69440 Guangzhou Green Trucks Pilot Project: Background Analysis Report for the World Bank “Truck GHG Emission Reduction Pilot Project� DRAFT FINAL – May 2010 The World Bank Clean Air Initiative for Asian Cities (CAI-Asia) Center Supported by the Australian Government, AusAID Guangzhou Green Trucks Pilot Project – Analysis Report – Draft Final © 2010 Clean Air Initiative for Asian Cities Center (CAI-Asia Center) and World Bank. All rights reserved. This publication may be reproduced in whole or in part in any form for educational or non-profit purposes without special permission from the copyright holder, provided acknowledgment of the source is made. The CAI-Asia Center would appreciate receiving a copy of any publication that uses this CAI-Asia Center and World Bank publication as a source. No use of this publication may be made for resale or for any other commercial purpose whatsoever, without prior permission in writing from the CAI-Asia Center or World Bank. 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Contact CAI-Asia Center Unit 3510, Robinsons-Equitable Tower, ADB Avenue Pasig City, 1605, Metro Manila, Philippines Tel +63 2 395 2843 Fax +63 2 395 2846 center@cai-asia.org www.cleanairinitiative.org About CAI-Asia The Clean Air Initiative for Asian Cities (CAI-Asia) promotes better air quality and livable cities by translating knowledge to policies and actions that reduce air pollution and greenhouse gas emissions from transport, energy and other sectors. CAI-Asia was established in 2001 by the Asian Development Bank, the World Bank and USAID, and is part of a global initiative that includes CAI-LAC (Latin American Cities) and CAI-SSA (Sub-Saharan Africa). Since 2007, this multi-stakeholder initiative is a registered UN Type II Partnership with over 170 organizational members, eight Country Networks (China, India, Indonesia, Nepal, Pakistan, Philippines, Sri Lanka, and Vietnam) and the CAI-Asia Center as its secretariat. Individuals can join CAI-Asia by registering at the Clean Air Portal: www.cleanairinitiative.org. Its flagship event, the Better Air Quality conference, brings together over 700 air quality stakeholders. Guangzhou Green Trucks Pilot Project – Analysis Report – Draft Final CONTENTS 1. Introduction .......................................................................................................................................... 1 1.1 Objectives, Scope and Outputs ..................................................................................................... 1 1.2 Problems addressed through the Pilot Project ............................................................................. 1 2. Situational Analysis of Diesel Trucks in Guangzhou .............................................................................. 4 2.1 Truck Numbers and Freight .......................................................................................................... 4 2.2 Fuels .............................................................................................................................................. 9 2.3 Trucking industry in Guangzhou and wider Guangdong Province .............................................. 11 3. Institutional and Policy Context .......................................................................................................... 14 3.1 Relevant Government Agencies.................................................................................................. 14 3.2 Relevant Plans and Policies ......................................................................................................... 16 4. Fuel Economy and Emission Reduction Strategies and Technologies ................................................ 17 4.1 Available Strategies and Technologies........................................................................................ 17 4.2 Selection Criteria ......................................................................................................................... 19 4.3 Strategies and Technologies proposed for Pilot Project ............................................................. 19 ANNEXES ..................................................................................................................................................... 21 Annex A – Traffic Restriction Rules for Trucks in Guangzhou ................................................................. 21 Annex B – Relevant Government Agencies and Other Organizations .................................................... 22 Annex C – Most Relevant Plans and Policies .......................................................................................... 26 Annex D – Descriptions of Existing Trucks Programs .............................................................................. 31 Annex E – Descriptions of Strategies, Equipment and Technologies ..................................................... 40 Guangzhou Green Trucks Pilot Project – Background Analysis Report – Final 1. Introduction 1.1 Objectives, Scope and Outputs The World Bank (WB) initiated a pilot project – dubbed “Guangzhou Green Trucks Pilot Project� in support of Guangzhou’s efforts to improve air quality in preparation for the 2010 Asian Games. The goal of this project 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 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 Guangzhou Environmental Protection Bureau (GEPB), Guangzhou Transport Committee (GTC), and Guangzhou Project Management Office (PMO) for the World Bank. The pilot project aims 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) greenhouse gas 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 following components, each with its own output: 1. Background analysis 2. Survey of Guangzhou truck sector 3. Driver training course for fuel efficiency of trucks 4. Technology pilot This document is the Background Analysis Report. 1.2 Problems addressed through the Pilot Project The pilot project aims 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) greenhouse gas emissions and climate change. First, there is a problem of fuel costs and security. The 10 million trucks on Chinese roads, more than a quarter of all vehicles in China, are a major reason China accounts for half the world's annual increase in oil. Total energy used for passenger and freight in China accounted for 5.34% of the total worldwide in 2005 and 1 Guangzhou Green Trucks Pilot Project – Analysis Report – Draft Final will account for 9.9% in 2035 according to IEA estimates.1 With international crude prices fluctuating from USD120 to USD140 a barrel in 2008 before dropping to $40 a barrel in late 2008, economists still expect that fuel prices will be higher in the future.2 China’s subsidies on diesel for socio-economic reasons has resulted in a surge in diesel truck sales (in 2008 this was nearly twice as many as in the US), and subsequently diesel supplies cannot keep up with demand for diesel at service stations, causing rationing and shortages.3 Improvements in the fuel economy of trucks will gain the support from truck owners and drivers, because it reduces their fuel bill, as well as Chinese authorities because it reduces the amount of diesel subsidies and the dependency on fossil fuels. At the same time, this will make an important contribution to reducing GHG emissions. Second, there is the growing problem of climate change. Greenhouse gas (GHG) emissions are rapidly rising in Asia, especially in cities. The Kyoto Protocol covers six main greenhouse gases.4 Air pollution5 and greenhouse gas emissions have similar causes (mostly energy-related), and there is increasing evidence that their effects are interacting. The strongest evidence points to black carbon, the carbonaceous component of soot (particulate matter) that is produced mostly by burning of biomass, diesel and coal. In addition to its contribution to air pollution, black carbon and is a dominant absorber of solar energy. Recent scientific studies suggest that black carbon is the second largest contributor to global warming following CO26. From a climate change perspective it thus makes sense to address black carbon emissions through the reduction of soot and particular matter. Finally, there is the problem of air pollution, which at the city level, is considered a bigger problem than climate change in Asia and a main focus of the Guangzhou authorities in preparation for the Asian Games 2010. Air pollution has replaced cigarette smoking as the first cause of lung cancer in Guangzhou. In the recent decade the number of lung cancer cases has doubled.7 In Hong Kong, approximately 1,600 people died each year as a result of air pollution, mostly from heart attacks, stroke, pneumonia and other lung diseases.8 While the pilot specifically aims to reduce GHG emissions, by emphasizing the “co-benefits� from GHG reductions in the form of reduced black carbon and other air pollutants, it is more likely that local authorities in the Guangdong province, most importantly Environmental Protection Bureaus, will support this pilot. Moreover, Guangzhou will be hosting the Asian Games in 2010. Air quality plans are being developed in preparation for this event, and the Guangzhou Environmental Protection Bureau will be looking for concrete measures to reduce air pollution during and beyond these events. Health Impacts of diesel trucks have been identified through a number of studies and summarized in Box 1. 1 International Energy Agency (IEA), Sustainable Mobility Project, www.iea.org 2 http://www.baq2008.org/preevent-fuels 3 http://www.lifeofguangzhou.com/node_10/node_37/node_85/2008/09/28/122258050352278.shtml 4 Carbon dioxide (CO2), methane (CH4), Nitrous oxide (N2O), Hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and Sulphur hexafluoride (SF6) 5 Nitrogen oxides (NOx), Sulphur oxides (SOx), Carbon monoxide (CO), particulate matter (PM), Volatile organic compounds (VOCs) 6 Ramanathan et al (2007) http://www.agu.org/pubs/crossref/2007/2006JD008124.shtml; and Rep. Henry A. Waxman, Chairman, Committee on Oversight and Government Reform, in a hearing on hearing on black carbon and global warming (18 Oct 2007) http://oversight.house.gov/story.asp?id=1550; 7 http://www.lifeofguangzhou.com/node_10/node_37/node_85/2008/09/28/122258050352278.shtml 8 http://www.redorbit.com/news/science/533045/pollution_costs_hong_kong_1600_lives_2bn_dollars_annually/index.html Guangzhou Green Trucks Pilot Project – Analysis Report – Draft Final Box 1: Health impacts of diesel emissions The results of studies investigating exposure to diesel emissions from older and more current engines indicate effects on the respiratory, reproductive, and cardiovascular systems. Extrapolation of these findings to people exposed to much lower concentrations of diesel emission components than those used in experimental studies or in epidemiologic studies of occupationally exposed workers can be challenging. Despite these challenges, many agencies have determined that diesel emissions are of sufficient concern to merit action to reduce emissions. New diesel engines with control systems meeting 2007 emission standards for heavy-duty on highway vehicles are now on the market. Emissions from four such engines will be characterized in detail in the Advanced Collaborative Emissions Study (ACES), which is a joint effort of the Coordinating Research Council and the Health Effects Institute (HEI); chronic and acute health endpoints will be assessed for one of the engines. Although durable older engines with higher emissions will continue to be used, these new engines, and those designed to meet the more stringent 2010 standards, will gradually become more common, with substantial replacement expected by 2030. Source: HEI Air Toxics Review Panel. 2007. Mobile-Source Air Toxics: A Critical Review of the Literature on Exposure and Health Effects. HEI Special Report 16. Health Effects Institute, Boston, Mass. (www.healtheffects.org ) Guangzhou Green Trucks Pilot Project – Analysis Report – Draft Final 2. Situational Analysis of Diesel Trucks in Guangzhou This chapter analyses the situation of diesel trucks in Guangzhou and in the broader context of Guangdong province and the China where relevant and where data is available. The analysis covers truck numbers and operation, and characteristics of the freight truck industry. 2.1 Truck Numbers and Freight 2.1.1 Truck Numbers Figure 1 shows that the total number of diesel motor vehicles in the China is expected to grow from around 10 million in 2005 to almost 60 million in 2035. Trucks, buses and vans (light and heavy commercial vehicles) will continue to be the dominant diesel vehicles. With Guangdong province as a main economic center, this growth is likely to apply to Guangzhou and the Guangdong province also. Figure 1: Expected Growth in Diesel Motor Vehicles in China 2005 – 2035 (in millions) Source: 2006. ADB, CAI-Asia, Segment Y Ltd. Notes: PC = personal cars; LCV = light commercial vehicles; HCV = heavy commercial vehicles; MC-three = 2 and 3 wheelers Figure 2 shows the total number of trucks registered in Guangdong province and Guangzhou from 2000 to 2007. The number of trucks registered in Guangzhou in 2007 was approximately 185,300, which is only 15% of the total 1.23 million trucks registered in the entire Guangdong Province. Guangzhou Green Trucks Pilot Project – Analysis Report – Draft Final 1400000 250000 Guangdong 1200000 Guangzhou Truck registered in Guangdong Truck registered in Guangzhou 200000 1000000 800000 150000 600000 100000 400000 50000 200000 0 0 2000 2001 2002 2003 2004 2005 2006 2007 Year Figure 2: Trucks registered in Guangdong (left axis) and Guangzhou (right axis) Source: Guangdong Statistics Yearbook 2001-2008 Table 1 shows the ratio of registered trucks in Guangzhou to trucks registered elsewhere for eight logistics parks surveyed in Guangzhou. The number of heavy/medium duty trucks registered outside Guangzhou outnumber the trucks registered in Guangzhou by 2.6 : 1, to 36.7: 1. For light duty trucks the ratio is about the same, and for mini duty trucks the ratio is reversed. At two cargo centers surveyed in Guangzhou, more than 95% heavy duty trucks were registered outside Guangdong Province. This shows that trucks registered outside Guangzhou contribute significantly to the freight transportation. Table 1: Ratio of trucks registered outside and inside Guangzhou in 8 logistics parks Loading capacity category Logistics park >5 ton 1.5 – 5 ton <1.5 ton #1 17.2 0.9 0.3 #2 2.6 0.4 0.1 #3 18.8 1.2 0.3 #4 10.9 1.2 0.2 #5 6.1 1 0.5 #6 3.1 1.2 0.4 #7 15.3 2 0.3 #8 36.7 1 0 Source: MVA, Interim report of research on Guangzhou urban traffic improvement strategy (GUTS4), 2008 Table 2 shows the number of trucks and motor vehicles registered in Guangzhou from 2002 until 2007. By the end of 2007, the motor vehicle population of Guangzhou was 1.05 million and the truck population was 185,300. The total truck population in Guangzhou has increased by approximately 20,000 (12%) since 2002. The proportion of trucks of the total vehicle population has declined from 34% in 2002 to 18% because of the sharp increase in the number of motorbikes and cars. What is noticeable is that In Guangzhou, 77% of Guangzhou Green Trucks Pilot Project – Analysis Report – Draft Final registered trucks are light duty trucks. Figure 3 shows the number of diesel vehicles registered in Guangzhou annually between 1994 and 2004 and shows a sharp increase in especially the registration of light duty diesel vehicles. Data on the age of trucks and whether trucks are Euro I or Euro II was not available and should be collected as part of a survey of truck drivers and companies. Table 2: Trucks registered in Guangzhou Truck Population (thousands) Total motor vehicle Year population Total HDT MDT LDT Mini-DT ( thousands) 2002 165.5 10.3 37.6 114.6 3.1 487.6 2003 178.1 10.5 39.9 123.9 3.8 572.0 2004 190.5 13.3 39.5 133.3 4.5 682.4 2005 178.5 10.8 33.5 130.4 3.9 761.5 2006 186.3 11.2 34.0 138.4 2.7 889.1 2007 185.3 11.3 31.2 141.0 1.8 1041.9 Source: Guangzhou Statistics Yearbook 2003 – 2008 Notes: Trucks are classified by the total weight, or gross vehicle weight (GVW), when loaded, including weight of the vehicle, fuel, passengers and cargo. HDT = heavy duty trucks, GVW≥12 tons; MDT = medium duty trucks, 4.5 tons ≤GVW<12 tons; LDT = light duty trucks, 1.8 tons