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Decarbonising Azerbaijan's Transport System Charting the Way Forward

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Decarbonising Azerbaijan's Transport System Charting the Way Forward CPB Corporate Partnership Board Decarbonising Azerbaijan’s Transport System Charting the Way Forward Decarbonising Azerbaijan’s Transport System Charting the Way Forward The International Transport Forum The International Transport Forum is an intergovernmental organisation with 62 member countries. It acts as a think tank for transport policy and organises the Annual Summit of transport ministers. ITF is the only global body that covers all transport modes. The ITF is politically autonomous and administratively integrated with the OECD. The ITF works for transport policies that improve peoples’ lives. Our mission is to foster a deeper understanding of the role of transport in economic growth, environmental sustainability and social inclusion and to raise the public profile of transport policy. The ITF organises global dialogue for better transport. We act as a platform for discussion and pre- negotiation of policy issues across all transport modes. We analyse trends, share knowledge and promote exchange among transport decision makers and civil society. The ITF’s Annual Summit is the world’s largest gathering of transport ministers and the leading global platform for dialogue on transport policy. The Members of the Forum are: Albania, Armenia, Argentina, Australia, Austria, Azerbaijan, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, Canada, Chile, China (People’s Republic of), Croatia, Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, India, Ireland, Israel, Italy, Japan, Kazakhstan, Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mexico, Republic of Moldova, Mongolia, Montenegro, Morocco, the Netherlands, New Zealand, North Macedonia, Norway, Poland, Portugal, Romania, Russian Federation, Serbia, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Tunisia, Turkey, Ukraine, the United Arab Emirates, the United Kingdom, the United States and Uzbekistan. International Transport Forum 2 rue André Pascal F-75775 Paris Cedex 16 [email protected] www.itf-oecd.org Case-Specific Policy Analysis Reports The ITF’s Case-Specific Policy Analysis series presents topical studies on specific issues carried out by the ITF in agreement with local institutions. Any findings, interpretations and conclusions expressed herein are those of the authors and do not necessarily reflect the views of the International Transport Forum or the OECD. Neither the OECD, ITF nor the authors guarantee the accuracy of any data or other information contained in this publication and accept no responsibility whatsoever for any consequence of their use. This work is published under the responsibility of the Secretary-General of the ITF. This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Cite this work as: ITF (2020), “Decarbonising Azerbaijan’s Transport System: Charting the Way Forward”, International Transport Forum Policy Papers, No. 87, OECD Publishing, Paris. Acknowledgements This work was completed on the basis of information provided by representatives of various public bodies during a fact-finding mission to Azerbaijan in November 2019. The authors would like to thank staff from the consulted Azeri institutions who provided comments and information in the framework of that mission. They would particularly like to thank staff of the Azerbaijani Ministry of Transport, Communications and High Technologies, and their various dependencies, including state owned companies. Most notably, the authors would like to thank Ravil Isgandarov for his support on co-ordinating the fact-finding mission that led to the writing of this report, as well as his comments and inputs. The report further benefited from discussions with, and information provided by, Turgut Mustafayev, transport consultant in Azerbaijan. This report is part of the outputs of the Decarbonising Transport in Emerging Economies project (DTEE). DTEE is funded by the International Climate Initiative (IKI) of the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU). As such, the authors would like to thank BMU for funding this project. They would also like to thank Santosh (Sunny) Kodukula and Alvin Mejia of the Wuppertal Institute (WI) for their contributions and ideas for this report. The International Transport Forum (ITF) and the WI jointly implement this IKI-funded project. The principal authors of this paper are Vatsalya Sohu (ITF) and Eric Jeanniere (ITF), who also supervised the process. The authors would like to thank Elisabeth Windisch and Francisco Furtado (both at ITF), who provided valuable comments and guidance. They would also like to thank Edwina Collins (ITF) for copy- editing and co-ordinating the production of this publication. DECARBONISING AZERBAIJAN’S TRANSPORT SYSTEM: CHARTING THE WAY FORWARD Table of contents Decarbonising Transport in Emerging Economies: The case of Azerbaijan ........................................... 6 Overview of relevant stakeholders and governance structure ........................................................ 6 Current climate goals ....................................................................................................................... 8 Overview of the transport sector in Azerbaijan .................................................................................... 9 Freight transport overview ............................................................................................................ 10 Passenger transport overview ....................................................................................................... 11 CO2 impacts of the transport sector .............................................................................................. 13 Overview of the main international transport corridors................................................................ 14 Overview of the main challenges of the transport sector today ................................................... 15 Transport sector emissions reduction policy ambitions ................................................................ 16 Urban transport ................................................................................................................................. 16 Overview of the main urban transport challenges in Azerbaijan ................................................... 17 Current actions towards the sustainability of urban transport in Azerbaijan ............................... 19 Proposals for project focus and related quantitative analysis............................................................ 20 Urban passenger modelling approach ........................................................................................... 20 Interurban passenger modelling approach .................................................................................... 21 Freight modelling approach ........................................................................................................... 22 Charting the way forward towards transport decarbonisation in Azerbaijan ............................... 22 Notes ................................................................................................................................................. 24 References ......................................................................................................................................... 25 4 © OECD/ITF 2020 DECARBONISING AZERBAIJAN’S TRANSPORT SYSTEM: CHARTING THE WAY FORWARD Figures Figure 1. CO2 Emissions by mode of transport, 1990-2012 ................................................................. 8 Figure 2. Movements in Azerbaijan for goods and passengers, 1995-2015 ........................................ 9 Figure 3. Impact of transport on the economy of Azerbaijan, 2014-18 ............................................ 10 Figure 4. Number of vehicles by type and rate of car ownership, 1995-2015.................................. 14 Figure 5. New compressed natural gas buses in Baku ....................................................................... 19 Figure 6. Structure of the ITF global model for urban passenger transport ...................................... 21 Tables Table 1. Relevant Institutions: Sustainable urban transport in Azerbaijan .......................................... 7 Table 2. Freight transport in Azerbaijan by mode of transport, 2014-19 ........................................ 10 Table 3. Passenger transport in Azerbaijan by mode of transport, 2014-19 ..................................... 11 © OECD/ITF 2021 5 DECARBONISING AZERBAIJAN’S TRANSPORT SYSTEM: CHARTING THE WAY FORWARD Decarbonising Transport in Emerging Economies: The case of Azerbaijan Azerbaijan is strategically situated at the intersection of the north-south and east-west trade routes between Asia, the Middle East and Europe. Azerbaijan is also one of the world’s oldest oil producing regions, and is today both a major producer and exporter of oil and gas in the Caspian Sea region; in 2018, fuels constituted almost 92% of the total exports for Azerbaijan (WITS, 2018). The transport sector in Azerbaijan is a fast-growing sector and makes a significant contribution to the gross domestic product (GDP). At the same time, the sector currently faces a number of challenges, such as: i) lack of co-ordination between the priorities of
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