clean air initiative

IMPROVEMENTS IN CONVENTIONAL FUELS AND

UPDATES ON ALTERNATIVE FUELS PROGRAM

IMPROVEMENTS IN CONVENTIONAL FUELS AND

UPDATES ON ALTERNATIVE FUELS PROGRAM

A Presentation by

ZENAIDA Y. MONSADA

Director, OIMB- Department of Energy

A Presentation by

ZENAIDA Y. MONSADA

Director, OIMB- Department of Energy

Partnership for Clean Air General Assembly Asian Development Bank 20 October 2005, Mandaluyong City

Partnership for Clean Air General Assembly Asian Development Bank 20 October 2005, Mandaluyong City

Power Mix Power Mix Energy Mix Energy Mix

2004 Energy/Power Mix2004 Energy/Power Mix

Others

32.1% Oil

36.8%

Coal

12.3%

Natgas

6.3%

Geo

6.8%

Hydro

5.6% Oil14.8%

Coal

28.9%

Natgas

22.6%

Geo

18.4%

Hydro

15.3%

Source: Department of Energy

FUEL EMISSIONVEHICLE

DOE DOTC / LTO / MMDA / DTI / DOST DENR

Fuels and Vehicle EmissionsFuels and Vehicle Emissions

Fuel Quality Improvement

Aromatics 45% max Jan. 1, 2000 Benzene 4% max Jan. 1, 2000 AKI 87.5 min Jan. 1, 2001RVP 9 psi max Jan. 1, 2001Aromatics 35% max Jan. 1, 2003Benzene 2% max Jan. 1, 2003

Unleaded Gasoline

Automotive DieselSulfur 0.2% max Jan. 1, 2001Cetane No./Index 48 min Jan. 1, 2001 Sulfur 0.05% max Jan. 1, 2004

Industrial Diesel

Sulfur * 0.3% max Jan. 1, 2001

CAA Requirements – Fuel SpecsCAA Requirements – Fuel Specs

*Note: 0.05% max effective Jan. 1, 2009, per PNS

1. CONVENTIONAL FUELS

PNS 1131:2000 (ULG complying to CAA for 2000 specs)

PNS 20:2000 (Diesel complying to CAA for 2001 specs)

PNS 1131:2001 (Multigrade ULG complying 2001 specs)

PNS 1131:2002 (ULG complying to CAA 2003)

PNS/DOE QS 004:2003 (Diesel complying to CAA for 2004 specs, and possible differentiation between tax-free and tax-paid)

PNS/DOE QS 001:2005 (ULG with sulfur level conforming to EURO II standard of 0.05% mass max.)

DPNS/DOE QS 007:2005 (Bunker Fuel)

Fuel Quality StandardsFuel Quality Standards

Phase out lead in gasoline 9 mos. ahead of sked – MMPhase out lead in gasoline 9 mos. ahead of sked – MMAccelerated sulfur reduction to 0.05% S in ADO 2 mos. ahead of sked MMAccelerated sulfur reduction to 0.05% S in ADO 2 mos. ahead of sked MM

Fuel Quality StandardsFuel Quality Standards

2. ALTERNATIVE FUELS

PNS 2020:2003 (B100 = 100% CME)

- DOE CME Logistical Test Protocol

PNS/DOE QS 003:2003 (2-stroke Lubricating Oils, update of 1992)

PNS/DOE QS 005:2005 (Auto-LPG, update of 1990)

DPNS/DOE QS 007:2005 (Anhydrous Bioethanol Fuel)

Drafting of standard for Jatropha

DEPARTMENT OF ENERGYDEPARTMENT OF ENERGY

ALTERNATIVE FUEL PROGRAM ALTERNATIVE FUEL PROGRAM (Fuel Ethanol Program)(Fuel Ethanol Program)

DPNS QS 007:2005 Anhydrous Bioethanol Fuel Specification

1. Raw Materials Imported Ethanol – 99% purity Local Ethanol

- Anhydrous- Hydrous

2. Intermediate Products Fuel Ethanol Pre-blended gasoline

3. Finished product offered at gas stations E-gasoline, E5 & E10


3. FACILITIES STANDARDS

PNS/DOE Petroleum Products for Retail Outlets (promulgated by BPS Feb. 23, 2005)

PNS/DOE FS 1-1:2005 – Health, Safety and Environment PNS/DOE FS 1-2:2005 – Underground Storage Tank PNS/DOE FS 1-3:2005 – Piping System PNS/DOE FS 1-2:2005 – Dispensing Pumps

DPNS on LPG Refilling Plant (For promulgation 1Q 2006)

Drafting PNS for Storage Facilities

Draft DC on Handling, Transport & Distribution of LPG Cylinders

Facilities Quality StandardsFacilities Quality Standards

» Types of additives applied/registered:Types of additives applied/registered:- Octane enhancerOctane enhancer- Lubricity/friction modifierLubricity/friction modifier- Emission/smoke suppressantEmission/smoke suppressant- Fuel efficiency improverFuel efficiency improver- DetergentDetergent- Deposit controlDeposit control- Anti-valve seat recession and othersAnti-valve seat recession and others

Fuel Additives Registration *» Total Applications filed - 79

Permanent Registration granted - 24 Total Provisional Registration Issued - 31 Applications Reviewed/Evaluated - 24

(subject for further compliance)

* As of 15 October 2005

DOE Role - Additives RegistrationDOE Role - Additives Registration


Alternative Fuels Program

ALTERNATIVE FUEL PROGRAM ALTERNATIVE FUEL PROGRAM (Coco-Biodiesel Program)(Coco-Biodiesel Program)

POLICY INITIATIVES

MC No. 55 “Directing all Departments, Bureau, Offices and Instrumentalities of the Government …. to Incorporate the Use of 1% by volume CME in Their Diesel Requirements (Feb 9, 2004)

DC No. 2004-04-003 “Rules and Regulations Implementing MC 55 (March 29, 2004)

Supreme Court M C No. 07-2004 “Directing the Supreme Court, Court of Appeals, Sandiganbayan and the Court of Tax Appeals to Use 1% CME (June 23, 2004)

DC No. 2005-04-003 “Promoting the Use of Coco-Biodiesel as an Alternative Clean Fuel” (March 1, 2005)

Alicia, Isabela Resolution No. 2004-009 “Requiring the Use of CME by All Motorists… In support of the Clean Air Act (Feb 11, 2004)

Baguio City Resolution No. 154, Series of 2004 “Encouraging the Use of CME by All Motorists …. In Support of the Clean Air Act (June 29, 2004)



Coco-Biodiesel Distribution Network

B100 Dealers/retailers

- 192 gasoline stations (Flying V and Seaoil)

- 110 retailers/distributors (Chemrez and Senbel)

Pre-blended 1% CME (B1) outlets

- Flying V stations - Unioil

- Seaoil - FilOil

-USA 88



I E C

• Stakeholders consultations and seminars on Coco-Biodiesel Program, M C 55 and demand expansion (expanded utilization of CME) in cooperation with TUP, PCA, CME manufacturers and USDOE/USAID SEDP

• Audio visual presentations, collateral materials & website

• Focused group discussions (i.e. clean cities program)



Steps Forward

Legislative measure: Biodiesel/Biofuels Bill

- mandate 1% CME blend by 2006 to all diesel fuel

Continue IEC campaigns to accelerate public acceptance especially in Clean Cities pilot areas (Baguio, Davao, Marikina and Makati)

Expand utilization of CME: nationwide; power generation and marine transport

HB 4629 – Mandating the Use of Bioethanol or Ethyl Alcohol and other Biofuels as

Transport Fuel

SB 2007 – Mandate the Use of Biofuels in the Transport Sector



LEGISLATIVE MEASURES

Ethanol Production

NDC-Bronzeoak Fuel Ethanol and Power Plant

- Location: San Carlos City, Negros Occidental

- Investment: P1.5 Billion

- Ethanol Distillery: 100,000 liters/day (30 million liters/yr.)

- Cogeneration Plant: 9 MW

- Timeline: 1Q 2006 (construction); 2nd Half 2007 (operation)



SUPPLY


• Executive Order No. 449 – Tariff is reduced from 10% to 1% when imported with certification from the Department of Energy that this article will be used for the Fuel Ethanol Program.

- Quality Specification: Ethyl alcohol strength by volume of exceeding 99% volume

• Tax Code – P 0.05/l excise tax on fuel ethanol vs. P23.30/l

• DOF–DOE Joint Guidelines drafting

• BIR Draft Revenue Regulation

INCENTIVES

ALTERNATIVE FUEL PROGRAM ALTERNATIVE FUEL PROGRAM (Natural Gas Program)(Natural Gas Program)


POLICY INITIATIVESExecutive Order 164 providing 1% import duty of NGV related equipment, parts and

components (January 10, 2003)

Promulgation of 48-sets of Philippine National Standards for Natural Gas Utilization for Transport (June 2003)

Executive Order 290 “Implementing the Natural Gas Vehicle Program for Public Transport” (February 24, 2004)

Department Circular No. 2004-04-004 “Guidelines on the Issuance of Certificate of Accreditation (CA) and Certificate of Authority to Import (CAI) Under the NGVPPT” (April 2, 2004)

Executive Order 396 “Reducing the Rates on CNG Vehicles and NGV Industry-Related Equipment” (December 31, 2004)

Department Circular No. 2005-07-006 Directing the |Enhance Implementation of the NGVPPT and the Development of compressed Natural Gas (CNG) Supply and Infrastructure. (July 5, 2005)



Attractive CNG price substantially lower than the pump price of diesel (P 14.52/diesel liter equivalent)

Zero percent (0%) rate of duty

Income Tax Holiday

Preferential franchises

Manpower development and capability building through training and technology transfer

Affordable and commercially tenable financial package from GFIs

Accelerated issuance of ECC for NGV facilities and refueling stations

INCENTIVES



MARKET DEVELOPMENT

• Accreditation of 7 bus operators

- HM Transport, RRCG Transport, KL Transport, Pascual Liner, Greenstar Express, Biñan Bus Line, CNG Vehicles Corp.

• Delivery Schedule of CNG Buses

- 5 units (October 2005)

- 200 Units (Total by 1st quarter 2006)

• Target for 2007-2008

- 2,000 CNG buses, 10 CNG refueling stations

• Potential suppliers of CNG buses

Cummins Westport Asia, Daewoo, Ashok Leyland



Standards Development (48 sets of PNS promulgated on June 2003)

Road vehicles

Refueling Station

Gas Cylinders

Gas Quality

I E C Libreng Sakay Sa NGVs” and testing by bus operators (May 17, 2004 with 2,286 passengers)

Bus operators participation

Presentation of the first CNG Commercial Bus (July 1, 2005)



STEPS FORWARDS

Expansion of the NGVPPT implementation

Encourage more investments in CNG-related industry (CNG suplly infrastructure, NGV assembly/manufacture, etc.)

Formulate pricing mechanism for commercial phase

Enhance incentives and standards

ALTERNATIVE FUEL PROGRAM ALTERNATIVE FUEL PROGRAM

(Auto LPG)(Auto LPG)


INCENTIVES

• Inclusion of autogas assembly facilities, conversion shops, refueling stations, and taxi fleet operations in BOI’s 2005 IPP

• DBP to finance acquisition of autogas vehicles through the “Clean Alternative Transport Fuel Financing Program”

STANDARDS

• Standards Technical Committees (TC6, TC44, TC- dispensing stations) drafted standards for autogas vehicles, autogas cylinders and autogas dispensing stations.




SUPPLY INFRASTRUCTURE

• Petron Gasul

- 4 dispensing pumps in MM and Cebu - - Future installation: 10 dispensing stations w/in MM / Luzon

• Shell LPG

- 4 dispensing pumps in Cebu and 1 dispensing pump in Cagayan de Oro City

- - Future installation: 2 garage-based pumps




MARKET DEVELOPMENT

• Metro Manila 110

- DBP28

- Freedom taxi

26 - Munich taxi

24 - ABC taxi 15 - Saigon taxi

10 - Basic taxi 2 - Alcotby taxi 2 - Avis

1 - AAP

1 - Ambi Energy 1

• Cebu258

-Corominas taxi 144 - Emersons transport 60 - Jays Express

44 - RP Corominas 10

• Cagayan de Oro 2

- Jays Express 2

ALTERNATIVE FUEL PROGRAM ALTERNATIVE FUEL PROGRAM (Auto LPG)(Auto LPG)


STEPS FORWARD

• Public hearing and promulgation of autogas standards

• Consultations with autogas stakeholders

• Recommendation for policy action

• Information, education and communication (IEC)

Diesel Demand vs. Supply in MBCD

% ImportsYear Demand Production Imports to Demand2004 121.10 53.70 63.90 52.82003 118.30 78.70 38.10 32.22002 120.40 81.50 38.50 32.02001 118.10 92.80 24.60 20.82000 114.80 95.50 20.30 17.71999 115.40 100.00 12.10 10.5

Gasoline Demand vs. Supply in MBCD

% ImportsYear Demand Production Imports to Demand2004 68.00 34.40 33.10 48.72003 67.30 43.10 24.20 36.02002 66.00 45.90 17.60 26.72001 63.30 48.60 14.30 22.62000 62.40 47.30 13.90 22.31999 63.90 55.60 5.80 9.1

EMISSION EMISSION FUEL FUEL QUALITYQUALITY

ENGINE ENGINE DESIGNDESIGN

ENGINE ENGINE MAINTENANCMAINTENANC

EE

VEHICLE VEHICLE USEUSE

TRAFFIC TRAFFIC MANAGEMENMANAGEMEN

TT

……Fuel Quality is Only One Fuel Quality is Only One of the Factors Affecting Emissionsof the Factors Affecting Emissions

clean air initiative

Documents