Working towards a Green Freight Program in China and Asia

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1 Working towards a Green Freight Program in China and Asia Bert Fabian, Sophie Punte, Yan Peng Clean Air Initiative for Asian Cities Transforming Transportation 2011 Washington, D.C.,

2 About the Clean Air Initiative for Asian Cities The Clean Air Initiative for Asian Cities promotes better air quality and livable cities by translating knowledge to policies and actions that reduce air pollution and greenhouse gas emissions in transport, energy and other sectors CAI-Asia began in 2001 as a multi-stakeholder initiative by ADB, World Bank and USAID Since 2007, CAI-Asia is a UN Type-II Partnership with almost 200 organizational members, 8 Country Networks, and the CAI-Asia Center as its secretariat 2

3 Outline Background Vehicle and freight trend Environment and Social concerns Barriers and challenges in road freight Strategies for a sustainable road freight sector in Asia 3

4 Increasing Motorization in Asia Source: ADB, CAI-Asia, Segment Y Ltd., and IEA 4

5 Heavy Commercial Vehicles Growth 80,000,000 70,000,000 China 80,000,000 70,000,000 India number of diesel vehicles 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 PC LCV HCV number of diesel vehicles 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 3-wheeler PC LCV HCV 10,000,000 10,000, Source: ADB, CAI-Asia, Segment Y Ltd. (2009) 5

6 Road freight dominates in Asia Pakistan Indonesia Thailand China India Bangladesh Philippines Vietnam 0% 20% 40% 60% 80% 100% Source: Various sources (ADB, 2008; Sopadang, 2007; Patdu, 2005; Lubis & Isnaeni, 2005, Ministry of Industries (Pakistan) 2006; World Bank, 2008; 6

7 Travel Activity Heavy & Medium Duty Trucks billion ton kilometers ,862 (87%) 19,104 (71%) 7,958 (29%) 0 1,068 (13%) Others Total Asian Total Source: WBCSD and IEA (2004) 7

8 Diesel consumption by trucks to double by 2050 and Asia s share to grow to 34% road trucks fuel consumption (bil liters gasoline equivalent) Asia Other % Consumption by Asia 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% % Consumption by Asian Countries Road Freight Energy Use and % Consumption by Asian Countries Source: WBCSD and IEA (2004) 8

9 Diesel high % of fuel mix and growing Country Bangladesh 73.3% 79.0% China 13.4% 40.2% India 55.0% 66.4% Pakistan 71.4% 84.1% Philippines 17.6% 54.4% Thailand 52.2% 68.6% Vietnam 15.5% 55.6% IEA s Energy Balances of Non-OECD Countries as quoted by Timilsina and Shrestha (2009) 9

10 Trucks relatively high emissions impact per truck China example Vehicles Diesel 12% CO 2 Emissions-2005 Petrol 28% Petrol 88% Vehicle Kilometer Travel Diesel 29% Diesel 72% PM Emissions-2005 Petrol 9% Petrol 71% Source: ADB, CAI-Asia, and Segment Y Ltd Diesel 91% 10

11 Other impacts of trucks Road accidents India: trucks 5% of vehicles but 30% of road accidents Pakistan: 25% of road accidents involved trucks Truck drivers at high risk of getting sexually-transmitted diseases such as HIV/AIDS Noise 11

12 Barriers: Technologies & Logistics Barriers and challenges in adopting cleaner technologies Limited applicability and availability of certain technologies (e.g. aerodynamics on slow highways) Fragmented technology suppliers network makes access to technologies difficult for carriers Limited policies for trucks and introduced much later than for light-duty vehicles Emission reduction technologies (e.g. Diesel particulate filters) will only work if legislated Limited verification/certification systems for technologies Limited case study examples for Asia to build confidence 12

13 Barriers: Technologies & Logistics Technology % Fuel Reduction Potential Aerodynamics 3 to 15 Auxiliary loads 1 to 2.5 Rolling resistance 4.5 to 9 Mass (weight) reduction 2 to 5 Idle reduction 5 to 9 Intelligent vehicle 8 to 15 Source: Transportation Research Board (2010). Technologies and Approaches to reducing the Fuel Consumption of Medium- and Heavy-duty Vehicles 13

14 Barriers: Technologies & Logistics Barriers and challenges in adopting better logistics and operations Freight seldom included in design and planning of urban transport systems and policy development Shippers seem to have a less direct relationships with carriers Long-haul trucks often travel large parts of trips in urban areas Limited knowledge and experience with logistics solutions (e.g. drop and hook; standard container sizes) Different transport modes covered by different government agencies, making intermodal transport and shift to other freight modes more difficult 14

15 Barriers: Technologies & Logistics Highly fragmented with a majority owner-driver trucks China, Guangzhou survey: 52% owner-driver trucks India: 80% of companies have 1-2 trucks, and only 10% of companies have more than 15 trucks Old trucks and poor maintenance practices > 10 Years 5-10 Years 0-5 Years 0 Diesel Vehicles Petrol Vehicles 15

16 Barriers: Technologies & Logistics Overloading Asia: 52% of trucks 45% over payload weight limit (Asia Fdn) Pakistan: 70% of 2-3 axle and 40% of 4-6 axle trucks overloaded Philippines: billion USD to repair pavement damage (JICA) 16

17 Barriers: Technologies & Logistics High percentage of empty hauls China surveys: 40-50% empty miles = 8 billion USD annual loss Philippines: 89% delivery vehicles empty return trips India survey: 37-46% of trips are empty All MAV 3-Axle 2-Axle LCV Empty up to 2.5 tons 2.5 to 5 tons 5 to 7.5 tons 7.5 to 10 tons 0% 20% 40% 60% 80% 100% 17 Source: Feasibility for 6-laning of NH-1 from Panipat Jalandhar in the State of Haryana/Punjab, India

18 Barriers: Knowledge & Capacity Lack of knowledge on green freight especially small trucking companies / driver-owners No training program available for all truck drivers In-house training courses at large trucking companies Courses provided by private companies (e.g. Scania or Michelin) to customers Lack of an agreed methodologies for fuel and emission measurement Limited public information available on freight sector Limited recognition for good practice in freight sector (e.g. Award) 18

19 Barriers: Financing Limited tax policies for truck sector relevant to energy and emissions management Investment costs are too high for many companies, even if potential savings are high and payback periods short Truck sector not considered most reliable sector for lending (especially small companies and individual truck driverowners) Banks currently start providing loans for new trucks but not for in-use fleet ESCOs (energy service companies) established for industry but no experience with trucking fleets 19

20 Strategies: Avoid Avoid: reduce the need to travel or the travel Promotion of local production and consumption Co-location of facilities within supply chain and with ports Improved logistics Load management Example: HCMC (Vietnam): 60% of all food sourced from within city boundaries 20

21 Strategies: Shift Shift: more energy-efficient modes Optimization of railways and inland waterways Different vehicle types that better match the loads Example: DHL improved carbon efficiency by 19% in Strategies included replacing 60 four-wheelers with 75 motorbikes 10/jcr:content.html 21

22 Strategies: Improve Improve: energy efficient modes, operations, technologies Fuel economy standards Stricter implementation of anti-overloading laws Technological tools, such radio frequency identification tags (RFID), global positioning systems (GPS) and vehicle routing software Example: fuel economy improvement in the ASEAN region from 2015 to 2035 will reduce26% of CO2 emissions from light and heavy duty vehicles 22

23 Potential for Southeast Asian countries Indonesia FE for HDV and LDV Indonesia(Reference) Indonesia FE for LDV Thailand-LDV+HDV-FE Thailand(Reference) Thailand-LDV-FE Million Tons of CO Million Tons of CO Million Tons of CO Philippines-LDV+HDV-FE Philippines(Reference) Philippines-LDV-FE Million Tons of CO Vietnam-LDV+HDV-FE Vietnam(Reference) Vietnam-LDV-FE

24 Need for a Green Freight Program Partnership 4 Elements - Green Freight Partners - Technologies and Logistics - Financing - Knowledge and Capacity Low Emissions Footprint 24

25 Find out more CAI-Asia Center Clean Air Initiative for Asian Cities (CAI-Asia) Center, Challenges and Opportunities for an Environmentally Sustainable Road Freight Sector in Asia. Pasig City, Philippines. Sophie Punte, Executive Director Yan Peng, China Representative Bert Fabian, Transport Program Manager Sudhir Gota, Transport Specialist Alvin Mejia, Environment Specialist Unit 3505, 35 th floor Robinsons-Equitable Tower ADB Avenue, Pasig City Metro Manila 1605 Philippines 25