are labelled as Euro-I to Euro- VI. European emission standards define the acceptable limits for exhaust emissions of new vehicles sold in EU member states. The emission standards are defined in a series of European Union directives staging the progressive introduction of increasingly stringent standards. Currently, emissions of nitrogen oxides (NOx), total hydrocarbon (THC), nonmethane hydrocarbons (NMHC), carbon monoxide (CO) and particulate matter (PM) are regulated for most vehicle types, including cars, buses, trains, tractors, trucks and similar machinery excluding seagoing ships and aeroplanes. For each vehicle type, different standards apply. Compliance is determined by running the engine on a standardized test cycle. Noncompliant vehicles cannot be sold in the EU, but new standards do not apply to vehicles already on the roads. No use of specific technologies is mandated to meet the standards, though available technology is considered when setting the standards. New models introduced must meet current or planned standards, but minor lifecycle model revisions may continue to be offered with precompliant engines. EU Regulations set an average CO 2 emissions target for new passenger cars of 130 grams per kilometre. This target is gradually being phased out during the period A new target of 95 grams per kilometre will apply from For light commercial vehicle, an emissions target of 175 g/km applies from 2017, and 147 g/km from The legal framework of above directives are EU Parliament decisions taken from 1970 onward. Summary of the list of these directives, their dates of enforcement, and what they apply to, are as under: Euro 1. (1993): For passenger cars Also for light trucks Euro 2 (1996): For passenger cars For motorcycles Euro 3 (2000) for any vehicle For motorcycle 3-46

115 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE Euro 4 (2005) for any vehicle Euro 5 (2008/9) for light passenger and commercial vehicles Euro 6 (2014) for light passenger and commercial vehicles The detailed description and classification of the vehicles to which the respective EU standards apply are contained in different EU Directives. In case any of the vehicles can have trailers, the specifications of the latter are also provided in the applicable directive. In the area of fuels, the 2001 Biofuels Directive requires that 5.75 percent of all transport fossil fuels (petrol and diesel) should be replaced by biofuels by 31 December 2010, with an intermediate target of 2 percent by the end of However, it was observed that since the voting was lower to this target in the wake of new scientific evidence about the sustainability of biofuels and the impact on food prices its implementation is under review. The European parliament's environment committee supported a plan to curb the EU target for renewable sources in transport to 4 percent by They also said that a thorough review would be required in 2015 before the EU could progress to an 8-10 percent mark by Emission standards for passenger cars and light commercial vehicles are petrol and diesel are different. Diesels have more stringent CO standards, but are allowed higher NOx emissions. Petrol-powered vehicles are exempted from particulate matter (PM) standards through to the Euro 4 stage, but vehicles with direct injection engines are subject to a limit of g/km for Euro 5 and Euro 6. A particulate number standard (P) or (PN) have been introduced in 2011 with Euro 5b for diesel engines and in 2014 with Euro 6 for petrol engines. All dates listed in the tables refer to new type approvals. The EC Directives also specify a second date - usually one year later - which applies to first registration (entry into service) of existing, previously type-approved vehicle models. Whereas for passenger cars, the standards are defined by vehicle, driving distance, g/km, for the trucks they are defined by engine energy output, g/kwh, and are therefore not comparable. The following table contains a summary of the emission standards and their implementation dates. Dates in the tables refer to new type approvals; the dates for all type approvals are in most cases, one year later (EU type approvals are valid longer than one year). Other EU member countries are also in the process of introducing consumer-friendly 3-47

116 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE labels. The official category name is heavy-duty diesel engines, which generally includes trucks and buses. Table 3-5: Table Showing Historical Development of Emission Standards for Passenger Cars Standard Year CO NOx HC PM (g/kwh) (g/kwh) (g/kwh) (g/kwh) Euro NA Euro I Euro II Euro III Euro IV Euro V Standard Year CO NOx HC PM (g/kwh) (g/kwh) (g/kwh) (g/kwh) Euro NA Euro I Euro II Within the European Union, road transport is responsible for about 20 percent of all CO 2 emissions, with passenger cars contributing about 12 percent. The target fixed in Kyoto Protocol was an 8 percent reduction of emissions in all sectors of the economy compared to 1990 levels by Relative CO 2 emissions from transport have risen rapidly in recent years, from 21 percent of the total in 1990 to 28 percent in 2004, but currently there are no standards for limits on CO 2 emissions from vehicles. It is estimated that EU transport emissions of CO 2 currently account for about 3.5 percent of total global CO 2 emissions. To ensure that consumers are aware of the above EU Directives, it is required that the manufacturers and marketing companies ensure that information relating to the fuel economy and CO 2 emission offered for sale or leased to the community to make informed choices. In the United Kingdom, the initial approach was deemed ineffective. The way the information was presented was too complicated for consumers to understand. As a result, car manufacturers in the United Kingdom voluntarily agreed to put a more "consumer-friendly," colour-coded label displaying CO 2 emissions of all new cars beginning in September 2005, with a letter from A (<100 CO 2 g/km) to F (186+ CO 2 g/km). The goal of the new "green label" is to 3-48

117 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE give consumers clear information about the environmental performance of different vehicles. The following table shows the European Union standards for HD diesel engines: Table 3-6: Table Showing EU Emission Standards for HD Diesel Engines Unit: g/kg Wh (smoke in m -1 ) Tier Date Test cycle CO HC NOx PM Smoke 1992, < 85 kw Euro I 1992, > 85 kw ECE R-49 Oct Euro ll Oct October 1999 only ESC & ELR Euro III 0.1 Oct * 0.8 Euro IV Oct-05 ESC & ELR Euro V Oct _ Euro VI 31 December Note: * for engines of less than 0.75 dm 3 swept volume per cylinder and a rated power speed of more than 3,000 per minute BEST PRACTICE: USE OF LOGISTICS INFORMATION PLATFORM The establishment of a logistics information platform, which enables companies that need goods to be transported to find freight carriers online, is another policy measure to optimize freight movement in China [119, 130]. Tools/elements of the logistics information platform typically include: An internet platform for on-line freight information exchange that is normally subscription-based with a small charge for advertising (posting) and searching; Freight exchange software with on-line chat windows; Freight maps; Local legislation and regulation databases; Transport company directory; Carrier rating system and reliable carrier verification/certification; and Transport route planning and Debt management BEST PRACTICE: PREPARATION AND DISSEMINATION OF BEST PRACTICE GUIDE Preparation of a general, comprehensive document, which lists good environmental practices in the logistics sector, can be a very effective tool. A good example of such practice is The European Environmental Agency's 6ood practice in Logistics Manual. While the main focus should lie in the 3-49

118 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE Mediterranean area, the basic concepts can be applicable everywhere. The manual is divided into four chapters. Most important are chapters 2, 3 and 4. Chapter 2 describes how to plan and carry out the introduction of a programme of good environmental practices (PGEP) in accordance with the dimensions and specific nature of a business, ranging from the independent transporter to a complex logistics operator. Chapter 3 describes the environmental impacts created by the sector's activities and good environmental practices (GEPs) that can be introduced to reduce them. Chapter 4 contains a driver's manual, which gathers together good environmental practices for raising quality and decreasing environmental impact and a guide for an initial evaluation of the environmental situation of a business in this sector. Similarly, Australian Government Department of Environment has developed a brochure and website which educate the freight organizations and drivers regarding the fuel economy and provide tips to fuel efficient driving [132]. They focus promote the following: Minimise your vehicle use Drive in the right gear Drive smoothly Minimise fuel wasted in idling Don't Speed Minimise aerodynamic drag Look after your vehicle's tyres Use airconditioning sparingly Travel light Keep your vehicle in good condition BEST PRACTICE: FINANCING There is a wide range of financial and economic mechanisms or instruments to facilitate investment in technologies and logistics solutions that reduce fuel use and emissions. These mechanisms have an impact on investment decisions or on an entity s ability to invest by helping to reduce overall costs of the investment (easing the decision to invest) or by facilitating the financing of the investment (reducing barriers to and costs of commercial financing) [116]. Financing mechanisms can be policy-based or market-based as shown below: Policy Based: - Tax (e.g., taxes and tax credits); - Subsidies (e.g., subsidies and grants) 3-50

119 INTERNATIONAL BEST PRACTICES IN TRUCKING FREIGHT ENERGY USE Market Based: - Debt financing or lending programs (e.g., bank loans, soft loans, revolving funds, guarantee funds, energy efficiency bank windows ) - Emission credits (e.g., clean development mechanism [CDM]) - Energy service companies (e.g., guaranteed savings, shared savings, pay from savings) 3-51

120 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES 4 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES This chapter summarises the implemented best practices and green freight initiatives. It presents selected case studies from the developed and developing parts of the world and special emphasis is given to the neighbouring countries of Pakistan. A similar sustainable transportation project in Egypt is also included in the case studies, which was initiated six years back and sponsored by the UNDP and GEF in collaboration with local partners. 4.1 UNITED STATES SmartWay TRANSPORT PARTNERSHIP PROGRAMME In 2004, the U.S. Environmental Protection Agency (EPA) pioneered SmartWay to encourage greater efficiency and lower greenhouse gases and other harmful emissions from transportation supply chains [102]. In the years since, SmartWay and its partners have made significant progress toward these goals, leading businesses through a historic transition toward a new era of freight sustainability [133]. From the beginning, EPA and its partners worked through SmartWay to collaborate, to provide technical assistance and funding to seed investment in verified environmental and energy improvements, and to create tools to quantify freight emissions and their costs in the supply chain. Moving forward, EPA will continue to leverage SmartWay and help businesses and their transportation service providers find ways to more efficiently move goods in an increasingly energy-constrained, low-carbon world [134]. SmartWay Transport Partnership is a strong government/industry collaboration between freight shippers, carriers, logistics companies and other stakeholders, to voluntarily achieve improved fuel efficiency and reduce environmental impacts from freight transport. Participating companies use performance based quantification and reporting tools that benchmark and inform industry and the marketplace on freight operations, energy and environmental efficiency. SmartWay partners demonstrate to customers, clients, and investors that they are taking responsibility for the emissions associated with goods movement, are committed to corporate social responsibility and sustainable business practices, and are reducing their carbon footprint. To date, the partnership 4-1

121 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES includes nearly 3,000 companies and associations committed to improving fuel efficiency. It aims to accelerate the availability, adoption and market penetration of advanced fuel efficient technologies and operational practices in the freight supply chain, while helping companies save fuel, lower costs and reduce adverse environmental impacts. EPA helps SmartWay Partners move more goods, more miles with lower emissions and less energy. In addition to the U.S. EPA program, SmartWay has been administered in Canada by Natural Resources Canada since SmartWay continues to positively influence green freight programs in other regions of the world, creating a single seamless network that can effectively cut carbon from our global goods movement system. SmartWay Tractors and Trailers meet voluntary equipment specifications that can reduce fuel consumption by 10 to 20 percent for 2007 and newer long-haul tractors and trailers. Each qualified tractor/trailer combination can save between 2,000 to 4,000 gallons of diesel per year. Models that meet these equipment specifications save operators money and reduce greenhouse-gas emissions and air pollutants. USEPA SmartWay Technology Assessment Center develops test protocols, reviews, strategies and verifies the performance of vehicles, technologies and equipment that have the potential to reduce greenhouse gases and other air pollutants from freight transport. As a result, companies can compare the fuel efficiency and environmental performance of various technologies and make more informed purchases [134]. Program Highlights [135] Saves Oil and Supports Energy Independence Since 2004, SmartWay has helped its partners save million barrels of oil. This is equivalent to taking over 13 million cars off the road for an entire year. By helping the American freight industry reduce dependence on foreign fuel, we are able to invest more dollars at home and reduce our national trade deficit. 4-2

122 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES Saves Money and Supports U.S. Business Interests Working with SmartWay, U.S. businesses have saved $20.6 billion on fuel costs to date, lowering prices for the typical consumer while supporting American truckers. Tractor, trailer, and equipment suppliers to the U.S. trucking industry rely upon SmartWay to demonstrate the benefits of more efficient products to customers. Works with Thousands of Partners and Affiliates More than 3,000 of the nation s carriers (truck, rail, barge, and multimodal), shippers, and logistics companies are SmartWay partners, continuing to improve efficiency within their transportation supply chains. SmartWay counts among its partners a significant and growing number of Fortune 500 firms, representing a broad cross-section of industries. SmartWay affiliates work with the program to achieve environmental and other goals, and promote the benefits of SmartWay. The federal government has set ambitious greenhouse gas emissions reduction targets for itself in Executive Order The federal government, through the General Services Administration, is specifically instructed to utilize SmartWay partners. Helps to Protect the Health of Americans Since 2004, SmartWay has helped partners avoid emitting 61.7 million metric tons of carbon dioxide, 1,070,000 tons of nitrogen oxides, and 43,000 tons of particulate matter. These help to counter climate change and keep Americans healthy. These emissions reductions benefit communities near ports, borders, and truck stops the most, protecting the health and well-being of the citizens in these areas. An International Leader in Green Freight SmartWay is a seamless bi-national program jointly operated by both EPA and Natural Resources Canada, and includes over 300 Canadian partners. The Climate and Clean Air Coalition (CCAC), of the United Nations Environment Program, works with the World Bank, governments, and key international organizations to utilize SmartWay s technical assistance, methods, and tools. SmartWay is an integral component of the CCAC Global Green Freight Action Plan, which aims to develop and implement green freight programs in other countries and regions. SmartWay has developed a comprehensive training curriculum to help other countries build capacity to implement their own green freight programs. The curriculum is available in English and four other languages. 4-3

123 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES 4.2 CHINA GUANGZHOU GREEN TRUCKS PILOT PROJECT The World Bank (WB) initiated a pilot project dubbed Guangzhou Green Trucks Pilot Project in support of Guangzhou, China s efforts to improve air quality in preparation for the 2010 Asian Games [131]. The goal was to develop a proof of concept for a truck program in Guangdong Province, and possibly China, that aims to: Enhance the fuel economy of the truck fleet Reduce black carbon and other air pollutants from trucks Consequently obtain greenhouse gas (GHG) emission savings. The project was implemented by the Clean Air Initiative for Asian Cities Center (CAI-Asia Center), in cooperation with Cascade Sierra Solutions, US EPA and World Bank, and with support from the Guangzhou Environmental Protection Bureau (GEPB), Guangzhou Transport Committee (GTC), and Guangzhou Project Management Office (PMO) for the World Bank. The project received financial support from the Australian Government (AusAid) and the Energy Sector Management Assurance Program (ESMAP) [131]. The pilot project aimed to contribute to addressing three problems related to trucks in Guangzhou and the wider Guangdong province simultaneously: Fuel costs and security; Air pollution and associated health impacts, and GHG emissions and climate change. The scope of the pilot was limited to Guangdong Province, focusing on diesel trucks accessing or passing through the city of Guangzhou and surrounding cities, like Shenzhen. Aside from GHG emissions, the scope includes black carbon and other air pollutants from trucks because of their potential interacting effects and contribution to climate change, and because air pollution is an important local concern. The pilot project consisted of the four components, each with its own output: Background Analysis, which analyses numbers, growth, operation, fuel use in Guangzhou; relevant institutions and policies in China; and available fuel economy and emissions reduction strategies and technologies. Guangzhou Truck Sector Survey, which summarizes the results of a survey of 1040 truck drivers and 43 companies. The survey intended to fill the gaps in information needed for the program design and for determining the potential fuel savings and emission reductions through a wider green freight program in Guangdong. It covered company details, truck details 4-4

124 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES (ownership, type/size, age, brand, replacement), and operation details (km travelled, average speed, number of trips, route, maintenance, training, record keeping). Smart Drivers for Trucking in China Training Course. Training materials for truck fuel efficiency were developed and tested, which can be the basis of a training component under a future green freight program. A 1 hour summary course in the form of 72 presentation slides in English and Chinese tailored to Chinese drivers based on feedback received from 20 drivers and operators from the Guangzhou pilot companies who took the course was prepared. Further information is provided in 6 supporting presentation modules based on an existing Smartway course (planning; truck specifications; components and accessories; maintenance and inspection; driving practices; smart driving summary). Technology Pilot, which tested a tire equipment package (to reduce the weight and rolling resistance of the tires) and an aerodynamics equipment package (to reduce air resistance and drag) on long-haul trucks (heavy duty trucks), short-haul trucks, and garbage trucks of three Guangzhou-based companies. It also presents recommendations for future pilots based on this pilot and estimates the potential for fuel and emissions reductions for Guangdong Province using heavy duty trucks as an example. A 10-minute video was produced by the technology pilot in English and Mandarin. Freight is not yet getting enough attention compared to other transport modes and the video thus allows results to be shared more easily with a larger audience. The project team received full support from the Guangzhou Environmental Protection Bureau (GEPB), Guangzhou Transport Committee (GTC), and Guangzhou Project Management Office (PMO), who provided general guidance for the project and information for the Background Analysis, obtained support from Guangzhou Municipality for the technology pilot, and supported that the pilot project would lead to a larger pilot for Guangdong Province. GTC identified and secured a commitment from the three truck companies to participate in the technology pilot; obtained police clearance for the testing of technologies where needed; helped identify survey sites and obtain clearance to conduct surveys at logistics centres and other locations; and supported the filming of the video on the pilot at various locations in Guangzhou. Government support was critical for the success of the pilot project and will be critical for a larger project in Guangdong Province and for the establishment of a Green Freight China program in the future [131]. As the goal of this project was to develop a proof of concept for a truck program in Guangdong Province and China, the results of the four project components are summarized within this context. 4-5

125 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES Technology pilot and potential for the trucking sector The purpose of the Technology Pilot was in the first place to demonstrate that technologies applied in the US and other Western countries can also work in China, identify factors of influence for China, and determine the potential for fuel and emissions reductions for Guangdong Province under a future program. The pilot results are promising, but a larger pilot is needed to confirm savings potential. For this reason the results from the technology pilot should be considered as indicative only and must be verified under a larger pilot. The Technology Pilot component of the project tested a, Tire equipment package to reduce the weight and rolling resistance of the tires, and consisting of aluminium wheels (heavy duty trucks, HDTs, only), low rolling resistance tires, tire pressure monitoring system Aerodynamics equipment package to reduce air resistance and drag, and consisting of a nosecone, cabin fairing, and trailer skirts. Summary results for truck companies Three companies participated in the pilot: Star of the City Logistics (SOCL), Xinbang Logistics (XWBL), and Baiyun District Guangzhou. At SOCL, tire and aerodynamics equipment were tested on 2 long-haul HDTs. Investment costs were US$ 16,333, and annual savings are 3557 litres (6.64%), 9.18 tons CO 2, kg NO x, and 1.41 kg PM 10. This results in a payback period of 5.1 years. A main reason for lower than expected fuel savings was that the average speed of pilot trucks was km/hr (influenced by load weight, weather conditions, the pilot was conducted during months with frequent fog, highway construction, and traffic congestion), and the highest benefits from aerodynamics equipment is achieved at speeds above 75 km/hr. Based on the pilot results, if the equipment package were to be installed for the entire long-haul fleet of SOCL, consisting of 30 HDTs to which the package can be applied, then this would require US$ 489,996, resulting in 106,704 litres of fuel savings, which is equivalent to US$ 96,033. The payback period would be 5 years. Emissions reductions would be 276 tons CO 2, 996 kg NOx and 42 kg PM 10 per year. It is important to note that SOCL is considering purchasing several equipment for its fleet, and is most confident about nosecones, cabin fairings, aluminium wheels and low rolling resistance tyres [131]. For Baiyun District Guangzhou company, tire equipment was tested on 2 garbage trucks. Investment costs were $6320, and annual savings would 4-6

126 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES amount to 2520 liters fuel (18.5%), 6.71 tons CO 2, kg NO x and 1 kg PM 10. The payback period is 3.1 years, but is actually considered to be 1.5 years if the longer life of LRR tires compared to existing tires is considered. If the equipment package were to be installed in the entire Baiyun District garbage fleet, 1500 garbage trucks, then this would require US$ 9,487,500. This would result in 3,780,250 litres of fuel savings, which is equivalent to US$ 3,402,225 (at $0.9 per litre). The payback period would be 3.09 years. If the costs for the LRR tires were to be adjusted based on a 5 year lifetime for LRR tires compared to 8 months for currently used tires, then the total investment costs for 1,500 garbage trucks would be US$ 4,557,000 and the payback period would be reduced to 1.49 years. In both cases, annual emissions reductions would be 9,761 tons CO 2, 35.3 tons NO x and 1,501 kg PM 10 per year [131]. It is noted that a more favourable payback period would be achieved if: Equipment would be factory-installed on trucks Equipment would be purchased in bulk (current costs are based on low number purchased as part of the Guangzhou pilot project) The longer life time of LRR tires compared to existing tires would be considered for the HDTs of SOCL as this would lower the LRR tire investment costs over a certain time period Lessons about technologies tested A general conclusion is that technologies applied in the US may thus not always be suitable for China. With regards to the individual technologies tested, the following lessons are drawn for consideration in future pilots and a broader program: Low rolling resistance (LRR) tires were tested to, as the name suggests, reduce the rolling resistance of tires on the road and thus reduce fuel use. Single-wide LRR tires would provide the largest savings, but could not be tested due to legislation in China that does not allow making changes to the truck structure. The first verified SmartWay Chinese made tire, Double Coin Holding is a very important influence for developing SmartWay technology verification to technologies manufactured and distributed in China Tire pressure monitoring systems have a good potential to reduce fuel and emissions, but hinges on good installation of the system and instruction of the drivers on how to operate it. The trailer skirts, aimed to reduce drag, were less successful because the long-haul trucks did not reach average speeds of 75 km/hr above which fuel savings can be significant. At lower speeds the added weight of trailer skirts offsets the fuel savings from reduced drag. Higher average speeds may be more difficult to achieve in China compared to the US. The weight of truck loads also plays an important role, as overloading of trucks is 4-7

127 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES common and renders driving at high speeds unsafe. The pilot found a wide range of truckload, which is not always measured because customers often pay per freight volume or units transported. Lessons about process The process is equally important to a successful application of technologies. The main lessons for consideration in future pilots and a broader program are: Training of drivers can greatly add to fuel and emissions savings, including training on eco-driving as well as on the equipment itself. Clear and detailed pilot protocols for data collection are essential. Their implementation can be difficult, and if not implemented correctly, the margin of error may exceed the savings percentage, thus rendering unreliable results as was the case for XWBL. Conditions for pilot and control trucks need to be kept as close as possible. Participating companies were keen to be considered leaders in their sector. Identification of leading companies that would profile fleets that advance emission reduction and fuel savings in the transportation sector would benefit a future pilot or program. Potential for fuel and emissions reductions for Guangdong Province Based on the results from the pilot, US experience, the survey, and literature, the potential to determine fuel and emissions reductions for Guangdong Province using the estimated 826,520 heavy duty trucks (HDTs) registered there as an example. It can be concluded that this potential is significant, especially when it is considered that conservative figures were applied, including for fuel % reductions, annual vehicle km travelled (VKT) and diesel price. Table 4-1: Fuel and Emissions Reduction Potential for Heavy Duty Trucks Registered in Guangdong Province Savings per year Per HDT Guangdong HDTs (826,520) Package 1 Tires Fuel savings 2, million hectolitre Fuel cost savings US$ 1,883 US$ 1.56 billion CO2 saving 5.4 tons 4.47 million tons NOx savings 19.5 kg 16,156 tons PM10 savings 0.84 kg 692 tons Package 2 Aerodynamics Fuel savings 1, million hectolitre Fuel cost savings US$1,431 US$ 1.18 billion CO2 saving 4.1 tons 3.39 million tons NOx savings 14.9 kg 12,279 tons PM10 savings 0.64 kg 526 tons Package 1 & 2 Tires & Aerodynamics Fuel savings 3, million hectolitre 4-8

128 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES Savings per year Per HDT Guangdong HDTs (826,520) Fuel cost savings US$ 3,315 US$ 2.74 billion CO2 saving 9.5 tons 7.9 million tons NOx savings 34.4 kg 28,435 tons PM10 savings 1.47 kg 1,218 tons Source: CAI-Asia and WB [131] Similarly, the potential for reductions can be calculated for all trucks (HDT, MDT and LDT) registered in Guangdong Province. This assumes the application of the tire package for all trucks and the aerodynamics package for HDT only. Table 4-2: Fuel and Emissions Reduction Potential for All Trucks Registered in Guangdong Province Parameter Total Remarks Total number of trucks registered in Guangdong Province 1,230, % HDT (826,520); 19.8% MDT (243540); 13.0% LDV (159,900) based on the ratios found in the trucks survey Total investment costs (tires and aerodynamics) 12,137,461,109 $12 billion dollars Total fuel savings (litres per year) 3,962,456,995 4 billion litres Total fuel cost savings ($ per year) 3,586,066,990 $3.6 billion Total CO2 savings (tons per year) 10,233, million tons Total NOx savings (kg per year) 37,009, tons Total PM savings (kg per year) 1,584, tons Payback period in years 3.38 Source: CAI-Asia and WB [131] 4.3 CHINA GREEN FREIGHT INITIATIVE The China Green Freight Initiative (CGFI) is multi-stakeholder program, launched in April 2012, which operates under the supervision of a steering group made up of representatives from Chinese government ministries. Currently funded by the non-profit Energy Foundation, the program is managed and implemented by the China Road Transport Association (CRTA), the Research Institute of Highway, and Clean Air Asia [116]. It is Chinaʼs national voluntary program which aims to improve energy efficiency and reduce emissions from road freight, improve and upgrade road trucks in China and promote broader sustainable development of the China's road freight sector. The program has three components: green management, green technology and green driving [116, 136]. 4-9

129 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES City and regional level projects in the freight sector will be successful and sustained only if an integrated policy package is in place nationally, due to the freight being carried across regional boundaries [130]. A Green Freight China Program is being designed that focuses on energy efficiency and reduced GHG and air pollutants, that Fills gaps in national policies and institutions that aim to reduce fuel use and emissions from the freight sector, and fill gaps the Guangdong GEF project that is restricted to the Guangdong Province. Provides a basis for nation-wide efforts to reduce fuel use and emissions from the freight sector. The program design will build on existing programs in other countries as well as the Green Trucks Pilot Project in Guangzhou Could also be used as a model for other countries establishing such programs, especially developing countries. The idea stems from the involvement of the Clean Air Initiative for Asian Cities (CAI-Asia) in the World Bank Guangzhou Green Trucks Pilot Project (Dec 2008 Feb 2010) and preparation of a GEF Guangdong Green Freight Demonstration Project, as well as the success of the SmartWay Transport program in the US and steps towards a similar program in Europe. The main output of the project is the Green Freight Design Report that includes the design framework of the overall program, and details of the various components of the proposed program, including Technologies, Logistics, Financing, Knowledge and Capacity and Green Freight Partnerships [137]. Governance and Funding CGFI was launched in 2012 as public-private partnership by the China Road Transport Association (CRTA), backed by the Ministry of Transport (MOT) and other ministries, and supported by the Research Institute of Highways (RIOH) and Clean Air Asia (CAA). The program is supported by the Ministry of Transport and managed by CRTA, which connects road enterprises with the government [137]. As freight cuts across different policy areas, collaboration on these is key, and for this reason, CGFI set up a Steering Committee, led by the Ministry of Transport that includes other relevant ministries. In parallel, CGFI set up an Expert Group with national and international experts who provide technical input in the program development. 4-10

130 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES At the start of the program in 2012, the CGFI guideline was issued that included the concept of green freight, its goals and principles of the program and identified tasks with a 5-year roadmap. The overall management of program by CRTA is funded by the Energy Foundation. Partners co-finance events and activities. At present companies may join the program free of charge. Scope of the Programme Currently road freight is a main component of the programme with the intention to include other modes in the future. As per May 2015, 20 carriers joined the program and participated in the pilot of the CGFI draft standards. Two shippers, Lenovo and Procter & Gamble joined the program in Emissions of CO 2, PM, NO x, and SO x are in scope, because CGFI aims to address government policy objectives in relation to climate and clean air. Vehicles/fuels and fleet management is in focused solutions. Modal shift will be considered in the future. Program Components Targets Instead of setting targets for individual companies, member carriers are encouraged to meet the requirements under the CGFI standards for green trucks and green carriers. Actions CGFI has three components through which to mobilize action among carriers: Green management, which aims to improve the fleets and management, for example through better loading practices, and drop-and-hook practices using articulated vehicles. Green technologies, to promote the adoption of green technologies for trucks and lightweight trucks through the development of green truck standard and issuance of a catalogue of green technologies and energysaving products. Green driving, with CGFI looking to establish driver-training programs to promote eco-driving through the development of eco-driving training programs and guidebooks. The next priorities for CGFI are: provide policy support and service for freight enterprises; promote and implement standards; accelerate industrygovernment alliance; establish a data collection and assessment method; start pilot projects such as technology verification. 4-11

131 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES Measurement Reporting & Verification CGFI has plans to develop a methodology for calculating road freight emissions, which will build on existing international methodologies, frameworks and standards, and could be developed in parallel to methodologies for other modes (air, sea, rail, inland waterways, and trans-shipment centres). Collaboration & Exchange Annual CGFI seminars are held to spur the learning of best practices from other countries and to share experiences and promote CGFIʼs program across other nations. Labels & Recognition CGFI is developing two standards: the Green Freight Enterprise Standard and Green Freight Vehicle Standard that provides details on the five-leave program requirements for companies and trucks. In 2013, twenty Chinese enterprises were selected to pilot these standards and CGFI was subsequently selected as a cooperation project under the China-US Climate Cooperation Working Group. The standards can be the basis of a potential carrier label under CGFI. 4.4 EGYPT SUSTAINABLE TRANSPORT PROJECT Background The energy consumption of freight transportation is the area with rapid growth in Egypt. What characterizes Egypt s freight transport system is that [138]: 1) The transportation is dominated by road transport with a share of 94% of all the freight, while the opportunities for more energy efficient rail and inland waterway transport are clearly underutilized; 2) The transport demand is concentrated on a few transport corridors starting from or ending in Cairo (the Cairo Alexandria corridor being the most heavily used for almost all the commodities); and 3) The transport patterns are influenced by the imbalance between exports and imports (the value of imports being about 2 times the value of exports in 2002, meaning that the trucks often have to return empty from Greater Cairo to the coastal ports) 4-12

132 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES In 2002/2003, the transport sector was responsible for 28 % of the final energy consumption in Egypt and for about 25 % of the energy related CO 2 emissions and is the fastest growing source of CO 2 emissions in the country. The total amount of greenhouse gas emissions from the transport sector in Egypt in 2002/2003 was estimated at 29 million tons of CO 2 [139]. While several studies have been conducted and sound strategies and plans have been developed for addressing the challenges faced by the transport sector, the implementation of these plans has suffered from different barriers such as: Lack of inter-sectoral co-ordination (harmonization of policies, institutional co-operation) and limited institutional capacity to effectively adopt, implement and further develop the programs; Focus on single infrastructure investments or technology driven approaches without an integrated view on broader requirements for successful intervention; Pressing needs to find solutions to pending day-to-day problems at the costs of adequately addressing the long term sustainable development needs of the transport sector; Shortage of sustainable transport models and new approaches tested in Egypt to gain experience, reduce the risks and build the confidence of the targeted stakeholders; Negative experiences with some early experiments such as the introduction of separated bus lanes in Cairo in late 1970 s and 1998 or with trolley busses in 1970 s; Possible public perception, social and cultural barriers and occasionally conflicting interest between the different key stakeholders; Limited access to suitable financing mechanisms to meet the required investment needs; and Inadequate emphasis on integrating sustainable transport planning with urban planning of new cities and on promotion of non-motorized transport in middle size provincial cities. The specific situation and background analysis related to the overall situation of the transportation sector in Egypt led to initiate the Sustainable Transport Project for Egypt (STP). The project was started in January 2009 for 6 years with USD 44 million in which USD 7 million funding from GEF/UNDP and rest USD 37 million is a local contribution by the Egyptian Government and private sector [138]. The project is executed by Egyptian Environmental Affairs Agency (EEAA), Ministry of Environment with technical support from Development Research 4-13

133 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES and Technological Planning Centre (DRTPC), Cairo University. The main stakeholders associated with the project are: Ministry of Transport, Ministry of Housing, Utilities and Urban Communities Ministry of Interior Cairo, Giza, Fayoum, Monofia Governorates Private sector, and NGOs Goal and Objectives of the Project The project goal is to reduce the growth of the energy consumption and the related greenhouse gas emissions of the transport sector in Egypt, while simultaneously mitigating the local environmental and other problems of increasing traffic such as deteriorated urban air quality and congestion. This is to be achieved by increasing or sustaining the modal share of greenhouse gas emission reducing public and non-motorized transportation options, discouraging the use of private cars and facilitating freight transportation by more energy efficient truck operations and increasing the share of cargo transported on rail and inland waterways [139]. The project objective is to create an enabling policy and institutional environment and to leverage financial resources for the sustainable transport sector development, including public-private partnerships. The STP is envisaged to achieve this by working with the following sustainable transport concepts: Initiating the concept for the development of new, integrated high quality public transport services for Greater Cairo and its satellite cities (to exert shift from car use) and facilitating its effective replication; Promoting non-motorized transport in medium sized provincial cities; Introducing new traffic demand management measures, with an objective to gradually scale them up over the time; Improving the energy efficiency of freight transport; and Enhancing the awareness and capacity and strengthening the institutional basis to promote sustainable transport during and after the project in general. The project strategy is initially focusing on relatively small pilot initiatives, by which it seeks to work through the identified barriers first at the smaller scale. By building on the results of those concepts that demonstrate early success, 4-14

134 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES the project seeks to facilitate and address their effective expansion and replication as well as the broader institutional and sector development needs. Component 1: Promoting a modal shift from private car use to sustainable, integrated public transport in Greater Cairo and its satellite cities by introducing privately operated new high quality buses This component is addressing the medium or higher income part of the population, who in principle would be in the favour of using more public transportation instead of a private car, if fast, comfortable and (in the case of connecting journeys) with other transport facilities (and the metro in particular) well integrated public transport services are available. Component 1 includes the following activities, which are to be promoted and replicated through a public-private partnership (PPP) arrangement: New, high quality public transport service for connecting Cairo and its satellite cities in order to attract current and expected future private car users, with the first services piloted between Cairo and the cities of Sheikh- Zayed and the 6th of October. Under this subcomponent, the selected private investor, will introduce three new, high quality bus services running between Cairo and the cities of the 6th of October, Sheikh-Zayed and Media Production vicinity (connected to the Metro Station # 2 at Cairo University). Improved internal, high-class public bus services within the satellite cities, with the first services piloted in the city. Under this subcomponent, the selected private investor will introduce two new bus services within the city of the 6 th of October to provide a more comfortable and higher quality alternative to the currently used, modified pick-up vans and the use of private cars. The purpose is to especially attract the current and expected future private car users and those requiring a connecting bus service for the intercity line running between the 6 th of October and Cairo. About 290,000 tons of CO 2 emissions are expected to be reduced over the next 20 years as a direct result of successful implementation of proposed pilot projects and an estimated 600,000 tons of reduced CO 2 through successful replication in Cairo, Alexandria and their satellite cities. Component 2: Promoting non-motorized transport in medium sized provincial cities Component 2 is designed to increase or sustain the modal share of nonmotorized transport in middle size provincial cities such as Shebin EL-Kom and 4-15

135 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES Fayoum. The residents in these cities are increasingly relying on the use of shared taxis and, more recently, three wheelers (3Ws) as a substitution mode for walking trips. The objective of this component is to work against this trend and to raise the status of non-motorized transport, namely walking and cycling, as a comfortable, healthy, safe and cheap way of moving from one place to another within the distances suited for this purpose. The initial focus of the project is on improving the NMT infrastructure for two middle cities close to Cairo, namely Fayoum and Shebin El-Kom with supporting promotional activities so as to test the concept and, in the case of a successful outcome, initiate its replication in additional middle size cities. The outcome of component 2 is aimed to be achieved by: Constructing two pilot NMT corridors in Shebin EL-Kom and Fayoum with improved facilities for walking and bicycle Designing and manufacturing bicycle racks, to be located in the two cities' accessible parking areas. Facilitating the purchase of bicycles through funds administered by partner NGOs that help people buy bicycles and pay over equal monthly instalments at zero interest rate. Conducting promotional campaigns to raise the social acceptance of cycling and to lower the barriers to bicycle purchase and use; Developing some local bicycle workshops and technicians to improve the NMT supply side services such as local bicycle repair. In Fayoum, the pilot project supports the local Governorate to improve the current sidewalks into a small NMT network with a total length of 14 km. The network includes separate lanes for walking and cycling as well as some supporting investments to make it more attractive for the users such as tree plantations etc. The effort is further supported by a promotional campaign conducted in cooperation with the Governorate of Fayoum, Fayoum University and the Egyptian Social Fund for Development 4-16

136 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES The construction costs of these first pilots is shared between the GEF and the local Governorates. This co-operation is facilitated, among others, through the UNDP Global Compact Network Initiative. In Shebin El-Kom, a second pilot project covers 14 km network with envisaged implementation and financing similar to those in Fayoum. About 262,000 tons of reduced CO 2 are expected over the next 20 years as a direct result of successful implementation of the proposed pilot projects and a potential for over 4 million tons of CO 2 through successful replication at all. Component 3: Successful introduction of the Transport Demand Management (TDM) concept with an objective to effectively discourage the use of private cars, when good quality public transport services are available. While Components 1 and 2 are promoting and testing new concepts for providing attractive alternatives for the use of private cars and motorized transport in general, respectively, Component 3 is designed to introduce selected transport demand management (TDM) measures to discourage the use of private cars. Until now, the focus in Egypt in dealing with congestion in cities such as Cairo has primarily been on traffic management, i.e. building new roads and implementing other measures to improve the traffic flow. While these measures can, at least temporarily, release some pressure on congested roads, they do not really produce any global benefits in terms of attempting to promote the shift to environmentally more friendly transport modes. The transport demand management (TDM) concept to be promoted approaches the issue from the other end, i.e. trying to actually reduce the number of private cars entering into the roads and encouraging the people to switch for the use of public transport and non-motorized transport modes, thereby producing also global environmental benefits. The initial TDM concepts promoted and facilitated in the frame of this project include the parking policy measures, to be complemented by the improved use of information technology such as Variable Message Parking (VMS) signs to guide the cars to the parking facilities outside the city centre and/or close to connecting public transport facilities, thereby reducing the additional driving and the associated greenhouse gas emissions from searching free parking space. 4-17

137 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES About 81,000 tons of reduced CO 2 are expected over the next 20 years as a direct result of successful implementation of the proposed pilot projects and a potential for over 18 million tons of CO 2 through successful replication and the introduction of more aggressive transportation demand management measures. Component 4: Improved energy efficiency of freight transport Component 4 is designed to promote the energy efficiency of freight transport, thereby complementing the efforts of the local authorities to reduce local air pollution caused by the trucks operating in and entering into the urban areas [140]. In exploring the opportunities for improved energy efficiency of freight transport, the project seeks to co-operate closely with private and public truck operators and managers of the freight terminals, warehouses, repair shops etc. operating in urban areas. It will build on the ongoing and planned activities of the Government of Egypt, such as the effort of the Egyptian Environmental Affairs Agency to establish a network of stations for vehicle checking and engine fine tuning with opportunities to improve also the fuel economy of the vehicles. Similarly, the project will cooperate with the Ministry of Transport and its underlying agencies to promote the increasing use of more energy efficient rail and river based freight transport modes, including the establishment of new intermodal (rail-truck) and (river-truck) terminal facilities [140]. The specific technical assistance activities supported under this component include Updating the situation analysis and developing policy recommendations and other measures for improving the energy efficiency of urban freight transport in Egypt Supporting the efforts of the Ministry of environment for establishing pilot integrated centres in Cairo for environmental and technical inspection of vehicles. The centres aim at issuing licenses in cooperation with the Ministry of Interior. The main global benefits of this component are arising from the gradual, incremental improvement of the fuel economy of the trucks and improved logistics reducing the trips with empty or partial load with the estimated GHG reduction of 850,000 tons of CO 2 as a direct result of the project and a potential 4-18

138 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES for over 5 million tons of CO 2 through successful replication. In addition, the project is expected to result in additional GHG reduction by promoting modal shift from road to rail and river based freight transport options. Component 5: Enhanced awareness, capacity and strengthened the institutional basis to promote sustainable transport sector development during and after the project This Component accommodates a package of activities to serve the required general capacity building and institutional strengthening to facilitate effective replication of the different pilot concepts tested under components 1-4 and to facilitate further sustainable transport development in Egypt in general The specific measures and activities to be promoted under this component include: Conducting a study to determine emission factors for small vehicles fuelled with gasoline in Great Cairo using On-Board Emission Measuring System. Raising the awareness and building the capacity of the key professionals in the institutions dealing with urban planning and development, including, among others, the Ministry of Housing and its underlying agencies, Local Governorates, Ministry of Interior and its underlying agencies enforcing the traffic rules and regulations on different aspects of sustainable transport. Consolidating and disseminating the results and lesson learnt from the implementation of the different project components and finalizing the recommendations for the required next steps. 4.5 EUROPE GREEN FREIGHT PROGRAMME The Green Freight Europe Programme was initiated by European Shippers Council (ESC) and EVO, the Netherlands in cooperation with private sector companies provides a single platform to which shippers and carriers input operational data necessary to calculate, validate and benchmark the environmental performance of their transport operations. Today, it is a working group of 100+ companies including multinational shippers, carriers, retailers and associations. The platform is run by a neutral and independent host, which ensures the confidentiality of information and the transparency of the process. 4-19

139 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES Members can apply annually for a Green Freight Label, which is based on the operational data and on the progress a company is showing on environmental targets. The label recognises the level of maturity in environmental performance. Maturity is expressed at four levels: Understanding the baseline and identify opportunities to improve Share CO 2 reduction strategies and set targets Measure and mature, show progress on CO 2 reduction and implementing measures Demonstrate leadership and achieve the targets For each level a member will receive a green leaf. The leaf is valid for one year. Each year members will raise the bar. Working mechanism Green Freight Europe recognises companies that demonstrate leadership in green freight practices for their entire road freight supply chain. The program rewards members with the Green Freight Europe label. The Green Freight Europe label is composed of four leaves. With each leaf Green Freight Europe motivates member companies to raise the bar. The label provides all stakeholders with a good indication of members with a successful strategy and CO 2 efficiency improvement. A transport company that is recognised with four leaves has demonstrated sustainable improvement in CO 2 reduction for its transport on own account and outsourced transport activities. A leaf 4 company that procures transport activities has successfully implemented a supply chain strategy aimed at improving environmental performance. For Carriers Carriers provide Green Freight Europe with data (e.g. fuel, km, fleet profile), enabling the calculation of their carbon emission performance Carriers receive a score and a benchmark against similar operations Carriers commit to improving the fuel efficiency of their fleet over time and need to demonstrate this annually Carriers receive a label that expresses their progress and level of maturity 4-20

140 WORLDWIDE GREEN FREIGHT INITIATIVES: CASE STUDIES For shippers Shippers provide Green Freight Europe with data (e.g. shipments, carriers used), enabling the calculation of the carbon emission performance of transportation operations contracted with Green Freight Europe carriers. Shippers commit to improving the carbon emission performance of their supply chain over time and need to demonstrate their commitment annually. Shippers receive a label that expresses their progress and level of maturity Green Freight Europe platform The UK-based Energy Saving Trust (EST) is appointed to develop a tool that would deliver the benchmarking reports and analysis of truck CO 2 emissions for the rapidly expanding membership of the group. With several years of experience in this field, EST has started working on this technical solution. Projects under Green Freight Europe Programme Step Change in Agri-Food Logistics Ecosystems (SCALE) Logistics operations in supply chains can be planned and executed in a significantly more sustainable fashion with increased collaboration between firms acting along a supply chain. With a better understanding of collaboration 4-21