philippines national workshop report pcfv...

Workshop Report: Philippine National Workshop on Clean Fuels

and Vehicles

Clean Air Initiative for Asian Cities (CAI-Asia) Center

March 2010

Philippine National Workshop on Clean Fuels and Vehicles

CONTENTS

1. INTRODUCTION ..................................................................................................................................... 1

1.1 Objectives...................................................................................................................................... 1

1.2 Design ............................................................................................................................................ 1

2. PROCEEDINGS ....................................................................................................................................... 3

2.1 Opening ......................................................................................................................................... 3

2.2 Presentations ................................................................................................................................ 3

2.3 Open forum ................................................................................................................................... 4

2.4 Action planning ............................................................................................................................. 4

2.5 Closing ........................................................................................................................................... 5

3. UPDATES AND NEXT STEPS ................................................................................................................... 6

ANNEXES ....................................................................................................................................................... 7

Annex A ..................................................................................................................................................... 7

Annex B ..................................................................................................................................................... 8

Annex C ................................................................................................................................................... 10

Annex D ................................................................................................................................................... 12

Annex E1 and E2 ..................................................................................................................................... 15

Annex F ................................................................................................................................................... 15

Annex G ................................................................................................................................................... 16

About CAI-Asia

The Clean Air Initiative for Asian Cities (CAI-Asia) promotes better air quality and livable cities by translating

knowledge to policies and actions that reduce air pollution and greenhouse gas emissions from transport,

energy and other sectors. CAI-Asia was established in 2001 by the Asian Development Bank, the World Bank

and USAID, and is part of a global initiative that includes CAI-LAC (Latin American Cities) and CAI-SSA (Sub-

Saharan Africa).

Since 2007, this multi-stakeholder initiative is a registered UN Type II Partnership with over 170

organizational members, eight Country Networks (China, India, Indonesia, Nepal, Pakistan, Philippines, Sri

Lanka, and Vietnam) and the CAI-Asia Center as its secretariat. Individuals can join CAI-Asia by registering at

the Clean Air Portal: www.cleanairinitiative.org. Its flagship event, the Better Air Quality conference, brings

together over 700 air quality stakeholders.

1. INTRODUCTION

Motorization in Asia is on an increasing trend. By 2050, it is predicted that there will be 300-350 vehicles per

1,000 people in Asian cities. As the number of vehicles increase, problems of traffic congestion and air

pollution also worsen. Air pollution affects morbidity and mortality. It is estimated that there are 162,933

deaths per year in the Philippines due to air pollution. Air pollution also impacts on climate change as there

are certain air pollutants that worsen it. Black carbon or soot and ozone absorb sunlight and make the

climate hotter. They are also deposited in the Himalayan snow making the snow melt rapidly and accelerate

climate change. The problem of air pollution should therefore be addressed and an integrated framework

like environmentally sustainable transport (EST) is needed to do this. One of the components of EST is cleaner

fuels and vehicles.

A publication entitled “Road Map for Cleaner Fuels and Vehicles in Asia,” published in November 2008 with

support from the Asian Development Bank (ADB), provides a detailed assessment of vehicle technology, fuel

quality and the technical requirements for producing cleaner fuels. It provides decision makers with up-to-

date information on how to clean up fuels in Asia by developing their own road maps. The Philippines is on

its way to developing such road map and the National Workshop on Clean Fuels and Vehicles held on 16

November 2009 in Manila is a step towards that direction.

The National Workshop was organized by the Department of Energy (DOE), with support from the United

Nations Environment Programme (UNEP)-Partnership for Clean Fuels and Vehicles (PCFV) and Clean Air

Initiative for Asian Cities (CAI-Asia) Center. About eighty (80) stakeholders from the government, oil and

automotive manufacturing industries, non-government organizations (NGOs), and the academe participated

in the workshop. A list of participants is provided in Annex B.

1.1 Objectives

The National Workshop aimed to bring together stakeholders so that they could develop an action plan for

cleaner fuels and vehicles in the Philippines. The action plan includes the identification of the steps needed to

achieve Euro 4 standards or specific parameters thereof and the different ways to finance and obtain public

support for such move to cleaner fuels and vehicles, the agencies responsible and the timelines for the steps

and actions to be undertaken.

1.2 Design

The National Workshop design consisted of presentations by resource persons in the morning of the one-day

Workshop and the preparation of an action plan by the participants in the afternoon. The open forum after

the presentations and the action plan formulation encouraged the active participation of the stakeholder

representatives.

The presentations focused on some of the issues raised during the consultative meetings held on October 23,

2009 to prepare for the National Workshop. These issues included the necessity of moving to cleaner fuels

and vehicles, the doability of the move to Euro 4 standard fuels or parameters thereof, the refinery capacity


2

and supply in Asia for Euro 4 or low-sulfur fuels, the impact of cleaner fuels and its properties to vehicle

emissions and air quality, and the cost to refiners of the move to cleaner fuels. For the action plan

preparation, participants were divided into two groups - one worked on Technical and Policy Concerns, the

other discussed the Financing of Cleaner Fuels and Vehicles. The Technical and Policy Concerns group

discussed such issues as the parameters of Euro 4 which will be adopted in the move to cleaner fuels and the

phases of implementation. The Financing of Cleaner Fuels and Vehicles group discussed the different ways to

finance cleaner fuels and vehicles (like differential taxation, tax incentives) and how to convince the public to

agree to the policy of shifting to cleaner fuels and vehicles.

The agenda is provided in Annex A.


3

2. PROCEEDINGS

Presentations were made by several resource speakers followed by facilitated discussions on technical,

policy, and financing issues in the move to cleaner fuels and vehicles.

2.1 Opening

The Workshop was opened by Sophie Punte, Executive Director of CAI-Asia who discussed, among others, the

impacts of air pollution, including its deleterious effects on health and how it worsens climate change. In

connection with this, she expressed support for the development of a road map towards cleaner fuels and

vehicles to help address the problem of air pollution. Department of Energy (DOE) Assistant Secretary

Matanog Mapandi in his opening message likewise expressed support for the development of an action plan

to achieving Euro 4 fuel standards.

2.2 Presentations

DOE Director Zenaida Monsada gave an overview of the fuel quality standards and thrusts in the Philippines.

She said that the Philippine policy is consistent with the global thrust of considering the impact of energy on

the economy, environment and society. She emphasized that while fuel quality is just one of many factors

affecting air pollution, fuels and vehicles remain critical for clean air. There are laws that establish fuel

standards supplemented by Philippine National Standards. There are fuel standards for Gasoline and Diesel,

Biodiesel and Blends and Bioethanol and Blends and standards for petroleum facilities and practices.

CAI-Asia Center’s Transport Program Manager, Bert Fabian, discussed the rationale for holding the National

Workshop and for working towards cleaner fuels and vehicles. He presented data on ambient air quality in

Asia and noted the explosive growth of motorization in the region. He said that as a result of this, there was a

concomitant increase in carbon dioxide levels in the air, especially in Asian cities. He noted that although

particulate matter levels are at a decreasing trend because of the implementation of stringent fuel and

emission standards, these are expected to increase in the future because of the sheer number of vehicles and

the uncertainty of the imposition of more stringent standards in the years to come. He also discussed the

impact to health of exposure to air pollutants and noted that air pollution causes morbidity and mortality. In

light of this, Bert Fabian stated that an integrated framework like the environmentally sustainable transport

(EST) is key to solving the problem of air pollution. Apart from urban/transport planning and demand

management, public transport and non-motorized transport, improved freight and logistics, cleaner fuels and

vehicles form part of EST. He stressed the importance of having a timeline in implementing stricter vehicle

emission standards and cleaner fuels.

Manwipa Kuson from Thailand’s Pollution Control Department shared Thailand’s experience in moving

towards cleaner fuels and vehicles. She traced the history of emission standards in Thailand. She stated that

low sulfur fuels is key to tighter new vehicle standards and that the 2012 fuel specifications for Thailand sets

sulfur levels at 50ppm both for diesel and gasoline. Manwipa Kuson also shared Thailand’s use of taxation

and incentives to encourage the use of vehicles that use alternative energy. Alternative and cleaner fuels are

also subsidized by the government to keep prices low.


4

Lucky Nurafiatin, Asia and Middle East Research Manager of Hart Energy, gave an overview of fuel quality and

supply in Asia. She predicted that there will be an increase in vehicle population in the years to come, but

while she acknowledged this to be a strong indicator of economic development, it will also exacerbate a

deteriorating air quality situation. She presented data on current gasoline and diesel specifications in Asia

Pacific as well as the expected Asian fuel quality by 2012 in Euro equivalent standards (Euro 1 to Euro 5). She

noted that a sufficient supply of gasoline of any quality, including cleaner fuels or fuels with lower sulfur

levels, is expected to be available in Asia until 2015. However, specifically for distillates (on road and non-

road diesel), it is expected to be short on 10-50 ppm sulfur fuels based on known refinery projects and

expansions by 2015.

Eric Holthusen, Fuel Quality Manager for Asia/Pacific & Middle East of Shell Global Solutions, discussed fuel

properties and their impact on emissions and air quality. He stated that major environmental priorities and

their associated emissions focus have changed as Euro 1 to 5 process developed. He said that cleaner vehicle

technology and cleaner fuels need to be implemented simultaneously for maximum impact on air quality and

that legislation for cleaner fuels should concentrate on fuel parameters that have an impact on air quality like

sulfur.

Benito Aganda from Pilipinas Shell talked about the impact on refineries of tighter fuel standards. He made a

comparison of the current fuel specifications with Euro 4 standards and discussed what the shift would entail,

including the estimated cost of the same. He noted in particular the investment cost in lowering the sulfur

level of gasoline and diesel from the current 500ppm level to the Euro 4 sulfur level of 50ppm. Because of

the high investment cost in the shift to cleaner fuels, he emphasized the need for clarity on the product

specifications and ample lead time, normally 5 years from legislation mandating implementation of Euro 4 or

the specific parameters thereof that will be adopted.

2.3 Open forum

During the open forum, the participants raised several questions including: whether there was really a

market for Euro 4 standard fuels and vehicles, what was the effect to fuel economy of the shift to cleaner

fuels, what actions needed to be taken to eliminate tampering of vehicles and the unregulated importation of

used vehicles that do not meet standards and cause air pollution.

2.4 Action planning

A draft action plan (see Annex C), based on the consultative meetings held on 23 October 2009, with

members of the oil industry, national government agencies and auto manufacturing sector was presented to

the participants for their consideration. Engr. Jean Rosete of the Environment Management Bureau of the

Department of Environment and Natural Resources explained the draft action plan. She said that:

• An integrated approach, like the government’s Environmentally Sustainable Transport (EST) strategy,

is needed to improve the air quality in the Philippines.

• This integrated approach includes improving fuel quality and the vehicle fleet.


5

• One of the proposed plans on improving fuel quality is for the DOE to issue by 2010, a regulation

mandating the phased implementation of new fuel specifications, including sulfur limits. This

regulation shall also provide that by 2012, diesel and gasoline with maximum sulfur level of 50ppm

will be introduced to the country and by 2015 only diesel and gasoline with maximum sulfur level of

50ppm will be allowed to be sold in the Philippines.

• On the proposed plan to improve the vehicle fleet in the country, by 2010 the DENR will issue Euro 4

(equivalent) vehicle emission standards for new light motor vehicles and that these standards shall

take effect in 2012 (that is, only Euro 4 vehicles will be given incentives beginning 2012) and that by

2014, only Euro 4 vehicles can enter the country and will be allowed to register with the LTO.

• The other components to an integrated approach towards improving air quality would include

improving public transport planning and traffic demand management, improving public transport

and non-motorized transport, improving vehicle inspection and maintenance and improving fuel

quality inspection.

Participants were divided into 2 groups: (a) Technical and Policy Concerns Group which discussed issues such

as the fuel specifications of Euro 4 that will be adopted in the Philippines, the policy to be adopted on in-use

vehicles, the importance of fuel monitoring, the timeline for the implementation of Euro 4 standard fuels and

vehicles, the question on what form the mandate shall be in the move to Euro 4 standards, among others,

and (b) Financing of Cleaner Fuels and Vehicles Group which discussed the different ways to finance cleaner

fuels and vehicles (e.g., taxation and other financing options) and to convince the public to support measures

for cleaner fuels and vehicles (e.g., awareness-raising campaign and giving of incentives to users of clean

fuels and vehicles). Each group made a list of the actions to be taken, the agency responsible, the timeline

for the accomplishment of actions and the remarks of the participants to the listed actions. A summary of

discussions for each working group is provided in Annex D.

2.5 Closing

Director Zenaida Monsada thanked those who participated in the preparation of the action plan which she

said shall be considered by the Technical Committee on Petroleum Products and Additives in their

deliberations and decision-making with respect to the move to cleaner fuels and vehicles.


6

3. UPDATES AND NEXT STEPS

After the National Workshop held in November 2009, the Department of Environment and Natural Resources

(DENR) and the Technical Committee on Petroleum Products and Additives (TCPPA) held several stakeholder

meetings to follow-up on the recommendations during the workshop in December 2009.

CAI-Asia Center came to know that the during the December 2009 meeting of the DENR with the auto

industry, it was discussed that Euro 4 vehicle emission standards be left out of the draft DENR Department

Administrative Order (DAO) and not be made mandatory in 2014 for the following reasons: (a)

recommendation of the ASEAN Automotive Association (AAF) that Euro 4 vehicle emission standards be

imposed only if Euro 4 fuels is available nationwide, (b) the oil companies will only have the Euro 4 fuel

available in 2016 (considering lead time of five years from date of signing of the government regulation in

2010). See Annex E1 and E2 for copies of the letters from the auto industry to the DENR and DOE.

After learning of this, CAI-Asia Center suggested to the DENR that the Euro 4 vehicle emission standards be

included in the draft DENR DAO and that the year of mandatory implementation be discussed at a meeting of

the stakeholders (government, oil industry, auto industry, and civil society). DENR called a meeting of

stakeholders on 4 February 2010 on this issue. CAI-Asia Center participated in the meeting and supported the

DENR’s move to include Euro 4 vehicle emission regulation in the DENR DAO. Annex F is a copy of the 8

March 2010 draft version of the DAO being circulated by DENR for comments. The relevant part of the DENR

DAO is Section 4.2 which states “By 1 January 2016, all new passenger and light duty motor vehicle types to

be introduced in the market shall comply with EURO 4 emission limits subject to EURO 4 fuel availability.”

The DENR is aiming to have the DAO on vehicle emission standards signed in 2010. In parallel, the TCPPA

aims to have the Philippine National Standards for Euro 4 fuels issued in 2010.

The Philippine government agencies, particularly the DENR and DOE, need support from international and

regional organizations to implement its plans to move to Euro 4 vehicle and fuel standards. Support in the

form of information on the availability of Euro 4 fuels in Asia and in the formulation of policies and

instruments to ensure implementation of Euro 4 vehicle emission and fuel quality standards (e.g., tax and

other incentives) is needed.

[Note: Workshop photos are found in Annex G]


7

ANNEXES

Annex A

Program

9.00 - 9.45 Welcome remarks

Sophie Punte

Executive Director, Clean Air Initiative for Asian Cities (CAI-Asia) Center

Matanog M. Mapandi

Assistant Secretary, Department of Energy (DOE)

9.45 - 10.00 Overview of Philippine Fuels Quality Standards and Thrusts

Zenaida Y. Monsada

Director, Oil Industry Management Bureau, DOE; Chairperson, Technical Committee on

Petroleum Products and Additives; Member of the Committee on Harmonization of Vehicle

Standards and Regulations; and Member of the East Asia Working Group on Benchmarking

of Biodiesel

10.00 - 10.20 Rationale for cleaner fuels and vehicles for the Philippines and objectives of the national

workshop

Bert Fabian

Transport Program Manager, CAI-Asia Center

10.20 - 10.50 Experience of Thailand in moving towards cleaner fuels and vehicles

Manwipa Kuson

Environmentalist, Professional Level, Automotive Air Pollution Section, Air Quality and

Noise Management Bureau, Pollution Control Department of Thailand

10.50 - 11.10 Refinery capacity and supply in Asia of Euro IV or low-sulfur fuels

Lucky Nurafiatin

Research Manager, Asia and Middle East, HART ENERGY

11.10 - 11.15 COFFEE/Question and Answer with Speakers

11.15 - 11.45 Relationship between fuel quality and vehicle emissions

Eric Holthusen

Fuel Quality Manager, Asia/Pacific & Middle East, Shell Global Solutions

11.30 – 12.00 Moving to cleaner fuels: Impacts on refineries

Benito Aganda

Pilipinas Shell


8

12.00 - 13.00 Open forum: questions & answers between participants and experts

13.00 - 14.00 LUNCH

14.00 - 14.30

Presentation of draft Action Plan

Jean Rosete, Environment Management Bureau, DENR

14.30 - 16.00 Working groups

Group 1: Technical and Policy Concerns (Facilitator: Alvin David T. Lim, DOE)

• Which parameters of Euro 4 will be affected in the move to cleaner fuels?

• Implementation in phases (i.e., introduction phase, full implementation phase)?

• From among the steps or actions identified in the draft action plan, are there any

missing steps or actions?

• Is the sequence of the steps or actions acceptable?

Group 2: Financing Cleaner Fuels and Vehicles (Facilitator: Sophie Punte, CAI-Asia Center)

• How can the Philippines finance cleaner fuels and vehicles (e.g., differential

taxation in favor of cleaner fuels, tax incentives)

• How can we convince the public to agree to the new policy measure to improve

fuels and vehicles?

16.00 - 16.15 COFFEE

16.15 - 17.15 Presentation of Working Groups and Discussion

17.15 Summing up and Closing

Zenaida Monsada, DOE

Annex B

Participants List

Aileen Valera

Chevron

Aldrin Magpantay

Chemrez Technologies

Alex Loinaz

FILCAR

Alvin David Lim

Department of Energy

Arjay Carandang

Ford Philippines

Armando Mallilin

ITDI, Department of Science and Technology

Arnel Antonio


Aulynn Cristobal

Total

Benito Aganda

Pilipinas Shell

Benjie Dionela

TMPC/CAMPU/TMA

Bert Fabian

CAI-Asia

Cecil Santiago

CAMPI


9

Christine Danao

National Economic Development Authority

Cleotilde Bulan


Clinton Martinez

Committee on Ways and Means, Senate of the

Philippines

Corazon Japson

Department of Science and Technology

Corie Panuncio

Ford Philippines

Danilo Encela

Land Transportation Office

David Garcia

AtinTo Foundation

Dennis A. Lim

National Economic Development Authority

Diane Marie Bernardo

Miraj

Don Mario Dia

Ethanol Producers Association of the Philippines

Eleanor Tantoco

PEI

Eleuterio Galvante

Department of Transportation and Communication

Eric Holthusen

Shell Global Solutions

Eva Aragones


Fernando Bontia

PROTON

Florello Galindo

Asian Institute of Petroleum Studies, Inc.

Florida Jurado

National Tax Research Center

Gianina Panopio

CAI-Asia

Grace Panares

Chevron

Henry Balaoro

Philippine Export Processing Authority

Hermelina Bion


Homer Maranan

CAMPI

Horace Cruda

Committee on Energy, Senate of the Philippines

Imelda Alaba

OIMB, Department of Energy

J. Tuazon

CAMPI

Jaime Diago

Pilipinas Shell

Jean Rosete

Environmental Management Bureau

Department of Environment and Natural Resources

Jennylyn Forbes

Seaoil

Jerry Horn

Chevron

Jing Raymundo

Joanne Sophia Chong

Asian Clean Fuels Association

Jose Dulce

USAID

Jose Maria Zabaleta

EPAP

Josefina Manuela Albano

National Tax Research Center

Karen Baydo

CAI-Asia

Lamberto de la Cruz

Marikina Pateros Jeepney Operators and Drivers

Association

Lara Orioque

Filpride

Lilian Cotaz

Board of Investments

Lucky Nurafiatin

HART Energy Consulting

Manwipa Kuson

Pollution Control Department of Thailand


10

Maricris Pordan

Seaoil

Mario Bunag

PROTON

Mary Anne Rodriguez

Filpride

Matanog Mapandi


Melchor Palaganas, Jr.

Bataan Petroleum

Mich Cruz

Pilipinas Shell

Michael Francis Mendoza

IEPI

Mike Alunan

AtinTo Foundation

Mylene Santos

Pilipinas Shell

Ning Ignacio

Chevron

Nona Pilariza


Odon Galido

Petron

Patrick Montero

PCIERD

Preeti Jain

Indian Oil/AIM

Rafael Diaz

Asian Institute of Petroleum Studies, Inc.

Renee Miciano

Office of Senator Miguel Zubiri

Ricardo Infante

OIMB, Department of Energy

Robles Ables

Partnership for Clean Air

Sahid Kamid

UP-NCTS

Sally Monteiro

Philippine Institute of Petroleum

Sheila Flor Javier

UP-NCTS

Shiva Mehrabi

Ethanol Products Association of the Philippines

Sophie Punte

CAI-Asia

Tanya Santillan

Flying V

Teddy Reyes

Philippine Institute of Petroleum

Teresa Fung

CAI-Asia

Tess del Rosario

BPS

Vicky Segovia

Partnership for Clean Air

Vivian Cerrer

PEZA

Vu Tat Dat

CAI-Asia

Willy Toledo

Petron

Zenaida Monsada


Annex C

Draft Action Plan

This Draft Action Plan was presented by Engr. Jean Rosete at the workshop and was the basis for discussion

in the working groups.

Key considerations

• Every person has the right to breathe clean air.


11

• An integrated approach to improving air quality is needed.

• Improving fuel quality and improving the vehicle fleet are important components of the integrated

strategy.

• All sectors (government, non-government organizations, academe, and private sector) play an

important role in improving air quality

Proposed actions related to improving vehicles

• Tightening vehicle emission standards

o By 2010, DENR to issue Euro 4 (equivalent) vehicle emission standards for new light-duty

motor vehicles

o These standards to take effect in 2012 (meaning that starting 2012, only Euro 4 vehicles with

incentives)

o Starting 2014, only Euro 4 vehicles can enter the country and only Euro 4 vehicles can be

registered with the LTO

Proposed actions related to improving transport fuels

• Improving fuel quality

o By 2010, DOE to issue regulation mandating the phased implementation of new

specifications including sulfur limits:

� Starting 2012, diesel and gasoline with a maximum of 50ppm sulfur will be

introduced into the country

� Starting 2015, only diesel and gasoline with a maximum of 50ppm sulfur will be

allowed to be sold in the country

Other components of the integrated strategy

• Improving Vehicle Inspection and Maintenance

o Review of in-use emissions standards

o Strengthen roadside apprehension of polluting vehicles*

o Expansion of MVIS (at present 4 MVIS established)

• Improving fuel quality inspection

o Curb smuggling of fuels that do not meet specifications

o Improve inspection of fuel quality

o Develop policies and guidelines for pedestrian- and cycling-inclusive land use planning*

o Provide NMT facilities*

• Public Transport Planning and Travel Demand Management

o Reduce travel time for public and private transport users*

• Improving Public Transport & Non Motorized Transport (NMT)

o Develop mass transit systems especially Bus Rapid Transit (BRT)*

*Refer to Environmentally Sustainable Transport (EST) Strategy for the Philippines


12

Annex D

Working Group Discussion

This Annex contains a summary of the issues discussed during the preparation of the action plan for the

Technical and Policy Concerns Group.

Summary of the Issues Discussed

During the Preparation of the Action Plan

Technical and Policy Concerns Group

Facilitator: Alvin David Lim, DOE

The first issue discussed was the fuel specifications that should be considered by the Technical Committee on

Petroleum Products and Additives (TCPPA) for Euro 4 standard fuels in the Philippines. There was a

suggestion by Alex Loinaz to use the Worldwide Fuel Charter (WWFC) as a starting point for this purpose. He

said that the WWFC already had a list of the properties, with minimum and maximum values and could serve

as guide for the group. An alternative proposal was suggested by Eric Holthusen of Shell Global Solutions

who said that the WWFC was like the “wish list” of the automobile manufacturers and that experience from

other countries shows that the specifications in this charter was not fully adopted in several countries that

moved towards Euro 4 equivalent fuels. He suggested that they use instead the European specifications

which were not as restrictive. Benny Aganda of Shell Pilipinas suggested that they just initially keep the

properties presented and just consider other properties later on. Alvin Lim noted that since the Philippines

wanted to harmonize standards in the region, it would be good if Manwipa Kuson can share what

specifications they have in Thailand. Manwipa Kuson replied that they chose parameters which had an

impact on emissions and acceptable to both the oil industry and auto manufacturing sectors. She identified

the parameters as sulfur, benzene, aromatics, olefins and PAH (for diesel). Bert Fabian suggested to adopt

Benny Aganda’s suggestion—to have as initial basis the Sulfur improvement, and for the other stakeholders

to submit a “one to four pager” to Director Monsada for other properties that they want to include and their

reasons for suggesting the same. At this point, Director Monsada said that the TCPPA will still deliberate on

the parameters and values and so whatever the group will produce is not the final thing. The initial

parameters identified were sulfur (50ppm), benzene, aromatics, olefins, and T95.

Director Monsada of DOE stressed that what is important is to have an action plan and to have a reference

Euro 4 that they can compare with other countries. She said that what they want is a Euro 4 fuel standard

that is doable, with ample supply and enforceable. There must also be a timetable for this.

The second issue was the concern on “old” or in-use vehicles, particularly those without catalytic converters.

One of the attendees stated that if a vehicle does not have a catalytic converter, the benzene and aromatics

in the fuel would cause the vehicle to pollute. The facilitator, Alvin Lim, said that he is set to inherit a 1991

model truck which does not have a catalytic converter. The question was therefore what to do with “old”


13

vehicles, like the 1991 model truck of Alvin Lim, which does not have catalytic converter and could pollute

because of the benzene and aromatics in the fuel used. Alex Loinaz answered that regular maintenance with

regular monitoring of the level of emissions of the vehicle would help. Also, he said that it was important to

take note of the “useful life” of the vehicle. He said that if a second-hand vehicle is imported to the country

there is usually a certificate indicating the “useful life” of the vehicle. The group agreed that there was a need

to develop in-use vehicle registration requirements and strict emission standards. A representative from the

USAID suggested that they help in revising the Motor Vehicle Inspection System (MVIS) to strengthen the

efforts in lessening the air pollution caused by in-use vehicles. Later on during the discussion, Director

Monsada said that the Department of Trade and Industry (DTI) and the Department of Transportation and

Communication and the DOE were considering having a national maintenance program for vehicles, and that

Director Victorio Mario A. Dimagiba of the DTI has accepted the responsibility of taking care of this concern.

The third issue is the time line for the implementation of Euro 4 standard fuels and vehicles in the

Philippines. The group agreed that the implementation shall be in phases (i.e., introduction, transition, full

implementation). It was suggested that since they wanted regional integration and harmonization of

standards, then they must look at other countries in the ASEAN region as far as adoption of Euro 4 fuels and

vehicles is concerned. The Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI)

representative, Homer Maranan, said that among the members of ASEAN only Thailand and Singapore are

certain to adopt Euro 4 standards. Director Monsada commented that, that is the reason she invited Japan

Automobile Manufacturers Association (JAMA) to the Workshop, so that they could have a bigger picture,

and not just ASEAN situation. She asked CAMPI when they expect to adopt Euro 4 standards. Homer

Maranan said that there will be a meeting of the ASEAN Automotive Federation (AAF) in the ASEAN region in

Hanoi later this month and he could update the group on the results of this meeting. Director Monsada said

that she was in Japan two weeks earlier and learned that because of the economic slowdown in Japan, it was

hard for them to decide. CAMPI requested that they be given the output of the Workshop before the

meeting in Hanoi so they could show it to the other members of the AAF.

Director Monsada then said that the “trigger” or first step to Euro 4 standards in the Philippines is the

issuance of the Department Administrative Order (DAO) from the DENR that “We are moving to Euro 4

effective two years after this announcement.” At this point, the issue of “2+2” was mentioned since

apparently this was what the auto industry wanted in the implementation of any regulation on cleaner fuels

and vehicles. Another representative from CAMPI rose up to explain the “2+2” principle. She said that what

this meant was that, for example DENR issues an announcement that there will be a move to Euro 4

standards on January 1, 2010, by January 1, 2012 Euro 4 will be adopted on a voluntary basis and by January

1, 2014, on a mandatory basis. It was noted that the DENR must not only make an announcement that the

country will adopt Euro 4 but it must issue the standards also. The desire of the group was that the present

Secretary of the DENR signs the issuance declaring a move to Euro standards before he leaves office to run

for an elective post. Homer Maranan summarized the steps in the implementation of Euro 4 fuel and vehicle

standards: (a) official announcement of the move to Euro 4 for example in 2010; (b) two years later, or in

2012, publication of the administrative order in the Official Gazette stating the voluntary adoption of Euro 4

standards for two years from said publication, or from 2012-2014 and mandatory adoption of Euro 4

standards thereafter, or from 2014-onwards. Incentives should be given to those who will opt to adopt Euro

4.


14

The fourth issue is the question on whether the official announcement by the DENR that the country will

move to Euro 4 fuel and vehicle standards, should be in the form of a law or administrative order. There was

a suggestion by Alex Loinaz that a Department Administrative Order (DAO) is not enough. He noted that a

DAO could be easily changed since only the DENR Secretary needs to sign it. The announcement or issuance

must be more stable he said. He suggested that a DAO endorsed to the Oversight Committee of Congress and

approved by the latter is a better option. The suggestion was seconded by Benny Aganda who noted that

since the move involves a big investment on the part of the refiners and oil industry, they need an assurance

that there will not be any change of policy once the announcement has been made to move to cleaner fuels

and vehicles. Bert Fabian pointed out however that in case of the move to Euro 2, only a DAO was issued to

effect the shift to Euro 2.

Another issue raised during the discussion was on logistics. Jimmy Diago of Shell asked who will handle the

logistics if all fuels should be Euro 4 by 2014. Another issue also is fuel efficiency. Director Monsada said that

government can play a role in fuel efficiency for public transportation but for private vehicles, “labeling”

could help. There should be a link between fuel efficiency and type approval standards.

Below is a summary of the actions identified:

Technical and Policy Options

Actions Organization Timeline Remarks

1 Official announcement by Gov’t

through a DAO (endorsed by Joint

Oversight Committee)

DENR 2010 Shell comments-X (legislation)

+ 5 years

Finalize fuel quality specifications DOE in cooperation

with TCPPA, DTI

In determining specs,

consider

- Significance to country

- Doability – supply, cost,

monitoring/enforcement

2 2 years later-publish the regulation DENR, DOTC 2012 Voluntary

3 Full implementation DENR, DOTC 2014 Mandatory for new vehicles

4 Develop National Maintenance

Program

DTI, DOTC 2012?

5 Develop/strengthen in-use emission

standards/registration requirements

DENR

DOTC

2010 Ongoing, check with current

plans in DOTC

6 Check with ASEAN Harmonization

Efforts

CAMPI, CAI-Asia

Center

Nov/Dec

2009

7 Identify incentives (and other

instruments) to promote Euro 4

compliant vehicles

?

8 Study/develop logistics distribution

of Euro 2 & 4, considering parallel

supply

Shell?


15

9 Link fuel efficiency/fuel consumption

regulations simultaneous with

implementation of new type

approval requirements for Euro 4

DOTC, DOE 2012

Financing

Actions Organization Timeline Remarks

1 Analysis of financing options? (tax

incentives, fines, registration/road

tax, toll) + framework to

implement the fund

DTI, DOE, DOTC,

DOF, DENR

Jan-Jul 2010

2 Analysis of incentives for

consumer, refineries, OEMs

DOF, DOE, DTI,

DOTC, DENR

Jan-Jul 2010

3 Consultation with stakeholders NGOs, OEMS,

refinery, oil

companies,

consumers

July-Dec 2010

4 Develop Bills (upper house and

lower house)

Energy-DOE Env’l-

DENR

Transport-DOTC

July-Dec 2010

draft

2011-2012

5 Develop IRR Energy-DOE

Env’l-DENR

Transport-DOTC

2012

6 Information and awareness

campaign

Energy-DOE

Env’l-DENR

Transport-DOTC

NGOs OEMs fuel

companies,

academe,

consumer groups,

others

Design 1st

Jul-Dec 2010

Design details

2011

Implementation

2012

Annex E1 and E2

Letters of the Auto Industry to DENR and DOE

Annex F

Draft DENR Department Administrative Order on Revised Vehicle Emission

Standards


16

Annex G

Workshop Photos

Figure 1. CAI-Asia’s Sophie Punte opening the Workshop

Figure 2. DOE Assistant Secretary Matanog Mapandi

giving welcome remarks


17

Figure 3. CAI-Asia’s Bert Fabian

Figure 4. Mawipa Kuson of Thailand

Figure 5. Open Forum


18

Figure 6. Shell’s Benny Aganda and Eric Holthusen and

DOE Director Zenaida Monsada

Figure 8. Action Plan Formulation

Figure 7. Welcome Slide

philippines national workshop report pcfv...

Documents