Working towards a Green Freight Program in China and Asia

1. Working towards a Green Freight Program in China and Asia Bert Fabian, Sophie Punte, Yan Peng Clean Air Initiative for Asian Cities Transforming Transportation 2011 Washington, D.C.,

2. About the Clean Air Initiative for Asian Cities The Clean Air Initiative for Asian Cities promotes better air quality and livable cities by translating knowledge to policies and actions that reduce air pollution and greenhouse gas emissions in transport, energy and other sectors CAI-Asiabegan in 2001 as a multi-stakeholder initiative by ADB, World Bank and USAID Since 2007, CAI-Asia is a UN Type-II Partnership with almost 200 organizational members, 8 Country Networks, and the CAI-Asia Center as its secretariat

3. Outline • Background • Vehicle and freight trend • Environment and Social concerns • Barriers and challenges in road freight • Strategies for a sustainable road freight sector in Asia

4. Increasing Motorization in Asia Source: 2009. ADB, CAI-Asia, Segment Y Ltd., and IEA

5. Heavy Commercial Vehicles Growth Source: ADB, CAI-Asia, Segment Y Ltd. (2009)

6. Road freight dominates in Asia Source: Various sources (ADB, 2008; Sopadang, 2007; Patdu, 2005; Lubis & Isnaeni, 2005, Ministry of Industries (Pakistan) 2006; World Bank, 2008;

7. Travel Activity Heavy & Medium Duty Trucks Source: WBCSD and IEA (2004)

8. Diesel consumption by trucks to double by 2050 and Asia’s share to grow to 34% Road Freight Energy Use and % Consumption by Asian Countries Source: WBCSD and IEA (2004)

9. Diesel high % of fuel mix and growing IEA’s Energy Balances of Non-OECD Countries as quoted by Timilsina and Shrestha (2009)

10. Trucks relatively high emissions impact per truck – China example Source: 2008. ADB, CAI-Asia, and Segment Y Ltd

11. Other impacts of trucks • Road accidents • India: trucks 5% of vehicles but 30% of road accidents • Pakistan: 25% of road accidents involved trucks • Truck drivers at high risk of getting sexually-transmitted diseases such as HIV/AIDS • Noise

12. Barriers: Technologies & Logistics Barriers and challenges in adopting cleaner technologies • Limited applicability and availability of certain technologies (e.g. aerodynamics on slow highways) • Fragmented technology suppliers network makes access to technologies difficult for carriers • Limited policies for trucks and introduced much later than for light-duty vehicles • Emission reduction technologies (e.g. Diesel particulate filters) will only work if legislated • Limited verification/certification systems for technologies • Limited case study examples for Asia to build confidence

13. Barriers: Technologies& Logistics Source: Transportation Research Board (2010) . Technologies and Approaches to reducing the Fuel Consumption of Medium- and Heavy-duty Vehicles

14. Barriers: Technologies & Logistics Barriers and challenges in adopting better logistics and operations • Freight seldom included in design and planning of urban transport systems and policy development • Shippers seem to have a less direct relationships with carriers • Long-haul trucks often travel large parts of trips in urban areas • Limited knowledge and experience with logistics solutions (e.g. drop and hook; standard container sizes) • Different transport modes covered by different government agencies, making intermodal transport and shift to other freight modes more difficult

15. Barriers: Technologies & Logistics • Highly fragmented with a majority owner-driver trucks • China, Guangzhou survey: 52% owner-driver trucks • India: 80% of companies have 1-2 trucks, and only 10% of companies have more than 15 trucks • Old trucks and poor maintenance practices

16. Barriers: Technologies & Logistics • Overloading • Asia: 52% of trucks 45% overpayload weight limit (Asia Fdn) • Pakistan: 70% of 2-3 axle and40% of 4-6 axle trucks overloaded • Philippines: 0.5 – 1 billion USD to repair pavement damage (JICA)

17. Barriers: Technologies & Logistics • High percentage of empty hauls • China surveys: 40-50% empty miles = 8 billion USD annual loss • Philippines: 89% delivery vehicles empty return trips • India survey: 37-46% of trips are empty Source: Feasibility for 6-laning of NH-1 from Panipat Jalandhar in the State of Haryana/Punjab, India

18. Barriers: Knowledge & Capacity • Lack of knowledge on green freight especially small trucking companies / driver-owners • No training program available for all truck drivers • In-house training courses at large trucking companies • Courses provided by private companies (e.g. Scania or Michelin) to customers • Lack of an agreed methodologies for fuel and emission measurement • Limited public information available on freight sector • Limited recognition for good practice in freight sector (e.g. Award)

19. Barriers: Financing • Limited tax policies for truck sector relevant to energy and emissions management • Investment costs are too high for many companies, even if potential savings are high and payback periods short • Truck sector not considered most reliable sector for lending (especially small companies and individual truck driver-owners) • Banks currently start providing loans for new trucks but not for in-use fleet • ESCOs (energy service companies) established for industry but no experience with trucking fleets

20. Strategies: Avoid • Avoid: reduce the need to travel or the travel • Promotion of local production and consumption • Co-location of facilities within supply chain and with ports • Improved logistics • Load management • Example: HCMC (Vietnam): 60% of all food sourced from within city boundaries

21. Strategies: Shift • Shift: more energy-efficient modes • Optimization of railways and inland waterways • Different vehicle types that better match the loads • Example: DHL improved carbon efficiency by 19% in 2009. Strategies included replacing 60 four-wheelers with 75 motorbikes http://www.dhl.co.in/en/press/releases/releases_2010/local/120510/jcr:content.html

22. Strategies: Improve • Improve: energy efficient modes, operations, technologies • Fuel economy standards • Stricter implementation of anti-overloading laws • Technological tools, such radio frequency identification tags (RFID), global positioning systems (GPS) and vehicle routing software • Example: fuel economy improvement in the ASEAN region from 2015 to 2035 will reduce26% of CO2 emissions from light and heavy duty vehicles

23. Potential for Southeast Asian countries

24. Need for a Green Freight Program Partnership Low Emissions Footprint • 4 Elements • Green Freight Partners • Technologies and Logistics • Financing • Knowledge and Capacity

25. Find out more Sophie Punte, Executive Director sophie.punte@cai-asia.org Yan Peng, China Representative ysn.peng@cai-asia.org Bert Fabian, Transport Program Manager bert.fabian@cai-asia.org SudhirGota, Transport Specialist sudhir@cai-asia.org Alvin Mejia, Environment Specialist alvin.mejia@cai-asia.org Unit 3505, 35th floor Robinsons-Equitable Tower ADB Avenue, Pasig City Metro Manila 1605 Philippines CAI-Asia Center www.cleanairinitiative.org Clean Air Initiative for Asian Cities (CAI-Asia) Center, 2010. “Challenges and Opportunities for an Environmentally Sustainable Road Freight Sector in Asia.” Pasig City, Philippines.