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Bhutan’S Experience on Regulations of Vehicle Import, Banning of Used Vehicles: Impact, Lessons and Next Steps

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Bhutan’S Experience on Regulations of Vehicle Import, Banning of Used Vehicles: Impact, Lessons and Next Steps Regional Consultation on Vehicle Import Policy Roadmap for Clean Air: Sharing Bhutan’s Experience on Regulations of Vehicle Import, Banning of used vehicles: Impact, Lessons and Next Steps May 31, 2018, Zanzibar Outline Country Background - Socio-Economic Indicators for Bhutan (March 2018) - Brief History of Road Transport in Bhutan - Types of Roads in Bhutan - Factors and Economic Trends Motorization Trends and growth forecast Share of vehicle by Type Forecast of Vehicle Stock/Fleet growth Vehicle Import Regulation Policy on Phase out of old vehicles Importing Countries Balance of Trade (Export –Import) Vehicle Emission Regulations Impact of Ban of secondhand and reconditioned vehicles Next Steps Country Background Socio-Economic Indicators for Bhutan (March 2018) Indicators 1985 2018 Population 678342 Population density (per sq.km) - 16 Population growth rate (%) 2.0 1.3 GDP Per capita in US$ (1 US$=Nu - 2879.07 67.19) GDP growth Rate (%) 6.8 7.99 Brief History of Road Transport in Bhutan • Over the past 57 years (1961-2018) Bhutan has been transformed from a closed pastoral society with no electricity and no roads into a rapidly emerging economy with aspirations for further substantial development. • Travel in Bhutan was by foot or on mule- or horseback until 1961 • Road construction began in earnest during the First Development Plan (1961–66). The first 171-kilometer long paved road was completed in 1962. • Today the road length has reached over 12,348 KMs. • Vehicle numbers have reached 94956 as of April 2018. Types of roads and length Sl# Road Type Length (Km) 1 Expressway 6.20 2 Primary National Highway 1974.64 3 Secondary National Highway 584.47 4 Dzongkhag Roads 1504.47 5 Urban Road 396.76 6 Farm Road 5240.32 7 Forest Road 1097.11 8 Approach Road 262.06 9 Power tiller track 111.1 10 GC roads (constructed) 60.30 As of June 2016 GC roads blacktopped 147.87 Total 11,322* Road Network in Bhutan (December 2015).Source: Department of Roads, MoWHS * As of March 2018..12,348 KMs of Roads of all types 6 100000 10000 20000 30000 40000 50000 60000 70000 80000 90000 0 1997 13584 1998 15629 1999 18288 2000 19463 2001 22494 2002 24430 2003 25003 2004 26740 Motorization trend Motorization No. of motor vehicles of motor No. 2005 29914 2006 33241 2007 35703 2008 40659 2009 45819 2010 53282 2011 62697 2012 67,449 2013 67926 2014 69602 2015 75190 2016 84297 2017 92008 2018 (April) 94956 Share of Vehicle by Type 2018 Forecast of Vehicle Fleet in Bhutan Bhutan Transport 2040: Integrated Strategic Vision (2011) 9 Vehicle Projections (Vehicle Stocks) Bhutan 2015-2030 Source: Grütter Consulting, 2017 Factors and economic trends affecting vehicle growth Fundamental factors and economic trends that will determine the future of the country. New factors may emerge in the future, but the following seven trends will likely dominate and drive change over the next 30 years: (1) Electricity production, hydropower projects and exports to India (2) Industrial development and new population centres in the south (3) Rural-to-urban migration: bigger cities and declining rural population (4) Tourism: carefully managed growth (5) Gross National Happiness including poverty reduction (6) Regional connectivity and increased levels of trade (7) Brand Bhutan: development of the country’s comparative advantages All the above trends will have an impact on the future of the transport sector and help defining the Transport Vision and the associated Transport Strategies. Electricity and GDP per Capita Source: Bhutan Transport 2040: Integrated Strategic Vision (2011) Industrial Areas Samtse Phuentsholing Gelephu Samdrup Nganglam jongkhar Thimphu Annual Average PM10 Levels Data from other stations (Rinchending, Bajothang, Kanglung) also show that PM10 levels are increasingly critical. Data from other stations (Rinchending, Bajothang, Kanglung) also show that PM10 levels are increasingly critical. Vehicle Import Regulations Bhutan is an import dependent country Prior to 1999, secondhand vehicles could be bought from India and other countries. Reconditioned vehicles started coming in from 1994 (Mostly from Japan) Since 1999, import of Second hand/reconditioned vehicle is not allowed for into the country, regardless of the country of origin except: (a) a second hand electric vehicle which has not run for more than 30,000 Kilometres, may be registered. (b) an expatriate may bring a used vehicle on posting in Bhutan but must be re-exported upon completion of term of employment in the country. (c) A Bhutanese expatriate may bring the used while stationed temporarily abroad but under the following conditions: (i) A Bhutanese national has worked continuously abroad for a period of at least two years; (ii) The vehicle must be procured and registered in his/her name in the country of residence at least one year prior to its importation into Bhutan; (iii) The vehicle procured abroad, is new and not second hand; and (iv) Duty and sales tax applicable shall be payable. Vehicle Import Regulations Vehicle Standards are set by the RSTA ( Three wheelers like Auto, Tempo etc. not allowed) Only four stroke two wheelers allowed Age limit exists for Commercial Vehicles (14 years for high end buses, 9 years for others and 9 years for taxis) Fuel Import Estimated comparison between the revenue from hydropower and expenditure on fossil fuel imports for Bhutan in 2015. (Source: Data from Bhutan Broadcasting Service) Custom Duty, Sales Tax and Green Tax Schedule Importing Countries (1) India (Maruti, Tata, Mahindra, Ford, Nissan etc) (2) Japan (Toyota, Hybrids, Power Tillers, Earth Moving Machines)- (3) South Korea (Hyundai, Kia, Sorento) (4) China ( Pick ups and Buses) (5) Vietnam (Power Tillers) (6) Thailand ( Pick ups and vehicle parts) Balance of Trade Source: Bhutan Trade Statistics 2016 Balance of Trade Excluding Electricity Source: Bhutan Trade Statistics 2016 Top Imports Source: Bhutan Trade Statistics 2016 Source: Bhutan Trade Statistics 2016 Overall Trade Source: Bhutan Trade Statistics 2016 Imports Source: Bhutan Trade Statistics 2016 Source: Bhutan Trade Statistics 2016 Proposed Policy on Phase out of old vehicles (1) National Transport Policy (Final revised) Policy Objective 4.1.6: Systematically reduce pollution from transport sector to contribute to maintain pristine environment for safeguarding human health and reduce Environmental footprint 4.1.6.3 RGOB will frame appropriate regulations related to end of life of vehicles. This would also cover the process of disposal of vehicles once they reach their end of life. 4.1.6.4 Differential taxes, tax exemptions on electric & hybrid vehicles will be provided to promote use of vehicles designated as fuel-efficient. Measures such as high ‘feebates’ or fuel surcharge will be explored to dis-incentivize private users from buying personal-use diesel vehicles. Proposed Policy on Phase out of old vehicles (2) Vehicle Emission Road map 2017 (3)Strategy for Carbon Commercial Vehicles in Bhutan 2017. Vehicle Emission Standards The Constitution mandates that Bhutan should maintain 60% forest cover for all times. At the 15th Conference of Parties to the United Nations Framework Convention on Climate Change in Copenhagen 2009, Bhutan declared itself to remain carbon neutral. Made commitment to maintain Bhutan’s status as a net sink of Greenhouse Gases by ensuring that greenhouse gas emission levels do not exceed the sequestration capacity of the country’s forests. Current Emissions Scenario in Transport Sector The 2000 National GHG inventory identifies the energy sector as the second highest contributor of GHG emissions after agriculture, of which the transport sector was responsible for 118.11 Gg of CO2 equivalent, or about 45 percent of all energy-related emissions and about 7.6 percent of the total GHG emissions. The graph depicts the emissions from the energy sector vis-à-vis the emissions from transport sector. Contribution of transport sector to CO2 emissions in Bhutan In 2040, the totalBaseline emissions Projections forfrom Transport Bhutan’s Sector economy are projected to be 4.7 million t CO2e or more than double the level in 2010, but still below the expected sequestration of 6.3 million t CO2e. Emissions from road transport (ktCO2e), 2005-2040 1000 905 906 885 400 376 361 348 350 800 300 600 250 228 468 357 376 361 200 177 400 348 228 150 177 200 100 50 0 0 2005 2010 2020 2030 2040 2005 2010 2020 2030 2040 Energy sector emissions (ktCO2) Road transport emissions (ktCO2) • In the course of the 35 year period 2005-2040, the emissions from • In the course of the 35 year period 2005-2040, the share of the road transport sector are projected to increase from 177 kt emissions from the road transport sector to total emissions is CO2e to 348 kt CO2e, showing a 96% increase in emissions projected to go down from 49.6% in 2005 to 39.3% in 2040. from the sector in the 35-year time period. • This implies that the emissions from the transport sector • The energy consumption of the road transport sector is projected would grow at a smaller pace as compared to the overall to increase from 55.09 toe in 2005 to 108.6 toe, showing a 97% emissions from Bhutan. increase in the energy consumption from the sector. Vehicle Pollutant Emissions Bhutan 2015 (in tons and as share) Vehicle category PM NO2 SO2 tons Share tons Share Tons share 12 Passenger cars 9.5 24% 174 10% 28% 2 Taxis 0.9 2% 29 2% 5% 0 Motorcycles 0.1 0% 13 1% 1% Heavy Duty Vehicles 30 (HDVs) 28.3 73% 1,509 88% 67% Total 38.9 1,724 45 Source: Grütter Consulting, 2017 Emission Standard for Motor Vehicle • Permissible level of emission for every motor vehicle shall be: • • Diesel: 75% Hartridge Smoke Unit (HSU) for vehicles registered before 1/1/2005 and 70% HSU for vehicles registered after 1/1/2005 • • Petrol: 4.5%Carbon Monoxide(CO) for vehicles registered before 1/1/2005 and 4%CO for vehicles registered after 1/1/2005 • • The permissible smoke density level and emission level for all other pollutants present in vehicular exhaust (like hydro carbons, oxides of nitrogen, etc.) shall be as laid down by the National Environment Commission from time to time.
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