1. www.rec.org.tr 25.10.2005 – Szentendre Workshop Clean Fuel and Vehicles in SEE and Turkey Workshop on Clean Fuel and Vehicles in South Eastern Europe and Turkey 25-26 October 2005, Szentendre Country Presentation: Clean Fuels and Vehicles in Turkey Yunus ARIKAN REC Turkey Climate Change Project Manager

2. www.rec.org.tr 25.10.2005 – Szentendre Workshop Clean Fuel and Vehicles in SEE and Turkey REC Turkey – Mission and Portfolio of Activities Basic Findings of Questionnaire for Vehicle Fuels and Emissions Proposals for Future Work

3. www.rec.org.tr 25.10.2005 – Szentendre Workshop Clean Fuel and Vehicles in SEE and Turkey REC Turkey – The Newest Country Office of REC “REC’s Extension to Turkey” 2000-2002 Feasibility Study Workplan REC Charter Signed in October 2002 Ratified in January 2004 Bilateral Agreement Signed in January 2004 Ratified in August 2004 Grants Agreement with EU (€2.3 Million) Signed in April 2004 Opening of REC Turkey Office 27 May 2004

4. www.rec.org.tr 25.10.2005 – Szentendre Workshop Clean Fuel and Vehicles in SEE and Turkey REC Turkey - Aim To strengthen the capacity in legal, institutional, technical and investment terms related to EU accession process in the field of environment Project Beneficiaries The Ministry of Environment and Forestry ------------------------------------------------------------ Local Administrations Environmental NGOs Businesses, media and academic institutions Programme Areas Capacity Development Programme Information Programme Grants Programme Special Programme

5. www.rec.org.tr 25.10.2005 – Szentendre Workshop Clean Fuel and Vehicles in SEE and Turkey Special Programmes Multiple Stakeholder Meetings Government – Business – NGO Dialogue Sustainable Development Initiatives European Business Awards for the Environment – focal point (in partnership with Environmental Platform for Sustainable Development Platform of Turkey) Business and Environment Raising Awareness of Corporate Social Responsibility (building partnerships for sustainable development / on-line directory to promote companies) Providing Assistance for EU Environmental Acquis Compliance (assisting umbrella organizations for different sectors to establish EU environmental acquis assistance centers) Climate Change National Focal Point for UNFCCC Article 6 – Education, Training & Public Awareness Designated by Ministry of Environment and Forestry in May 2005 Related Partnerships and Projects REEEP, Clean Fuels and Vehicles, LIFE-Third Countries Project 2005 “Promoting Climate Change in Turkey”

6. www.rec.org.tr 25.10.2005 – Szentendre Workshop Clean Fuel and Vehicles in SEE and Turkey Area (km 2 )783,562 Population (million)67,803,927 (2000 Census) GDP ($ per capita)US$ 3,111 (2003) Total consumption of crude oil S% in crude oil 129,114,545 barrels of crude oil/yr (16,944,166 tons of oil is sold by oil distribution companies in 2003) 3,5% (fuel oil No.6), 1,5% (heating oil), 0,005 - 0,7% (diesel oil), 2-4 % in petrol Energy consumption by transport 12,396,000 TOE Turkey - general

7. www.rec.org.tr 25.10.2005 – Szentendre Workshop Clean Fuel and Vehicles in SEE and Turkey Turkey – main institutions in air quality, clean fuels and vehicles Government Ministry of Environment and Forestry Ministry of Energy and Natural Resources Ministry of Trade and Industry Ministry of Interior Ministry of Health Municipalities Business NGOs PETDER – Petroleum Association OSD – The Association of Automobile Manufacturers Research Middle East Technical University – Petroleum Research Center (PAL) Other Energy Markets Regulatory Authority

8. www.rec.org.tr 25.10.2005 – Szentendre Workshop Clean Fuel and Vehicles in SEE and Turkey Turkey – technical assistance to air and fuel quality EC Developing Capacity in Implementation and Enforcement through the AC IMPEL Network – component on air quality management, Environmental Heavy-Cost Investment Planning in Turkey MATRA Capacity Building for the Implementation of the IPPC Directive Stregthening of Implementation of 96/62/EC Directive and 97/101/Council Decision EU-Twinning Approximation of Air Quality Management - 96/62/EC and 2001/80/EC World Bank Energy and Environment Review, 2002

9. www.rec.org.tr 25.10.2005 – Szentendre Workshop Clean Fuel and Vehicles in SEE and Turkey Turkey – air quality legislation Main Framework – historical - the Regulation on Protection of Air Quality (RPAQ) (OJ:19269, 1986) - The National Programme on Adoption of Acquis (NPAA) Section 22.2 – 13 regulations on Air Quality (OJ: 24 March 2001, No:24352) - Law No:4856 – Establishment of Ministry of Environment and Forestry (2003) - since 2001, 5 daughter directives of EC included in NPAA Progress - Regulations on Emissions from Industrial Process (OJ:25606 -2003) and on Emissions from Domestic Heating (OJ:25699-2005) - Regulation on Petrol and Diesel Quality, (OJ:25489-2004), full transposition of 2003/17/EC (amanding 98/70/EC) - Draft Regulation on Ambient Air Quality Assessment and Management (RAQAM), transposition of 96/62/EC

10. www.rec.org.tr 25.10.2005 – Szentendre Workshop Clean Fuel and Vehicles in SEE and Turkey Turkey – fuel quality 2005200620072009 Petrol 500 ppm S, (introduction of 150 ppm S), max 0,15 Pb g/lt, Complete ban on leaded petrol, use of additives 150 ppm S, introduction of 10 ppm S 10 ppm S* Diesel 7000 ppm S, (introduction of 350 ppm S in 2004, 50 ppm S in 2005) 50 ppm S, (introduction of 10 ppm S) 10 ppm S* 1997200020032004 Unleaded petrol consumption (M ton/yr) 0.51.42.22.7 Premium leaded oil consumption (M ton/yr) 1.51.0 * TUPRAS notes that suitable capacity will be available before that day

11. www.rec.org.tr 25.10.2005 – Szentendre Workshop Clean Fuel and Vehicles in SEE and Turkey Turkey – fuel quality Main issues; - TUPRAS; leading refinery group (biggest in CEE, 7th in Europe) - liberalization of energy markets as of 1.1.2005, decreasing market share of TUPRAS (~ 85% in 2004, ~ 60% in 2005), privatization in 2005 - control of sales and quality; -~15% of liquid fuels in market are not accounted, illegal border trade -METU-PAL (2004)% compliance (2750 samples); 79% in diesel, 87% unleaded petrol - Financial instruments - cumulative tax on diesel price; ~60%, on petrol price 75% - excise tax of unleaded petrol > leaded petrol, diesel with 350 ppm S > diesel with 7000 ppm S

12. www.rec.org.tr 25.10.2005 – Szentendre Workshop Clean Fuel and Vehicles in SEE and Turkey Turkey – alternative fuels Bioethanol Regulated by Tobacco Markets Regulatory Agency. Tax exemptions that enable use of minimum 2% bioethanol in petrol have been defined by Ministry of Finance. Additives (manganese and potassium) is recommended to replace lead in all fuels. Biodiesel Planned to be promoted within the scope of new regulations as Draft Energy Efficiency Law. The amendment defines biodiesel as an alternative fuel and enables distribution in the petrol markets. Tax exemptions enabling use of minimum 2% of biodiesel (derived from domestically grown biomass) in diesel will be defined by Ministry of Finance.

13. www.rec.org.tr 25.10.2005 – Szentendre Workshop Clean Fuel and Vehicles in SEE and Turkey Turkey – vehicles and emissions Total vehiclesPassenger carsLDVHDVBuses 7,719,5504,700,343973,457405,034368,864 Vehicle exhaust emissions control; OJ: 25869, 2005. Privatization since 2003, ~600 testing sites, Possibility of integrating with vehicle inpections Restrictions; It is restricted to import used vehicles to Turkey. For M1 Class new vehicles, Type Approval Certificate is required Standards; EUROIV will be applied for new cars after 1.1.2007, all existing cars after 1.1.2008 Total vehicle production; 562,148 Total vehicle exports; 346,830 Total vehicle imports; 223,277

14. www.rec.org.tr 25.10.2005 – Szentendre Workshop Clean Fuel and Vehicles in SEE and Turkey Turkey – vehicles and emissions; incentives Accelarated retirement For cars older than 30 years. The incentive was implemented by the Ministry of Finance and 2,500 - 4,000 YTL was paid for the banning of each car. As a result a total of 248,000 passenger cars which are heavily fuel consuming and emitting intensive pollutants were excluded from traffic. Tax Reductions Possibility of decreasing taxes for cars manufactured in compliance with EURO standard. Law No:1318 on Vehicle Purchase Tax and Law No: 197 on Motor Vehicle Tax enables Cabinet of Ministers to have the flexibility of decreasing up to 50% of related taxes in case purchased cars meet. Alternative fuels The framework for certain exemptions for excise tax of bioethanol is completed and new products are in market since 2005. The framework for biodiesel is being regulated within the scope of draft Energy Efficiency Law and Petrol Markets Law.

15. www.rec.org.tr 25.10.2005 – Szentendre Workshop Clean Fuel and Vehicles in SEE and Turkey Turkey – conclusions, proposals by REC Turkey - I capacity building in; fuel quality control monitoring of enforcement of new regulations (transposition OK, Action Plan?) inventory and data collection (esp. vehicle park), effective use of IT technologies (online registry of all fuels consumed) Policy integration synergy with UNFCCC commitments more effective role of Ministry of Environment and Forestry in promotion of use of alternative (biofuels) (i.e introduction of 2003/30 EC on alternative fuels for transport) and 2003/96/EC on detaxation of energy

16. www.rec.org.tr 25.10.2005 – Szentendre Workshop Clean Fuel and Vehicles in SEE and Turkey Turkey – conclusions, future prospects by REC Turkey - II Stakeholders participation - raising awareness of industry with new regulations - putting the issue in the agenda of environmental NGOs - increasing cooperation with research community further steps in transposition of Acquis; 94/63/EC (VOCs from petrol) 1999/13/EC (VOCs from solvents) 1999/32/EC (Sulfur content in liquid fuels) other components of fuel quality (e.g. Benzene) New public-private partnerships

17. www.rec.org.tr 25.10.2005 – Szentendre Workshop Clean Fuel and Vehicles in SEE and Turkey Turkey – conclusions, future prospects by REC Turkey-III Integrated policies instead of end-of-pipe solutions > 95% of goods and human transportation is by roadway policies and measures for mass transportation energy security – dependency of fuel market exports Role of REC Turkey ( Based on the new scope of accession process between EU and Turkey after 3rd of October 2005) access to information raising awareness capacity building through training involvement in demonstration projects through partnerships

18. www.rec.org.tr 25.10.2005 – Szentendre Workshop Clean Fuel and Vehicles in SEE and Turkey Thank you for your attention. Yunus ARIKAN REC Turkey Climate Change Project Manager Tel:+90 312 284 95 55 / 23 Fax: +90 312 287 01 10 E-mail: yunus.arikan@rec.org.tr www.rec.org.tryunus.arikan@rec.org.trwww.rec.org.tr REC Turkey extends sincere appreciations; - to Ms. Fulya SOMUNKIRANOĞLU from Ministry of Environment and Forestry and Ms. Hülya ERCAN from OSD – Association of Car Manufacturers for their close and active collaboration in compiling the data for the workshop and questionnaire. - to Dr. Erol METİN from PETDER – Petroleum Association and Prof. Dr. Ender OKANDAN from METU-PAL (Petroleum Research Center) for their kind interest in this study and initative.