Fuel Economy Policy Pathways for the ASEAN Region

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1 Fuel Economy Policy Pathways for the ASEAN Region

2 Fuel economy standards in Asia Few Asian countries have fuel economy standards but growing over the years! Standards for passenger cars (LDV) are given priority Standards for motorcycles are also being developed Source: Clean Air Asia 2012

3 Diesel consumption (million liters) 180, , , , ,000 80,000 60,000 40,000 20,000 0 Fuel economy standards in ASEAN Impact potential compared to BAU Indonesia, Thailand, Philippines, Vietnam Remaining Consumption Petrol Consumption (millionliters) 70,000 60,000 50,000 40,000 savings with HDV standards 30,000 20,000 Remaining Consumption 10,000 0 Fuel savings: 446 b liters diesel 134 b liters gasoline CO2 reductions LDVs 16% CO2 reductions LDVs and HDVs 26-27% 3 Source: GFEI and Clean Air Asia Improving Vehicle Fuel Economy in the ASEAN Region

4 Beginning of an ASEAN-wide conversation Policy targets proposed for ASEAN countries Fuels 50 ppm sulphur by 2015/16 10 ppm sulphur by 2019 Vehicles Euro 4 by 2015/16 Euro 6 by 2020 Enable support for in-country implementation of policies aimed to cleaner fuels and including regional harmonization efforts where possible

5 Brunei Action Plan on environment and climate ASEAN Transport Ministers commitment to reduce energy and carbon emission Brunei Action Plan, LTG-7: Establish a sustainable, energy efficient and environmentally-friendly transport system - need to initiate actions on mitigation LTA-16 includes Exchange of experiences, projects & knowledge related to environmental-friendly transport system, and fuels An ASEAN Task Force was mandated to develop a post-2015 strategic action plan based on the 2013 ASEAN Transport Ministers Meeting to address vision and roadmap for transport cooperation and integration: fuel economy included

6 To keep the momentum going Experts Group Meeting on Accelerating Fuel Economy Policies in the ASEAN Region 18 November 2014 Organized by: Attended by: Indonesia Malaysia Myanmar Philippines Thailan Vietnam ASEAN Secretariat

7 COUNTRY Fuel Economy Baseline Calculations Fuel Economy Standards Type of Vehicles Covered Fuel Quality and Vehicle Emissions Standards Fuel Economy Vehicle Labeling Fiscal incentives and/or other Tax Instruments Public Information programs Indonesia Baseline calculations and Cost- Benefit Analysis completed in Legal drafting of fuel efficiency policies and standards (km/l) underway Light-duty 2-wheelers 2000ppm sulfur diesel Currently, Euro 2 (LDVs) and Euro 4 by 2016 Voluntary based on Conformity of Production Low Cost Green Car (LCGC) Program Eco-driving programs and intensive policy dialogues (2013) Malaysia National Automotive Policy 2014: Implementation of Energy-Efficient Vehicles (EEV) will be based on fuel consumption specification (l/100km) and carbon emission (gco 2 /km) will only be used once the EURO 4 fuel quality standard is introduced. LDVs particularly passenger 2-wheelers 500ppm sulfur diesel Euro 2 (LDVs) None but under discussion Import tax and excise duty exemption for CKD hybrid (from 1 January 2014 until 31 December 2015 ) and CKD EVs (from 1 January 2014 until 31 December 2017 ) Government developing Malaysia as the regional automotive hub for Energy Efficient Vehicles (EEVs) Philippines Baseline calculations underway and scheduled to be completed by Jan Introduction of standards planned under the proposed House Bill on National Energy Efficiency Conservation Light-duty 500ppm sulfur diesel Euro 2 (LDVs) and Euro 4 by 2016 Voluntary based on fuel economy runs Senate proposing bill to incentivize fuelefficient Eco-driving programs and fuel economy runs Thailand Draft MEPS & HEPS (km/l) established for diesel and gasoline in 2013 by DEDE Ministry of Energy with Thailand Automotive Institute Light-duty 2-wheelers 50ppm sulfur diesel Euro 4 (LDVs) since 2012 and Euro 5 for Eco- Car Programme None CO 2 taxation policy based on engine size Viet Nam TCVN issued by the Ministry of Science and Technology: fuel consumption limits (l/100km) of passenger cars (Aug 2013) and for 2-wheelers (Sep 2014) Light-duty 2-wheelers 500ppm sulfur diesel Euro 2 (LDVs) and Euro 4 by 2017 Voluntary from 1 Jan 2014 and mandato ry from 1 Jan 2015

8 Why go for regional harmonization? Aligned with the vision of the ASEAN Economic Community to enhance efforts to tackle climate change and contribute to sustainable development A regional framework will provide the necessary pressure and opportunities to exchange experiences for national governments to adopt and/or advance fuel economy policy discussions: early adoption will lead to faster realization of the benefits Combining small car markets reduces cost for development of standards and related transactions (certification, conformity of production)

9 Points to consider Fuel economy not an issue in isolation: air pollution, fuel costs, fuel security Fuel subsidies in several countries Varying standards in a small market Resistance industry and other stakeholders Multiple agencies with overlapping responsibilities (ownership of the process is unclear) ASEAN Countries Vehicle Emissions Standards Fuel Quality Vehicle Tariffs/ Taxes; Fuel Subsidies /Taxes Energy Efficiency and Fuel Economy Indonesia Environment Energy Finance Energy Malaysia Environment Energy Finance Energy Philippines Environment Energy Finance Energy Singapore Environment Environment Finance Environment Thailand Environment Energy Finance Energy Vietnam Transport Environment Finance Transport

10 Way Forward Roadmap for developing fuel economy policies in the ASEAN Region rationale baseline database vehicle labeling* common goal (but with varying timelines) policy instruments guidelines for developing policies Sustain the Experts Group Meeting for Accelerating Fuel Economy Policies in the ASEAN Region

11 Can ASEAN be part of this in the future? Grams of CO 2 per kilometer normalized to NEDC test cycle C02 Standards for Passenger Cars Worldwide Solid lines: historical performance Dashed lines: enacted targets Dotted lines: proposed targets or targets under study S. Korea 2015: 153 Mexico 2016: 153 Brazil 2017 [3] : 146 China 2020 [1] : 117 India 2021: 113 Japan 2020: 105 EU 2021: US US 2025 [2] : 103 Canada 2025:103 Canada Mexico EU Japan China S. Korea India Brazil [1] China's target reflects gasoline only. The target may be higher after new energy are considered. [2] US standards GHG standards set by EPA, which is slightly different from fuel economy stadards due to low-gwp refrigerant credits. [3] Gasoline in Brazil contains 22% of ethanol (E22), all data in the chart have been converted to gasoline (E00) equivalent [4] Supporting data can be found at:

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