Yogyakarta Bus Replacement Project Martha Maulidia Pelangi Indonesia August 25-27, 2004, Santiago, Chile

Agenda Overview of Project Baseline Additionality Monitoring Lessons Learned

YOGYAKARTA 475,000 inhabitants Students from all over parts of Indonesia and overseas Cheap living costs, comfortable life Tourist destination (culture and nature) However, they have worsening problems with air quality and transportation system

Overview of the Project A project owned by an alliance of: –University (Center for Transportation Studies, University of Gadjahmada, Yogyakarta) –Local Government (Transportation Office of Yogyakarta Province) –Cooperative of bus owners (KOPATA) Unique  it was proposed because there was an opportunity of the CDM incentives (co- financing, initial funding from SSN, international exposure, better outreach)

Overview of the Project First Proposal: –Bus Replacement –Public Transport Management Restructuring (institutional setting, better planning and clear specification at operational standards, competitive licensing system) –Routing and Scheduling Improvement Over time: –Soft measures excluded from CDM p.a. (complicated & hard to measure) –Bus Replacement & Fuel Switching

Overview of the Project Existing condition: –Badly maintained buses (average age: years old) –Inefficient use of energy –Local air pollution –Low priced motorcycles  chaotic traffic & air pollution –Public transport  not attractive Objectives: –To improve image of public transportation –To increase bus ridership –To reduce emissions

Overview of the Project Fuel Switching –Assessment of alternative fuels: bio-diesel, clean diesel, LPG, CNG. –Engine intervention: re-powering, rebuilding, retrofitting, re-fuelling and retiring. –LPG was chosen based on technical feasibility studies (includes availability and continuity of supply  commitment from LPG supplier).

Baseline Appendix B of Simplified M&P: project activity reduces anthropogenic emissions by sources and directly emits less than 15,000 tons of CO2e annually  Type III.C Emission reductions by low-greenhouse gas emitting vehicles.

Baseline Project Boundary: 200 buses owned by KOPATA (Bus Owner Cooperative) in Yogyakarta

Baseline Baseline Existing Condition Regulation: Age Limitation for Buses Data 7 scenarios, different fuels and bus ages Most financially attractive Primary: financial; Secondary: technical  Primary: Survey, sample 10 buses

Baseline 7 scenarios reviewed Average age (years) Fuel 20 Diesel LPGDieselLPGDieselLPG 105 New Existing Project Highest NPV Affordable for bus owners Baseline

Baseline Sublet System Employment System 2 systems of revenue divide between owners and operators existing proposed

Baseline Local regulation on age limitation for buses cannot be ignored and has to be taken into account Difference of engine efficiency plays an important role: –DIESEL: higher compression ratio: higher engine efficiency (compression ignition engine) –LPG: lower engine efficiency (spark ignition engine)

Baseline Having chosen the most financially attractive option as baseline scenario, it turns out that: –Emission reductions over 10 years is less than 3,000 ton CO2e Assuming transaction costs (Validation, DNA Approval, Monitoring and Verification, EB Registration) of app. $ 40,000, at $10/tonne the CER revenue ($ 30,000) is even less the transaction costs.

Baseline Other crucial issue: leakage  what to do with the old buses being replaced? Small-scale: no leakage calculation required

Additionality Barriers Approach TechnologyInvestmentInstitutional/ Managerial LPG common for cooking, but rarely found in buses additional converter kit  expensive requires special training and monitoring

Monitoring Measuring the exact amount of LPG consumed by 200 buses in 10 years. At each LPG filling station, a balance is provided to measure the weight of the full tank and the empty tank. The difference = the fuel consumption/bus/day.

Monitoring Parameters being monitored: Tank ID No Weight of full tank Weight of empty tank Distance travelled at refuelling time Number of buses operating Efficiency of combustion in LPG buses Changing legislation

Lessons Learned Transportation improvement project involves: vehicles, fuel, & the system. At the same time: management (ownership), policy/regulation (local/ national). Consideration of regulation  translate it into emission reductions calculation.

Lessons Learned In choosing the baseline: highest NPV does not merely describe the most financially attractive option  cash flow analysis To switch fuel with LPG, higher value of CERs could have been achieved if the baseline is vehicles using other fuels, e.g. petroleum. Good project, but not good CDM project. (Other benefits: reduce local air pollution: CO, NOx and particulate; but very low GHG ER, hence CERs) Stop with CDM Bigger scope of the project: supply of bio-diesel or ethanol  better result than LPG. Move forward with CDM.

Current Status of the Project Excellent public exposure (radio talk shows, article and debate on local newspapers, brochure/leaflets, formal meetings) Proposals to various funding agencies Continue with the proposed fuel switching with LPG  stop the CDM activities Continue to seek investment especially from credit scheme provided by state-owned enterprises. Continue the efforts for an agreement with PERTAMINA, the state-owned oil and gas company