CDM PoA Feasibility Study for Fuel Efficiency Improvement through Introduction of Digital Tachograph to Cargo Trucks in Malaysia

Transcription

1 CDM Feasblt Stud 2011: Fnal Report CDM PoA Feasblt Stud for Fuel Effcenc Improvement through Introducton of Dgtal Tachograph to Cargo Trucks n Malasa FS Partners Locaton of Proect Actvt Categor of Proect Actvt Targeted GHG CDM/JI Descrpton of Proect Actvt b: Nppon Express Co., Ltd. Methodolog to be appled AMS-III.AT Verson 01 Baselne Scenaro Montorng Plan Estmated GHG Emsson Reductons Duraton of Proect Actvt/ Credtng Perod Nttsu Research Insttute and Consultng, Inc.; Mtsubsh UFJ Morgan Stanle Securtes Co., Ltd.; NITTSU TRANSPORT SERVICE SDN. BHD.; NIPPON EXPRESS SDN. BHD. Malasa Transportaton Carbon Doxde () CDM Ths proect ams to mprove fuel effcenc b tranng drvers for effectve drvng tps through contnuous recordng of vehcle speed, and functons such as voce alarm to unnecessar dlng or sudden acceleraton / break b ntroducng dgtal tachograph sstem. Ths proect s mplemented as proect CDM (PoA). AMS-III.AT Verson 01 approved b the board meetng of CDM held n Aprl, 2011 wll be appled to the PoA. The frst CDM program actvt (CPA) of the PoA s a proect to nstall dgtal tachograph to 46 trucks owned b Nttsu Transport Servce SDN. BHD. (herenafter NTS ) establshed n Selangor State, Malasa. It ams to acheve of emsson reducton per ear. Baselne scenaro s a condton that dgtal tachograph and feedback sstem for neffcent drvng (= fuel-neffcent) have not been nstalled n the vehcles et. Current stuaton s under ths condton. Montorng plan s to collect data of transportaton and fuel usage of each vehcle as same as the baselne. And emsson s then calculated based on these data. Man montorng tems are as follows: Freght transportaton data (each vehcle): route, dstance and weght. Fuel usage (each vehcle): fuel tpe, refuelng quantt and refuelng date Others: Constructon condton of express was, changes n bofuel blendng rato, etc. / r PoA perod s up to 28 ears from UN regstraton. The duraton and credtng perod of the frst CPA s 10 ears and the start of the proect s expected to be n December, For ncluson of addtonal CPAs, currentl, there are some problems for collectng baselne data. It s necessar to devote more tme preparng those data

2 Envronmental Analss Impact Demonstraton of Addtonalt Ths proect wll not lkel to make an negatve mpact to the envronment snce t wll not change transport condton, vehcles and fuel. Therefore, t wll not brng an addtonal polluton emsson and nose. Then, t s not necessar to cope. It has been confrmed wth Malasa Green Technolog Corporaton (Malasa DNA) that the envronmental mpact assessment wll not be requred for ths proect. Ths proect s a voluntar actvt mplemented b Nppon Express (Japan) as a part of ther efforts on corporate socal responsblt actvt. The methodolog appled to ths proect was developed b Nppon Express Group n collaboraton wth Mtsubsh UFJ Morgan Stanle Securtes, and NTS s the target feld of the attached PDD for applcaton. Ths fact clearl demonstrates that Nttsu orgnall ntended to develop the proect on as CDM. Also, through the ntervews wth MGTC, Mnstr of Transport and Futsu, a provder of dgtal tachograph sstem, t has been confrmed that there s no precedent n Malasa to nstall dgtal tachograph, not onl for freght transport, but also for the entre busness sectors. The Addtonalt of ths proect had been demonstrated b "frst of ts knd" barrer, whle a new gudelne was recentl approved. The proect partcpants wll contnue to stud the gudelne to confrm applcaton of frst of ts knd barrer to ther proect. Proect Feasblt Ths proect s expected to start n December, The valdaton of PoA-DD s expected to begn n the frst half of Propagaton Scenaro of Programmatc CDM Co-benefts effect (Improvement effect of Local Envronment Problems) Contrbuton to Sustanable Development n Host Countr The canddate for addtonal CPAs s the proect for the vehcles owned b Port Kelang branch of Nppon Express Malasa. At frst, the branch wll prepare to buld a management and operatonal scheme to enable the data collecton and calculaton of baselne emsson. An applcable crteron from Co-Beneft Quanttatve Estmaton Manual to ths proect s ntrogen oxde (NOx) reducton. From the past stud conducted n Japan, a correlaton s obtaned as below x x : emsson( gco 2 ), :NOx emsson( gno x ) If emsson reducton of /r assumed n the 1 st CPA s appled n the formula, expected NOx emsson reducton s 1.45tNOx/r. Referrng to the past stud conducted n Japan, consderable reducton of traffc accdents s expected b ntroducton of dgtal tachograph and eco-drvng. If dgtal tachograph s promoted n Malasa wdel, t s estmated that number of traffc accdents wll reduce b 22,649, the number of wounded b 1,406, and the number of deaths b

3 CDM PoA Feasblt Stud for Fuel Effcenc Improvement through Introducton of Dgtal Tachograph to Cargo Trucks n Malasa Organzaton name: Nppon Express Co., Ltd 1. Implementaton sstem of the proect Nttsu Research Insttute and Consultng, Inc. Basng on CDM methodolog - AMS-III.AT, the made dscusson on the polc for collectng the baselne data and settng traceable route specfed b the methodolog based on the data management condton of the proect target, and calculated baselne emsson. Mtsubsh UFJ Morgan Stanle Securtes Co., Ltd. The made consultaton wth Nppon Express on the formulaton of PDD based on the methodolog, and prepared PoA-DD and CPA-DD. NITTSU TRANSPORT SERVICE SDN. BHD. The made a database of transportaton data needed for baselne and montorng, provded the dataset to Nttsu Research Insttute and Consultng, and selected the target vehcles for the proect. The also made consultaton on settng traceable route for the preparaton of CPA-DD. 2. Descrpton of the proect (1) Proect outlne Ths proect s mplemented as proect CDM (PoA), amng to mprove fuel effcenc b tranng drvers for effectve drvng tps through contnuous recordng of vehcle speed, and functons such as voce alarm to unnecessar dlng or sudden acceleraton / break b ntroducng dgtal tachograph sstem. AMS-III.AT approved b the meetng of CDM executve board held n Aprl, 2011 wll be appled to the PoA. The frst CDM program actvt (CPA) of the PoA s a proect to nstall dgtal tachograph to 46 trucks, of whch baselne montorng data applcable to the CDM methodolog (AMS-III.AT) can be collected. These trucks are owned b Nttsu Transport Servce SDN. BHD. (herenafter NTS ) establshed n Selangor State, Malasa. The proect ams to acheve about of emsson reducton per ear. The frst CPA proect s expected to start n the frst half of Valdaton s assumed to be undertaken n accordance wth ths tmng. The management of PoA n Malasa s to be conducted manl b Nppon Express Malasa, the parent compan of NTS, and supported b Nppon Express Japan. Nppon Express wll prepare for the possblt of nternatonal expanson. (2) Methodolog AMS-III.AT: Transportaton energ effcenc actvtes nstallng dgtal tachograph sstems to commercal freght transport fleets Verson Contents of the stud (1) Problems n the stud 1 Although the descrpton tems for settng traceable route provded b the methodolog are specfed, no detaled descrpton level (e.g. terran, traffc denst, etc.) has been specfed. The methodolog to be appled s a new one, and there s no precedent for the base methodolog (AMS-III.S Introducton of low-emsson vehcles/technologes to commercal vehcle fleets), as there s no approved proect for the methodolog. -3 -

4 2 It has been found out that t was dffcult to capture the freght data (weght, transport route, etc.) based on the methodolog because the proect target (NTS) conducted a consoldated transport of urban delver and mult consgnors. 3 Regardng the long-dstance transportaton other than 1, our ntal understandng was that t conssted of 5 routes. However, t was revealed that there had been about 20 constant transport routes after we conducted a detaled hearng on ste. 4 Accordng to the methodolog, the proect vehcles shall be dvded nto dfferent classes (specfed as class k, and the dvdng method s not clarfed), whch s specfed as Servce Level. However, onl 40ft contaner s used for long dstance transportaton n NTS. Therefore the vehcle shape s ver smlar and there s no dfferent class. Thus, t s not necessar to classf the vehcles n NTS. 5 It s dffcult to prepare CPA-DD for the 2 nd CPA expected target, Port Kelang branch of Nppon Express Malasa, because the stll do not have all the data of the freght weght. 6 Snce we found that some maor transport routes arrve and depart at Sngapore after checkng NTS s data, t s necessar to exclude the emsson n Sngaporean terrtor from the baselne proect emsson. 7 Other than 6, we also found that some proect vehcles ma run routes other than the traceable route. Therefore, we have to exclude the dstance and fuel usage caused b the outsde-traceable route. 8 We had been dscussng to demonstrate the addtonalt of ths proect b "frst of ts knd" barrer, whle a new gudelne was recentl approved whle ths stud perod. Bascall, we wll contnue to demonstrate the Addtonalt b the frst of ts knd barrer. However, because ths new gudelne has not been adopted b an proect before, the nterpretaton s expected to be a large pont of contenton n the valdaton. It s necessar for us to stud the gudelne and carefull prepare ourselves for the valdaton. (2) Stud Contents 1 st on-ste stud (Aug. 8 to 9, 2011) Detals of the stud Vst to Port Kelang branch of Nppon Express Malasa Stud of mport and export shppng freght; consultaton on data collecton Vst to Bukt Jeluton warehouse of Nppon Express Malasa Stud of ncomng and outgong freght of the warehouse; consultaton on data collecton Vst to the head offce of Nppon Express Malasa Overvew explanaton of the proect Vst to NTS Stud of truck transportaton n Malasa and mport and export freght of Thaland and Sngapore; consultaton on data collecton Summar of stud results Port Kelang branch of Nppon Express Malasa Bascall, the freght weght data of mported contaners can be collected from the paper data receved from shppng companes. However, the freght s sent to ther destnatons from the branch after devannng, and the weght of those delvered freght s not sstematcall understood. Therefore, t s dffcult to obtan the ton-klometer data. Bukt Jeluton warehouse of Nppon Express Malasa Snce ths s onl a warehouse, not nvolved n transportaton, onl the freght weght data of the over land transport handled b Nttsu Transport Servce ma be obtaned. NTS At ths pont, t seems realstc to nclude the long-haul transport as the CDM target -4 -

5 because contaner weght data of these long-hauls can be obtaned. Ths CDM target group s not ver small because the long-haul transport accounts 80% of all freght handled b NTS. Consultaton on PDD preparaton based on the 1 st on-ste stud Stud contents Partcpant: Nppon Express, Nttsu Research Insttute and Consultng, Mtsubsh UFJ Morgan Stanle Securtes Regardng how to extract onl the fuel consumpton data of NTS long-haul transport (CDM proect target) Regardng how to set the traceable route Checkng other nformaton necessar for PDD preparaton Summar of stud results Accordng to the methodolog, the baselne emsson factor shall be per transport ton-klometer. However, trucks ma run wth no freght (wth freght beng zero ton, no matter how man klometers the truck runs, the ton-klometer factor s stll zero). Therefore, we wll extract the fuel consumpton basng on the travel dstance, and mantan a conservatve calculaton. Snce the requred lstng tems for traceable route are specfed as dfferences of terran, traffc denst, etc., the settng for traceable route can be nterpreted as between areas (ctes), rather than the delver stes. 2 nd on-ste stud Stud contents Vst to the head offce of Nppon Express Malasa Explanng the progress of the proect Vst to NTS Consultaton focusng on how to set the traceable route for the long-haul transport as CDM proect target Summar of stud results NTS Most of the master data relatng to the arrval and departure ponts are prepared. Once the locatons for each transport trp are entered, t wll lnk to the freght weght n trp data, and transport ton-klometer calculaton can be done. NTS wll handle t n near future. After recevng the data, the traceable route settng plan wll be dscussed and prepared b Japan sde. 3 rd on-ste stud Stud contents Vst to the head offce of Nppon Express Malasa Explanng the progress of the proect Vst to NTS We undertook consultaton on the traceable route settng plan, and also dscussed how to handle the case when proect vehcles run routes outsde the traceable route. Summar of stud results We dvded the loadng and unloadng locatons n the transport data used for baselne nto 12 areas, ncludng Thaland (transshpment at the border) and Sngapore (drect transport), -5 -

6 and set traceable routes between these areas. We decded that durng the baselne data acquston perod, all transport shall be ncluded n the traceable route. Durng the proect perod, outsde-traceable route runnng s expected to be less. Even f t does happen, the runnng dstance can be obtaned from the GPS log. And because fuel s alwas reflled n each trp (round trp between NTS and delver ste), even t s a small amount, t s eas to exclude the extra runnng dstance for outsde-traceable route and the fuel consumpton thereof. Measures for the problems n the stud (numbers correspond to those n (1) respectvel) 1 The traceable route wll be set between areas (ctes), based on the locaton data n NTS transport data. 2 We wll exclude the short-dstance and consoldated transport based on the travel dstance n order to extract the fuel consumpton of long-haul transport as the proect target, and mantan a conservatve calculaton. 3 Same as 1. 4 It seems there s no need to classf the vehcles. But we receved advce from NTS that we can classf vehcles b the gas emsson regulatons. 5 We wll contnue to dscuss how to obtan the baselne data for the proect mplementaton over next ear. 6 In order to mantan a conservatve calculaton, we wll exclude the dstance between the border of Malasa and Sngapore and the farthest loadng and unloadng locatons n Sngapore, as well as the fuel consumpton proportonal to such dstance from the calculaton. 7 It s possble to exclude the fuel consumpton and travel dstance of outsde-traceable route, based on the current refuelng condton of NTS and n combnaton wth usng GPS log. 4. Stud results for the mplementaton of CDM proect (1) Methodolog of baselne montorng The followng s the summar of the applcable condtons descrbed n the methodolog, AMS-III.AT Verson 01, and the respondng status of NTS. (Excludng the techncal requrements for dgtal tachograph) Paragraph Applcable condtons n methodolog Measurng Status of NTS 3 Trucks must be centrall controlled and managed b a sngle entt. All proect vehcles match the condtons. Drver of the truck must be hred b Un-matched vehcles (transport the entt or a contractor. entrusted to other companes = fuel Fuel expenses must be pad b the expenses are pad b other central busness. companes) wll be excluded from 4 The proect actvt s unlkel to change the level of servce provded before the proect actvt. The proect actvt does not nclude measures to brng about a modal shft (e.g. a shft from truck to ral) n transport the proect. Stable busness from maor clents (consgnor) and no sgnfcant change expected n assgnment of vehcles No expected modal shft -6 -

7 The proect actvt does not nvolve a fuel swtch n exstng vehcles, except for an optonal swtch to bofuel blends where the blendng rato s not greater than 20% b volume. 5 Not applcable to proect actvtes n locatons where the nstallaton of dgtal tachograph sstems s mandator b law and the exstng mandator polc/regulaton has a hgh level of enforcement. 6(d) The vehcles that are n use on each traceable route should not be part of another CDM proect actvt. 7 The emsson reducton must be less than 60,000te annuall. 8 The proect desgn document shall nclude documentaton of procedures to elmnate an potental double countng of emsson reductons from other CDM proects or Programmes of Actvtes. There wll not be fuel converson. It s unlkel that bo desel wth blendng rato over 20% wll be sold n Malasa. It s not requred to ntroduce the tachograph n Malasa and there s few n the countr. No other smlar CDM proect s n progress. Currentl, the emsson reducton s expected to be or less per ear. Potental double countng s excluded because proect vehcles are all owned, managed and operated b Nppon Express Group. (2) Settng of baselne scenaro and proect boundar The baselne scenaro s a condton that dgtal tachograph and feedback sstem for neffcent drvng (= fuel-neffcent) have not been nstalled n the vehcles et. Current operatng stuaton of the trucks s under ths condton. As mentoned above, we have decded how to obtan baselne data and set the traceable routes, whch are requred b the methodolog, AMS-III.AT, after undertakng consultaton wth the proect target busnesses. The target of the 1 st CPA s the 46 trucks (tractors) used for long-haul transport of whch data acquston s possble to meet the requrement of the methodolog. The boundar of PoA s the entre countr of Malasa, and vehcles owned b Nppon Express Group and travellng n the countr. The stud target vehcles are owned b NTS, and NTS s a compan of Nppon Express Group. Therefore the are nsde the boundar. It s specfed the baselne emsson shall be calculated b the followng 2 equatons. BEF BEF P dp D * ηblv * NCV * EF, P * dp BE P, BEF dp, Baselne emsson factor per ton-klometer of vehcle under baselne condtons (tco 2 / ton km) Total annual transport weght of goods transported b vehcle under baselne condtons (tonnes) The annual average dstance of transportaton per ton of freght b vehcle under baselne condtons (km) -7 -

8 D Total annual transport dstance traveled b vehcle under baselne condtons (km) η Fuel effcenc of vehcle under baselne condtons (qt of fuel/km; BLV see paragraph 13 for fuel effcenc of new vehcles.) NCV Net calorfc value of fuel (MJ/ Unt qt of fuel) EF, BE CO 2 CO 2 emsson factor of fuel used b vehcle (t/ energ content of fuel, countr specfc data or IPCC default value) Total baselne emsson n ear (tco 2 / r) P, The annual freght weght transported b each proect vehcle n each traceable route n ear (ton) BEF Baselne emsson factor per ton of goods per klometer for vehcle (tco 2 / ton.km) under baselne condtons dp, Annual average avarage dstance of transportaton per tonne of goods b proect vehcle n ear (km) The followng s the necessar transport data acquston structure of NTS. NTS Database Delver Order DB Transport dstance and weght of each freght Vehcle number Fuel DB Each vehcle s Travel dstance Fuel consumpton GPS Data Travel dstance of each vehcle Locaton tracng P dp D Varables needed for baselne calculaton η BLV Snce vehcles owned b Nppon Express Malasa ma be ncluded as CPA target vehcle n future, we wll prepare PoA-DD wth the assumpton of such case. (3) Montorng plan The methodolog to be appled s AMS-III.AT Transportaton energ effcenc actvtes nstallng dgtal tachograph sstems to commercal freght transport fleets. The Montorng plan s to collect data of transportaton and fuel usage of each vehcle n the current transport condtons, and emsson s then calculated based on these data. However, the local proect partner shall montor and collect nformaton regardng an sgnfcant change (e.g. constructon of hgh was, etc.) on the preset traceable routes. The emsson calculaton of the proect s bascall conducted b collectng the same data tema as those used n the baselne calculaton. Therefore, the data collecton s carred out dal and contnuousl. Bascall, the emsson reducton wll be calculated based on these data accordng to the frequenc of verfcaton (expected to be one ear at ths pont). Man montorng tems are as follows: Freght transportaton data (each vehcle): route, dstance and weght Fuel usage (each vehcle): fuel tpe, refuelng quantt and refuelng date Others: Constructon condton of express was, changes n bofuel blendng rato The montorng plan of CPA wll be n accordance wth the small scale methodolog, III.AT, same as PoA. Ever vehcle data ncluded n CPA are to be collected separatel. -8 -

9 Abbrevaton Item, Unt Montorng method / Item DT Total dstance travelled b each vehcle n Drver logs and route maps,, ear (km/r) recorded b GPS trackng sstem The trucks are dentfed based on the age, The data are perodcall checked characterstcs and load capact and on annual bass and recorded avalablt of hstorcal data electroncall dp, FC,, NCV EF, P, SL, CO 2 k Annual average dstance of transportaton per tonne of freght b each proect vehcle Consumpton of fuel b vehcle n ear (quantt of fuel consumed) Net calorfc value of fuel (energ content of fuel/quantt of fuel) emsson factor of fuel used b baselne vehcle (t/energ content of fuel) Total annual goods transported b each proect vehcle n ear Servce level n terms of volume of goods tmes the average dstance of transportaton per tonne of freght b truck class k n ear Annual montorng to check f tachograph sstems have become a mandator practce, or that hghlenforced ant-dlng polces or legslaton have been put nto place Montorng to ensure that all tachograph and feedback sstems are operatng correctl and have not been dsabled (4) Emsson reducton amount of greenhouse effect gas Baselne emsson amount For calculaton method, refer to (2) (p.5). 3,636t/r Montored through compan records Purchase or consumpton records, whose hgher value s taken to ensure conservatveness Countr specfc data or IPCC default value Countr specfc data or IPCC default value Montored data durng the proect e.g. drver logs and route maps, plus sales recepts Montored for each truck class, from compan/operators records, e.g. drver logs and route maps, plus sales recepts To follow the status of government polc and regulatons ntroducton. If an tachograph sstem nstalled n a proect vehcle s not operatng correctl, no emssons reductons can be attrbuted to that vehcle for the perod that the sstem has not been operatng correctl Proect emsson amount It s specfed that the proect emsson amount shall be calculated b the followng equaton: PE FC * NCV * EFCO 2, PE,, Total proect emssons n ear (tco 2 /r) FC,, Consumpton of fuel b vehcle n ear (quantt of fuel) NCV Net calorfc value of fuel (as obtaned b countr specfc data or IPCC default value) EF CO 2, CO 2 emsson factor of fuel used b vehcle under baselne condtons (t/energ content of fuel, countr specfc data or IPCC default value) 3,381 t/r -9 -

10 Reducton amount of greenhouse effect gas Year Eco-drvng due to ntroducton of dgtal tachograph (NTS) Total 179t 179t 204t 204t 230t 230t Amount ma reduce 10% to 20% due to outsde-traceable route travellng and fuel consumpton. Introducton effect from 2012 to 2014 has been calculated b multplng a rato of 70% to 90%. Total reducton amount of greenhouse effect gas of the entre PoA Port Kelang branch of Nppon Express Malasa s expected to be the canddate for the second CPA. Snce ths branch owns about 40 vehcles, the annual reducton amount wll be, whch s calculated based on the above GHG reducton amount of 46 vehcles. Therefore, the total annual reducton amount of the entre PoA s 477t. However, the amount needs to be re-calculated when preparng PDD, because the above amount s not calculated based on the detaled transport data and fuel consumpton data of Port Kelang branch. (5)Duraton of Proect Actvt/ Credtng Perod The perod of ths program (PoA) s up to 28 ears from the date PoA s regstered at UN. The CPA mplementaton duraton of NTS proect and credtng perod s10 ears and t s stll under consultaton wth the local busness. The start of the proect s expected to be n December, As descrbed above, the target vehcles of ths proect are those used for long-haul transport n NTS. Based on our local on-ste studes, t s estmated that baselne data of these vehcles can be collected b then. Therefore, start tmng beng Dec s consdered reasonable. As for addtonal CPAs, there are some problems for collectng baselne data, basng on our on-ste studes. It s necessar to devote more tme preparng those data. The valdaton of PoA s scheduled to start n the second half of 2012, whch s earler than the start of the frst CPA proect mentoned above. Therefore, there s no problem wth the current start tmng of CPA proect. In addton, Nppon Express, the man partcpant of ths proect, has made applcaton and obtaned approval of the methodolog necessar for the mplementaton of CDM. Ths can be evdence document demonstratng that the proect has been orgnall developed as CDM. Furthermore, the development of the methodolog was selected for FS stud of NEDO n 2009, whch ma be used as an mportant evdence document. (6)Envronment mpact / other ndrect mpact Ths proect wll not lkel to make an negatve mpact to the envronment that need to be dealt wth, snce t wll not change transport condton, vehcles, and fuel. Therefore, t wll not brng n an addtonal pollutant emsson and nose. It was confrmed wth Malasa Green Technolog Corporaton (MGTC: CDM energ secretarat) that the envronmental mpact assessment would not be requred for ths proect. Eventuall, t s necessar to be mentoned n the descrpton of Malasa crtera n PDD. (7)Comments from stakeholders

11 Comments from manager of truck drvers Bascall, the drvers won t lke t. However, f t s ntroduced as the compan s sstem, the wll tr to understand lttle b lttle, and eventuall compl wth t. It ma catch the enthusasm of some drvers b the fact that t s envronmentall frendl, reduces traffc accdents, and mprove the socal status. As a manager, I thnk t s ver helpful to use graphs to tran drvers how to drve properl. It wll be useful for the tranng of drvers and the proect s welcome. Comments from the Mnstr of Transport MOT has much nterest n ths proect. We hope t wll be brought nto shape. Should ou have an nqur n the future, please feel free to contact us. Measures for preventng publc bus accdents have become an mportant ssue for the publc admnstraton. If the dgtal tachograph s effectve for safe drvng, we d lke to spread the sstem wdel n the countr. We would apprecate our sharng nformaton wth us n the future. We asked advce from SIRIM QAS, the DOE that can carr out valdaton of transportaton ndustr n Malasa, about who should be nvolved n the stakeholder meetng. The suggested drvers, relevant mnstres, ndustral organzatons, and NGO. The also suggested the specfc canddate nsttutons except for the ndustral organzatons. (8) Implementaton sstem of the proect: Implementaton sstem of the proect CPA Man Partcpants PoA management n Malasa Nppon Express (Japan) Nppon Express Malasa Nttsu Transport Servce Nppon Express Malasa s a subsdar of Nppon Express and NTS s a subsdar of Nppon Express Malasa. The are workng closel as Nppon Express Group companes, wth recent achevement of SS7000, a proect relatng land transport n East Asa. The CPA proect ams to reduce emsson b eco-drvng through the ntroducton of dgtal tachograph to vehcles owned b NTS. Therefore, NTS and ts parent compan, Nppon Express Malasa are the man partcpants of ths proect. PoA management n Malasa s manl conducted b Nppon Express Malasa, and supported b Nppon Express (Japan). Nppon Express wll prepare for the possblt of nternatonal expanson n the future. (9) Fnancal plannng We are conductng stud on the busness condtons of the operators, but we have been focusng on the baselne data acquston, traceable route selectng for long-haul transport onl. Thus, at ths pont, the analss of the followng tems s conducted based on the long-haul transport onl

12 Prerequstes In: Rnggt Intal nvestment Management cost (Annual) Amount of Deprecable 309,925 Deprecaton (average) 47,493 ntal Expense 6,600 Software mantenance 16,500 nvestment Communcatons 5,465 (46 Labor fee (Incentve 39,478 vehcles) addton average) sub total 316,525 Sub total 108,935 Fuel consumpton mprovement, etc. Effect Other Prerequste Fuel consumpton -7.0% Fuel Currentl 1.8 rnggt / L mprovement reducton (annual) * expected to rse 3% per ear Corporaton tax 26.0% Indrect tax 10.0% Deprecaton Intal ear 20.0% (hardware) 2 nd ear and 14.0% after Remans Nl Deprecaton Intal ear 20.0% (software) 2 nd ear and 40.0% after Remans Nl Snce the decded to purchase the server used for operatng software of the tachograph sstem b themselves, the purchasng fee and cost for purchasng the rght to use the software are the addtonal expenses from the ntal estmaton. Fundrasng wll be conducted nternall as planned; no negotaton wth external nsttuton s undertaken. (10) Economc analss As descrbed above, we are conductng stud on the busness condtons of the operators, but we have been focusng on the baselne data acquston, traceable route selectng for long-haul transport onl. Thus, at ths pont, ths analss s conducted based on the long-haul transport onl. The analss summar s as follow: Proftablt analss In: Rnggt Paback perod IRR calculaton (10 ears) Intal Accumulated IRR nvestment ncome Income-based 316, , % 7 th ear CF based 316, , % 4 th ear Wthout credt Wth credt Income-based 316, , % 7 th ear CF based 316, , % 4 th ear

13 The effect of fuel consumpton mprovement s set to be a reducton of 7% based on the results of prevous studes. In theor, the nomnal prce of credt shall be calculated based on the prces n the prevous ears. However, we decded that t should be more approprate to use the tradng prce after the Seventeenth Sesson of the Conference of Partes to the Unted Natons Framework Conventon on Clmate Change, n whch framework and drectons for next term had been ndcated. Thus, we used the average prce of carbon credt quotaton b Nkke and JBIC after December 2012, whch s en. The nvestment return and IRR calculatons are conducted separatel for ncome statement (ncome-based), nvestment paback ear, and cash flow based. In the calculatons, because t ma take some tme to ntroduce the sstem and for the drvers to start eco-drvng, the estmated effect n the frst 3 ears has been multpled b a certan rato respectvel. For the 4 th ear and after, the estmated effect s 7%. However, as descrbed n the methodolog, the proect wll show ts effect onl f the drvng method of the drvers has been mproved. But we cannot guarantee a certan level of mprovement wll be mantaned. It s the bggest factor to make t harder to udge f the proect s effectve or not. In addton, there s no precedent of contnuous measurement for the effect of the sstem and eco-drvng n Malasa. We have to sa that t s dffcult to decde f a stable performance can be mantaned durng the proect perod and to quantf the effect. Accordng to the Fnance Mnstr ordnance (Mnsteral Ordnance concernng Durablt of Deprecable Assets) of Japan, lfe-span of vehcles wth a total emsson of 3L or more used for transportaton ndustr n Japan s 5 ears. Ths means that 5 ears s an mportant benchmark for a busness to recoup the purchasng nvestment of the vehcles as deprecaton occurs for onl 5 ears. Based on ths reason, an nvestment to ancllar equpment wth a paback perod of more than 5 ears s normall consdered unproftable. Ths dea regardng the relaton between the nvestment of transportaton busness and ts paback perod s beleved to be ver reasonable. On the other hand, n Malasa, deprecaton for accountng s left to the udgment of each busness but the lmt on deductble expenses for each ear s prescrbed b the deprecaton sstem (captal allowance) for tax purpose. Accordng to the deprecaton sstem for tax purpose, two knds of deprecaton can be deducted: deprecaton on acquston (ntal allowance) and annual deprecaton (annual allowance). For heav machneres and vehcles, the ntal allowance s 20% and annual allowance s 20% for 4 ears. Ths means, n Malasa, deprecaton perod of vehcles s 5 ears from the acquston ear, and t s approprate to determne the actual proftablt of an nvestment b 5 ears. Therefore, based on the proftablt calculaton b quanttatve analss, the paback perod of the nvestment s too long. In addton, ths proect s the frst of ts knd n Malasa, and t has hgh uncertant of effect contnut and stablt. The concluson s that ths proect s not an nvestment a prvate sector can carr out alone. For more nformaton, please refer to the attached document. (11) Demonstraton of Addtonalt Ths proect s a voluntar actvt mplemented b Nppon Express (Japan) as a part of ther efforts on corporate socal responsblt actvt, amng to contrbute to energ conservaton n transportaton ndustr. From the begnnng, we expected to obtan the results of ths proect onl n the form of credt (CER), and f t had not been CDM, we would not have started the proect. The methodolog appled to ths proect was developed b Nppon Express Group n

14 collaboraton wth Mtsubsh UFJ Morgan Stanle Securtes, snce there was no applcable methodolog for the proect. NTS has been set as the target feld n the PDD attached to the applcaton of the proect. Ths fact clearl demonstrates that we orgnall ntended to develop ths proect onl as CDM. Ths also demonstrates that Nppon Express wouldn t have promoted ths proect as a normal proect (wthout CDM). Development of methodolog was necessar to move forward wth CDM procedure. In addton, t has been confrmed b the ntervew of MGTC at the end of last ear that not onl n the logstcs ndustr of Malasa, but n the whole countr, dgtal tachograph has not been ntroduced. MGTC s an organzaton promotng envronmental technologes n Malasa, and the have sectors for transportaton ndustr. The proects the are workng nclude green car (hbrd, electrc vehcle, ethanol vehcle, hdrogen vehcle, and fuel cell vehcle), bofuel, and publc transportaton. Dgtal tachograph has not been mentoned n none of these proects. We also had comment n the meetng wth the Mnstr of Transportaton that there s no precedent of dgtal tachograph n Malasa. In addton, we had comments from Futsu and Transtron- manufactures of dgtal tachograph- that the had not sold an dgtal tachograph n Malasa. And so far, we don't have an nformaton that an manufacturer has ever sold a tachograph n Malasa. The Addtonalt of ths proect had been demonstrated b Frst of ts knd barrer. However, Gudelnes on Addtonalt of Frst-of-ts-knd proect actvtes was approved on the 63 rd CDM boardng meetng, and under these gudelnes, requrements for the demonstraton of Addtonalt b Frst of ts knd barrer became more strngent. As a result, we wll contnue to work on t and reflect the results to PDD submtted for valdaton. (12) Prospects of the proect The proect s expected to start n December of We are havng consultaton wth the local operators and at ths pont, the startng schedule remans unchanged. The valdaton of PoA-DD s expected to start n the frst half of We have contacted the local operators about the necessar tasks for promotng the proect, whch nclude contactng Malasa Green Technolog Corporaton and Mnstr of Transportaton, holdng stakeholder meetng, makng nqur to DOE, etc. Nppon Express and other partners have agreed to carr out these tasks collectvel. We wll begn workng on these tasks when we have a clear prospect about the baselne data acquston. (13) Stud on propagaton scenaro of programmatc CDM The canddate for addtonal CPAs s the proect for the vehcles owned b Port Kelang branch of Nppon Express Malasa. However, as mentoned above, there are some problems on the baselne data acquston. At frst, the branch shall mprove ther operatonal management to start collectng data on dal bass. The shall also buld a management and operatonal scheme to accumulate those data and calculate the baselne emsson. On the other hand, vehcles n NTS and Port Kelang branch have been ncreased to meet the growng demand for transportaton n Malasa. There s a bg possblt that addtonal CPA targeted these ncreased vehcles wll be establshed. Therefore, we wll contnue to consult wth the local operators n the future. The frst PoA mplementaton n Malasa s expected to brng some spread effects to

15 conduct the same proect n other branches of Nppon Express. And t s expected to brng the spread effects not onl to the operators n Nppon Express Group, but also to other logstcs busnesses and the entre sector n the future. 5. Stud results on Co-beneft An applcable crteron from "Co-Beneft Quanttatve Estmaton Manual" to ths proect s ntrogen oxde (NOx) from moble source, and we conducted a quanttatve assessment stud on t. Accordng to the exstng studes conducted nsde Japan, the actual measurements ndcate correlaton between and NOx emsson amounts. The followng equaton has been obtaned x x emsson( gco 2 ) NOx emsson( gno x ) Accordng to ths equaton, NOx reducton amount s proportonal to emsson as well. B substtutng /, the emsson reducton estmated n the 1 st CPA, nto the equaton, we obtan 1.45tNOx/ as the NOx emsson reducton. Regardng the NOx from vehcles, t s mportant to fnd the area wth hgh NOx envronmental concentraton and reduce the NOx emsson n the area to eventuall reduce the envronmental concentraton. Therefore, establshng an assessment method consderng regonal factors s our future challenge. 6. Stud results on Contrbuton to Sustanable Development Accordng to the exstng studes conducted nsde Japan, a certan percentage reducton of traffc accdent can be expected b the ntroducton of dgtal tachograph and eco-drvng. The followng s the results of a rough estmaton of the effect. Item Value Remarks (1) Percentage of truck among vehcles 16.2% Accdent preventon effect of (2) ntroducton of dgtal-tachograph and eco-drvng to trucks 35% Accdent reducton rate b dgtal (3) tachograph and eco-drvng (estmaton) (4) Traffc accdent reducton effect n Malasa Accdent -22,649 Wounded -1,406 Death % (1) (2) (set based on exstng studes) Occurrence (3) It nvolves a lot of factors to prevent traffc accdent. For Japanese truck operators, t s beleved that the establshment and operaton of operatonal manager sstem can brng bg effect. The Mnstr of Transportaton of Malasa commented that f t can contrbute to road safet, the would consder expandng the sstem to publc buses