JTCA Future CDM Workshop 2005.12.3 Montreal Canada

Outline of “Study to Promote CDM in Sector to Resolve Global Warming Problem” & “Bio-diesel Fuel CDM Project”

Ryo Masutomo Japan Transport Cooperation Association (JTCA) 1 JTCA Introduction of JTCA (Japan Transport Cooperation Association)

˜ Semi-governmental Organization under Ministry of Land, and Transport (MLIT), Japan ˜ Promote the International Cooperation in Transport Sector ˜ 25 Regular Members and 33 Supporting Member Firms from Many sectors ˜ Environmental Issue is one of the most Important fields to support

Japan Foreign Countries

MLMLIITT GovGoveerrnnmementnt JaJapapann

JTJTCACA PrPriivvateate SSeectorctor Cooperation In the Member Firms Member Firms transport UnUniviveerrsitysity ((JJWWAA,, AlAlmmeec,c, PCI,PCI, ….)….) sector

2 InternationalInternational CCooperationooperation byby JTCAJTCA (1993-(1993-22002002)) JTCA

ContentsContents

Part I: Outline of Study to Promote CDM in Transport Sector (2003-MarchMarch 2002005)5) • BBackgackground • OOutlineutline of Study past 3 years

Part II: Outline of Transport BDF-CDMBDF-CDM (April 2005-Dec.-Dec. 2005) • OOutlineutline of Project • NNewew Methodology • AApplicabilitypplicability for Other Area

Part III: Next Step (Dec. 2005-)-) • OOththeerr Transport CDM

3 JTCA HistoryHistory ofof TransportTransport CDMCDM StudyStudy byby MLIT,JTCAMLIT,JTCA

20022002 Preparation of Study 2003/3 2003/3 Study to Promote •Field Test (16,000 km) CDM in Transport •Bangkok Driving Cycle by speed & Sector to Resolve Global Warming •Emission Test (120 ) Problem” •Emission Factor by speed & car by MLIT,Japan •Estimation of BKK CO2 Emission 2004/32004/3 (March 2003 --MaMarchrch 2005) •Classify Transport CDM candidate •Select BDF-CDM as model case PART - I •Emission Factor by Palm & Coconut •Initial Project Plan of Transport BDF-CDM

2005/32005/3 •Detail F/S of Transport BDF-CDM PART - II •New Methodology & Tentative PDD •Final PDD

PART - III •Study on BRT CDM 2006/32006/3 4 JTCA

PartPart II

OutlineOutline ofof “Study to Promote CDM in Transport Sector to Resolve Global Warming Problem”

EntrustedEntrusted byby MMLLIT,IT, JapanJapan

(March 20020033--March 2005)

5 JTCA

Background 1 Importance of Transport CDM

GHG emission from transport sector ˜ is over 20 % in Japan, more in Asian Countries ˜ About 90 % of it emitted from vehicle ˜ Is increasing rapidly in Asia

Increasing of CO2 emission from Transport Sector

Industries Transport

Home

6 JTCA

Background 2 Difficulties of Transport CDM

Transport CDM project is difficult Because

• Many CO2 emission sources are moving • Complicatedness of Urban Transport System • It makes the Baseline Scenario difficult • Lack of Basic Transport Data • Low Cost Effectiveness for CO2 Credit • Lack of Good sample of Transport CDM

7 JTCA

Background 3

How does Transport CDM promote?

=> To prepare ˜ Driving data (cycle) and emission factor ˜ Common basic data and method for calculation ˜ Baseline scenario by scientific method ˜ Accurate calculation method of GHG reduction ˜ Good sample of Transport CDM Project

8 JTCA Flow Chart of Study

Collect actual traffic data in Bangkok

Develop Bangkok Driving Cycle & Emission Factor

Develop Method of GHG Emission Estimation

Identify and Promote of Feasibile Transport CDM Project

Promotion of CDM in Transport Sector Effectiveness Reduction of GHGs Improvement of Urban Air Increase of Investment chance 9 JTCA Results of Study 1. Bangkok Driving Cycle

2. Emission Factors of Various in Bangkok

3. Estimate CO2 Emission from Transport Sector in Bangkok 4. Preliminary Classification of Transport CDM project candidate 5. Identify Feasible Pilot CDM Project Sample

CDM

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How to use the outcome of Study

Example of Using Emission Emission Factors Reduction

Case 1. Improvement of CO2 Increase of Emission Vehicle Speed Traffic Flow Factor

Emission Case 2. Improvement of Reduction Emission by Usual car CO2 Emission Factor Hi-breed car

11 NatureNature ofof TransportTransport SectorSector CDMCDM ProjectsProjects

CertainCertain TechnolTechnoloogicalgical OptiOptionsons EVEV CNGCNG BiodieselBiodiesel CNGCNG carscars Buses BiodieselBiodiesel CNGCNG Buses Buses LPGLPG EthanolEthanol TaxisTaxis TaxisTaxis carscars carscars LPGLPG Ethanol BiodieselBiodiesel CNGCNG Ethanol HybrHybridid Trucks TaxisTaxis Taxis Trucks Trucks Taxis carscars Impact to EVEV CarCar VehicVehicllee Private vehicles SharShariingng I/MI/M Impact to Public or commercial PlaPlattee Nu Numbemberr PaParkrk a anndd policy vehicles BRTBRT policy RideRide LRTLRT FuelFuel PrPriceice RoadRoad BusBus ExclusiveExclusive incrincreasingeasing Railway PricPricinging lanelane Railway IInnterstersectionection ImprImprovingoving UncertainUncertain TraTrafffificc MMaananaggeemmeentnt //IInnfrafraststrruuctctureure OOppttiiononss By Dr. Atsushi Fukuda, Nihon University JTCA International Seminar on “Study to Promote CDM in Transport Sector to Resolve Global Warming Problem” in Bangkok March 15, 2005

13 JTCA

PartPart IIII

OutlineOutline ofof “Palm Methyl Ester - Biodiesel Fuel production and use for transportation in Thailand” (NM0142) (Study entrusted by MLIT, Japan)

(April 2005-)

14 JTCA Identified Feasible Transport CDM Project is BDF-CDM in Last Study Basic Concept Chart at March 2005

˜ Concept chart

15 JTCA Outline of Transport BDF-CDM at Now

BDF Products: 300 ton/day, 100,000 ton/ year ˜ Raw Material: CPO 124,000 ton/year (FFB: 730,000 ton/year) ˜ Raw material CPO procure from Suratthani and neighboring 3 provinces ˜ Location of Plant: near Bangkok ˜ Amount of CO2 Reduction: 217,000 ton/year

˜ Initial Cost: 20 million US $ ˜ O & M Cost: 5.8 million US $/year ˜ Expected BDF Sales: 58 million US $/year Suratthani (Ex plant price at 20 baht) (Ex plant price at 20 baht) ˜ Raw Material Cost: 52.7 million US $/year ˜ CO2 Credit: 1.5 million US $/year (at 7 $/ton) ˜ IRR: 3 % (without CDM), 14% (with CDM)

16 JTCA Outline of Transport BDF-CDM Project(2b) Comparison the Project with other CDM BDF-CDM Project in Windmill CDM Project Thailand Essaouira, Morocco

Project Cost: 58 million US $ CO2 Reduction: 156,000ton/year

Project Cost: 20 million US $ CO2 Reduction: 217,000ton/year = 80 windmills (1MW) 17 JTCA Outline of Transport BDF-CDM Project３ Merit of the Project (300 ton/day) for Host Country

< Merit of CDM for Host Country > 1) Additional income by GHGs* reduction credit CO2 Credit: 1.5 million US $/year (at 7 $/ton, 300ton/d) 2) Technical & Financial Assistance for the Project Implementation 3) Spread Knowledge of Energy Saving Method & Technique 4) Indirect Merit from Natural Disaster Reduction (Contribution for Countermeasure of Global Warming)

< Merit of BDF-CDM Project for Host Country > 1) Increase of Palm Farmer’s Income 2) Promotion of Local Economy by Related Industries (Oil mill) Raw Material Cost: 52.7 million US $/year go to mill & farmer 3) Secure of National Security by Import Fossil Oil Reduction Light Oil Reduction: 58 million US $/year 4) Improvement of Air Pollution by BDF using Buses in the City

=> Most of Developing Countries can obtain Various Benefit 18 Number of approved methodologies for each sectoral scopes

20 Consolidated Methodologies No approved methodology Small Scale Methodologies for Biodiesel CDM project 15 3 Methodology 1 6 2 10

2 5 10 8 31 4 1 1 3 2 2 0 1 1 1 1 t / s s s e e d n n n n n - r al r e s e of o o o n el i i o s i i i io r r n a t le t u t tio o t u p t t ) t o c ltu s b p a f u s s i s m t s uc uc u t om n b e e i s i r en cu r s) d d p a c du du t r om v o a f d o d ri t re l ewa r m r s r y s ur Tr g o g ns f in i in f u g o p l p s o d So en A s g l on r l d a r i s re n and e C n a

s y e ( on in ta r o ic l d i s a s g r e e i l s ng b c r e n i En i u s i n a e l d o i M em i r

a ct , t w h em n m a s d nd an f En e

i C a em l io ne v u t du i e e ng/ on t n h a r v i i (so e i t a t ni in t g t s c n- i s y u M o u g a re Mi F n u o f od erg W f F r n p A E

As of 30 November, http://cdm.unfccc.int/DOE/scopes.html#4 JTCA

Outline of New Methodology for the Project (1)

- NNaameme of the new methodology: Baseline methodology “Baseline Methodology for Palm Methyl Ester or Coconut Methyl Ester Bio-diesel Fuel Production for Transportation using Life Cycle Assessment approach” Monitoring methodology “Monitoring Methodology for Palm Methyl Ester or Coconut Methyl Ester Bio-diesel Fuel Production for Transportation using Life Cycle Assessment approach” Draft PDD “Palm Methyl Ester-Biodiesel Fuel (PME-BDF) production and use for transportation in Thailand” - RReferenceference number on UNFCCC website NM0142 - SSubmissionubmission Submitted to the CDM EB on 3 October and now call for public inputs until 8 December

(http://cdm.unfccc.int/methodologies/PAmethodologies/publicview.ht ml?OpenAll=1&cases=B)

20 JTCA Outline of New Methodology for the Project (2)

The potential strengths of this new methodology

Simplified, but transparent and conservative as well by…

a) limiting raw materials only to palm oil or coconut oil

b) specifying the formation and purpose of entity just for bio-diesel production

c) applying Life Cycle Assessment approach to calculate GHG emissions

d) monitoring project specific parameters to ensure precise calculation of project emissions

21 Outline of New Methodology for the Project (3) Emission Reductions Emission reductions (ERs) are calculated as: ERs = Baseline emissions - Project emissions - Leakage

For Thailand project case,

ERs = 295,643 - 37,973 - 39,915 = 217,755 tCO2e/yr

Emission Reductions (tCO2/year)

350,000

300,000

250,000

Emission Reductions 200,000 217,755 Leakage 150,000 295,643 Project emissions 100,000

50,000 39,915 37,973 0 22 Baseline Project JTCA Barriers for Realization of the Project

1) Approval of New Methodology by Methodology Panel 2) Approval of Governments (Japan & Thailand) 3) Validation of PDD by CDM 4) Procurement of CPO at Stable Price

17 baht/ kg (Average2001-2004)

23 Changes of CPO and FFB Price (2001-2004) JTCA Applicability for Other Area (1) Necessary BDF Plants in Thailand

Thai Government Policy on BDF Replace 10 % of Diesel Oil by BDF in 2011 ˜ 80 Million Liters / day diesel oil is assumed to consume in 2011 => 8 Million Liters /day BDF oil will be needed ˜ 8000 ton BDF is necessary everyday => 27 BDF Plants (300 ton/day class) is needed

X 27

24 JTCA Applicability for Other Area(2) Palm & Coconut can grow all Tropical Area ((PinkPink CColorolor shows Tropical Area in Koeppen’s Climate Classification)

25 JTCA Applicability for Other Area(2b) World Oil Palm Cultivation Area Distribution

South America (5%) Africa (15%) Asia (80%)

Colombia 0.3 2% Nigeria 1.6 9% Malaysia 6.0 35.0%

Ecuador 0.2 2% Ivory Coast 0.5 3% Indonesia 5.2 30.5%

Cost Rica 0.1 1% Cameroon 0.3 2% Thailand 2.7 16.0% 26 Unit: Million hectare JTCA Applicability for Other Area(2c)

World Coconut Cultivation Area Distribution

South America (10%) Africa (5%) Asia & Pacific (85%)

Brazil 0.5 5% Tanzania 0.5 1% Philippine 3.2 30% Mexico 0.2 2% Madagascar 0.2 1% Indonesia 3.0 26% Pacific 0.3 3% Mozambique 0.2 1% Thailand 0.3 3% 27 Unit: Million hectare JTCA Applicability for Other Area (3)

Applicable Country/Region of Transport BDF-CDM

Geographical View ˜ All Tropical Area can introduce this project ˜ Especially Asia Region has high potentiality

Political View Countries who; ˜ put political priority on rural economy and agriculture ˜ depend on imported crude oil for domestic energy use ˜ have big cities which suffer from air pollution by vehicle

have big incentive to introduce this type project

28 JTCA Key Point & Perspective of Project Formation

Key Points of Project formation

˜ Assistance from Government (Regulation, Subsidies) ˜ Stable Procurement of Raw Material by using Long term Contract because market price of edible oil fluctuate much. ˜ Coordination among many stakeholder is necessary. (farmer, mill, company, user, government, project participant) ˜ Establishment of New Methodology

Perspective of Project formation

˜ Importance of First Project Success ˜ 27 Plants (300 tpd) are necessary for realizing Government Policy ˜ Other Region especially South Asia has potentioal to introduce this project

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PartPart IIIIII

NextNext StepStep

(Other Transport CDM)

(December 2005 - )

30 JTCA Other Transport CDM Study (1) What is Next Task of Transport CDM promotion for JTCA

1. Utilization of Data & Information of Last Study (2003-2005)

2. Preparation of Adequate Model & Monitoring Method

3. Study on Other Feasible Transport CDM

31 JTCA Other Transport CDM Study (2) Next Study related to Transport CDM

We will conduct the following two study projects from now

1) Preliminary F/S ooff CDM in Bangkok (MLIT, Japan)

2) Study on Air Pollution Reduction by Subway Extension inin BangBangkkok (JBIC) (a) Calculation of Vehicle Emission of every node of Bangkok network by using data of previous study (b) Development of Proper Simulation Models for Predicting Urban Transport Demand and Its Impact for Air Pollution & CO2 32 JTCA

END

Thank you for your attention!

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