1. CAI Asia / MoEF Better Air Quality Conference Agra India, 6-8 December 2004 Planning the Energy Scenarios for Asia: How to Minimize Negative Air Quality Implications Lew Fulton Office of Energy Technology and R&D International Energy Agency

2. Talk Outline Energy use: where are we headed globally and in Asia? A word on stationary sources Transportation, oil and Asia What transport solutions for both energy use and emissions? Conclusions

3. What is the IEA? International Energy Agency is part of OECD Created in 1975 in response to oil supply disruptions 26 Member countries, mainly in Europe, plus US, Canada, Japan, Korea, Aus/NZ Secretariat and “think-tank” www.iea.org

4. New IEA Publications Oil Crises and Climate Challenges: 30 years of energy use in IEA countries Biofuels for Transport : An International Perspective World Energy Outlook 2004 www.iea.org

5. Projected Fuel Consumption 2002-2030 Source: IEA World Energy Outlook 2004 Notes: “Asia” includes East Asia and South Asia except Japan and S. Korea. Excludes Former Soviet Union and Middle East. MTOE = thousand tonnes oil-equivalent; note difference in scaling of the Y axes. WORLD: fossil energy use increases by 64% by 2030 ASIA: fossil energy use increases by 128% by 2030

6. Projected Growth in Asian Fuel Consumption, 2002-2030 Source: IEA World Energy Outlook 2004 Notes: “East Asia” excludes China; MTOE = thousand tonnes oil-equivalent; note difference in scaling of the Y axes. East AsiaSouth AsiaChina

7. Projected Growth in Fuel Consumption By Sector and Fuel, 2002-2030 Source: IEA World Energy Outlook 2004 Notes: “East Asia” excludes China; MTOE = thousand tonnes oil-equivalent; note difference in scaling of the Y axes. East AsiaSouth AsiaChina

8. Coal Use: What Are the Implications? Clearly a “dirty” and high CO2 fuel, but much cleaner coal use is possible Advanced technologies for coal cleaning/emissions scrubbing can reduce all pollutants dramatically Carbon capture and storage may eventually offer near-zero CO2 emission coal US planning to build a large prototype zero-emission (for all pollutants) coal plant (“Future Gen”) Will rely on coal gasification to extract hydrogen; technology has many possible applications Trouble is higher costs; China and other Asian countries are showing interest in these technologies but uptake through 2030 expected to be relatively small. Strong emissions control regulations and incentives will be needed and could make a huge difference.

9. Oil Use, 1971-2030 Supply to Transportation v. Other Sectors Source: IEA historical data and projection from World Energy Outlook 2004 WorldAsia

10. Decomposition of Projected Asian Energy Use by Passenger Mode, 2000-2050 (average annual pct change) Source: IEA projections for WBCSD Mobility 2030 Study, 2004

11. Car ownership will continue to rise, especially in the developing world Source: IEA projections for WBCSD Mobility 2030 Study, 2004

12. 2-wheeler growth could also be substantial Source: IEA projections for WBCSD Mobility 2030 Study, 2004

13. IEA/World Energy Outlook 2004 Crude Oil Price Projections Oil prices are assumed to drop back from recent highs over the next 2 years, but rebound after 2010

14. A Key Variable: Oil Demand Growth Annual demand growth 1% annual growth rate 3% annual growth rate mb/d

15. What do the trends mean for emissions? Projected total Non-OECD road transport emissions if countries eventually adopt euro-type standards IEA/SMP Projections; Reference case assumes a 10-year lag time; all scenarios assume fairly strong enforcement

16. Changing the travel/energy use trends: What are some fuel/vehicle options? The following slides outline some areas for where we see promise: Vehicle efficiency improvement Near-term alternative fuels Hydrogen / Fuel cell vehicles Greater attention to travel demand management and non-motorised modes

17. Vehicle Efficiency Options There are many technologies available to improve vehicle efficiency at relatively low cost IEA estimates that 25% reduction in new car fuel use/km could be achieved by 2020 at fairly low cost Strong policies will be needed; China has taken an important step in this regard Somewhat lower potential for other modes, but still significant This will save fuel but won’t directly impact pollutant emissions (except hydro carbons to a small degree)

18. Hybrids Hybrid-electric vehicles are somewhat different from other “incremental” technologies By running the engine at more constant load, significant pollutant emissions reductions can be achieved. Prius is certified SULEV in California Though still expensive, there may be significant market potential for hybrids in Asia There is no inherent reason why hybrids can’t run on any fuel specification (e.g. higher sulfur fuels)

19. Gaseous Fuels and Liquid Biofuels CNG and LPG are very clean fuels and can provide important emissions reductions Quality of vehicle conversions and availability of fuels is at issue Biofuels (ethanol from grains, biodiesel from oil seeds): Provide significant GHG reductions (20-50%) (sugar cane up to 90%) Can cost 2-3x gasoline before taxes Ethanol provides some emissions benefits (PM,CO) but also higher volatility (evaporative HC) Biodiesel clearly cuts diesel PM, HC; NOx may rise No major vehicle compatibility issues for either fuel, though slight modifications needed to ensure proper running

20. Hydrogen / Fuel Cells: Promise, but when? Potential for zero pollutant emissions and near- GHG-free road vehicle sector by 2050, but: Vehicle costs must come down by at least 10x before large volume production can begin Large investments in refueling infrastructure will be needed, perhaps €0.5 trillion across IEA countries Sources for large-scale low-GHG hydrogen production are needed Thus many questions to resolve New technology appears likely to come first for cars, then coaches then trucks Should Asia lead or follow?

21. Travel Demand Management Any reduction in travel growth rates reduces emissions Key is to provide mobility without emissions Growth in car ownership is inevitable but it can be slowed and alternatives provided A model: cars in Europe are driven far less than in the US because of travel alternatives

22. Travel Demand Management: Promising Options Many important measures; will mention three here: Get the prices right  Tax vehicles and fuels in line with social costs;  Differential taxation based on vehicle emissions is a powerful tool Invest in strong transit systems  Learn from Latin America – BRT makes a huge difference Encourage cities to be friendly to non-motorized transit and pedestrians

23. One Possible Alternative Transport Future Worldwide Average Vehicle Energy Intensity Improves by 10% (beyond improvements expected in reference case); Hybrids reach 40% of LDV and medium-duty truck market share by 2030 Biofuels reach 20% share of all motor fuels worldwide by 2050 Fuel cell vehicles start to be sold in 2020 and reach 35% of global sales market by 2050 for light-duty vehicles and medium- duty trucks

24. Possible Future: Resulting Reduction in Global Transport Oil Use

25. Conclusions The world is likely to experience strong growth in fossil energy use over next 50 years, and Asia set to lead the way Coal is inexpensive and will be used; but much cleaner coal is possible if somewhat higher costs are accepted and investments are made Though oil use will increase substantially, we may not see oil prices rise much through 2030 (in real terms) In any case, oil use does not have to mean much higher pollutant emissions over this time frame Oil will be with us, but the potential exists for significant reductions in oil use in transport even in 2020-2030 time-frame Some transportation options look especially promising for pollutant emissions reductions Hybrids Gaseous fuels Hydrogen fuel cells (in the very long run) Changes to travel demand and structure