1. Transportation Sector Update Source: The Economist

2. 2005-01-354 truck car Population of Chinese Cars and Trucks Has Increased by More Than 12 Times in 25 Years

3. The Growth in Chinese Vehicle Population Is Only at Its Beginning

4. Chinese Vehicle Population Could Reach 100 Million by 2020 CATARC 1 CATARC 2 ANL

5. Both Passenger and Freight Traffic Volume Will Increase Dramatically

6. China’s Crude Oil Imports Middle East 45% Europe and Western Hemisphere 14% Asia-Pacific 12% Africa 29% Source: Calculated from data in China OGP, February 1, 2005.

7. China’s Oil Use Is Catching Up with That of U.S. Fast Source: Feng An, Consultant

8. CSEP Transportation Program Strategy 1.Fuel Economy Standards 2.Vehicle Emissions Standards Urban air pollutantsUrban air pollutants 3.Cleaner Conventional Fuels (e.g., low sulfur) 4.Alternative Fuels 5.Advanced Vehicle Technologies Hybrid Electric, Fuel Cell R&DHybrid Electric, Fuel Cell R&D 6.Bus Rapid Transit Systems

9. Chinese Vehicle Fuel Consumption is Higher Than Many Other Countries 4.9% 24.7% 39.4% 48.4%

10. China Adopted Phase 1 and Phase 2 Fuel Consumption Standards in 2004 2005-01-354

11. Chinese Fuel Economy Standards vs. Fuel Economy of 2001 Model-Year U.S. Vehicle Models 2005-01-354

12. Results: Fuel Economy Standards

13. Results: Vehicle Tax Policy Passenger Vehicle Market Share by Engine Size Source: New York Times

14. The Top Three Most Polluted Cities in the World Are Chinese Cities

15. Strengthened Vehicle Emission Standards Require Low-Sulfur Fuels

16. Sulfur Content in Chinese Gasoline and Diesel is Much Higher than in the EU or U.S.

17. Coal to Liquid Fuels: An Opportunity or a Carbon Risk? China’s coal:China’s coal: –reserves of 200 billion tons –coal resource of 600 billion tons –ultimate coal resource of 1440 billion tons Liquid fuels can be produced from coal viaLiquid fuels can be produced from coal via –Direct liquefaction to gasoline and diesel: requiring high-quality coal –Indirect liquefaction via gasification to: methanol, dimethyl ether, Fitscher-Tropsch diesel, and hydrogen

18. Coal to Liquid Fuels: An Opportunity or a Carbon Risk? Status of liquid fuel production from coal:Status of liquid fuel production from coal: –Methanol: current production of 5 million tons a year –DME: current production 40,000 tons a year –Direct liquefaction: a plant of 3.2 million tons of oil a year to be completed in 2007; 10 million tons possible by 2010 –Indirect liquefaction: Several projects are under consideration Both direct and indirect liquefaction have low conversion efficiencies, resulting in large amounts of carbon emissions during productionBoth direct and indirect liquefaction have low conversion efficiencies, resulting in large amounts of carbon emissions during production –Direct liquefaction makes carbon capture economically infeasible –Indirect liquefaction makes carbon capture and sequestration feasible Captured carbon could be used for enhanced oil recovery in NW ChinaCaptured carbon could be used for enhanced oil recovery in NW China Policy is required for systematic carbon capture and sequestrationPolicy is required for systematic carbon capture and sequestration

19. Results: Bus Rapid Transit Dedicated bus lanes Station-to-station Priority at intersections Hybrid-electric buses Lead cities: Beijing, Kunming, Xian, Shanghai, Chengdu 15 more cities in advanced planning New NGO — “China Sustainable Transportation Center”

20. Clean Energy Solutions Gigatons coal equivalent Business as Usual Low-Carbon Path Buildings Efficiency Industrial Efficiency Vehicle Efficiency Renewables & Gas Source: LBNL

21. Challenges Ahead Capacity building at provincial and local levelsCapacity building at provincial and local levels Government budgetsGovernment budgets Monitoring and enforcementMonitoring and enforcement Elevate SEPA; vertical integrationElevate SEPA; vertical integration Energy intensity targets as proxy for KyotoEnergy intensity targets as proxy for Kyoto U.S. government engagementU.S. government engagement in funding energy efficiency and renewable energy policy capacity U.S. federal policy leadership;U.S. federal policy leadership; China (and the world) need U.S. clean energy innovation

22. T h e C h i n a S u s t a i n a b l e E n e r g y P r o g r a m 中 国 可 持 续 能 源 项 目 Further Information: www.efchina.org www.ef.org Michael Wang: mqwang@anl.gov Doug Ogden: doug@ef.org

23. Chinese NGO Trends Increasing environmental NGO registrations Challenge of “free association” Groups focusing on: – –“Green” GDP – –“Recycling Economy” – –Water pollution; mercury – –Public education re: dams (Nu River EIA) – –Develop the West program (illegal logging) – –“Car Free Days” in major cities – –Green products consumer awareness – –Etc.