Funded by Penetration of alternative fuels in Cyprus road and maritime sectors Implemented by the Deutsche Gesellschaft für Internationale Zusammenar- beit (GIZ) GmbH Financed by the European Commission Structural Reform Support Services and the German Ministry of Economy and Energy Christoph Heidt, Marie Jamet, Udo Lambrecht, Fabian Bergk, Michel Allekotte (ifeu) With the contribution of Pr. Theodoros Zacchariadis (Cyprus University of Technology) Heidelberg, June 2017 ifeu Wilckensstraße 3 D - 69120 Heidelberg phone +49 (0)6 221. 47 67 - 0 fax +49 (0)6 221. 47 67 - 19 email [email protected] www.ifeu.de ifeu Penetration of alternative fuels in Cyprus road and maritime sectors 1 ifeu Penetration of alternative fuels in Cyprus road and maritime sectors 2 Content Table of figures 4 Table of tables 6 List of abbreviations 8 1 Acknowledgments & Disclaimer 10 2 Executive summary 11 3 Introduction 19 3.1 Background and objective 19 3.2 Structure of the report 19 4 Cyprus road and maritime transport: current situation and brief outlook (D 5.1) 22 4.1 Cyprus in figures 22 4.2 Energy dependency and the transport sector in Cyprus 23 4.3 Current transport policies 26 4.3.1 European and international policies 27 4.3.2 National energy and transport policy framework in Cyprus 31 4.4 Status quo - road transport 33 4.4.1 Vehicle fleet and mileage 33 4.4.2 Fuel supply and current penetration of alternative fuels 36 4.5 Status quo - maritime transport 39 4.5.1 Vessel fleet 40 4.5.2 Alternative fuel supply 42 4.6 Conclusion 42 5 The promotion of alternative fuels in Cypriot road transport (D 5.2) 44 5.1 Methodology for the energy demand and cost analysis 44 5.1.1 Modelling energy demand and emissions for Cyprus: TREMOD 44 5.1.2 Main data sources for modelling the current situation 45 5.1.3 Costs evaluation 47 5.2 Definition of the scenarios 49 5.2.1 The targets for a sustainable transport system 49 5.2.2 Background to the chosen scenarios 50 5.2.3 Scenario definition: vehicle fuel efficiency improvements 53 5.2.4 Scenario definition: penetration of biofuels in Cyprus 55 5.2.5 Scenario definition: uptake of alternative fuel vehicles 60 5.3 Results of the scenarios 68 5.3.1 Final energy demand 68 5.3.2 Reaching RED and FQD targets 2020 69 ifeu Penetration of alternative fuels in Cyprus road and maritime sectors 3 5.3.3 GHG reduction and long-term decarbonisation 70 5.3.4 Summary and outlook 73 5.4 Costs of the scenarios for the society 73 5.4.1 Common parameters for Scenario B and C 74 5.4.2 Costs for Biofuel blends 82 5.4.3 Cost of B100 buses 85 5.4.4 Cost of electro-mobility in Scenarios B and C 87 5.4.5 Cost of CNG in Scenarios B and C 90 5.4.6 Comparison of the overall costs of the two scenarios 93 6 The promotion and penetration of alternative fuels in Cypriot maritime transport (D 5.3) 97 6.1 Plans for LNG in the context of the DAFI 97 6.1.1 Framework of the EU project Poseidon MED 97 6.1.2 Demand projection from 2020 to 2045 98 6.1.3 LNG supply and refuelling strategy 99 6.1.4 Contribution to Cyprus energy and environmental targets 101 6.2 Biofuels for maritime shipping 101 7 Supporting policies (D 5.4) 103 7.1 Overarching principles 103 7.2 Input on the structure of a transport strategy 105 7.2.1 Supporting policies to reach the RED and FQD goals by 2020 106 7.2.2 Long-term supporting policies for the post-2020 energy efficiency objectives 112 7.3 Open issues 122 8 ANNEXES 124 8.1 Annex II Details on European and international policies 124 8.2 Annex III: TREMOD and calculation methodology 125 8.2.1 Methodology 125 8.2.2 Uncertainties for the input data 126 8.2.3 Lifetime of the vehicles for fleet projections 127 8.2.4 Share of new registrations per vehicle category 129 8.3 Annex IV: Details on the cost analysis 129 References 134 ifeu Penetration of alternative fuels in Cyprus road and maritime sectors 4 Table of figures Figure 1: Final energy demand for the three scenarios up to 2050 13 Figure 2: Achievement of the RES goals based on scenario C and additional measures considered within this project 14 Figure 3: Overview of activities forming the complete report 20 Figure 4: GDP and population in Cyprus since 2005 23 Figure 5: Energy import dependency by member state in 2020 and 2030 24 Figure 6: Share of fuel energy consumption per sector in 2015 in % 25 Figure 7: GHG emissions in the National Inventory Report of Cyprus 25 Figure 8: Content of the National Policy Framework 27 Figure 9: Implementing and supporting measures included in Directive 2014/94/EU 28 Figure 10: TEN-T network map 31 Figure 11: Cyprus governmental bodies and their respective responsabilities 31 Figure 12: Vehicle fleet for road transport in 2014 34 Figure 13: Mileage per type of vehicle in Cyprus in 2014 34 Figure 14: Passenger cars by age, 2013 (% of all passenger cars) 36 Figure 15: Installed capacity of renewable energy by type in MW in 2015 38 Figure 16: Existing and future location of electric car charging stations 39 Figure 17: Maritime activity in Cyprus between 2005 and 2014 40 Figure 18: Amount of maritime bunkering 2015 41 Figure 19: SWOT analysis of the penetration of alternative fuels in Cyprus transport sector 42 Figure 20: Main input parameters and levers used for modelling in TREMOD 45 Figure 21: Results for the fuel consumption of transport in Cyprus 2014 per vehicle category 47 Figure 22: Methodology for cost analysis 48 Figure 23: Targets derived from EU directives 50 Figure 24: Strategy towards sustainable transport 51 Figure 25: Comparison of Cyprus GDP 52 Figure 26: Total mileage of road vehicles between 2000 and 2050 53 Figure 27: THG emissions and costs of different biofuels 56 Figure 28: Vehicle new registrations in Cyprus from 1990-2015 61 Figure 29: Number of cars in the Reference scenario by age 62 Figure 30: Well-to-wheel energy consumption of a car (C-segment) with different alternative fuels in 2020 63 ifeu Penetration of alternative fuels in Cyprus road and maritime sectors 5 Figure 31: Well-to-wheel GHG emissions of a car (C-segment) with different alternative fuels in 2020 63 Figure 32: Example for new registrations and vehicle stock of passenger cars in Scenario C 66 Figure 33: Comparison of final energy consumption of road transport until 2050 in the 3 scenarios by type of energy 68 Figure 34: GHG emission savings in road transport in the scenarios compared to 2005 71 Figure 35: Annual primary electricity demand from RES needed to fill the gap to the GHG reduction targets via PtX 72 Figure 36: Achievement of the RES goals based on scenario C and additional measures considered within this project 73 Figure 37: Energy prices used in Scenario B and C in €/MJ 76 Figure 38: Real CAPEX of charging infrastructure 79 Figure 39: Incremental prices for e-cars and related battery prices 80 Figure 40: CAPEX of CNG refuelling stations 81 Figure 41: Incremental price of CNG cars compared to conventional cars 82 Figure 42: OPEX of introducing B7 and ETBE in Cyprus for the two scenarios 85 Figure 43: Incremental CAPEX and OPEX for B100 buses in Scenario C 86 Figure 44: Charging infrastructure compared with the total number of e-cars 88 Figure 45 CAPEX, OPEX and discounted net cash flow of e-cars fpr Scenario B and C 90 Figure 46: Number of CNG fuel stations 91 Figure 47 CAPEX, OPEX and discounted net cash flow for CNG in both Scenarios 92 Figure 48: Ports included in the Poseidon MED II project 98 Figure 49: Scenarios for potential natural gas demand in the maritime and road sector from 2020-2045 99 Figure 50: Options for bunkering of LNG in ocean-going vessels 100 Figure 51: Example of supporting policies 104 Figure 52: Sum-up of the levers considered for the ambitious scenario and its environmental impact 105 Figure 53: “Scrapping function” for a medium petrol passenger car in Cyprus compared to Germany 128 ifeu Penetration of alternative fuels in Cyprus road and maritime sectors 6 Table of tables Table 1: Current status of alternative fuel technologies in Cyprus road sector (2017) 12 Table 2: Share %v/v of the biofuels used for the different scenarios 13 Table 3: Net discounted cash flow of the different technologies per MJ of alternative energy by 2020 15 Table 4: Net discounted cash flow of the different technologies per MJ of alternative energy by 2050 15 Table 7: Key figures on the infrastructure and the vehicles for CNG and E- mobility in scenario C 16 Table 5: Economic output Scenario B 16 Table 6: Economic output for Scenario C 17 Table 8: Current policies concerning RES and alternative fuels applying for Cyprus transport 26 Table 9: Status quo for the demand and availability of alternative fuels in Cyprus 33 Table 10: Alternative fuel vehicles in Cyprus in 2014 35 Table 11: Transport turnover in Cyprus ports in 2015 by ship type 41 Table 12: Input parameter road sector 46 Table 13: Average fuel efficiency (MJ/km) in Cyprus from 2015 until 2050 for main vehicle categories 54 Table 14: Example of blending grade used in EU countries (Stand 2014) 57 Table 15: Share %v/v and biofuels feedstocks used for the different scenarios 59 Table 16: Share of feedstock for the biofuel blends in the 3 scenarios 59 Table 17: Number and share of annual new vehicle registrations (excluding second hand vehicles) between 2015 and 2050 61 Table 18 Number of passenger cars in the scenarios per fuel type (in 1000s) 67 Table 19: Comparison of the scenario results to the targets for RED and FQD in 2020 69 Table 20: Share in new registrations of alternative cars for the two scenarios from 2020-2050 74 Table 21: Fuel prices without tax by 2050 77 Table