Increasing focus on sustainable urban transport systems-
Compelled by rising fuel prices and the fact that transport is a major user of energy, countries in Southeast Asia are increasingly focusing on developing sustainable transport systems. In the last decade, crude oil prices have increased sharply, as reflected in the Brent crude oil spot price, which stood at $107.93 per barrel in July 2013, as against $28.35 per barrel in July 2003. As per estimates by the Institute of Energy Economics, Japan, the transport sector in ASEAN accounts for about a 25 per cent share of total energy consumption, which is projected to increase to 29 per cent in 2020.
Another factor driving demand for green transport in the region is rapid urbanisation. The level of urbanisation in the ASEAN region reached 42 per cent in 2010, up from only 15.5 per cent in 1950. Urbanisation in the region is estimated to increase to about 50 per cent by 2025. This has resulted in a rapid increase in motorisation due to lack of advanced transport systems, particularly public transport systems, which has, in turn, resulted in increasing congestion, decreasing mobility, and health problems.
Due to these issues, the Southeast Asian countries are driving investments in fuel-efficient vehicles, promoting public transport systems, and encouraging the use of non-motorised transport.
Green transport initiatives: Emerging across the region
All the countries in the Southeast Asian region are taking steps to promote green transport. Most have already implemented pilot projects that are on their way to becoming commercially viable. Some other emerging technologies are still in the development stage in a few countries. Singapore, Indonesia, the Philippines, Thailand, and Malaysia have been undertaking measures in the area of green transport for quite some time, while countries including Laos and Brunei have yet to make headway in this direction.
Biofuel: The most commonly used transport biofuels in the region are ethanol and bio-diesel, with countries like Malaysia, Indonesia, Thailand, and the Philippines actively promoting their use through mandates for a minimum blend in motor fuel. The countries have moved beyond prototype /pilot-scale blending projects and are now engaged in extending these programmes further.
For instance, in August 2013, Indonesia strengthened its bio-diesel-blending mandate by making it compulsory for power utilities to use gasoil blended with 20 per cent bio-diesel. Malaysia has also extended its ethanol blending programme from the central part of the country to the southern regions. In July 2013, the National Biofuels Board of the Philippines launched the on-road test of B5, an improved coconut-bio-diesel blend that contains 5 per cent biofuel, in public transport vehicles. PTT, Thailand is planning to introduce algae-based biofuels by 2017.
Public transport: Unlike most other available modes of transportation, metros do not rely on internal combustion of fuels because trains, air-conditioning facilities, escalators, and all the other vital equipment of metros are electrically powered. On a per passenger km basis, metros have far lower carbon emissions than private cars. Currently, metro projects are operational in Bangkok, Kuala Lumpur, Manila, and Singapore, with a combined length of over 200 km. The total operational metro network is projected to increase to over 770 km by 2020, and an investment of about $35 billion is expected to be realised. This will be achieved through the expansion of existing lines as well as the development of new networks in cities, including Jakarta, Ho Chi Minh, and Hanoi.
Bus rapid transit (BRT) projects are also being accorded priority as low-cost, low-carbon transport solutions. Currently, BRT systems are operational in Jakarta, Indonesia, and in Bangkok, Thailand, and plans are underway in the Philippines and in Malaysia.
Electric and hybrid vehicles: Rising petroleum prices and environmental issues associated with the use of fossil fuels have led policymakers to focus on both pure-electric and hybrid-electric vehicles. In 2012, Indonesia launched a locally developed battery-powered electric bus prototype. The use of this battery is expected to reduce the operational costs of buses by around 50 per cent and the maintenance costs by 70 per cent. Manila-based Green Frog Transport Corporation has deployed two hybrid buses for a test rollout on the 15-km Buendia–Kalayaan route (M1 route) in Makati.
Along with the procurement of electric vehicles (EVs), infrastructure in the form of charging stations is also being created. Electric vehicle-charging stations have been established in Jakarta, Indonesia; Manila, the Philippines; Changi City Point shopping mall, Singapore; and Ploenjit Road, Bangkok, Thailand. Since electric vehicle-charging stations put pressure on the grid while in operation, smart grid initiatives are also being taken by a few Southeast Asian nations. Countries such as Malaysia, Indonesia, and Thailand have launched these initiatives.
Non-motorised transport (NMT): NMT, including cycling and walking, is another green alternative being promoted by countries in the region. Indeed, promotion of bicycles goes far beyond recreational sport and is now being integrated into the city public transport system as a feeder system for last-mile connectivity to passengers through the construction of off-road cycling tracks. Singapore, for instance, is investing $43 million to build 50 km of cycling tracks in five suburban towns linking major transport hubs to destinations by 2014, in addition to the existing recreational cycling tracks over 200 km in length across the island state.
Besides these standalone initiatives, regional projects such as Sustainable Urban Mobility in ASEAN are also supporting cities in the area of green transport. In January 2013, Indonesia submitted the “Sustainable Urban Transport Initiative” as a nationally appropriate mitigation action. During the pilot phase, the programme will initially focus on implementing low-carbon mobility plans in the cities of Medan, Menado, and Batam.
Policy and fiscal measures
Tax rebates and duty waivers are the most popular policy tools used by Southeast Asian governments for promoting the purchase or import of lower-emission private vehicles. Singapore, Indonesia, Thailand, and Malaysia have instituted the comprehensive policies to promote green transport. Singapore’s National Environment Agency aims to raise the emission standard of petrol vehicles to Euro IV by January 2014, from Euro II standard, which has been in place since 2001. Refer Table 1 for fiscal incentives provided in the in ASEAN region for green transport.
Growing market opportunities
Given the increasing focus on green transport measures in Southeast Asia, technology suppliers are gearing up to meet the rising demand for sustainable solutions. Players like Induct, Panasonic, Siemens, Nissan, ABB, and JTC Corporation are developing new technologies and products, and conducting trials to raise awareness about the benefits of green transport.
Discussing the factors driving technology providers to Southeast Asia, Andrew Hodgson, associate director for transport planning, Atkins, Asia Pacific, says, “The approach to sustainable transport differs considerably across Southeast Asia. A number of markets, including Singapore, have been at the global forefront of sustainable transport, supporting sustainable travel behaviours that are often impacted by practical purposes such as space constraints. Other countries in the region such as Brunei are more dependent on the automobile as the density and historic strategy for urban planning have limited the short-term affectability of introducing sustainability-focused measures in relation to green transport. However, it is in these more car-dependent markets that we are seeing an increasing desire for change.”
Malaysia-based vehicle producer Proton and Japan-based companies Nissan and Mitsubishi are running trials of battery-powered cars in the country to raise awareness of the plug-in option and to test their viability. ABB has installed the first EV fast chargers in Singapore. In June 2013, Siemens and the Vietnam Motors Industry Corporation (Vinamotor) launched the first hybrid bus with a combined electric/diesel drive in Hanoi.
Recently in August 2013, Nanyang Technological University, Singapore, JTC Corporation, the Economic Development Board (EDB), and Induct started trial runs of Singapore’s first driverless electric shuttle on the roads. Pierre Lefevre, CEO of Induct, the manufacturer of the autonomous 100 per cent electric shuttle named NAVIA, said, “NAVIA has been delivered as a premiere product in Asia to the National Technical University of Singapore in August. This first delivery, meant for research and development at the Eco Business Park Cleantech One, is linked to a broader partnership established between Induct, the Government of Singapore represented by the JTC, and the EDB. This partnership has already identified a clear potential in Singapore for the implementation of NAVIA, which may reach a volume potential of over 30 vehicles in Singapore in the short term.”
Issues in deployment
The deployment of new green technologies in the transport sector faces various obstacles. The most prominent of these is the upfront cost. Even though the lifetime costs of such technologies are generally lower than those of conventional technologies due to lower maintenance and fuel costs, the upfront costs are considered unaffordable for most governments in the absence of external funding support. As per industry estimates, the cost of an EV can be $5000–$15,000 more than that of an internal combustion engine vehicle.
Another constraining factor is the slow introduction of EV-charging infrastructure. First, there are several regulatory barriers in the deployment of EV-charging infrastructure. These policy uncertainties relate to the sale and availability of electricity (as in the Philippines), lack of adequate technical standards for the charging infrastructure, and absence of clarity about, pertinent regulations. Further, there are problems with the use of battery-powered minibuses, as the batteries take a fair amount of time to charge and sometimes do not provide enough power to run the fleet.
Promising future
The Southeast Asian countries have chalked out ambitious plans for encouraging green transport. Overall, projects worth at least $900 million are on the anvil in Singapore, Laos, the Philippines, and Thailand.
Singapore has earmarked around $17 million for investment in green initiatives in the transport sector. The Philippines plans to invest $500 million by 2017 to replace about 100,000 of the 3.5 million gasoline-powered tricycles in the country with electricity-powered tricycles with loans from the Asian Development Bank. The Laotian government is implementing a project to convert 40 per cent of the nation’s motorcycles, tricycles, and four-wheel vehicles into EVs by 2020 with the cooperation of the Japan International Cooperation Agency. Bangkok Mass Transit Authority is replacing its current diesel buses with natural gas vehicles. The tender for the procurement of 3,183 natural gas-powered buses is expected to be invited by the end of 2013 or early 2014. The cost of the buses is expected to be around USD390 million. Brunei Darussalam is developing a Land Transport Master, which forms a single, coherent transportation system in the country, with the help of Atkins.
Hodgson highlights, “As the sustainable infrastructure market further matures, there will be an increasing need for intergovernmental collaboration and adaptation, which will become the focus for the upcoming ASEAN Economic Community initiative due in 2015. The more mature markets will focus on exploring new technologies and approaches. It is this long-term opportunity to influence growth and change which excites us most.”
Overall, the demand for sustainable green transport is quite significant. The major growth drivers are rising fuel prices and environmental concerns. The various fiscal incentives provided by the various governments have been quite encouraging.
However, high upfront costs and lack of supportive infrastructure are restricting the use of greener technologies. These issues may discourage investments in green transport in the short term, but it is undeniable that green transport is the ultimate solution to the problems of increasing road congestion and environmental degradation. That is the way of the future. The only question is when and how quickly the fossil-fuel and private vehicle dominated urban transportation will switch over to green solutions.
