Carbon Impact of Rail Infrastructure Investments Methodology Applied to the Green Bonds Programme of Sncf Réseau
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CARBON IMPACT OF RAIL INFRASTRUCTURE INVESTMENTS METHODOLOGY APPLIED TO THE GREEN BONDS PROGRAMME OF SNCF RÉSEAU September 2017 SUMMARY 01/ INTRODUCTION 02/ CARBON IMPACT OF INFRASTRUCTURE P.06/ 1.1. CONTEXT RENEWAL PROJECTS 1.1.1. Projects financed by Green Bonds P.12/ 2.1. FOREWORD P.07/ 1.1.2. Estimating 2.1.1. The key components the carbon impact of railway infrastructure of projects financed P.14/ 2.1.2. Financing of infrastructure by Green Bonds renewal projects for 2016 P.09/ 1.2. DOCUMENT P.15/ 2.2. METHODOLOGY GOALS AND CONTENT GUIDELINES 1.2.1. Document goals P.16/ 2.3. CARBON FOOTPRINT 1.2.2. Document Contents OF INFRASTRUCTURE RENEWAL PROJECTS P.10/ 1.3. SNCF Réseau 2.3.1. General principles P.10/ 1.4. GREEN BONDS 2.3.2. Carbon profiles 2016 ALLOCATION for infrastructure components P.11/ 1.5. CARBONE 4 P.17/ 2.3.3. Scope of carbon footprint of projects 2 SNCF RÉSEAU P.18/ 2.3.4. Allocation P.22/ 2.4.2. Method for calculating of a footprint avoided emissions share to Green by maintaining rail Bonds fundings service on a section 2.3.5. Extrapolation of the renewed line to all projects financed 2.4.2.1. Types of trains travelling across by Green Bonds the renewed section of the line 2.4.2.2. Occupancy of trains P.20/ 2.4. AVOIDED 2.4.2.3. General process for calculating emissions avoided by renewal GHG EMISSIONS FROM projects INFRASTRUCTURE 2.4.2.4. Duration of the study RENEWAL PROJECTS 2.4.2.5. Changes to traffic P.20/ 2.4.1. General principles 2.4.2.6. Traffic speed reduction trajectory and its impact 2.4.1.1. Baseline and situation with renewal on traffic project 2.4.2.7. Change in demand after 2.4.1.2. Prevention of double accounting: reduction of traffic speeds setting in place of allocation rules 2.4.2.8. Equivalences for distance 2.4.1.3. Estimation of emissions avoided travelled depending on by a renewal project the mode of transport used 2.4.1.4. Extrapolation to all projects 2.4.2.9. Emission factors financed by Green Bonds for the modes of transport P.39/ 2.4.3. Allocation avoided emissions to finance the issuance of Green Bonds P.42/ 2.4.4. Extrapolation to all projects P.44/ 2.5. CARBON IMPACT OF INFRASTRUCTURE RENEWAL METHODOLOGY DEVELOPED JOINTLY BY CARBONE 4 AND SNCF RÉSEAU 3 SUMMARY 03/ EVALUATION P.49/ 3.4. EMISSIONS OF THE CARBON AVOIDED BY NEW LINE IMPACT FROM PROJECTS NEW LINE PROJECTS 3.4.1. General Principles 3.4.1.1 Situation with new line project P.46/ 3.1. FOREWORD and baseline 3.4.1.2 Preventing double entries: 3.1.1. Summary of financing setting in place of an allocation rule of new line projects for 2016 3.4.1.3 Estimation of emissions avoided by a new line: P.47/ 3.2. METHODOLOGICAL a two-stage approach PRINCIPLES P.50/ 3.4.2. Calculation method P.47/ 3.3. CARBON FOOTPRINT for a new line FOR NEW LINE PROJECTS 3.4.2.1 General process for calculating emissions avoided by a new line 3.3.1. General Principles 3.4.2.2 Duration of the study 3.3.2. Carbon footprint 3.4.2.3 Changes to traffic of a new line 3.4.2.4 Modal reports and traffic induction P.48/ 3.3.3. Allocation of part of the footprint P.51/ 3.4.3. Allocation to financing to the financing from Green Bonds provided by Green Bonds P.52/ 3.5. CARBON IMPACT OF NEW LINE PROJECTS 04/ EVALUATING THE CARBON IMPACT OF GREEN BONDS 4 SNCF RÉSEAU LIST OF ACRONYMS REFERENCES CITED IN THIS DOCUMENT ADEME French environment and energy management agency. GHG Protocol – Methodology AOT Passengers Transport Authority. for carbon accounting, 2017 IEA International Energy Agency. ADEME – Base Carbone, 2017 BPL “Brittany – Pays de la Loire”HSL. CCR Centralised Network AIE – Energy Technology Perspectives 2017 Control System. CGDD – Long-term transport demand CGDD French General Commission forecasts), 2016 on Sustainable Development. INSEE – Projections de la CNM “Nîmes Montpellier” bypass. population à horizon 2030 EE 2 “Est Européenne” HSL, phase 2. RTE – Bilan prévisionnel de l’équilibre EF Emissions Factor. offre-demande d’électricité en France, 2014 GHG Greenhouse Gas Emissions. GOPEQ Equivalent Planned Large Operation. IdF “Île-de-France”. IFTE Electrified Fixed Traction Infrastructure (EFTI). LGV High-Speed Line. RS Rolling Stock. ES Engineered Structure. EW Earthworks. OA/OT Bridges & Tunnels. RER Regional Express Network. SEA “Sud Europe Atlantique” HSL. SLO Freely Organised (Bus) Services. SNBC National Low-Carbon Strategy. TAGV High-speed trains and equivalent. TER Regional Trains. Editing and contacts TGV High-Speed Train. For SNCF Réseau UIC International Union Financing & Treasury Division: HST of Railways. Étienne Oberthür and Guillaume Hintzy Environmental and Sustainable Development Division: Sophie Jalabert, Jean-Baptiste Frier and Bernard Torrin. Senior advisor, Department of Regulation and Economics: Sylvain Séguret For Carbone 4 Clément Ramos and Sylvain Borie SNCF Réseau © September 2017 METHODOLOGY DEVELOPED JOINTLY BY CARBONE 4 AND SNCF RÉSEAU 5 01 INTRODUCTION 1.1. CONTEXT 1.1.1. PROJECTS FINANCED BY GREEN BONDS Collected funds are allocated to projects deemed eligible falling under A Green Bonds Programme involves the three categories: issuance of bonds by a company, international organisation or local • Investment in maintenance, government on the financial markets modernisation and energy efficiency to finance a project or activity having of the rail network. This mainly concerns an environmental benefit. Since rail renewal of track, plants providing power transport is one of the most environmentally to trains and signalling systems, friendly forms of transport, and electrification of the line, etc. it falls within the category of activities that are eligible for this type of bond. • Investment in the building of new lines. This generally concerns high speed lines, On 27 October 2016, SNCF Réseau allowing for marked improvement issued its first Green Bond for the most part in the mobility of individuals and goods to finance the sustainable modernisation of on the routes concerned, for example the its network. SNCF Réseau thereby became Eastern Europe HSL, the Southern Europe the first railway infrastructure operator Atlantic HSL, the Brittany - Pays de la Loire in the world and the first transport company HSL, and the Nîmes and Montpellier in Europe to set-up a Green Bonds Bypass Route. Programme. The company plans to adopt this as a long-term strategy through the issuance of one Green Bond each year. This methodology guide now supplements To highlight the positive the section of the 2016 report consequences of such on the SNCF Réseau Green Bonds section, investment, and in the which can be found on the SNCF Réseau interests of clarity for investors website. Further information and civil society, SNCF Réseau on the company and the programme wishes to quantify the impact can also be found there. of projects funded by Green Bonds in terms of cutting greenhouse gas emissions. 6 SNCF RÉSEAU • Other Investments in the fight against 1.1.2. ESTIMATING THE CARBON climate change, protection of biodiversity IMPACT OF PROJECTS FINANCED and natural resources, by refurbishing BY GREEN BONDS the existing network. For all transport infrastructure projects, The eligibility criteria set down by a distinction should be drawn between SNCF Réseau concern renewal projects on a project’s “carbon footprint” the main lines of its network, namely: and its “carbon impact”. – high speed lines, which were brought into In this document, the carbon impact of a rail service in 1981; project and the comparison of emissions – standard lines grouped 1 to 4 using the during the usage stage with a baseline UIC classification. (without the project). An infrastructure In total there are around 15,000 km of totally project’s carbon footprint is composed electrified lines, out of a total of 30,000 km of the direct and indirect GHG of lines on the national rail network. used in its creation (consumption of site machinery, etc.), and particularly including upstream emissions (manufacture THE UIC of materials used, etc.). CLASSIFICATION This conception of a carbon footprint is therefore a “site-based” one, The International Union of Railways and fails to include emissions from (UIC) established a railway line classification method based on traffic usage, which are covered in the analysis levels and also based on the traffic of avoided emissions. loads supported by the infrastructure Usage of any infrastructure project and the type of traffic. UIC group 1 also generates GHG emissions, through is for lines with very heavy traffic the operation of trains. Executing such and conversely UIC 9 is for lines a project would improve rail competition with very little traffic. with competing modes of transport – for which GHG per unit transported are The main French railway lines come higher than the train – and therefore reduce under UIC groups 1 to 4. Major lines with less traffic (e.g. Paris – Caen, transport system emissions. Poitiers – La Rochelle and Toulouse – A comparison of these generated usage Bayonne) fall under UIC groups 5 and emissions with a reference scenario 6. The low traffic lines in groups UIC7 (without the project) is specified below to 9 are generally regional lines. for “avoided emissions”. METHODOLOGY DEVELOPED JOINTLY BY CARBONE 4 AND SNCF RÉSEAU 7 EXAMPLE CALCULATION OF AVOIDED EMISSIONS DURING THE USAGE PHASE tCO2eq EMISSIONS DURING USAGE PHASE Avoided emissions Reference situation (without project) Situation with project Accordingly, GHG emissions generated by SNCF Réseau highlights that most the infrastructure project will ultimately avoid of assumptions required emissions during the subsequent use phase: in the present methodology are comparing these two overall factors provides related to the French context.