JCM Feasibility Study for low carbon city development ... · JCM Feasibility Study for low carbon...

Ministry of Economy, Trade and Industry, Japan

JCM Feasibility Study for low carbon city development through introduction of E-jeepney in Metropolitan Manila Region,

Republic of the Philippines

Final report

March 2017

Oriental Consultants Global Co., Ltd.

Table of contents

Chapter 1 Project overview ..................................................................................................................... 1

1.1 Project objective and background .............................................................................................. 1

1.2 Study overview ........................................................................................................................... 2

1.2.1 Overview of candidate sites for battery swapping electric jeepney technology introduction ......................................................................................................................................................... 2

1.2.2 Survey implementation structure ......................................................................................... 4

1.2.3 Survey schedule ................................................................................................................... 5

1.2.4 Survey items ........................................................................................................................ 8

Chapter 2 Trends in related policies and EV markets in the Philippines ................................................ 9

2.1 Situation of transport sector in the Philippines .......................................................................... 9

2.1.1 Situation of the Philippines and Metropolitan Manila Region ............................................ 9

2.1.2 Situation of air pollution (Situation of air pollutants emissions) ...................................... 11

2.2 Transport policy ....................................................................................................................... 12

2.2.1 Relationship with development plan and other policies in the Philippines and Metropolitan Manila Region ......................................................................................................... 12

2.2.2 Masterplan in transport sector in the Philippines and Metropolitan Manila Region ......... 14

2.2.3 Situation of traffic congestion mitigation, laws on pollution prevention and relevant regulations, etc. ............................................................................................................................. 15

2.2.4 Situation of countermeasures related to traffic congestion mitigation and environmental pollution prevention in the Philippines (Regulations and countermeasures against exhaust gas and air pollution at level of national government, Metropolitan Manila Region and other municipalities) ............................................................................................................................... 18

2.3 Climate change policy .............................................................................................................. 23

2.4 Support measures for introduction of battery swapping electric jeepney technology in the Philippines ..................................................................................................................................... 27

2.5 Trend of EV market in the Philippines ..................................................................................... 38

2.6 GHG emission trends in the Phililppines (Overall emission and transport sector) .................. 41

Chapter 3 Result of consideration for Battery Swapping Electric Jeepneys introduction in Metropolitan Manila Region in the Philippines .................................................................................... 42

3.1 Selection of potential project sites ........................................................................................... 42

3.2 Overview of battery swapping electric jeepney technology .................................................... 51

3.3 Specification of battery swapping electric jeepneys for introduction in the Philippines .......... 54

3.3 Project implementation strucuture in commercial operational phase ...................................... 56

3.4 Consideration on project cost and financial plan ..................................................................... 59

3.5 Appraisal of environmental impact of electric jeepney introduction ....................................... 61

3.6 Roadmap for battery swapping electric jeepneys introduction in the Philippines including Metropolitan Manila Region ............................................................................................................. 73

Chapter 4 Result of Seminar on Battery Swapping Electric Vehicles Technology and the Joint Crediting Mechanism ............................................................................................................................ 78

4.1 Seminar overview ..................................................................................................................... 78

4.2 Comments and feedbacks from seminar participants and revision of project plan .................. 80

Chapter 5 Policy proposal for battery swapping electric jeepney technology introduction under the JCM ....................................................................................................................................................... 82

5.1 Policy proposal ......................................................................................................................... 82

5.2 Contribution to preparation of standards for modernized electric jeepneys under future Jeepney Modernization Program in consideration by Government of the Philippines ..................... 83

1

Chapter 1 Project overview

1.1 Project objective and background

In Republic of the Philippines (hereinafter referred to as “the Philippines”), air pollution mainly from

exhaust gas of automobiles as result of traffic congestion has become a serious problem mainly in major

urban areas. According to Ministry of Environment and Natural Resoruces (hereinafter referred to as

“DENR”), 80% of air pollution in Metropolitan Manila Region can be attributed to traffic emissions,

while the other 20% is result of emissions from factories and open burning. In Metropolitan Manila

Region, more than 6,000 jeepneys take part of public transportation system. A large part of them has

become obsolete after more than 20 years of its operational period, and are lack of proper maintenance.

This situation results in emission of black smoke including particulate matter 10 microns or less in

diameter (hereinafter referred to as “PM10”) and total suspended particles (hereinafter referred to as

“TSP”). This air pollution represents a threat to the citizens’ lifestyle and health, requiring introduction of

low emission vehicles for air pollutants emission reduction as an urgent agenda. Also, the old jeepneys

require frequent reparis by jeepney operators, bringing the operators economic loss, and this is regarded

as a challenge for transport sector in the Philippines.

At present, electrification program for 3-wheel veicle for public transportation system for citizens

(hereinafter referred to as “tricycle”) had been promoted by Department of Energy (hereinafter referreed

to as “DOE”) as an iniative for low carbon transport with support from Asian Development Bank (ADB).

The program originally had a target of electrification of 100 thousand tricycles by the end of 2017, and

was cancelled in December 2016 due to higher cost compared to conventional tricycles. In this situation,

electrification of jeepneys with larger size in comparison with tricycles has further financial barriers as

unit price of electric jeepney body is more expensive than electric tricycles. Furthermore, prevailed

electric jeepneys in process of promotion in the Philippines at stage of March 2017 adopt heavy lead-acid

batteries with short crusing distance; manual battery swapping puts workers heavy burden and the lead-

acid batteries, with crusing distance of approximately 10 kilometers per charge, do not have enough

power output.

Based on understanding of above challenges and problems, Oriental Consultants Global Co., Ltd.

(hereinafter referred to as “OC Global”), PUES Corporation (hereinafter referred to as “PUES”) and

International Center for Environmental Technology Transfer (herein after referred to as “ICETT”)

conducted a commissioned study on potentials of promotion and project implementation for battery

swapping electric jeepneys introduction in Metropolitan Manila Region and other regions in the

Philippines under Ministry of Economy, Trade and Industry (hereinafter referred to as “METI”).

The study objectives were shown below, and these three institutions have conducted field surveys and

consultation activities with Electric Vehicle Association of the Philippines (hereinafter referred to as

“EVAP”), the business partner in Philippine side.

- To propose fiscal and/ or non-fiscal incentives for promotion of battery swapping electric

jeepney technology introduction in the Philippines under the Joint Crediting Mechanism

2

Figure 1.1 Location of candidate sites

(hereinafter referred to as “JCM”) between the Philippines and Japan,

- To consider project plan for battery swapping electric jeepney technology introduction for

Metropolitan Manila Region and other regions in the Philippines with financial incentives under

the JCM, and

- To make identification of challenges for battery swapping electric jeepney technology promotion

and countermeasures against identified challenges as an input for the said project plan.

1.2 Study overview

1.2.1 Overview of candidate sites for battery swapping electric jeepney technology introduction

METI Study Team conducted on-

site surveys at 10 candidate sites in

northern and central Luzon Island

during 4 field surveys with schedule

shown in sub-sub-chapter 1.2.3. The

Study Team made consultation with the

owner institution of respective

candidate sites for consideration of

battery swapping electric jeepney

technology introduction during the F/S

period.

Location and overview of candidate sites is shown in Figure 1.1 and Table 1.1.

Table 1.1 Overview of candidate sites

No Site name Current situation of candidate site

Site owner name

Atributes of the candidate site

Number of jeepneys at candidate site

Current number of unit

Plan for future expansion of jeepney fleet

1 Clark Freeport area (Angeles City, Pampanga Province)

- Conversion and development of a former US Air Force base site is in progress.

- The diesel jeepneys are operational in 5 routes now, and route buses are in operation on its main roads.

- Currently around 87,000 workers and around 1,800 residents are using the diesel jeepneys and route buses. In the future, with the development of the area, the demand for transportation is expected to increase.

Clark Development Corporation (CDC)

- A Freeport Zone. - CDC is keen to

promote environmental friendly development in the Freeport zone area with electric vehicle (hereinafter referred to as “EV”) introduction.

335 diesel Jeepneys (2015) ( equivalent to the number of drivers who had obtained the driving license in CFZ area)

N/A

2 John Hay Special Economic Zone （Baguio City, Benguet

- Conversion and development of a former US forces residential and retreat area is in progress.

John Hay Management Corporation (JHMC)

- A Special Economic Zone (SEZ).

- JHMC is keen to promote ecotourism

None in the SEZ area. (Except for a electric jeepney which

N/A

3


Site owner name





Province) - No jeepney is in operational, and taxis and private vehicles are used for transportation within the special economic zone area.

- With the increase of workers, companies and turism, the transportation demand is expected to increase.

and development as a business center. JHMC also wishes to preserve their environmental status with abundant of forest resources in the area including surrounding natural reserve.

- There is a plan to combine prohibition of access of diesel vehicles to the SEZ area with electric jeepneys introduction to cope with increased transport demand in SEZ area.

Philippine Utility Vehicles Inc. (hereinafter referred to as “PhUV”) provided for a hotel in SEZ area for their tourist transportation service.)

3 University of the Philippines Diliman (Quezon City, Metropolitan Manila Region)

- Diesel jeepneys are operational for the transportation of university students and staff in campus area.（5km/ round trip）

- Its faculty of engineering has information on vehicle bodies and their related equipment that conform to government regulations in the Philippines and expertise in vehicle inspection.

University of the philippines (UP Diliman)

Main campus of the university.

71 diesel jeepneys (Operational for university students and staff, etc. in university area.)

N/A

4 Quezon City and Kaloocan City

Diesel jeepneys are operational by a private company.

OneTeam Company

N/A 500 diesel jeepneys

150 diesel jeepneys to be replaced by Chinese diesel jeepneys

5 Tanauan City, Batangas Province

- Tricycles are operated in city area.

- For transport service connecting inter-city jeepney terminal and neighboring cities including San Pablo City, Caramban City and Ripa City, diesel jeepneys are operational in their operational route (16km/ one way).

City of Tanauan

N/A Around 200 diesel Jeepneys in operation at inter-city jeepney terminal

N/A

6 Subic Bay Freeport Zone

- Conversion and development of a former US Naval base site is in progress.

- Taxis and buses are operational in the freeport zone area by 27 operators, and no jeepney is oeprational within the area.

- Port, industrial parks and commercial areas are located within an area of 55,000 ha in the freeport zone area.

Subic Bay Metropolitan Authority (SBMA)

A freeport zone. None in the freeport zone area

N/A

7 Olongapo City, Zambales Province

- Located in the north of Subic Bay Freeport Zone.

- Diesel jeepneys are operational in 13 jeepney routes in City area.

City of Olongapo

N/A（Under the eco-friendly development plan, the city is aiming for a sustainable and comprehensive development.）

N/A N/A

8 Muntinlupa City, Metropolitan

- PhUV Inc. operates an electric jeepney service for connection of Muntinlupa city area, city bus terminal and neighboring

PhUV Inc. - As a municipal project, PhUV Inc. operates under contract with

12 electric jeepneys with large-size lead-

5 additional e-jeepneys for 2017

4


Site owner name





Manila Region San Pedro city, with route length of 10km.

- Citizens and holders of a "Resident Welfare Card" issued by City of Muntinlupa can take the jeepney service without charge.

City government. - City government

positions the electric jeepney project as a platform for promotion of the city's efforts for environmentally friendly transport for citizens. (It broadcasts the city’s PR program on the electric jeepneys.)

acid batteries

9 Filinvest Alabang area, (Muntinlupa City, Metropolitan Manila Region)

- The area is commercial area including a shopping mall under control by Filinvest, a conglomerate including real estate business in the Philippines. EVEEI operates electric jeepney transport services in the route which connects the shopping mall, neighboring residential and office areas in the site unuder control by Filinvest and city bus terminal. (7.4 km/ round trip).

- Filinvest provides EVEEI with previleged permit for passenger transport services in residential and office areas on their operational route, under their principle of environmental consideration. (Except for existing local private van taxis.)

- Users of the electric jeepneys are mainly staff of call centers in Filinvest Alabang area.

Electric Vehicle Expansion Enterprices Inc. (EVEEI)

EVEEI operates under the principle of environmental consideration by Filinvest.

18 electric jeepneys with large-size lead-acid batteries

Adittional electric jeepneys under following schedules: - 2 electric

jeepneys in 2016

- 2 electric jeepneys in 2017

- 20 electric jeepneys in 2018

(Transportation demand increase is expected after establishment of an university campus.)

10 Ayala Alabang District (Muntinlupa City, Metropolitan Manila Region)

A high class residential area. PhUV. Inc N/A A electric jeepney with large-size lead-acid batteries

N/A

Source: METI Study Team

1.2.2 Survey implementation structure

OC Global, PUES and ICETT formed METI Study Team to conduct survey in cooperation with EVAP,

the business partner in Philippine side. Also, METI Study Team received support from Commercial

Section, Embassy of the Republic of the Philippines in Tokyo for coordination with Philippine institutions

including owner institution of each candidate project site during F/S period.

Furthermore, representative from OC Global, the leading company of METI Study Team, PUES, the

company with battery swapping electric vehicle technology, and EVAP signed a memorudum of

understanding (MoU) for trilateral cooperation for implementation of this study, in witness of President

Rodrigo Duterte, at a signing ceremony in Tokyo in 26 October 2016. The ceremony was organized by

the Embassy.

1.2.3 Survey schedule

The following

and December of year 2016 and February 2017.

Survey schedule

The following table represents the survey process. 4 field surveys were conducted in August, October


Figure

Figure 1.3

(Photo by Embassy of the Republic of the Philippines in Tokyo

Survey schedule

table represents the survey process. 4 field surveys were conducted in August, October


Figure 1.2 Study implementation structure

igure 1.3 MoU signing ceremony in Tokyo

Embassy of the Republic of the Philippines in Tokyo



5

Study implementation structure

MoU signing ceremony in Tokyo












Embassy of the Republic of the Philippines in Tokyo)



6

Table 1.2 Survey schedule (Actual performance)

Table 1.3 and Table 1.4 represents member list of METI Study Team and destinations of field surveys.

Table 1.3 Member list of METI Study Team Name Organization name Field visit Note

Mr. Masahiko Fujimoto OC Global 1, 2, 3, 4 Team leader

Mr. Kentaro Ofuji OC Global 1, 2. 3, 4

Ms. Fumio Sugawara OC Global - Assistance in Japan (Reporting)

Mr. Izumi Miyashita PUES 1, 2, 3, 4

Mr. Yuji Takezaki PUES 3

Mr. Takeshi Suzuki PUES 2

Mr. Koji Asano PUES 4

Ms. Etsuko Minamikawa ICETT -

Ms. Yasuko Ozaki ICETT -

Mr. Hiroyuki Ueda ICETT -

Mr. Charles Cole B. Navarro ICETT - ICETT consultant in the Philippines

Mr. Yusuke Yamamoto Oriental Consultants Co., Ltd. 4

2016 2017

Jul Aug Sep Oct Nov Dec Jan Feb Mar

Field Survey

- Survey plan preparation

- Proposal of policies related to EV introduction under the JCM

- Policy information collection

- Study on EV market trends in the Philippines

- Preparation of electric jeepneys introduction plan

- Consideration on project implementation structure in the Philippines including financial plan

- MRV methodology preparation and estimation of GHG emissions reduction amount

- Evaluation of economic impact of the project

- Consideration on schedule for electric jeepneys introduction

- Seminar on Battery Swapping Electric Vehicles Technology and the Joint Crediting Mechanism

Work in Japan

- Survey preparation

- Literature survey on existing documents

- Technological consideration

- Preparation and submission of project final report

Work in the Philippines Work in Japan

7

Table 1.4 Schedule table for field surveys (Activities in the Philippines) Date Time Destination or activity name

1st field survey (7-11 August 2016)

Mon, 8 August 2016 9:30am

Kick-off meeting for the F/S (Meeting with EVAP, EVEEI, Board of Investment (hereinafter referred to as”BOI”), and Commercial Section, Embassy of Republic of the Philippines in Tokyo)

2:00pm Embassy of Japan in the Philippines

Tue, 9 August 2016 10:00am Low Carbon Transport Planning Department, Department of Transport

(hereinafter referred to as “DOTr”)

2:00pm Climate Change Division, Environmental Management Bureau, Department of Environment and Natural Resources (hereinafter referred to as “DENR”)

Thu, 10 August 2016

8:50am Investment Promotion Office, Department of Energy (hereinafter referred to as “DOE”)

10:40am Base Conversion and Development Authority (hereinafter referred to as “BCDA”), Office of the President of the Philippines

1:30pm Wrap-up meeting for 1st field survey (Meeting with EVAP, BOI and Commercial Section, Embassy of Republic of the Philippines in Tokyo)

2nd field survey (9-17 October 2016)

Mon, 10 October 2016

9:45am

Kick-off meeting for 2nd field survey (Meeting with EVAP, BOI, Commercial Section, Embassy of Republic of the Philippines in Tokyo, University of the Philippines National Center for Transportation Studies (hereinafter referred to as “UP-NCTS”), DOTr, DENR and DOE)

2:00pm UP-NCTS

4:15pm President of University of the Philippines (hereinafter referred to as “UP”)

Tue, 11 October 2016

10:15am Mayor of City of Olongapo, Batangas Province

2:30pm Isuzu Philippines

4:50pm Visit to factory of PhUV Inc.

Wed, 12 October 2016

9:00am Clark Development Corporation (hereinafter referred to as “CDC”)

3:30pm Subic Bay Metropolitan Authority (hereinafter referred to as “SBMA”)

4:40pm City council of Olongapo City, Zambales Province

Thu, 13 October 2016 2:00pm John Hay Management Corporation (hereinafter referred to as “JHMC”)

Fri, 14 October 2016 2:40pm Wrap-up meeting for 2nd field survey (Meeting with EVAP and Commercial Section, Embassy of Republic of the Philippines in Tokyo）

Sat, 15 October 2016

10:00am Ride on electric jeepneys under PhUV project in Muntinlupa City, Metropolitan Manila Region

11:30am Ride on electric jeepneys under EVEEI project in Filnvest Alabang District, Metropolitan Manila Region

Afternoon Analysis on field survey outcomes(*1)

Sun, 16 October 2016 Whole day Analysis on field survey outcomes(*1)

3rd field survey (4-8 December 2016)

Mon, 5 December 2016 10:20am SBMA

2:15pm CDC

Tue, 6 December 2016 2:15pm JHMC

Wed, 7 December 2016 1:20pm UP Diliman

3:55pm Wrap-up meeting for 3rd field survey (Meeting with EVAP, BOI and BCDA)

4th field survey (5-11 February 2017)

Mon, 6 February 2017 10:00am JHMC

2:15pm Benguet Electric Cooperatives Inc (hereinafter referred to as “BENECO”)

Tue, 7 February 2017 10:00am CDC

Wed, 8 February 2017 10:20am EVAP、MERALCO

1:30pm EVEEI

Thu, 9 February 2017 9:30am BOI

1:30pm Seminar on Battery Swapping Electric Vehicles Technology and the Joint

8

Date Time Destination or activity name Crediting Mechanism

Fri, 10 February 2017

10:00am Climate Change Division, Environmental Management Bureau, DENR (*2)

10:00am Clark Electricity Distribution Corporation (*2)

1:00pm 1 Team

4:00pm Wrap-up meeting for the F/S (Meeting with EVAP and BCDA)

Note:

(*1) Extension of schedule in Manila for a part of study team members due to typhoon attack.

(*2) Separate meetings with participation by different study team members

1.2.4 Survey items

The feasibility study conducts survey on following items:

i. Proposal of policies related to EV introduction under the JCM

ii. Consideration on concrete project plan for electric jeepneys introduction based on proposed

policies

- Collection and analysis of policy information collection e.g. upper policies and incentives

- Research on latest EV market trends

- Preparation of plan for electric jeepneys introduction in the Philippines (i.e. consideration of

specification of electric jeepneys and design)

- Consideration on project impelementation structure in the Philippines (i.e. project

implementation structure, consideration on project cost and financial plan)

- Evaluation of environmental impact of electric jeepneys introduction (i.e. CO2 and air

pollutants emission reduction amount)

- Consideration on schedule for electric jeepneys introduction in the Philippines (i.e. preparation

of roadmap for electric jeepneys introduction)

iii. Analaysis on impacts on the Philippines including economic impact from electric jeepney project

(e.g. economic evaluation, expected economic impact and contribution to local economy)

iv. Consideration on challenges for electric jeepneys introduction, success factor and solutions for the

challenges for project implementation under Philippine-Japan JCM scheme

v. Activities for enhancement of understanding on the JCM in Philippine stakeholders and

reinforcement of partnership with the stakeholders (i.e.Seminar on Battery Swapping Electric

Vehicles Technology and the Joint Crediting Mechanism for governmental institutions and EV

industry in the Philippines)

9

Chapter 2 Trends in related policies and EV markets in the Philippines

2.1 Situation of transport sector in the Philippines

2.1.1 Situation of the Philippines and Metropolitan Manila Region

At stage of year 2013 7.69 million automobiles are registered in the Philippines at stage of year 2013,

and this figure includes 868 thousand private cars, 346 thousand SUVs, 40 thousand trailers, 4.2 million

2-wheel vehicles including tricycles and 350 thousand trucks. Also, 30 thousand buses for public

transportration service and 179 thousand public utility vehicles including jeepneys were included in the

overall figure.Proportion of utility vehicles amounts for 23.3% and utility vehicles were second largest

group among overall registed automobile fleets in the Philippines. In comparison with registered

automobile volume in year 2010, the volume was increased for every automobile type by 1.05 million

vehicles or 16% in total.

In comparison with registered automobile volume in year 2010, the volume was increased for every

automobile type by 1.05 million automobiles or 16% in total. Among the overall volume of increased

automobiles, 2-wheel vehicle amounts for 768 thousand and it mainly owes to public utility vehicles with

increased volume of 930 thousand vehicles. Among increase rate of diferent vehicle type, the highest rate

is that of trailers (i.e. 37% or 10 thousand vehicles) and the second highest rate is that of SUVs (i.e. 33%

or 85 thousand vehicles).

Table 2.1 Registered automobile volume in the Philippines

Item Year Buses Private cars

Bicycles and tricycles SUVs Trailers Trucks Public utility

vehicles Total

Registered volume

2010 34,933 808,583 3,482,149 261,213 29,279 317,903 1,700,795 6,634,855

2011 34,478 828,587 3,881,460 284,099 32,531 329,385 1,748,402 7,138,942

2012 33,586 852,255 4,116,690 310,521 37,459 341,572 1,771,310 7,463,393

2013 31,665 868,148 4,250,667 346,396 40,145 358,445 1,794,572 7,690,038 Proportion by vehicle type 2013 0.4% 11.3% 55.3% 4.5% 0.5% 4.7% 23.3% 100.0%

Increase rate in year 2013 in comparison with

year 2010 (Times) 0.91 1.07 1.22 1.33 1.37 1.13 1.06 1.16

Unit:: vehicle

Source: LTO

On the other hand, registered automobiles in Metropolitan Manila Region in year 2013 amounts for

2.1 million vehicles, including 453 thousand private cars, 185 thousand SUVs, 18 thousand trailers, 773

thousand 2-wheel vehicles including tricycles, and 18 thousand trailers, and 27% of overall registered

automobiles are concentrated in the Region. The registered automobile volume in the Region includes 13

thousand buses and 57 thousand utility vehicles (including jeepneys) as public transport service vehicles.

Proportion of utility vehicles among the registered automobiles in the Region is 27.5% and is the second

largest among them, while 2-wheel vehicles including tricycles in the largest. If excluding 2-wheel

vehicles, proportion of utility vehicles among the rest of automobiles in the Region amount for 44%.

Furthermore, more than 40% of registered buses, private cars, SUVs and trailers in the Philippines are

10

concentrated in national central region.

Table 2.2 Registered automobile volume in Metropolitan Manila Region

Item Year Buses Private cars

Bicycles and tricycles SUVs Trailers Trucks Public utility

vehicles Total

Registered volume

2010 14,184 435,473 667,424 145,438 14,572 69,181 558,123 1,904,395

2011 13,345 446,106 734,465 156,188 16,911 72,121 575,614 2,014,750

2012 13,007 450,189 745,777 167,105 18,220 72,009 566,083 2,032,390

2013 13,989 452,959 773,291 185,623 18,033 78,521 578,732 2,101,148 Proportion by

vehicle type 2013 0.7% 21.6% 36.8% 8.8% 0.9% 3.7% 27.5% 100.0%

Increase rate in year 2013 in comparison

with year 2010 (Times) 44% 52% 18% 54% 45% 22% 32% 27%

Registered volume 2010 1.04 1.16 1.28 1.24 1.14 1.04 1.10

Unit: vehicle

Source: LTO

According to JICA study report on Roadmap for Transport Infrastructure Development for Metro

Manila and Its Surrounding Areas in year 2014, V/C ratio which represents traffic congestion in

Metropolitan Manila Region is 0.8 in average, and automobiles operate in approximately a half of roads

in the Region in velocity of 20km/h and below. As to road network development, 1,032 kilometers of

national roads with road density of 0.095km/km2 and 27,457kilometers of local roads with road density of

0.57km/km2 are developed, and roads in Metropolitan Manila Region enjoy comparatively high road

density and development rate compared to other regions in the Philippines. However, more automobile

volume on less developed rod network amounting for 1 kilometer of road for 424 automobiles is

considered to lead to traffic congestion in the Region. Furthermore, traffic volume by time period is

drastically increased in around 7:00 am and evening time at 8:00pm and after, and it is observed there is

traffic congestion in daytime and evening time, as well as peak hours, as shown in Figure 2.1.

Source: The Project for Capacity Development on Transportation Planning and Database Management in the Republic of the Philippines (JICA,2013)

Figure 2.1 Traffic volume by time period in main roads in Metropolitan Manila Region

Published estimate by NEDA based on result of the abovementioned JICA Study indicates daily traffic

cost including expense for operation of automobiles and time cost in users side amounts for 2.4 billion

11

Philippine Pesos, and it is shown that traffic congestions have serious negative social impact.

2.1.2 Situation of air pollution (Situation of air pollutants emissions)

Situation of installed air pollution monitoring stations and monitoring items are summarized in Table

2.3.

Table 2.3 Situation of installaed air pollution monitoring stations in Metropolitan Manila Region Location Monitoring item(s) Sampling method Installed

volume

Central Office (Quezon City)

PM10 Lower volume sampling system 1

NO2、SO2、O3 DOAS-Open path; BTX-CO 4

Metropolitan Manila Region

TSP (Total Suspended Particulates) Higher-volume sampling system 10

PM10/ PM2.5 Real-time BAM 3

PM10 Higher-volume sampling system 5

Source: National Air Quality Status Report 2010-2011(DENR,2012)

Concetration of TSPs in atmosphere, as shown in Figure 2.2, had been decreased from 171μg/Ncm to

171μg/Ncm in the period of year 2004-2013 by approximately 30%. Focusing on TSP concentration,

this represents air quality improvement in Metropolitan Manila Region, and this is considered as success

of mandated exhaust gas inspection, improved fuel quality and preparation of laws related to air

pollution countermeasures; however, further improvement is still necessary to meet long-term national

air quality standard level (90μg/Ncm as average yearly value).

Figure 2.2 Concentration of TSPs in atmosphere in Metropolitan Manila Region

National air quality standard value for PM10 is set as 60μg/Ncm(long-term value in yearly average)

and 150μg/Ncm (short-term value in 24-hour average) At stage of year 2013, observed concentration

value of PM10 at all of 9 stations for observation of PM10 concentration was below the short-term

national standard value. Also, as shown in Table 2.4, observed concetration value of PM10 at 5 of 9

stations in year 2013 was 74μg/Ncm in average and was slightly below the long-term value. There is a

decreasing PM10 concentration on a continuous basism, and the long-term PM10 concentration value had

been decreased by 39% from upper half of year 2011 to latter half of year 2014, while the observed

PM10 concentration value in year 2015 (i.e. 50μg/Ncm) was also below the long-term value.

171 162 146 131 138 129150

118 119 118

0

50

100

150

200

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Con

cent

ratio

n in

at

mos

pher

eμg

/Ncm

Year

Long-term air quality standard level:(90μg/cm)

Source: DENR

12

Table 2.4 PM10 concentration at each monitoring station in year 2013 (yearly geometric mean value)

Monitoring station

Ateneo RT NPO-EDSA

Marikina DOH-Manila

MMDA-EDSA

Pasay Muntinlupa Val-ESDA-RT

NAMARIA-RT

Value (μg/Ncm) 50 73 61 69 67 105 25 74 53 Source: DENR

Observed value on SO2 and NO2 concetration had been below air quality standard value in period of

year 2007-2011, as result of efforts including mandated exhaust gas inspection and fuel quality

improvement.

2.2 Transport policy

2.2.1 Relationship with development plan and other policies in the Philippines and Metropolitan Manila Region

Transport policy has close relationship with national development plan and national land

policies.NEDA is a major supervising authority over national and regional land policies. National land

policy is formulated in dimension of spatial planning and socio-economic planning at national and

regional levels, as shown in Table 2.5. Especially in Metropolitan Manila Region, the Metropolitan

Manila Development Authority (hereinafter referred to as “MMDA”) formulates plans for its terrain

under Republic Act No. 7924 titled An Act Creating the Metropolitan Manila Development Authority,

Defining its Powers and Function, Provinding Funds Therefor and Other Purposes.

Table 2.5 Framework of land policy plans and supervising agencies Spatial planning Socio-econoimic planning Supervising

agency National level National Framework for Physical

Planning (2001-2030) Medium Term Philippines Development Plan (2011~2016、2017~2022)

NEDA

Metropolitan Manila Region

- A Physical Development Framework Plan for Metropolitan Manila 1996-2016 - The Metro Manila greenprint 2030 : building a vision

MMDA

Description on each land policy plan is shown as follows:

a. Medium Term Philippines Development Plan and National Framework for Physical Planning (2001-2030)

Medium Term Philippines Development Plan (hereinafter referred to as “MTPDP”) is a six-yearland

policy plan as the socio-economic development plan framework by the National Economic and

Development Authority (hereinafter referred to as “NEDA”). The MTPDP is the national plan which

covers policy goals of administration of each President of the Philippines1. The components of the

MTPDP on infrastructure sector stipulates transport system development from viewpoint of “safety,

efficiency, appropriateness, competency, inclusiveness, environmental consideration and citizens-based”,

and its disiplines include promotion of Public-Private Partnership (PPP), efficiency in plan development 1 MTPDP2017-2022 as the latest MTPDP was approved by President Rodrigo Duterte on 21 February 2017, and its pre-

publication version is available on NEDA website as of 16 March 2017.

13

and budget procurement, enforcement in institutional arrangement and implementation structure and

consideration on environment including climate change.

MTPDP 2011-2016 has target of air pollutant emissions reduction in Metropolitan Manila Region and

city center of other major cities by 30% by year 2011 compared to year 2009 level with yearly emissions

reduction by 5% within period of year 2011-2016. To accomplish this target, the MTPDP covers fiscal

mechanism introduction for large-scale introduction of public transport services based on EVs among

other efforts such as enforcement in initiatives including emission test and mandated inspection for

stationery and mobile emission sources, promotion of conversion to high efficient automobile engines,

full-scale installation of air quality monitoring stations in Metropolitan Manila Region and city center of

other major cities under the Clean Air Act. MTPDP positions the fiscal mechanism as promoting

measure to support both EVs production and conversion of conventional fossil fuel vehicles to EVs2.

NEDA published the pre-publication version of MTPDP 2017-2022 in March 2017. The MTPDP

urged LGUs and MMDA to work on quality improvement in road public transport services and raised

development of high-quality public transport services as a more attractive alternative for citizens

compared to use of private vehicles as a goal for accerated infrastructure development under the MTPDP.

As examples of actions for accomplishment of the goal, the MTPDP mentioned to fleet modernization

and development of environmentally-friendly sustainable urban transport.3.

Apart from MTPDP, National Framework for Physical Planning (hereinafter referred to as ”NFPP”)

2001-2030 represents a 30-year long-term national special development plan, and the NFPP is reviewed

and revised every 10 years. The NFPP positions transport sector as a sub-sector in infrastructure

development field, and stipulates that dissemination and promotion of inter-modal transport system

needs to be mainstreamed into infrastructure development plans and policy directions. Also, the NFPP

stipulates that such mainstreaming efforts need to consider desirable mutual compatibility, economic

feasibility, comparative advantage and linkage among different type of transport modes for promotion

of smooth transportation of passengers and freights between different locations4.

b. Physical Development Framework Plan for Metropolitan Manila 1996-2016

The Physical Development Framework Plan for Metropolitan Manila 1996-2016 was formulated by

MMDA, as a city and region development plan at regional level in Metropolitan Manila Region for

development of the Region with better planning and efficent management.

The Plan is a 20-year long-term plan with review every 10 year. The latest version of the plan (Version

for 1996-2016 after revision in year 1999) set a new focus on development of wider range of

metropolitan region including peripheral area of Metropolitan Manila Region, detailed description on

development policy zones and countermeasures against transport issues.

2 p.329, MTPDP2011-2016 3 p.3, p.19 and p.20, Chapter 3, Pre-publication version of MTPDP2017-2022 (Version of March 2017) 4 p.12, NFPP2011-2030 Executive Summary

14

Consideration on the next phase of physical development framework plan for period of year 2017-2037 has been in progress by MMDA.

c. The Metro Manila Greenprint 2030: Building a Vision

MMDA prepared and published development

vision titled The Metro Manila Greenprint 2030:

Building a Vision for overall Metropolitan Region

area including 16 cities and a municipality under

Metropolitan Manila Region with support from the

World Bank. The Greenprint was prepared in

response to Presidential direction for preparation of

long-term plan for Metropolitan Manila Region and

the Greater Metropolitan Manila Region to the

Regional Development Council in the National Capital Region (RDC-NCR) by the former Aquino

administration in year 2011.

The Greenprint Vision set a goal for implementation of following measures for Building a Green,

Connected, and Resilient Metropolis for All in Metropolitan Manila Region, through implementation of

large-scale infrastructure development and coordination among relevant governmental agencies with

coordination for vitalized public and private vehicle transport system in the Region:

- Re-organizing of jeepney and Asian Utility Vehicle (AUV) services to feed (rather than compete

with) major trunk routes and key nodes, while providing short-distance intra-nodal travel using

cleaner fuels and vehicle technologies, and

- Upgrading of jeepney drivetrains, moving from polluting diesel and/or petrol to cleaner fuels or

electric batteries5.

2.2.2 Masterplan in transport sector in the Philippines and Metropolitan Manila Region

a. Transportation Road Map for the Sustainable Development of Manila Metropolitan Area of the Philippines

The Transportation Road Map for the Sustainable Development of Manila Metropolitan Area of the

Philippines was prepared and approved at the Cabinet meeting in June 2014, with support from JICA, in

response to request from NEDA. The Road Map is a comprehensive transport development roadmap

with focus on Metropolitan Manila Region and neighboring Central Luzon and Calbarzon Regions. The

Road Map includes transport development investment program and priority projects in a short term for

year 2014-2016 and medium-term for year 2017. 5 p.37, The Metro Manila Greenprint 2030: Building a Vision, MMDA

Source: MLIT website

Figure 2.3 Policy zoning map under Physical Development Framework Plan for Metropolitan

Manila 1996-2016

15

The Road Map sets goal of 5 NOs: namely, NO traffic congestion, NO household living in high hazard

risk areas, NO barrier for seamless mobility, NO excessive transport cost burden for low-income groups

and NO air pollution. Furthermore, improvement in bus and jeepney public transport service, along with

BRT introduction as a long-term priority, is positioned as a part of road public transport project among 5

major projects under the dream plan for better Metropolitan Manila Region through accomplishment of

the said 5 NOs targets. Specifically, the improvement in the said public transport service is aimed for

modernization, safe fleet management, rational operational route arrangement and improved terminal

and transition station facilities development for bus and jeepney transport services6.

Among them, jeepney modernization is also positioned as an effort under road public transport project

in combination with relevant efforts including conversion of old conventional buses to lower pollutant-

emitting buses and utilization of ICT system, with target year of year 20307.

Source: Translation of p.44, Japanese summary of Final Report for Technical Assistance in Creating a Transportation Road Map for the Sustainable Development of Manila Metropolitan Area of the Philippines, JICA

Figure 2.4 Impact of implementation of 5 major projects under the Road Map on travel time of users in Metropolitan Manila Region

2.2.3 Situation of traffic congestion mitigation, laws on pollution prevention and relevant regulations, etc.

a. Tranportation Policy Act

The Act covers division of roles between national and regional governments, roles, criteria for

selection of plans and measures, subsidy programs of governments at different levels and other contents.

However, there is no description on details of financial sources and restriction on concessions. 6 p.33. Japanese summary of Final Report for Technical Assistance in Creating a Transportation Road Map for the Sustainable

Development of Manila Metropolitan Area of the Philippines, JICA 7 p.50, Japanese summary of Final Report for Technical Assistance in Creating a Transportation Road Map for the Sustainable

Development of Manila Metropolitan Area of the Philippines, JICA

16

In item of urban transport policy, there are following eight items as priority policies in the Act.

- Development of hirachy of urban public transport system

- Promotion of mass freight and public transport system as a suitable option for intra-urban transport service

- Promotion of improved mutual connectivity and nodosity among public transport services

- Promotion of actions for low cost transport engineering and transport management

- Promotion of travel demand control policies

- Strengthened regulation over cargo vehicles

- Consideration for pedestrians and bicycle users in transport policies

- Promotion of traffic impact assessment implementation

b. Clean Air Act

The Clean Air Act regulates standard value of concentration of substances include carbon monoxide

(hereinafter referred to as “CO”), nitrogen oxide (hereinafter referred to as “NOx”) and suspended

particulate matter (hereinafter referred to as “SPM”) as summarized in Table 2.6 and Table 2.7. Also, the

Act mandates automobile users to undergo exhaust gas inspection and requires installation of automobile

pollution control device.

Table 2.6 National ambient air quality guideline for criteria pollutants Pollutant name Short term (*1) Long term (*2)

μg/Ncm ppm Averaging time μg/Ncm ppm Averaging time SPM(*3) - TSP - PM10

230(※4) 150(※6)

- -

24hours 24hours

90 60

- -

1 year(*5) 1 year(*5)

Sulfur dioxide (*5) 180 0.07 24 hours 80 0.03 1 year Nitrogen dioxide 150 0.08 24 hours - - Photochemical oxidants

140 0.07 1 hour - -

Photochemical oxidants as ozone

60 0.03 8 hours - -

Carbon monoxide 30 mg/Ncm 10 mg/Ncm

30 9

1 hour 8 hours

- -

- -

Lead*7 1.5 - 3 month(*7) 1.0 - 1 year Note:

*1 Maximum limits represented by ninety-eight percentile (98%) values not to be exceed more than once a year. *2 Arithmetic mean *3 SO2 and Suspended Particulate matter are sampled once every six days when using the manual methods. A minimum

of twelve sampling days per quarter of forty-eight sampling days each year is required for these methods. Daily sampling may be done in the future once continuous analyzers are procured and become available.

*4 Limits for Total Suspended Particulate Matter with mass median diameter less than 25-50 um. *5 Annual geometric mean *6 Provisional limits for Suspended Particulate Matter with mass median diameter less than 10 microns and below until

sufficient monitoring data are gathered to base a proper guideline. *7 Evaluation of this guideline is carried out for 24-hour averaging time and averaged over three moving calendar months.

The monitored average value for any three months shall not exceed the guideline value.

Source: Section 12, Clean Air Act

17

Table 2.7 National ambient air quality standards for source specific air pollutants from industrial sources/ operations

Pollutants (*1) Concentration (*2) Averaging time (min)

Analysis/ Measurement method (*3) μg/Ncm ppm

Ammonia 200 0.28 30 Nesselerization/ Indo Phenol Carbon Disulfide 30 0.01 30 Tischer Method Chlorine and Chlorine Compounds (Cl2)

100 0.03 5 Methyl Orange

Formaldehyde 50 0.04 30 Chromotropic acid Method or MBTH Colorimetric Method

Hydrogen Chloride 200 0.13 30 Volhard Titration with Iodine Solution Hydrogen Sulfide 100 0.07 30 Methylene Blue Lead 20 - 30 AASc Nitrogen dioxide 375

260 0.20 0.14

30 60

Greiss- Saltzman

Phenol 100 0.03 30 4-Aminoantiphyrine Sulfur dioxide 470

340 0.18 0.13

30 60

Colorimetric-Pararosaniline

SPM ・TSP

300

-

60

Gravimetric

Note:

*1 Pertinent ambient standards for Antimony, Arsenic, Cadmium, Asbestos, Nitric Acid and Sulfuric Acid Mists in the 1978 NPCC Rules and Regulations may be considered as guides in determining compliance.

*2 Ninety-eight percentile (98%) values of 30-minute sampling measured at 250C and one atmosphere pressure. *3 Other equivalent methods approved by the Department may be used.

Source: Section 12, Clean Air Act

EMB issues Certificate of Compliance (COC) for automobile manufacturers, assemblers and importers

to certify that their specific new vehicle or vehicle type compliance with national ambient air quality

standard under the Clean Air Act. COCs are effective for 6 years after issuance date. At the same time,

the Act stipulates that importers or owners of vehicles such as reassembled vehicles imported or used

cars and unregistered retroffited vechiles with used engines shall apply for Certificate of Compliance to

Emission Standards (CCES) from LTO.

As shown in Table 2.8, it was revealed that approximately 73% of 60,444 vehicles in Metropolitan

Manila Region were not in compliance with emission standard according to emission test in year 2011.

Table 2.8 Result of emission test in Metropolitan Manila Region in year 2011 Office location Targeted vehicles for emission

test (cars) Vehicles in

compliance (cars) Compliance ratio

(%) Quezon City 18,730 8,006 42.7 Pasig City 9,035 3,174 35.1

Manila City 10,193 2,789 27.4 Mandaluyong City 7,908 0 0 Muntinlupa City 3,433 84 2.4

MMDA 3,394 1,015 29.9 EMB-NCR 2,637 863 34.0 Makati City 5,214 0 0

Total 60,444 15,931 26.4

Source: EMB

18

2.2.4 Situation of countermeasures related to traffic congestion mitigation and environmental pollution prevention in the Philippines (Regulations and countermeasures against exhaust gas and air pollution at level of national government, Metropolitan Manila Region and other municipalities)

DOTr, with objective of traffic congestion abatement and environmental pollution prevention, has

prepared the National Environmental Sustainable Transport Strategy for the Philippines and the

Philippines National Implementation Plan on Environment in the Transport Sector Low Pollution-Low

Emission 2011-2016 (hereinafter referred to as “NIP”). This Sub-subchapter describes overview of

national initiatives and programs including the said two documents.

a. National Environmental Sustainable Transport Strategy for the Philippines (hereinafter referred to as “EST Plan”)

The EST Plan was prepared by DOTr with assigned numerous strategies for respective 12 topics as

shown in Table 2.9. Also, the Strategy describes necessary concrete actions and budget procurement

method for the strategies.

Table 2.9 Overview of the EST Plan Topic Strategy

1. Public health - Preparation and issuance of administrative orders - Partnership with institutions, groups and stakeholders related to PR

campaign - Implementation and appraisal of sustainable trtansport programs

2. Ambiental air quality monitoring and survey

- Monitroing of progress of air pollutants emission reduction - Installation of ambiental air pollutants monitoring equipment - Capacity building on monitoring and survey for local government, etc.

3. Noise - Revision and observation of noise regulation standards - Increased capacity in local governments and issuance of ordinances

4. Regulation, monitoring and management of emissions

- Revised regulations on appropriate driving and fuel economy - Strengthened monitoring on roads - Mandatory inspection for public transport vehicles

5. Improved fuel quality - Promotion of fuel with good quality - Introduction of Euro4 standards - Improved CNG supply system

6. Public transport planning and demand control

- Integrated public transport system networks - Preparation and reinforcement of appropriate freight transport policies - Preparation of measures related to appropriate TDM/ TSM - Introduction of mass transport system - Rationalization of public transport

7. Non Motorized Transport (NMT) - Preparation of policies and guidelines on pedestrians and bicycles - Facility development for NMT

8. Infrastructure development with consideration for environment and human

- Transport-related infrastructure with environmental consideration - Applied inclusive design in transport-related infrastructure and freight

vehicles - Seamless and safe public transport system

9. Social justice and gender - Scrutiny on existing laws and regulations from viewpoint of social justice and gender

- Necessary support for users 10. Road safety and maintenance - Safety inspection for roads

- Appraisal of cost of traffic accidents - Allocation of transport safety and traffic regulation zones

11. Land-use plan - Capacity building on integration of land use and transport policy - Land development for complex utilization

12. Knowledge database development, dissemination and citizens participation

- Establishment of a research institute for environmentally-conscious transport

- Establishment of award system - Organized information on public hygiene

19

b. Philippines National Implementation Plan on Environment in the Transport Sector Low Pollution-Low Emission 2011-2016 (hereinafter referred to as “NIP”)

NIP is the national action plan for the Philippines, based on ASEAN-Japan Action Plan on

Environment Improvement in the Transport Sector as approved at ASEAN Transport Ministers Meeting

plus Japan (ATM+J) in year 2009. The NIP includes strategies and plans for introduction of low carbon

and green transport system. Compared to previously prepared EST Plan, the NIP is comparatively focused

on low carbon and low pollution transport and guidance on the EST Plan is reflected on the National

Climate Change Strategy 2010-2022.

Projects which was proposed under the EST Plan is not mandatory, however, the EST Plan requires

concerned institutions to continue their effortsfor implementation of the projects in year 2016 and afte,

though the target period of the EST Plan is until year 2016. The EST Plan describes 10 project pillars for

road transport initiatives, and the second project pillars of Vehicle Technology refers to promotion of EVs

including electric jeepneys in the Philippnies.

1. Emission control and standards 2.Vehicle technology 3. Public transportation 4. Travel demand management 5. Non Motorized Transport (NMT)

6. Freight and logistics 7. Cleaner fuels 8. Biofuels 9. Behavioural change 10. Environmental monitoring

In parallel of initatives under the NIP, there are various regulations and programs in enforcementor

implementation in traffic congestion abatement and environmental pollution prevention in the

Philippines. Regulatory measures and programs by Philippine governmental agencies in cooperation

with other various stakeholders in field of abovementioned 10 project pillars under the NIP are

summarized in Table 2.10.

20

Table 2.10 Regulations and countermeasures in the field of traffic congestion mitigation and pollution prevention Action Responsible organization in the Philippines Location for action implementation Action contents or objectives 1. Emission control and standards Euro4 standards DENR、DOTr Nationwide - Mandated compliance with Euro4 standards by new

passenger vehicles - Regulation of CO, Hydrocarbon (hereinafter referred

to as “HC”) +NOx and PM emissions from existing Euro-2/ Euro-3 compliant diesel vehicles.

- Issuance of DAO-2016-23 for introduction of Euro 4 standards (effective since July 2016)

Anti Smoke Belching Campaign - DOTr, LTO and DENR - Philippine Business for Social Progress - Businessmen-Bishops’ Conference - Philippine Business for the Environment - Philippine Medical Association (PMA)

Nationwide (Main focus on Metropolitan Manila Region)

- Air quality improvement and prevention of further deterioration of air quality

- Increased environmental awareness in private sector - Demonstration to promote the idea that business can

use its economic clout to force proper environmental performance.

Motor Vehicle Inspection System (MVIS) LTO - East Avenue, Quezon City - Old MIA Road, Pasay City - San Fernando, Pampanga Province - Mandaue City, Cebu - Alaminos, Laguna Province

- Prohibition of operation of buses and school buses with life span over 15 years

- Improved air quality conservation through abatement and mitigation of air pollution by vehicles which are not in compliance with exhaust gas regulation

2.Vehicle technology Promotion of 4-stroke tricycles operation Local government units (hereinafter referred to

as “LGUs”) Mandaluyong City and San Fernando City Reduction of air pollution from tricycles and motorcycles

Promotion of EVs including electric jeepneys and motorcycles

DOTr, DOE and municipalities with support from the World Bank

Makati City, Mandaluyong City and Surigao City

Mitigation of air pollution from automobiles

3. Public transportation Development of public transport planning support system for Metropolitan Manila Region

DOTr Metropolitan Manila Region Capacity building

Regulation on franchaise issuance for public transport services

Land Transportation Franchising & Regulatory Board (hereinafter referred to as “LTFRB”), DOTr

Nationwide Suspension of franchaise issuance to operators of public transport services

Rationalization of public road transport routes

DOTr, LTO, LTFRB and Metro Manila Bus Operators’ Association (MMBOA)

Metropolitan Manila Region and Cebu City Increased effiency in public transport

Metro Cebu BRT Demonostration Proejct DOTr and Government of Cebu City Cebu City Modal shift Enhancement of the Pasig River Ferry Services

Pasig River Rehabilitation Committee (PRRC) Metropolitan Manila Region Modal shift

Enhancement of operation of the nautical highway (RORO service)

DOTr, The Maritime Industry Authority (MARINA) and Phlippine Port Authority (PPA)

Nationwide Enhancement of development and promotion of an effective and efficient intermodal/ multimodal transportation network system in the Philippines

Development of additional urban rail DOTr and Philippine National Railway (PNR) Metropolitan Manila, Panay and Mindanao Implementation of rail network development plan for

21

Action Responsible organization in the Philippines Location for action implementation Action contents or objectives services Regions Metropolitan Manila Region 4. Travel demand management Unified Vehicular Volume Reduction Program (UVVRP)

MMDA Metropolitan Manila Region Reduction of vehicular traffic volume

Implementation of traffic management measures e.g. restoration of signalized intersections

MMDA, Department of Public Works and Highways (hereinafter referred to as “DPWH”) and LGUs

Nationwide - Travel time reduction - Fuel consumption and pollutants emission reduction

Travel demand and traffic system management

MMDA and LGUs Nationwide - Travel time reduction - Fuel consumption reduction

Truck ban MMDA and Truckers Association Metropolitan Manila Region Improved traffic efficiency Increased utilization of electronic payment system (EPS)

DOTr and Toll Regulatory Board (TRB) Toll roads Inreased efficiency and reduced vehicle congestion at toll plaza

Pedestrianization of commercial facilities Ayala Commercial Center Management Alaya-Makati Commercial Center Induction of walk by providing pedestrian facilities e.g.underpass and overpass with escalators and connection with various malls by elevated walways with 3 MRT stations

5. Non Motorized Transport (TNT) Development of bikeways DOTr and Department of Interiors and Local

Government (DILG) Marikina City and University of the Philippiners (UP)

Promotion of use of bicycles

Conversion of roads to pedestrian haven UP and Marikina City Quezon City and Marikina City Pedestrianization 6. Freight and logistics Improved freight and logistics management

DOTr and Truckers’ Association Nationwide Efficient goods transportation

7. Cleaner fuels Passage of the EV Incentive Bills Legislation Nationwide Tax subsidy and other fiscal/ non-fiscal incentives for

production and importation of EVs and their components Natural Gas Vehicle Program for PublicTransport (NGVPPT)

DOE, NGVPPT and accredited bus operators Manila - Promotion of compressed natural gas (hereinafter referred to as “CNG”) in transport sector in consonance with the goal of ensuring fuel supply diversification and supply security

- 60 CNG bus units initially Alternative fuel program AutoLPG program for taxi services

DOE and DOTr Nationwide Diversification of the country’s fuel sources and contribution to actions against air pollution from vehicles

Operation of 5,000 CNG buses DOTr Nationwide Promotion of operation and use of environmentally friendly transport services and fuel

8. Biofuels The Philippine Biofuel Program DOE, Philippine Coconuts Authority

(Department of Agriculture) and National Biofuel Board (DOE)

Nationwide Promotion of biofuel use

Mandatory requirement of 2% biodiesel blend

DOE Nationwide Promotion of biofuel use

22

Action Responsible organization in the Philippines Location for action implementation Action contents or objectives Mandatory requirement of 10% ethanol blend

DOE Nationwide Promotion of biofuel use

9. Behavioral change Car-less day, carpooling and auti-idling campaigns (Voluntary program)

DOE and industrial establishments under the Partnership for Energy Responsive Companies/ Ecozones

Nationwide Promotion of fuel conservation and reduction of pollution and traffic congestion

Ecosafe driving awareness program MMDA Metropolitan Manila Region Promotion of fuel effcicient driving Introduction of bike lanes MMDA Metropolitan Manila Region Traffic efficiency and road safety 10. Environmental monitoring Identification of potential hotspots and prioritization of establishment of ambient air quality monitoring stations

National: EMB Local: LGUs and Highly Urbanized Cities (hereinafter referred to as “HUCs”)

Nationwide

Identification of potential staff to be trained in HUCs

National: EMB, DOTr or LTO. Local: LGUs

Nationwide

Trainings for governmental staff National: EMB, DOTr or LTO Local: LGUs

- Training on use of DENR mobile air quality monitoring van

- Impelmentation of action plan workshop on air quality management

Update of baseline roadside noise level data by year 2010

EMB、Housing and Land Use Regulation Board (HLURB). DOTr and Bureau of Product Standards (BPS) under Department of Trade and Industry (DTI)

Establishment of interagency technical working group

EMB

Source: Revision of p.24-27, Philippines National Implementation Plan on Environment in the Transport Sector Low Pollution-Low Emission 2011-2016 based on information from Philippine governmental agencies during the F/S period

23

Among efforts on Table 2.10, regulation values under Euro 4 standards are summarized in Table 2.11.

Table 2.11 Regulation values under Euro 4 standards Targeted substance name

CO NOx HC+NOx PM Gasoline Diesel Gasoline Diesel Gasoline Diesel Gasoline Diesel

Regulation value 1.0 0.5 0.08 0.25 - 0.30 - 0.025

Unit: g/km

Source: p.37, Final Report on Study on trends of Automobile Market in Asian Emerging Economies by Mitsubishi UFJ Research and Consulting Co., Ltd. (Commissioned study by METI in JFY2015)

Also, in relation to item of EV introduction on Table 2.10, sectoral target for energy efficiency

improvement and target for introduction of CNG and LPG vehicles, electric tricycles and biofuel-driven

(biodiesel/ bioethanol-driven) vehicles are shown in Table 2.12 and Table 2.13 respectively.

Table 2.12 Sectoral target for energy

efficiency improvement Sector name 2020 2020 2030 Agriculture 20 25 30 Industrial 283 408 583 Commercial 241 345 482 Household 265 401 588 Transport 689 894 1,169 Total 1,499 2,072 2,850

Unit: Accumulated k-toe

Source: Philippine Energy Plan 2012-2030, DOE

Table 2.13 Target for introduction of CNG, LPG, electric tricycles and biofuel-driven vehicles

Vehicle type 2020 2025 2030 CNG vehicles CNG buses 6,900 units 9,200 units 15,000 units

CNG taxis 1,000 units 6,000 units 16,000 units LPG vehicles 21,700 units 23,200 units 23,000 units Electric tricycles 106,000 units 150,000 units 230,000 units Biofuel-driven vehicles Bioethanol-driven

vehicles 20％ 20％ 20％

CME (Biodiesel)-driven vehicles

10％ 20％ 20％

Source: The same as Table 2.12

2.3 Climate change policy

2.3.1 National climate change policy by Government of the Philippines

National statistics of sectoral energy consumption in the Philippines show that transport sector was the

largest energy consumer which consumes around 36.7% of overall energy consumption in the country at

stage of year 20108. Furthermore, energy consumption in road transport subsector amounted for nearly

around 80% of overall transport sector. Energy Supply and Outlook 2006 by APEC forcasted that energy

demand in road transport subsector would be continue to increase by 4.6% on a yearly basis. Similarly,

transport sector was the largest GHG emitter and their emission amounted for around 30%, and this fact

shows importance of climate change policy countermeasures in the sector. In this situation, measures

against air pollution and traffic congestion have been implemented as a part of climate change

countermeasures. In this sub-subchapter, national policy and plan with focus on climate change policy

countermeasures are described.

8 Key Energy Statistics 2010, DOE (https://www.doe.gov.ph/energy-consumption)

24

a. Climate Change Act 2009

Climate Change Act 2009 titled An Act Mainstreaming Climate Change into Government Policy

Formulations, Establsihing the Framework Strategy and Program on Cliamte Change, Creating for this

Purpose the Climate Change Commission, and for Other Purposes has following characteristics:

Under the Act, the Climate Change Commission was established with President of the Philippines as

the Chairman and members from related governmental agencies including DOTr, DOE and DILG as

well as other institutions including NGOs, as an independent and autonomous body with the same status

as that of a national government agency. The Commission is tasked to coordinate, monitor and evaluate

the programs and action plans of the government related to climate change, and receives support and

technical advices from subordinate Climate Change Office and Panel of Technical Experts.

Also, the Act mandates formulation of national framework strategy on climate change with revision

for every 3 years and national climate change action plan under the framework strategy one year after

the formulation of the framework starategy. Under the Act, central and provincial governments shall

provide technical and financial support to subordinate LGUs for their accomplishment of local climate

change action plan, while LGUs shall be responsible for implementation of the action plan in respective

fields.

In year 2012, the Act was revised to add clauses on increased involvement by departments related to

finance and budget for importance of climate finance and an additional role on leading role of the

Climate Change Committee in the field of international climate change negotiation.

b. National Framework Strategy on Climate Change 2010-2022 (hereinafter referred to as “NFSCC”)

NFSCC was prepared in year 2010, with objective of building of adaptative capacity to climate change

impacts, strengthened structure of natural ecosystem, appropriation of mitigation initiatives for

sustainable development. The NFSCC shows 16 mitigation, adaptation and cross-sectoral strategies, and

especially there is a description on transport sector as Environmentally Sustainable Transport as a key

result area (KRA) of its mitiation pillar under the NFSCC.

c. National Climate Change Action Plan 2011-2028 (hereinafter referred to as “NCCAP”)

NCCAP has objective of fusion of rationally achievable climate change mitigation and adaptation

measures to materialize action programs under the national strategy. The NCCAP sets following 7

strategic priorities and the Action Plan stipulates that environmentally sustainable transport will be

promoted and adopted in transport sector in the strategic priority of 6. Sustainable Energy.

1. Food Security 2.Water Sufficiency 3. Ecosystems and Environemntal Stability 4. Human Security

5. Climate-smart Industries and Services 6. Sustainable Energy 7. Knowledge and Capacity Development

Also, for promotion and introduction of sustainable transport, the NCCAP set target for promotion of

environmentally sustainable transport through initiatives as shown in Table 2.14 during the target period

of the NCCAP.

Immediate outcome nameEnvironmentally sustainable transportpromoted and adopted

Source:

Furthermore, the Climate Change

changeaction plan by respective LGUs after approval of the NCCAP.

2.3.2 Low carbon city development action plan in Metropolitan Manila Region (e.g. sustainable transport)

MMDA, as a supervising authority over entire Metropolitan

Manila Region, issued MMDA Resolution No

2012-

Formulate a Climate Change Action Plan

subordinate cities and municipality to prepare their climate change

action plan.

In this trend, Makati City, as a city in the Region, prepared the

Carbon Reduction and Offseting Program (hereinafter referred to as

“C.R.O

C.R.O

Manila Region, is explained.

C.R.O.P. shows guidelines for impelementation of realistic, responsive and feasible countermeasures

and projects

and in Makati City area, and the C.R.O.P. made clear necessary financial resources and capacity

development support needs for future implementation of climate change

Major activities under the C.R.O.P. are described as follows:

- Formal creation of GHG Management Committee under the Environmental Protection Council

of Makati City

- Development of comprehensive land use plan to include viewpoint of GHG

efforts by each emitter in the City

impact on GHG emission control in Makati City

- Formulation of Makati City Climate Change Action Plan as mandated by the

- Implementation of short

Table 2.14Immediate outcome name

nvironmentally sustainable transportpromoted and adopted

Source: National Climate Change Action Plan



Low carbon city development action plan in Metropolitan anila Region (e.g. sustainable transport)



- Urging the Local Government Units in Metro Manila to



action plan.



O.P.”) in year 2013. In this sub

O.P., as an example of initiative by a city in Metropolitan



and projects as a part of GHG emissions reduction efforts at several levels by Makati City government




Formal creation of GHG Management Committee under the Environmental Protection Council

of Makati City

Development of comprehensive land use plan to include viewpoint of GHG



Formulation of Makati City Climate Change Action Plan as mandated by the

Implementation of short

Table 2.14 Initiatives on low carbon transport policy under the NCCAPImmediate outcome name

sustainable transport Environmentally sustainable transport strategies and fuel conservation measures integrated in development plans Innovative financing mechanisms developed and promoted

National Climate Change Action Plan






Urging the Local Government Units in Metro Manila to





ear 2013. In this sub

, as an example of initiative by a city in Metropolitan



as a part of GHG emissions reduction efforts at several levels by Makati City government





of Makati City,





Implementation of short-term programs titled

Initiatives on low carbon transport policy under the NCCAPOutputs

Environmentally sustainable strategies and fuel

conservation measures integrated in development

Innovative financing mechanisms developed and

National Climate Change Action Plan

Furthermore, the Climate Change Commission was tasked to support formulation of climate






Formulate a Climate Change Action Plan in January 2012 to urge




ear 2013. In this sub-subchapter, overview of the









efforts by each emitter in the City’s administrative process in the field of land use with potential



term programs titled

25

Initiatives on low carbon transport policy under the NCCAP

Environmentally sustainable strategies and fuel

conservation measures integrated in development

Implement clean fleet programFormally adopt a socially equitable and integrated landtransport planning processes at the national and local levelsImplement energy

Innovative financing mechanisms developed and

Implement appropriate innovative financing to encourage new investments in EST

Commission was tasked to support formulation of climate


Low carbon city development action plan in Metropolitan


Manila Region, issued MMDA Resolution No.12-05, Series of


in January 2012 to urge




subchapter, overview of the









s administrative process in the field of land use with potential

impact on GHG emission control in Makati City,


term programs titled Rapid l


Implement clean fleet programFormally adopt a socially equitable and integrated landtransport planning processes at the national and local levelsImplement energy efficiency labelling for new vehicles

Implement appropriate innovative financing to encourage new investments in EST



Low carbon city development action plan in Metropolitan


05, Series of


in January 2012 to urge




subchapter, overview of the











Rapid launch in fields including electricity use in

Initiatives on low carbon transport policy under the NCCAPActivities

Implement clean fleet program Formally adopt a socially equitable and integrated landtransport planning processes at the national and local levels

efficiency labelling for new vehicles

Implement appropriate innovative financing to encourage new





development support needs for future implementation of climate change countermeasures.





in fields including electricity use in

Source: MMDAFigure 2.5

Resolution No.12


Formally adopt a socially equitable and integrated landtransport planning processes at the national and local levels







countermeasures.


Development of comprehensive land use plan to include viewpoint of GHG emission reduction


Formulation of Makati City Climate Change Action Plan as mandated by the NCCAP, and


Source: MMDA Figure 2.5 Cover letter of

Resolution No.12

Formally adopt a socially equitable and integrated land-use and transport planning processes at the national and local levels








emission reduction


NCCAP, and


Cover letter of MMDA Resolution No.12-05

MMDA

26

the fields including residential and commercial areas, transport, solid waste and wasterwater with

target period of November 2012- June 2013 and formulation of long-term GHG emission

management plan with various programs.

At stage of year 2011, proportion of GHG emissions in Makati City area in electricity (electricity use)

and transport sectors amounted for 75% and 18% respectively.

Table 2.15 Initiatives in low carbon transport field under the Rapid launch Initiative field name Initiative items

Community initiatives - Conversion of tricycles from 2-strokes from 4-strokes - Efficient traffic management

Community awareness - Development of audit visual materials to be released and shown in key areas e.g. cinema houses and electric billboards

- Inculusion of climate change mitigation and GHG management to regular information, education and communication (IEC) programs and activities

- Development of incentive-based programs (competition) for Barangays to actively participate in this initiative

Source: C.R.O.P.

Table 2.16 Strategic long-term initiatives for GHG management in low carbon transport field Item name Sub-item name Initiative contents

Climate Smart Transportation (Policy coordination and promotion of low carbon transport and introduction of incentives for direct fuel consumption reduction for GHG emissions reduction at city level)

1. Reducing GHG emissions and improving livability of planning processes

- Prioritizing GHG emissions reductions in transportation planning

- Integrating planning at the local, metropolitan, and regional levels

- Applying principles of Smart Growth and Transit-Oriented Development (e.g. mixed use communities and car-free areas)

- Promoting the expansion of the green canopy by encouraging street trees

2. Promoting non-motorized transportation and moving information

- Provision of bicycle lanes - Implementing bicycle parking spaces, bike racks and public

bicycle programs throughout the city, and especially adjacent to transit stations

- Giving priority access to public space and transit stations to pedestrians and bicycle riders

- Expanding the number and quality of sidewalks along principal pedestrian routes

- Rationalizing parking on public streets - Utilizing bicycles for police officers in urban centers

3. Utilizing public transportation and high occupancy vehicles

- Increasing the efficiency and connectedness of low capacity systems (bus, jeepney, and tricycle)

- Promoting education and incentive-based trip reduction programs

- Promoting car-pooling, van-pooling, and car share programs for private vehicles

- Introducing market-based instruments to reduce congestion and pollution

4. Improving transportation system efficiency

- Improving the circulation of traffic Improving traffic signal synchronization Utilizing intelligent traffic management systems Promoting GHG inventories and mitigation planning for

private sector - Improving the efficiency of the transportation fleet

Promoting community purchases of compact and hybrid vehicles (Public Transportation)

Purchasing fuel efficient (e.g. hybrid) and/or smaller fleet vehicles for the municipal fleet

Utilizing fuel-efficient vehicles (e.g. scooters) for parking enforcement

Improving vehicle inspection program and technical inspections of vehicles in the streets

- Improving the integration of modes of transportation

27

Item name Sub-item name Initiative contents Funding for the Makati City Mono Rail program

5. Supporting the adoption of renewable fuels and clean energy

- Utilizing alternative fuel vehicles (biodiesel, ethanol, electric, compressed natural gas) for city fleet

- Promoting the use of low carbon alternative fuels - Formulation of incentive programs to encourage stakeholders

to purchase alternative fuels Source: C.R.O.P.

Apart from the C.R.O.P., Makati City prepared GHG Management Framework Plan to set

management of climate change management actions in the City in year 2009. The Framework Plan set

agendas includingf identification of priority fields based on GHG inventory information, and promotion

of regulatory and volunatary GHG emissions reduction efforts by City government and citizens, as well

as GHG emissions risk management.

2.4 Support measures for introduction of battery swapping electric jeepney technology in the Philippines

In Government of the Philippines, a inter-agency working group for EV promotion is organized, and

its members include BOI as a leading agency, DOTr, DOE and relevant agencies. DOE, in cooperation

with DILG, had supported introduction of electric tricycles, while DOTr and DOE have jointly promoted

electric jeepneys introduction in the Philippines. Also, BOI has implemented applicable incentive

measures for EV promotion.

Also, aside from support measures by DOTr and BOI, EVAP, the Philippine EV industry and the

business partner in the Philippines under this project, has made efforts for legislation of EV incentive

bills with component of fiscal incentives for EV manufacturers, assemblers and importers and non-fiscal

incentives including related inter-agency cooperation scheme and benefits for preferential measures

under laws and regulations in the Philippines. The EV incentive bills are under process of negotiation

with the Senate and House of Representatives of the country, with support from BOI and other relevant

governmental agencies.

In this subchapter, overview of support measures by DOTr and BOI and latest situation of the EV

incentive bills with initiative by EVAP is described.

2.4.1 Support measures by DOTr

a. Exemption of franchaise regulations for EVs

LTFRB introduced suspension of issuance of franchaise certificate for bus operators in each province

to reduce traffic volume in the Philippines including Metropolitan Manila Region in year 2000.

Furthermore, LTFRB introduced an additional measure to suspend and regulate business franchaise

issuance for every public transport service in pursuant to a nationwide regulation of Memorandum

28

Circular 2003-0289.

Later, DOTr issued administrative order No. 2011-16 for exemption of franchaise regulation for EVs

including electric jeepneys for public transport service, in eye of promotion of EV transport including

the Jeepney Modernization Program in the Philippines10.

b. Jeepney Modernization Program

In addition to initatives related to NIP and MVIS by DOTr as decribed in previous Sub-subchapter

2.2.4, LTFRB has been promoting modernization of public utility vehicles including jeepneys. LTFRB

considers gradual retirement of jeepneys with operational age of 15 years or more under Jeepney

Modernization Program, and is aimed to promote safe and comfortable passenger services and

mitigation of air pollution as result of operation of old engines.

The Program has faced severe objection by existing domestic jeepney operator associations including

Alliance of Concerned Transport Organization, and coordination has been in progress between LTFRB

and these associations. In this process, Mr. Winston Ginez, Chairman of LTFRB mentioned that old

jeepneys would not be retired under the Program before the end of year 2016.

At present, consideration of Omnibus Franchaising Program by DOTr and LTFRB, with participation

by EVAP and other representatives from Philippine EV industry, has been in progress. The Program

cancels 350 thousand existing franchaise certificates for existing operators to update public utility

vehicles with operational age of 15 years or more and re-issue franchaise only if they handle vehicles in

compliance with latest standards including Euro 4 standards,

Customized Local Road Vehicle and MVIS system11. It is expected

that modernization of public utility vehicles will be promoted in

combination with reform of business franchaise scheme and the

Jeepney Modernization Program.

2.4.2 Promotion measures for automobile industry and tax incentive measures by BOI under Executive Orders

a. New Motor Vehicle Development Program12

In the former Aroyo Administration, New Motor Vehicle

Development Program (hereinafter referred to as “NMVDP”) was

introduced under the Executive Order No. 156 in year 2002

9 p.7, Bus Transportation Sector in the Philippines- Presentation Note, CUTS Center for Competition, Investment &

Economic Regulation http://www.cuts-ccier.org/crew/pdf/Note-Bus_Transport_Sector_in_the-Philippines.pdf

10 Department Order No. 2011-16 (Inclusion of Electric Motor Powered Vehicles in Item No.4 of DOTC Order No. 97-1997 “Providing Standard Classification for All Public Transport Conveyances” and the Exemption of All Electric Vehicles for Public Transport from the Moratorium on Franchise Applications)

11 Based on confirmation with EVAP. 12 Information on website of Government of the Philippines

http://www.gov.ph/2002/12/12/executive-order-no-156-s-2002/

Source: EVAP

Figure 2.6 Certificate on tax incentive for PhUV Inc. by BOI

based on EO156

29

(hereinafter referred to as “EO156”). NMVDP is aimed to promote manufacture and knock-down of

automobiles in the Philippines and is targeted for Philippine or foreign enterprises which were

established under Philippine law. BOI is the supervising authority over the Program under DTI.

- NMVDP is applied for passenger vehicles, commercial vehicles and motorcycles, including

commercial vehicles by PhUV, and

- Special custom duties are applied to production or knock down activities by targeted companies.

Also, NMVDP includes prohibition of import of used vehicles in regular situation and no specific tax

incentive is set for EV industry in the Philippines under the NMVDP13.

b. The Comprehensive Motor Vehicle Development Program14

The Comprehensive Motor Vehicle Development Program (hereinafter referred to as “CMVDP”) was

introduced in the former Aroyo Administration, under Executive Order No. 877-A (hereinafter referred

to as “EO877-A”) in year 2010. Introduction of the CMVDP had objectives of consolidation of MVDP

and enhanced international competitiveness of Philippine automobile industry in perspective of

establishment of ASEAN Economic Community (AEC) as well as scheduled tariff reduction after AEC

establishment. Overview of the CMVDP is as follows.

- CMVDP is applied for three vehicle categories: namely, commercial vehicles including gasoline-

driven, diesel-driven and electric vehicles and motorcycles including 2-wheel or 3-wheel

gasoline-driven, diesel-driven and electric vehicles and other vehicles. Also, CMVDP is

automatically applied for targeted companies of MVDP.

- Special custom duties for knock down automobile parts and components are continuously

applicable, and assembly and parts/ components production of automobiles had been listed on the

Investments Priority Plan by BOI until 13 June 2015.

- Prohibition of import of used vehicles is described in CMVDP as stipulated in NMVDP.

- Custom duty and excise tax reform is initiated in CMVDP and custom duty for automobile parts

will be amended for comformity with custom duty rate of neighboring companies with similar

automobile industry development program as the CMVDP. As to excise tax, excise tax taxation

system reform were included for establishment of equitable, simple, transparent and stable

taxation system and promotion of development of Philippine automobile industry.

- Introduction of packaged incentives for export of automobiles and their parts and compoents for

increased and diversified import of automobiles from the Philippines.

- Establishment of the Motor Vehicle Industry Council under DTI, with DTI Seretary as the

Chairman, as the major entity for policy coordination for enhanced automobile industry

13 For condition for authorized import of used vehicles, see JETRO website.

https://static.jetro.go.jp/world/asia/ph/qa/01/04A-041107 14 Website of Government of the Philippines http://www.gov.ph/2010/06/03/executive-order-no-877-a/

30

development in the Philippines. The Council is composed by Secretarty and 2 Undersecretaries,

Undersecretary of DENR, DOE and Department of Labor and Employment (DOLE), executives

from DOTr (LTO Assistant Secretary and LTFRB Chairman), Commissioner of Bureau of

Custom and 4 representatives from the Motor Vehicle Industry Association.

- Establishment of Industry Development Fund to provide fund for research and development of

equipment and facilities, procurement, development and replacement by automobile exporters,

under supervision of the Motor Vehicle Industry Council through BOI.

However, full-scale implementation of EO877-A was suspended and publication of rules and

procedures for the EO877-A by Government of the Philippines was cancelled, due to domestic

controversy in the Philippines. As its background, there was a tug-of-war within Philippine automobile

industry over position of representative from the industry in Motor Vehicle Industry Council, and

foreign companies and agent for automobile import and sales in the Philippines were against the

CMVDP, claiming incentives for domestic automobile industry in the Philippine should be an obstacle

for fair competition15.

c. Comprehensive Automotive Resurgence Strategy Program16

Comprehensive Automotive Resurgence Strategy Progtram (hereinafter referred to as “CARS

Program”) was introduced by the former Aquino Administration under the Executive Order No. 182

(hereinafter referred to as “EO182”) in June 2015, with objective of demand stimulation through inviting

new investment for Philippine automobile industry after suspension of the EO877-A, as a roll-back

against Thailand and other countries with advantage in automobile industry development in ASEAN

region and development of the Philippines as the automobile manufacture hub.

- Targeted business activities of the CARS Program are 1) manufacture of 3 types of 4-wheel

automobiles in maximum, 2) Manufacture of automobile type which has already been sold in

Philippine market, 3) Body shells and large plastic parts assembly for the car types which have

already been sold in Philippine market, 4) Manufacture of 4-wheel automobile parts except for

parts for OEM production in the Philippines and 5) Activities at shared testing facility for

automobiles and/ or their parts. Automobile and automobile parts manufacturers and shared

testing facility are qualified under the CARS Program.

- Under the CARS Program, Inter-agency Committee on Automotive Industry Development was

established for supervision and implementation of the Program. The representrative from DTI-

BOI shall act as Chairperson of the Interagency Committee, with members from Department of

Finance (hereinafter referred to as “DOF”), DOTr, DOST, Technical Education and Skills

Development Authority (hereinafter referred to as “TESDA”), the Co-Chairman of the Industry

Development Council and the Co-Chairman of the National Competitiveness Council. The Inter-

15 p.14, 16 and 17, Final Report for JICA project In the Republic of the Philippines, the Project for Developing Motor Vehicle

Regulations and Certification 16 Website of Government of the Philippines http://www.gov.ph/2015/05/29/executive-order-no-182-s-2015/

31

agency Committee takes roles including review on application to the Program, supervision of

implementation of the Program, research and consideration on revision of exisiting laws and

regulations (if necessary) and advice on admonishment for withdrawal of support for Program

participant entities in case of their incompliance to eligibility criteria for the Program.

Table 2.17 Eligibility and qualifications of Program participants Qualification

category name Eligibility and qualification criteria

Car manufacturers (Car Makers)

- An internationally-recognized Car Maker/brand owner and/or its authorized in country licensed manufacturer acting jointly with an internationally-recognized carmaker/brand owner;

- Proven global track record; and - Existing multinational operations.

Parts manufacturers (Parts Makers)

- Endorsed by the PCM to manufacture parts of its enrolled Model; - OEM automotive Parts Maker and/or its authorized in-country licensed manufacturer

acting jointly with an internationally-recognized carmaker/brand owner; - Proven track record; and - A member of good standing of the Philippine Parts Maker Association.

Shared testing facilities

- Collectively endorsed by the PCMs; and - Proven track record.

Source: Website of Government of the Philippines http://www.gov.ph/2015/05/29/executive-order-no-182-s-2015/

- For qualification under the CARS Program, applicants shall meet eligibility and qualification

criteria in Table 2.17 and other standards as required by BOI.

- The registered Participants may be entitled to 2 types of fiscal support during the enrolled Model

Life, up to a maximum of 6 years, namely, Fixed Investment Support (FIS); and Production

Volume Incentive (PVI), as shown in Table 2.18, provided, that the Participants satisfy the

following qualifications

- Mitsubishi Motors Philippines Corporation, the overseas subsidiary for automobile manufacture

and sales of Mitsubishi Motors, was qualified as the first program participant in June 2016. The

company is scheduled to produce 200 thousand units of their small-car product called Mirage for

the next 6 years17.

Table 2.18 Condition for support for participating companies under CARS Program Support type Conditions

Fixed Investment Support (FIS)

- New investments in the manufacture of Parts and/or establishment of Shared Testing Facility; - Delivery of Parts to the PCM within the prescribed period as stipulated by the BOI; - Introduction of the enrolled Model to the market using the Parts manufactured under this CARS

Program; - Consistently meeting the criteria for enrollment of PCMs; and - Attainment of other conditions that the BOI has imposed at the time of registration.

Production Volume Incentive (PVI)

- Manufacture of at least 50% of the assembly by weight in the case of Body Shell Assembly; - Manufacture of major components of the assemblies in the case of Large Plastic Parts

Assemblies; - Exceeds 100,000 units in production volume; and - Attainment of other conditions that the BOI has imposed at the time of registration.

Source: The same as Table 2.17.

17 JETRO website https://www.jetro.go.jp/biznews/2016/06/4600d60809b1279d.html

32

d. Incentives under the Omnibus Investment Code of 1987 and Investment Priority Plan

BOI provides following incentives for registered enterprises under the Omnibus Investment Code of

1987 (Executive Order No. 226 of year 1987):

- Income Tax Holiday (hereinafter referred to as “ITH”),

- Additional exemption for labor cost (If proportion of employees to capital equipment cost

exceeds a designated value, 50% of labor cost in response to increased direct labors can be

additionally deducted from taxable earnings for the first 5 years after registration.),

- Unlimited use of OEM facilities,

- Employment of foreigners as supervisors, engineers or advisors for the first 5 years after

registration (can be extended),

- Import of livestock for bleeding and genetic materials without custom duty for 10 years after

registration date at longest,

- Tax deduction for domestic livestock for bleeding and domestic genetic materials for 10 years

after registration date in maximum (Deduction of equivalent amount of 100% of duty tax and

other costs in case of export of corresponding livestock and/or materials),

- Exemption of equilavalent amount of domestic taxes for raw materials, supply parts and semi-

products for manufacture, processing and production of imported products and their components,

- Use of bond factories and warehouses,

- Exemption from quayages, export tax, levies and others.

- Simplified clearance process at the custom.

Among them, as stipulated in Article 17 of the Omnibus Investment Code, newly registered enterprises

are certified as Pioneer enterprises, if they fulfill following conditions. For Pioneer enterprises, ITH is

applied for the first 6 years.

- The enterprises are engaged in the manufacture, processing or production, and not merely in the

assembly or packaging of goods, products, commodities or raw materials that have not been or

are not being produced in the Philippines on a commercial scale, or

- The enterprises use a design, formula, scheme, method, process or system of production or

transformation of any element, substance or raw materials into another raw material or finished

goods which is new and untried in the Philippines, or

- The enterprises are engaged in the pursuit of agricultural, forestry and mining activities and/ or

services including the industrial aspects of food processing, or

- The enterprises produce non-conventional fuels or manufacture equipment which utilize non-

conventional energy sources or uses/ converts to coal or other non-conventional fuels or energy

sources in its production, manufacturing or processing operations.

For certification of Pioneer enterprises, after application to BOI Industrial Group by the applicant

33

enterprises at stage of establishment of the enterprises, BOI make reference to DOST and concerned

industrial associations for recommendation from the institutions for final approval by BOI. The applicant

enterprises shall present concretre business plan for BOI. If the applicant enterprises fail in awarding as

Pioneer enterprises, ITH is applied for the first 4 years.

Also, BOI publishes Investment Priority Plan (hereinafter referred to as “IPP”) every 3 years, and

provides incentives including ITH under the Omnibus Code for new business in listed business field as

Preferred Areas of Investment on each IPP. Applied period of ITH incentive for the business can vary

depending on whether the business entity is certified as Pioneer enterprise. As IPP 2017-2019 is still

under process of formulation, information on Preferred Areas of Investment on IPP 2014-2016 is listed

in Table 2.19.

Table 2.19 Preferred Areas of Investment on IPP2014- 2016 Area name Included business categories

1. Manufacturing - Motor vehicle (based on Logistics Efficiency Index; excluding motorcycles, e-bikes and golfcarts) and motor vehicle parts and components

- Shipbuilding including parts and components - Aerospace parts and components - Chemicals - Virgin paper pulp - Copper wires and copper wire rods - Basic iron and steel products, steel grinding balls, long steel products (billets and reinforcing

steel bars), and flat hot/cold-rolled products - Tool and Die

2. Agribusiness and Fishery 3. Services - Integrated Circuit Design

- Creative Industries/Knowledge-Based Services - Ship repair - Charging stations for EVs - Maintenance, Repair and Overhaul (MRO) of aircraft - Industrial waste treatment

4. Economic and Low-cost Housing 5. Hospitals 6. Energy 7. Public infrastructure and logistics 8. PPP projects

Source: JETRO

Among Preferred Areas of Investment on IPP 2014-2016, there is a possibility that motor vehicle and

motor vehicle parts and components in Manufacturing category and haring stations for EVs in Services

category are applicable to this Project. Applied incentives for motor vehicle, motor vehicle parts and

components and EV charging stations are listed in Table 2.20.

Table 2.20 Overview of applied incentives for automobile vehicles, vehicle parts and components and EV charging stations

Area name Targeted business activity and incentive contents Motor vehicle (based on Logistics Efficiency Index; excluding motorcycles, e-bikes and golfcarts) and motor vehicle parts and components Motor vehicles Any of the new business for manufacture/assembly of alternative fuel vehicles (including

include hybrid vehicles, and flexible-fuel vehicles) and EVs is qualified as Pioneer enterprise. Motor vehicle

parts and components

Any of new business handling Original Equipment Manufacturer (OEM) parts and components related to Controller assembly, motor, and battery (other than lead acid) for EVs is qualified as Pioneer enterprise.

Charging stations for EVs

- Etablishment of charging stations for electric vehicles is targeted business is targeted - Charing stations could refer to a ‘service station’ designed to simultaneously fast charge

34

Area name Targeted business activity and incentive contents multiple vehicles similar to gasoline/diesel stations or a network of at least 5 charging stands.

*Application for registration must be accomplished by an endorsement from the Department of Energy-Investment Promotion Office (DOE-IPO).

Source: EVAP

2.4.3 Discussion for introduction of further support measures

a. Consideration for introduction of government’s guarantee for equipment procurement by electric jeepneys

DOTr has considered introduction of financial support measures in form of government’s guarantee

for bank loan procurement by operators including jeepney operators, as a part of promotion of electric

jeepneys under the Jeepney Modernization Program.

In the Philippines, the Small Business Guarantee and Finance Corporation was established for

financial support to industries including manufacturing industry in year 1991, and the Guarantee Fund

for Small and Medium Enterprises was established under the Office of President to provide guarantee

for initial bank loan procurement by small and medium enterprises in year 1984. These two institutions

are merged as the Small Business Corporation under DTI in year 2001.

According to DOTr, they are considering possibility for providing above financial support mesasures

with financial source from the Small Business Corporation, in cooperation with the Transport

Cooperatives and the Development Bank of the Philippines (DBP), due to lack of background of existing

executive orders, laws and regulations.

- DOTr provides government’s guarantee for operators including jeepney operators without bank

account for their procurement of private bank loan with commercial bank interest rate (6%).

- Operators who received loan guarantee from the Small Business Corporation, shall submit

certificate of vehicle registration and certificate of the certificate issuance which are issued by

LTO for every year to the Government Financial Institution (hereinafter referred to as “GFI”)

after their procurement of vehicle(s) to prove fact of vehicle registration and proprietary of the

vehicle(s).

Due to strong objection from the Commission of Audit (hereinafter referred to as “COA”) of the

Philippines against the government’s guarantee, coordination has been in process among DOTr, COA

and GFI for establishment of new mechanism to legally enable government’s guarantee for loan

procurement by private companies.

b. Utilization of Road Fund

A part of commission paid by vehicle owners in the Philippines for LTO for their annual vehicle

registration is charged as the Road User’s Tax and accumulated as the Road Fund by DOTr. Expenditure

of the Road Fund is limited to infrastructure development related to transport with permission by the

Road Board under DPWH.

DOTr has a plan to mobilize a part of the Road Fund for promotion of EVs through related

infrastructure development and their related efforts for jeepney modernization. Their consultation with

the Road Board was not

c. Efforts for legislation of EV Incentive B

EVAP, the business partner under the Project and the EV industrial association of the Philippines, has

lobbied na

governmental agencies for legislation of EV Incentive Bills including fiscal and non

measures for promotion of EV introduction in the country, since the

period.

Ways & Means Committee has taken initiatives for the discussion.

As shown in Figure 2.6, bills in the Philippines are submitted to both Senate and House of

Representatives during term of congress session, and after 3 Readings at each of Senate and House of

Representatives,

discussion at the Bicameral Conference Committee and ratification by the Senate and the House,

Incentive Bills

to the congress

President uses the veto on

congress session,

Overview of the latest EV Incentive Bills under discussion at the ongoing 18

previously submitted bills is summarized in Table 2.21.



the Road Board was not

Efforts for legislation of EV Incentive B


lobbied national congress (Senate and House of Representatives), BOI, DOE, LTO and other related



period. The House of Representatives has priority over discussion on such incentive measures and their




Representatives, the Incentive Bills


Incentive Bills are legislated with approval by President. If the President refers

to the congress, additional 3 readings at the Sen

President uses the veto on

congress session, the Incentive Bills

Figure





the Road Board was not successful due to objection from the COA.

Efforts for legislation of EV Incentive B


tional congress (Senate and House of Representatives), BOI, DOE, LTO and other related



The House of Representatives has priority over discussion on such incentive measures and their




the Incentive Bills


are legislated with approval by President. If the President refers

, additional 3 readings at the Sen

President uses the veto on the Incentive Bills

the Incentive Bills

Source: EVAP

Figure 2.7 Procedure for legislation process in the Philippines





successful due to objection from the COA.

Efforts for legislation of EV Incentive Bills by the EV industry association in the Philippines









the Incentive Bills are deliberated at the Bica



, additional 3 readings at the Sen

the Incentive Bills

the Incentive Bills are not legislated.

EVAP

Procedure for legislation process in the Philippines



35




ills by the EV industry association in the Philippines









are deliberated at the Bica



, additional 3 readings at the Senate and the House are necessary. In another case, the

the Incentive Bills. If the Incentive Bills

are not legislated.
















are deliberated at the Bicameral Conference Committee. After



ate and the House are necessary. In another case, the

the Incentive Bills are not approved by President during









measures for promotion of EV introduction in the country, since the former Acquino Administration




meral Conference Committee. After


are legislated with approval by President. If the President refers the Incentive Bills


are not approved by President during








governmental agencies for legislation of EV Incentive Bills including fiscal and non-fiscal incentive

former Acquino Administration






the Incentive Bills




Overview of the latest EV Incentive Bills under discussion at the ongoing 18th Congress and






fiscal incentive

former Acquino Administration





discussion at the Bicameral Conference Committee and ratification by the Senate and the House, the

the Incentive Bills back



Congress and

36

Table 2.21 Overview of incentive measures in EV Incentive Bills (As of 8 February 2017) Congress

name Bill name Components of fiscal incentive measures Components of non-fiscal incentive measures Status

18th Congress

Revised version of the EV Bill endorsed by the Electric Vehicle Alliance

a) For manufacturers and assembling bussinesses 9-year exemption of excise and duties for manufacture and assembly of complete knock down (hereinafter referred to as “CKD”) parts of EVs including charging stations and hybrid cars. (*1)

9-year suspension of VAT for purchase and import of raw materials, spare parts, components and equipment

b) For Importers 3-year exemption for import of completely built unit of EVs, hybrid cars and other alternative fuel vehicles (*2)

c) Others Exemption of payment of Road User’s Tax for LTO

a) Establishment of Creation of an Inter-Agency Task Force (ministerial) for the Promotion of Electric and Hybrid Vehicles Including Charging Stations

The Task Force is chaired by DTI Secretary, with DOTr Secretary and DOE Secretary as Vice Chairpersons and MOF Secretary, DILG Secretary, DOST Secretary and three representatives from EV and hybrid vehicles industriies as members. Representatives from other agencies of the government may be invited as resource persons during the meetings of the Task Force.

The Task Force is created to expedite identification, prioritization, and resolution of issues affecting the entire supply chain of the electric and hybrid vehicle industry by formulating a shared implementation plan and monitoring system.

b) Incenticves for EVs and EV charging stations Priority in Registration and Issuance of Plate Number Priority in Franchise Application Exemption from the Unified Vehicular Reduction Program (hereinafter referred to as “UVRP”)

Provision for Free Parking Spaces in New Establishments LGUs to allocate land and lot space for the construction of EV charging stations

Deliberation in process

18th Congress

Tax Reform Bills

The Incentive Bills initiate tax reforms including followings, with net increased national tax revenue estimated as 368.1 billions Philippines Pesos: Increased excise tax for diesel oils, buncker oils and lead-free gasolines, and

Increased excise tax for all vehicles but EVs

None Deliberation in progress

17th Congress

Electric, Hybrid and Alternative Fuel Vehicle Incentives Act of 2016

Exposion of VAT for additional energy demand with objective of promotion of electric jeepneys and tricycles sales and tax exemption for EVs for net increased national revenue by 10.23 billion Philippine Pesos through followings: Increased income tax revenue due to new employment Reduced governmental expenditures over pollution related health expenses

Reduced payment of foreign currency due to reduced petroleum import amount

CO2 emissions reduction as result of conversion from

None Failed in legislation (Deliberation process was limited to 1st reading of the Senate and the House during the Congress session period.)

37

Congress name

Bill name Components of fiscal incentive measures Components of non-fiscal incentive measures Status

fossil-fuel driven vehicles to EVs, etc.

16th Congress

Electric, Hybrid and Alternative Fuel Vehicle Incentives Act of 2013

a) For manufacturers and assembling bussinesses 9-year exemption of excise tax and duties for CKD manufacture and assembly of EVs, hybrid vehicles and other alternative fuel vehicles including the conversion of vehicles into electric, hybrid and other alternative fuel vehicles. (*1)

9-year suspension of VAT imposition for purchase and importation of raw materials, spare parts, components and capital equipment

b) For importers 9-year exemption from payment of excise tax and duties for import of complete built completely built unit of EVs, hybrid and other alternative fuel vehicles.


a) Establishment of a Coordinating Council (ministerial) for the Promotion of Electric and Hybrid Vehicles Including Charging Stations The Coordinating Council is chaired by DTI Secretary, with DOTr Secretarty and DOE Secretary as vice chairpersons, MOF Secreatary, DILG Secretary, DOST Secretary and elected 3 representatrives from EV and hybrid vehicle industry and the civil society by the Coordinating Council. Representatives from other agencies of the government may be invited as resource persons during the meetings of the Cooridnating Council.

b) Incenticves for EVs and hybrid vehicles Priority in registration and issuance of plate number Priority franchise application Exemption from UVRP Provision for free parking spaces in new establishments

Failed in legislation (Deliberation process was limited to 1st reading of the Senate and the House during the Congress session period.)

15th Congress

Alternative Fuel Vehicles Incentives Act of 2011

a) For manufacturers and assembling bussinesses 9-year exemption of excise tax and duties for CKD parts manufacture and assembly including the conversion of vehicles into electric, hybrid and other alternative fuel vehicles. (*1)

9-year suspension of VAT imposition for purchase and importation of raw materials, spare parts, components and capital equipment

b) For importers 9-year exemption from payment of excise tax and duties for import of complete built completely built unit of EVs, hybrid and other alternative fuel vehicles.


Priority in registration and issuance of plate number Priority franchise application Exemption from UVRP Provision for free parking spaces in new establishments

Failed in legislation (3rd reading of the Senate and the House was finished. However, the House leadership did not appoint representatives fro the Bicameral Conference Committee for fear of veto by the President, under situation that they are lack of support from MOF.)

Source: EVAP Note:

(*1) CKD includes assembly of imported parts from numerous countries in the Philippines. (*2) The exemption period was shortened compared to previous bills in consideration of BOI’s consciousness of negative impact on Philippine domestic manufacturing industry.

38

For process of submission of above EV Incentive Bills, EVAP has closely collaborated with BOI for

their following efforts.

- To address pressing concerns of EV industry under the Electric Vehicle Sub-Cluster Working

Group, and

- To consider possible executive order to grant additional support to the EV Industry

Furthermore, METI Study Team confirmed with EVAP that they have made efforts for submitting

bills which provide fiscal and non-fiscal incentives as a package and packaged tax reform bills for

consideration of MOF in alart of fiscal incentive measures which may lead to preferential support to any

particular industry sector18.

It is observed that fiscal incentives including excise tax exemption can lead to dissemination of battery

swapping EV technology for the Project. Based on this understanding, METI Study Team has explained

to stress importance of early legislation of these EV Incentive Bills, as well as consideration of project

plan including financial plan under this F/S, for dissemination of the said technology, and set it as one of

important agendas during the study period for mutual understanding in both Philippine and Japan sides.

2.5 Trend of EV market in the Philippines

2.5.1 Situation of introduction of electric trycicles and jeepneys in domestic market of the Philippines

Proportion of automobile volume in the Philippiens in year 2011 is 12% for private vehicles, 26% for

4-wheel vehicles for public utility services or utility vehicles, 51% for 2-wheel vehicles and 11% for

other 4-wheel vehicles. Among them, most of public utility vehicles and 2-wheel vehicles are jeepneys

and tricycles 19 . As EVs, electric jeepneys and tricycles have already been available in domestic

Philippine market at a certain level, and their specification and situation of their introduction in the

market are shown in Table 2.22 and Table 2.23 respectively.

Table 2.22 Example of specification of electric jeepneys and tricycles in Philippine market Electric jeepney

(Conventional type by PhUV Inc.) Electric tricycle

(Model for ADB Electric Tricycle Project) Battery type Lead-acid (7kWh) Lithium-ion (3kWh、chargable fir 2000 times) Maximum speed 65km/h 60km/h Crusing distance (full charge) Appox. 100km (for flatland) Approx. 30km Passener volume (except for a driver)

20 passengers 5 passengers

Source: E-Trike Project website by DOE, information from EVAP and ADB website

18 Based on information from EVAP 19 Electric 3-wheel taxis in the Philippines, NTT Data Corporation, 2014

39

Table 2.23 Situation of electric jeepneys and tricycles intoruduction in the Philippines (as of February 2017)

Vehicle type Company name Situation Electric tricycles

BEMAC (Subsidiary of Uzushio Electric Co., Ltd. and a member company of EVAP)

- BEMAC was awarded as the initial production of 3,000 electric tricycles for pilot test of the Electric Tricycle Program by DOE under support from ADB. ADB under the Electric Tricycle Program aimed to introduce 100 thousand

electric tricycles with finance amounting for 504 milion US Dollars. First tender was opened in May 2015 and BEMAC was awarded. However, the program was finished by DOE, due to lack of participant operators for fear of high production cost of electric tricycles in December 2016.

- In year 2016, BEMAC conducted a test run of 10 electric tricycles in UP Diliman. The electric tricycles had a schedule to be handed over to the UP Diliman through local company after the test run.

K.E.A.Corporation (Member company of EVAP)

K.E.A. produces electric tricycles in Cavite City and operates charging stations for the electric tricycles for commercial operation.

EV Wealth Corporation (The same as above)

EV Wealth provides mass transport package services for community in Mandaluyong City in Metropolitan Manila Region.

Softbank Softbank is implementing a demonstration project titled The Mobility as a System (MaaS) including location data acquisition by in-vehicle equipment, in Intramuros district of Manila City in Metropolitan Manila Region, in cooperation with BOI under demonstration scheme of New Energy and Industrial Technology Development Organization(hereinafter referred to as “NEDO”). Under the project, 50 electric tricycles and 17 charging stations are introduced and installed for demonstration.

Electric jeepneys

PhUV Inc. (Leading company of EVAP)

- PhUV implements commercial operation of lead-acid electric jeepneys in Makati City and Muntinlupa City in Metropolitan Manila Region. In Muntinlupa City, they operate 12 electric jeepneys for city health care card holders and will increase their fleets up to 17 in year 2017.

- PhUV has provided a lead-acid electric jeepney for a hotel in John Hay Special Economic Zone for shuttle service for hotel guests.

1 Team Corporation (Member company of EVAP)

- 1 Team is an operator of diesel jeepneys in Quezon City, Caloocan City and Clark Freeport Zone.

- In Quezon City and Caloocan City, they introduced Chinese lead-acid electric jeepneys to replace 150 of their 500 diesel jeepneys.

- In Clark Freeport Zone, they provide passenger shuttle service in a operating route between Main Gate of the Freeport Zone and Clark International Airport, by lead-acid electric jeepneys (1.8kWh/ 12 batteries)

EVEEI (The same as above)

EVEEI operates 18 lead-acid electric jeepneys for transport service for office employees and tourists in Filinvest Alabang area in Muntinlupa City in Metropolitan Manila Region. They are scheduled to increase their electric jeepney fleets up to 50 by end of year 2018.

Metro Express Corporation (The same as above)

Metro Express operates lead-acid electric jeepneys in Bacolod City in Negros Occidental Province and Iroiro City in Iroiro Province.

Source: - Confirmation during field surveys by METI Study Team and information from EVAP - LTFRB: New e-jeepney route up for approval, The Philippine Star, 8 January 2015

http://www.philstar.com/metro/2015/01/08/1410558/ltfrb-new-e-jeepney-route-approval

2.5.2 Potential of EV introduction in the near future

DOTr has taken intiative over Jeepney Modernization Program which consists of replacement and

40

selection of obsolete obsolete diesel jeepneys and introduction of electric jeepneys. During this F/S

period, DOTr has showed their strong interest in our project at our meeting with their representatives as

our project concept is in line with the Program.

The Program has faced objection from jeepney drivers’ association, and DOTr-LFFRB promoised

about introduction of the Program after year 2017. Furthermore, DOTr, in parallel of preparation of the

Program, has considered standards for modernized jeepneys including additional requirement for electric

jeepneys for introduction in around year 2018, and the additional requirement includes followings:

- The traction system should be so designed to allow the vehicle to negotiate the Metro Manila

drive cycle on a chassis dynamometer.

- The peak power of the motor controller, traction motor, battery management system and batteries

should properly match each other unless controls are introduced to ensure that the system

operates only at the least peak power among the said components.

- Traction battery shall be securely fixed to the vehicle where the place shall be well ventilated and

has good heat dissipation. During the operation there shall be no hazardous gasses accumulated

in any part of the vehicle20.

The consideration by DOTr has been in progress with participation by representatives from concerned

parties including EVAP. In this context, there is an uncertainty over introduction of the Program before

year 2018.

In this situation, potential of introduction of electric jeepneys including conversion from conventional

diesel jeepneys or new introduction is expected to be 3 thousand units in Metropolitan Manila Region

and 350 thousand units in the Philippines in the near future21.

Prevailed electric jeepneys adopt lead-acid batteries and there is a possibility that lithium-ion batteries

will be adopted.

A part of Philippine society has a negative perception of safety and liablity of electric jeepneys due to

burning and fire accident resulting from inproper operation and maintenance in the operators’ side

including charging at closed compartments. On another hand, some candidate project site owners are in

favor of or wish introduction of battery swapping electric jeepneys for conversion of their traffic mode

to low carbon and environmentally friendly electric jeepneys. This shows that there is a certain degree of

market potentials of the electric jeepneys from viewpoint of air pollution countermeasures and GHG

emission reduction measures. Furthermore, on the basis of a considerable degree of cost reduction and

utilization of incentive measures in sub-subchapter 2.4.2, conversion to battery swapping electric

jeepneys and production and assembly of equipment of support equipment including battery swapping

and charging stations can absorb a part of existing needs of EV introduction in amount of 350 thousand

units, which can lead to new employment in the Philippines.

20 Based on material for Modern Jeepney Standards Industry Consultative Meeting by DOTr in 21 October 2016. 21 Based on information from EVAP. NIP does not include cumulative target for introduction of electric jeepneys and

tricycles.

41

2.6 GHG emission trends in the Phililppines (Overall emission and transport sector)

According to the 2nd National Communications to the UNFCCC Secretariat in 2014, overall GHG

emissions in the Philippines excluding that of land-use, land use change and forest (LULUCF) sector

amount for 126,879,000 t-CO2 (equivalent amount) at stage of year 2000. Breakdown of the country’s

GHG emissions is shown in Table 2.24.

Table 2.24 GHG emissions in the Philippines (At stage of year 2000) Sector name Emission amount

(t-CO2e/year) Proportion ratio (%)

Energy 69,667,240 55%

※Breakdown of GHG emissions in energy sector

Energy industry 21,219,450 30%

Manufacturing and construction

9,142,210 13%

Transport 25,935,780 37%

Solid fuelds 33,600 0%

Oil and natural gas 3496.29 5%

Others 9,839,910 14%

Industrial process 8,609,780 7%

Agriculture 37,002,690 29%

Waste 11,599,070 9%

Source: pp.29-30, Second National Communications to the United Nations Framework Convention on Climate

Change by the Philippines

GHG emissions in transport sector amounted for 25.93 million t-CO2e in quantity and 20% in

proportion among overall GHG emissions in year 2000.

For forecasted GHG emissions in the scenario of “Business as usual” in which no emission reduction

effort for long-term period of year 2005-2050 was made is analyzed by UP-NCTS under the Clean Air

Initiatives. Their analysis result is shown in Table 2.25.

Table 2.25 Forecasted GHG emissions in transport sector in the Philippines (UP-NCTS scenario)

Year 2005 2010 2020 2030 2040 2050

Emissions 27.25 36.11 55.47 87.31 135.32 206.27

Unit: Million t-CO2 Source: p.7, Summary of Studies: Philippines Transportation Sector Emissions, Alvin Mejia

42

Chapter 3 Result of consideration for Battery Swapping Electric Jeepneys introduction in Metropolitan Manila Region in the Philippines

3.1 Selection of potential project sites

3.1.1 Selection criteria

Appraisal of 10 candidate project sites on previous sub-subchapter 1.2.1 was made for potential project

site selection based on following 3 evaluation criteria, and candidate project sites which fulfill all criteria

were selected as potential project sites for battery swapping electric jeepneys technology under the

Project.

- Possibility of financial procurement by site owner of the candidate project site

- Element(s) for technological demonstration to be examined during demonstration phase

- Potential of dissemination and expansion to other sites of the site owner in the Philippines in commercial operational phase after the demonstration phase

a. Possibility of financial procurement

This F/S confirmed idea or capacity for necessary financial procurement for equipment acquisitionand

continuous operation by owner of candidate project sites for selection of project sites for battery

swapping electric jeepney technology introduction, based on needs for low carbon and green transport in

the Philippines.

METI Study Team assumes examination of technical challenges for dissemination and expansion of

the said technology in the Philippines after demonstration activities with experimental equipment of

electric jeepneys and battery swapping and charging stations at selected project sites, after this F/S phase.

If the Project conducts demonstration

under JCM Demonstration Program under

NEDO, experimental equipment for

demonstration will be transferred to the

Japan side (company/ institution which is

commissioned by NEDO) with depreciated

cost after demonstration phase is finished,

according to NEDO rule. In this case,

separate consultation on concerned issues

including price for transfer to the Philippine

side needs to be made. Thus, the price for

transfer needs to be fixed based on

consultation between the company/

institution which procures the equipment

based on the depreciated cost and the

Disposal of experimental equipment for demonstration under NEDO rule

- Depreciation in demonstration phase shall be made Straight-line method. By the end of asset’s statutory durable years, depreciation shall be made at a uniform rate until the depreciate value wil be as low as 10% of acquisition cost of the equipment.

- Satutory duerable years are specified by the Ordience by Ministry of Finance, Japan, on statutory durable years on assets for depreciation (Ordinance No.15, 31 March 1965)

3 years for small-size vehicles (total emission is 2 liter or less)

5 years for large-size vehicles (total emission is 3 liter or more)

4 years for other vehicles 5 years for share-ride vehicles

Source: NEDO manual

43

Philippine side.

This represents idea for procurement or utilization of own budget to cover the abovementioned

depreciated cost for payment after NEDO demonstration phase by the site owner side is critically

important for appraisal of potential for sustainable project implementation at each candidate project site

after the demonstration phase by the site owner by METI Study Team.

b. Element(s) for technological demonstration

Under this Project, it is assumed that following technical elements for technological demonstration

need to be examined during demonstration phase with experimental operation of equipment including

electric jeepneys and battery swapping and charging stations.

- Safety and reliability of batteries

- Deterioration of batteries (battery cells)

- Durability of EV propelling system

- Durability of battery swapping mechanism

- Stable management of battery charging equipment

- Effectiveness of collected data

- Operation and maintenance

Therefore, it is necessary for METI Study Team to cover all potential technical challenges for

dissemination and expansion of battery swapping electric jeepneys and equipment including battery

charging and swapping stations in demonstration phase at all of selected potential project sites.

For reference of appraisal of each candidate project site, METI Study Team considered relationship

between above 7 tehcnical elements for technological demonstration and candidate project site

characteristics of 1) operational speed of electric jeepneys, 2) load for electric jeepneys for its

operational process, 3) frequency in battery swapping, 4) road condition, 5) climate condition, 6)

condition of related infrastructure and 7) management structure, based on result of meeting(s), based on

information which was collected through meetings with owner of each candidate project site. The degree

of relationship between these technical elements and the site characteristics is summarized in Table 3.1.

Table 3.1 Relationship between technical elements and site characteristics Aspect of site characteristics

Technical elements Speed Load Frequency

of swapping Road

condition Climate

condition Infra-

strucuture Management

strucuture 1. Safety and reliability of batteries B A C B C - C 2. Deterioration of batteries (battery cells) B A B - C - C 3. Durability of EV propelling system A A - A C - C 4. Durability of battery swapping mechanism B B A A C - C 5. Stable management of battery charging equipment

- - B - C A A

6. Effectiveness of collected data - - C B B A A 7. Operation and maintenance - - B - - C A

Note: A: Very high relevance, B: High relevance, C: Low relevance, -: Very low relevance

Source: METI Study Team, based on meetings with candidate project site owners

44

Taking into account the above relationship, METI Study Team compared site characteristics of each

candidate project site to avoid overlapping among combinations of technical elements for different

project sites during demonstration at different project sites during site selection process.

c. Potential of dissemination and expansion to other sites of the site owner

This Project has objective of dissemination and expansion of battery swapping electric jeepney

technology in other areas of the Philippines after demonstration phase, in application of prepared

countermeasures against technical challenges which are identified and considered at demonstration

phase.

For technology dissemination and expansion in the Philippines, this Project applies prepared

countermeasures to other project sites which are owned or managed by the site owner or their affiliated

institution for dissemination of electric jeepneys and their equipment including battery charging and

swapping stations in the Philippines. From this viewpoint, it is assumed that success at a project site of

governmental institutions, universities and private companies will be disseminated and expanded to

other sites of their supervising agency, other campuses of the universities, other areas under

development by the companies, respectively.

In this viewpoint, METI Study Team and EVAP consulted with each other over candidate project sites

which fulfill criteria of above a. and b. for appraisal of potential for technologydissemination, based on

result of meetings with each candidate project site owner.

3.1.2 Result of site selection and technology introduction plan preparation for selected potential project sites

With three criteria in sub-subchapter 3.1.1, Clark Freeport Zone in Angeles City in Panpanga Province,

John Hay Special Economic Zone in Baguio City in Cordillera Administrative Region and Filinvest

Alabang in Muntinlupa City in Metropolitan Manila Region were selected as potential project sites from

10 candidate project sites.

After the F/S period, METI Study Team will continue consideration for entry into demonstration phase

at these selected potential project sites. In the other hands, METI Study Team will continue information

sharing and opinion exchange with other candidate project sites, in consideration of possibility of

commercial operation after demonstration phase.

Background of site selection and overview of battery swapping electric jeeney technology introduction

plan are summarized in Table 3.2 and Table 3.3.

Operational routes of introduced electric jeepneys at each potential project site are shown in Table 3.4,

Table 3.5 and Table 3.6.

45

Table 3.2 Background of potential project site selection Candidate project site

name Site owner name Supervising authority name a) Possibility of financial

procurement b) Element(s) for technological

demonstration c) Potential of dissemination

and expansion to other sites of the site owner

Selection result

1. Clark Freeport Zone CDC BCDA Yes (Possiblity of finance of a

part of project cost)

Yes (Evaluation of impact on electric jeepney system and operational

life under condition of high-speed and high intensity electric jeepney

fleet operation)

Yes (Potential of expansion to other sites under control by BCDA)

Selected as project site

2. John Hay Special Economic Zone

JHMC BCDA Yes (Possiblity of finance of a

part of project cost)

Yes (Information collection on impact

of electric jeepney operation in hilly areas on vehicle system and demonstration at area with poor

electricity supply)

Yes (Potential of expansion to other sites under control by BCDA)


3. University of the Philippines Diliman

UP Diliman ― No (Negative comment on

financial arrangement by the UP side)

― Yes (Potential of expansion to other

UP campuses)

Not selected (Negative comment on

financial arrangement by the UP side)

4. Quezon City and Kaloocan City

1 Team (Private company)

― ― ― ― Not selected (Difficulty in site owner side for technology introduction

due to high unit cost of electric jeepneys)

5. Tanauan City, Batangas Province

Tanauan City ― ― ― ― Not selected (Difficulty in technology

introduction from viewpoint of economic aspect of electric

jeepney introduction in the City side at this stage.)

6. Subic Bay Freeport Zone

SBMA BCDA ― ― Yes (Potential of expansion to other sites under control by BCDA)

Not selected (Difficulty in technology

introduction and necessity in further opinion exchange for consideration of technology

introduction in the site owner side.)

7. Olongapo City, Zambales Province

Olongapo City ― ― ― ― Not selected (Difficulty in collection of necessary information for project plan proposal from

city side) 8. Muntinlupa City, Metropolitan Manila Region

PhUV Inc. (Private company)

Muntinlupa City (Electric jeepney project as

city project)

― ― Yes (Potential of expansion to other

sites with PhUV projects)

Not selected (Difficulty in technology introduction due to less possibility of financial

46

Candidate project site name

Site owner name Supervising authority name a) Possibility of financial procurement

b) Element(s) for technological demonstration

c) Potential of dissemination and expansion to other sites of

the site owner

Selection result

procurement by project owner side)

9. Filinvest Alabang area, Muntinlupa City, Metropolitan Manila Region

EVEEI (Private company)

Filinvest Development Corporation

(Private company and real estate developer)

Yes (Possibility of financial

procurement for 20 electric jeepneys and a battery swapping and charging

station.)

Yes (Appraisal of system operational

life under low-speed and low intensity electric jeepney fleet

operation

Yes (Potential of expansion to other sites under control by Filinvest)


10. Ayala Alabang District, Muntinlupa City, Metropolitan Manila Region

PhUV Inc. (Private company)

－ ― ― Yes (Potential of expansion to other

sites with PhUV projects)

Not selected (Difficulty in technology introduction due to less possibility of financial

procurement by project owner side)

47

Table 3.3 Electeric jeepney introduction plan for project sites (As of 9 February 2017) Potential project site

name Introduction plan

1. Clark Freeport Zone

1.Travel distance: 25-27km/trip

2. Number of trips: 12.57 trips/day in average （7 days a week）

3. Average speed: 38 -39km/h

4. Peak hours： 6:30-8:30am, 4:30-6:30pm

5. Introduced equipment：

- 14 E-jeepneys

- 28 battery sets (21kWh/set)

- 14 charging units at 2 charging stations

- A set of battery data collection system


1.Travel distance: 5.6km/trip

2. Number of trips: 10 trips/ day in average (7 days a week)

3. Average speed: 11.2 km/h

4. Peak hours:

- Sundays-Wednesdays:6:00-9:00am, 4:00-7:00pm

- Thursdays-Saturdays:6:00-9:00am, 10:00am-3:00pm, 4:00-7:00pm

5. Introduced equipment:

-10 E-jeepneys

-20 battery sets (15kWh/net)

-3 charging units at a charging station

-A set of battery data collection system

3.Filinvest Alabang area

1.Travel distance: 4.5km/trip

2. Number of trips： Weekdays 24.79 trips/day, Saturdays 21.32 trips/day (6 days a week)

3. Average speed: 13.5km/h

4. Peak hours:

- Weekdays 5:00- 11:00am, 12:00am-9:00pm (Small peak at 10:00- 11:00pm)

- Saturdays 5:00-11:00am, 12:00am-8:00pm

5. Introduced equipment:

- 19 E-jeepneys

- 38 battery sets (15kWh/net)

- 6 charging units at a charging station

- A set of battery data collection system

Note:

- Average speed without consideration of stopping time at jeepney stations on operational routes.

48

Table 3.4 Operational route map on introduction plan for Clark Freeport Zone (As of 9 February 2017)

Route 1 (Main Gate of Clark Freeport Zone- M.A. Roxas Avenue- Clark Freeport Zone Main Loop)

Source: METI Study Team, based on information from CDC

- 7 electric jeepneys


- Route length: 26.75km/ round trip

- Operational route (in red line): M.A. Roxas - J. Abad Santos - E. Quirino - C.P. Garcia - J. Abad Santos - C.M. Recto thru Commercial Area to the Airport - M.L. Quezon - Ninoy Aquino - E. Quirino - J. Abad Santos - M.A. Roxas Avenue back to Main Gate.

- Location of battery swapping and charging station: Main Gate

Route 2 (Mabalacat Gate of Clark Freeport Zone- Prince Balagtas Avenue- Clark Freeport Zone Main loop)

Source: The same as above




- Operational route (in red line): Gil Puyat - Panday Pira to PSPC - Centennial Rd - Creekside Rd - C.M. Recto to Airport - M.L. Quezon - Ninoy Aquino - E. Quirino - C.P. Garcia - J. Abad Santos - C.M. Recto - Creekside Rd - Centennial Rd to PSPC - Panday Pira - Gil Puyat back to Mabalacat Gate

- Location of battery swapping and charging station: Mabalacat Gate

49

Table 3.5 Operational route map on introduction plan for John Hay Special Economic Zone (As of 9 February 2017)

Route (Round trip on Ordonio Drive in John Hay Special Economic Zone)

Source: METI Study Team




- Operational route (in yellow line): Ayala Baguio Technohub- Le Monet Area- Historic Core Complex- Mile Hi Center- Baguio Country Club (*Return to Ayala Baguio Technohub after arriving at Baguio Country Club station)

- Location of battery swapping and charging station: Corporate Center of JHMC

Table 3.6 Operational route map on introduction plan for Filinvest Alabang area (As of 9 February 2017)

Route (Circular route connecting Filinvest Alabang Shopping Mall North and North Gate Express Route)

Source: METI Study Team, based on information from EVEEI


- 14 battery sets (15kWh/ set)


- Operational route (in green and orange dash line): South Station Terminal- Bridgeway Stop- North Bridgeway Stop- Fast Bytes- Studio 1&2- Vector Stop- West Park- West Gate- South Supermarket- Filinvest One- Capital One- Convergys- Asean Drive- Shopwise/ Festival Mall- South Station Terminal

- Location of battery swapping and charging station: South Station Terminal

50

METI Study Team explained above electrc jeepneys introduction plan with each potential project site

owner, and meetings a part of project sites (i.e. Clark Freeport Zone and John Hay Special Economic

Zone) was conducted with attendance by representatives from BCDA as the supervising authority over

these project sites. Comments and feedbacks from the Philippine side and approach for revision of

introduction plan based on the consultation result are shown in Table 3.7.

Table 3.7 Approach for revision of introduction plan based on consultation with potential project site owners

Potential project site name (Site owner name)

Comments on introduction plan contents Approach for revision of introduction plan

All project sites - Necessity in increased net project profit through increased

jeepney fare revenue or decreased project cost - Revision of jeepney fare system for improvement in

financial analysis contents

Clark Freeport Zone (CDC)

- High cost of battery with capacity of 21kWh/jeepney as an equivalent cost as an electric jeepney without batteries, and

- Necessity in confirmation on possibility of concession to jeepney operator(s) for operation of electric jeepney project in Clark Freeport Zone area due to legal constraint under Philippine law (Concern about direct management of electric jeepney project by CDC).

- Lower investment cost in battery component through decrease in battery capacity from 21kWh/jeepney to 15kWh/jeepney for reduced financial burden in the CDC side, and

- Revision of project implementation strucuture in assumption of comissionesd operation by jeepney operator(s).

John Hay Special Economic Zone (JHMC)

- Necessity in confirmation of lawfulness of direct management of electric jeepney project by JHMC by BCDA side, and

- Necessity in confirmation of possibility of electric jeepney operation in the Special Economic Zone area without franchaise acquisition in case of electric jeepney operation in the Special Ecobnomic Zone area as a private area of JHMC, for project operation by the Corporation, by BCDA side.

- Revision of project implementation structure based on result of confirmation by BCDA

Filinvest Alabang area (EVEEI)

- Necessity in consideration of combinated operation of battery swapping electric jeepneys and lead-acid electric jeepneys of EVEEI to meet passenger demand for reduction of battery swapping electric jeepney volume in original introduction plan to reduce project investment cost.

- Concern about high cost of batteries with capacity of 15kWh/ jeepney

- Revision of introduction plan for reduced battery swapping electric jeepney volume in consideration of balance between fleet volume of battery swapping and existing lead-acid electric jeepneys for reduction of overall project cost, and

- Decrease in investment cost for battery component through reduction of battery capacity from 15kWh/jeepney to 9kWh/jeepney for reduction of operational burden in EVEEI side.

Photo 3.1 Consultation with CDC

Photo 3.2 Conslutation with JHMC

51

Photo 3.3 Consultation with EVEEI

Photo 3.4 Initial meeting with BCDA

3.2 Overview of battery swapping electric jeepney technology

3.2.1 Battery swapping technology

EVs need to replenish lost electricity for

their continuous operation one way or the

other. Ordinary EVs (e.g. Nissan Leaf) gain

power through battery charging cable

connecting battery chargers and EV batteries.

Another method for electricity supply is

swapping of charged batteries and empty

batteries. Characteristics include 1-10 minutes

of short charging time, compared to 0.5 to 2-3

hours for charging by quick chargers and

more than 8 hours for normal charging. As

this result, battery swapping can contribute to

shorter waiting time and increased operation

availability of EVs.

There are examples of battery swapping

EVs, and there have been development and

demonstration activities. Some of such

activities have resulted in a small-scale

commercial operation.

Photo 3.5 shows an example of test run of battery swapping electric buses under development in

Taiwan. The electric buses can load 4-6 battery packs with capacity of 25kWh/ bus unit and crusing

distance of 100-150km. Battery swapping process requires a large-scale facility for operation of special

swapping machine to handle battery packs with weight of around 300kg/ pack.

Photo 3.6 shows an example of electric motorcycles at early stage of its dissemination in Taiwan, and

the electric motorcycles has already sold 10 thousand and more units. More than 100 battery swapping

Source: Website of Advanced Lithium Electrochemistry Co, Ltd

Photo 3.5 Example of battery swapping buses

Source: Website of Gogoro

Photo 3.6 Battery swapping motorcycles

52

stations have been located

in Taipei City and other

areas in Taiwan, according

to the operating company.

An electric taxi loads 2

battery packs with

capacity of 1.2 kWh/ taxi

unit and its crusing

distance is around 50km.

The battery pack weighs around 12kg and can be swapped manually. The battery cells adopt circular cell

18650 for design of small and light batteries, and there is a concern of deteroriation of battery capacity

after scharges and discharges. Battery deterioriation severely affects on economic feasibility and this

issue needs to be considered for further expansion of battery swapping motorcycle technology. Further

demonstration through battery information collection is expected.

Photo 3.7. shows example of battery swapping taxis by Better Place, and Better Place conducted

demonstration in Tokyo with support from METI in year 2010. PUES has participanted in a

demonstration component of development of battery swapping electric taxis and their swapping

mechanism. Battery capacity of the electric taxis is 16kWh/ taxi unit, and battery charging process for

the electric taxis can be finished in around a minute with special battery swapping equipment. However,

considerably large-scale battery swapping equipment costed several ten thousand US Dollars or more for

the demonstration activities in Tokyo. The company had implemented various experimental and project

activities in Israel, Europe and their neighboring regions as well as Japan, and went bankrupt in year

2013.

Photo 3.8 Experimental activities on battery swapping EV by PUES

Photo 3.8 shows example of battery swapping technology development by PUES. In the Philippines,

there have been efforts for electric jeepney introduction by various institutions; however, most of them

have not been successful. Key factors for their insuccessful operation include use of cheap and prevailed

lead-acid batteris or consumer lithium ion batteries instead of appropriate batteries for vehicles. Use of

Photo 3.7 Example of battery swapping electric taxis

53

such inappropriate batteries has resulted in problems of heavy jeepney body weight, lack of output

energy and shorter battery life.

Batteries for battery swapping technology by PUES meet condition of 1) light battery weight, 2) easy

enough for smooth battery swapping process, 3) long battery life and 4) safety as necessary requirement

for economic operation of the battery swapping EV system.

Table 3.8 Advantage of battery swapping system by PUES Necessity requirement System solution by PUES Light battery weight Appropriation of battery capacity and weight and adoption of high energetic density can provide

batteries with weight of 12-15kg to secure easy manual battery swapping.

Easy for battery swapping

Automatic battery connector connection and alighnment mechanisms can secure automatic battery connector connection for easy battery desorption.

Long battery life Adoption of battery cells for EVs and battery management and charging technologies as by-product of EV technology can secure multiplied battery charging cycle life compared to cylindrical batteries and minimized demange to batteries.

Safety Battery management on the basis of EV technology as well as special charger and charger control for battery swapping system can secure increased safety and was proven to be safe in various safety certificate test (UN, UL and ECE, etc.)

3.2.2 Technology for vehicle control

Battery control under consideration takes

approach for 2-stage control with battery

management unit (hereinafter referred to

as ”BMU”) for monitoring of battery packs

and safety management and vehicle control

unit (hereinafter referred to as “VCU”).

Signals within battery packs are processed

internally under BMU and information

exchange between battery packs and VCU is

handled by Controller Area Network (CAN).

Expected benefits from this approach includes

reduced number of harnesses and reduced

burden of calculation in VCUs. Also, smooth

response to any irregular condition of battery packs is secured under this approach. Furthermore, this 2-

stage battery control can record control function and data information to preserve information on usage

record, electricity current and voltage and temperature of each battery on each battery pack.

From another viewpoint, it is desirable to install VCU in an upper level of BMUs for overall vehicle

control for safety of entire vehicle. In case of problem(s) in any of battery packs during vehicle operation,

vehicle control system has to make decision whether to separate battery pack(s) in irregular condition to

continue operation with other battery packs until the vehicle stopps at road side area with safety. The

vehicle control unit at upper level in the vehicle control system controls also handles relay control within

Figure 3.1 Overview of vehicle control technology

54

battery packs after security verification of system after a vehicle driver starts up the vehicle motor.

3.3 Specification of battery swapping electric jeepneys for introduction in the Philippines

3.3.1 Electric jeepney body

METI Study Team assumes required specification of electric jeepney body as follows, based on result

of this F/S and requirement of operational plan for each project site.

Table 3.9 Required specification of electric jeepney body Speicification item Specification Maximum spped Electric jeepneys have to join a stream of vehicles for their operation in each project site. In Clark

Freeport Zone as a projectsite for demonstration activities, the road infrastructure is well developed and other vehicles sometimes operate in a high speed of around 60km/h on public roads in the Zone area. For demonstration, the maximum speed of electric jeepneys is set as 60km/h without consideration on operation on highways.

Hill-climbing performance

Hill-climing performance of the electric jeepney was set as more than 20% as an considerable value, in consideration of operation in mountainuous area, passage of uneven road area as well as entry into slopes.

Crusing distance Route length of electric jeepney route in project sites is around 20km at longest. On this basis, METI Study Team set crusing distance as at least 40km or more to avoid risk of electricy shortage. As it is easy to adjust number of connected batteries, several patterns of crusing distance will be examined during demonstration phase to examine most appropriate specification on crusing distance in consideration of economic feasibility.

Charging time Maximum charging time is set as 1 hour judging from electric jeepneys operation plan at each project site. This is to avoid queuing time for battery charging and to minimize negative impact on battery life. In demonstration phase, slow charging will be tried as much as there is no negative impact on battery operation performance.

Figure 3.2 Consideration on specification for electric jeepneys

With this assumption, METI Study Team considered specification of an electric jeepney for

introduction in the project sites as shown in Table 3.10.

55

Table 3.10 Overview of specification of an electric jeepney body Specification item Specification Note

Chassis Isuzu In coordination with Isuzu Overall length 4,590 mm Overall height 2,095 mm Overall width 1,695 mm Empty weight 1,495 kg Chassis only Gross weight 3,800 kg Designed value Capacity 21 passengers Planned value Transmission 5-speed manual transmission In consideration of use of transmission on chassis from Isuzu Motor outputs 15 kW In consideration Motor type Permanent-magnet

synchronous electric motor

Battery capacity 12 kWh 1.5 kWh/ battery * 8 batteries (In consideration of the details) System voltage 96 V In consideration Maximum speed More than 60 km/h Designed value Hill-climbing performance More than 20% Designed value Electricity economy 3.0 km/kWh Value based on simulation Crusing distance per charge 45 km/ charge Value based on simulation Energy efficiency equipment Regenerative brake Safety equipment Battery management system Time for battery swapping Within 5 minutes Designed value Certificate UN38.8、UL2580、ECE In consideration

3.3.2 EV batteries and chargers

Overview of EV battery packs and charging system for battery swapping station for introduction in the

Philippines based on the F/S result and assumed operational plan is listed in Table 3.11 and Table 3.12.

Table 3.11 Overview of specification of a battery pack Specification item Specification Note

Rated voltage 45.6 V Capacity 1.5 kWh Maximum current 100 A 66 A on a continuous basis

Charging time 1.0 hr 0 – 100 %, charge by special charger for the battery pack

Size 469 x 174 x 297 mm Recorded value by Sample B Weight 15.6 kg Recorded value by Sample B Ventilation Natural cooling Battery lifespan More than 80% of battery capacity after 3000 charging cycles In consideration Network CAN2.0B ISO 11898-2 compliant

Protection feature

Overcurrent protection Recovery after reset Overvoltage protection Recovery after reset Overdischarge protection Recovery after reset Overcharging protection Recovery after reset Overheat protection Recovery after reset

Table 3.12 Overview of specification of a charging system for electric jeepneys

Specification item Specification Note Input voltage AC 170 – 260V / 1φ Input frequency 47 – 63 Hz Output voltage DC 30 – 60 V ±1.5 V Input current 30 A ±1.0 A Rated output 1.5 kW Ventilation Forced air cooling Ventilation by powered fans Network CAN2.0B ISO 11898-2 compliant

Protection feature

Overcurrent protection Recovery after reset Overvoltage protection Recovery after reset Overheat protection Recovery after reset Response to other innormaly Recovery after reset

56

Photo 3.9 Exterior of a battery pack for

introduction in the Philippines Photo 3.10 Exterior of a charging system for

introduction in the Philippines

3.3 Project implementation strucuture in commercial operational phase

3.3.1 Sales and leasing for operators in the Philippines

A business model for commercial operation of battery swapping electric jeepneys in the Philippines by

PUES is shown in the figure below.

Figure 3.3 Buisiness model for electric jeepney project by PUES

One of characteristics of the business model is selective use of parts from Japan as shown in Table

3.13 for vital parts with large impact on specification of electric jeepneys especially quality, reliability

and durability. On the other hands, procured and assembled products in the Philippines will be usedfor

other parts and components for appropriation of product quality and costs.

Table 3.13 Japanese parts to be procured for electric jeepney project by PUES Parts name Parts manufacturer name Note

Pack for batteries for swapping

PUES Battery pack with high reliability and long lifespan developed based on Japanese EV technology

Charger PUES Special design for prevention of accident and damage to batteries in battery charging process and high efficient charging process

57

Parts name Parts manufacturer name Note Motor controller Vehicle controller

- Domestic parts manufacturer in Japan

- PUES

Secured quality of electric jeepneys and overall system safety

Drive motor In consideration

These parts will be exported to the Philippines

and will be loaded on electric jeepneys by a local

body assembler (jeepney body manufacturer).

Chasses for electric jeepneys will be basically

procured in the Philippines.

PUES has already consulted with PhUV Inc.

(Location: 2 Susano Road, Deparo, Novaliches,

Caloocan City, Philippines) as a candidate local

partner for vehicle assembly, and both sides has

already reached broad agreement. PhUV Inc. has

manufactured lead-acid electric jeepneys by themselves previously, and their electric jeepneys have been

operated in Philippie domestic market for nearly 10 years. Also, the company has built truck bodies as

their core business and METI Study Team considered that the company has sufficient technology and

expertise for assembly of electric jeepneys for the Project.

Also, for purchase of chasses as basis of electric jeepney bodies, coordination with affiliate companies

of Japanese truck manufacturers including Isuzu, Hino and Mitsubishi Fuso in the Philippines, and

PhUV Inc. will make final selection in consideration of procurement cost and possibility of procurement

of parts for maintenance.

METI Study Team assumes that PhUV Inc., as a local partner, will take role of a front company to sell

and lease electric jeepney products for jeepney operators and other customers. On this basis, PUES will

take charge of supply of core EV technology and parts for division of roles between PUES and PhUV

Inc sides.

This approach has been taken by PUES for their efforts for introduction and expansion of electric

buses in Malaysia.

3.3.2 Operation and maintenance

There are 350 thousand jeepneys in operational and the jeepneys undergo daily maintenance.

Maintenance for electric jeepney bodies and chasses can be handled by existing maintenance factory in

the Philippines without problem as they can for diesel jeepneys.

In constrast, it is said that maintenance of EV driving parts requires different knowledge and expertise

from that of diesel vehicles. After this F/S period, there is a schedule for implementation of activities

including preparation of tools and manuals preparation and technology transfer activities so that each of

local jeepney operators can conduct daily exterior check and other miminal level of maintenance

Source: Photo by METI Study Team

Photo 3.11 Prototype lead-acid battery swapping electric jeepneys at factory of PhUV Inc.

58

activities.

On the other hand, such activities as maintenance and overhaul impacting on internal structure will be

commissioned to specific service companies or conducted by PUES by themselves, in consideration of

safety operation, necessity of special maintenance tools, necessity in appropriate use of protective

equipment and other issues. Local service companies for commissioned maintenance service for the

Project will be determined based on consideration result at future stage.

At this moment, PUES has internally requirement for their employees for assembly and maintenance

of EVs that they have to attend a program of Special Education for Low-voltage electricity handling

businesses, in addition to acquisition of certification related to vehicle maintenance.

3.3.3 Technology transfer and capacity development in the Philippines

During process of consultation with CDC, JHMC as potential project site owners and meeting with

Climate Change Division of DENR, METI Study Team have received requests on implementation of

technology transfer andcapacity development for the Philippine side in following fields for introduction

and dissemination of battery swapping electric jeepney technology.

- Operation and maintenance (hereinafter referred to as “O/M”) of electric jeepney bodies and battery

swapping and charging stations for local staff including personnel from JHMC, and

- Acvitity component of Monitoring, Reporting and Verification (hereinafter referred to as “MRV”) of

GHG emissions during demonstration phase by the Philippine side.

For O/M component, PUES will consider capacity building support for Philippine stakeholders in

cooperation with experts from DOTr, UP-NCTS and Philippine institutions, EVAP and manufacturers of

electric jeepney components in the Philippines. In addition, technical transfer will be conducted for local

stakeholders to enhance capacity of automonous daily O/M activities related to electric jeepney bodies

and battery charging and swapping stations in the Philippine side. Furthermore, possibility for accepting

trainees from the Philippine side at factories or facilities of PUES in Japan will be individually

considered depending on training topics.

For MRV component, OC Global, will provide support to Philippine stakeholders including potential

project site owners in the field of prepration of necessary parameters to be monitored and documents

preparation and management approach, with advice from Climate Change Division and Air Quality

Management Office of DENR and experts from universities or research institutions in Japan and the

Philippines with expertise in MRV field. Also, for technology transfer and capacity development related

to operation of battery data collection system for monitoring of GHG, OC Global trains Philippine

stakeholders, with support from experts from PUES, as described in detail in Subchapter 3.5.

3.3.4 Project implementation structure in Japan and the Philippine side for demonstration phase

Project implementation structure has not yet been fixed at stage of March 2017; however, METI Study

Team will make necessary consideration for establishment of appropriate implementation structure, in

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view of strengthened network at this F/S and future demonstration phases and condition for project

implementation after demonstration phase.

3.4 Consideration on project cost and financial plan

3.4.1 Project cost estimation result

Based on electric jeepney introduction plan on Table 3.3, rough estimate for project cost at each

potential project site is made as shown in Table 3.14.

For rough estimation of project cost, reference value on Table 3.15 was used, based on

consultationwith EVAP.

Table 3.14 Electric jeepneys introduction plan for each potential project site (As of 9 Feburary, 2017) Potential project site name Project cost (Rough estimate for demonstration phase)

1. Clark Freeport Zone

- Electric jeepneys 420,000 US Dollars - Batteries and chargers (including a set of

battery information collection system) 791,000 US Dollars

1,211,000 US Dollars in total (0.14 billion Japanese yens)



- Electric jeepneys 300,000 US Dollars - Batteries and chargers (the same as above)

413,500 US Dollars

713,500 US Dollars in total (0.08billion Japanese yens)

3. Filinvest Alabang area - Electric jeepneys 570,000 US Dollars - Batteries and chargers (the same as above)

787,000 US Dollars


Note:

- Project cost in Japanese yens is calculated by exchange rate of 1 US Dollar as 113 Japanese Yen. - Average speed without consideration of stopping time at jeepney stations on operational routes. - Project cost does not include demonstration activity cost, labor cost, travel cost, local construction cost, postal cost

and taxes (duties and VAT, etc.)

Table 3.15 Reference value for rough estimation of project cost

Item Reference value of unit cost 1. Electric jeepney body 30,000 US Dollars/ unit including EV components

and body assembly (Batteries are not included.) 2. Battery charging and swapping system

2.1 Batteries 30,000 US Dollars/ 2 battery sets/ jeepney (*1) 2.2 Battery charging and swapping unit at charging station 4,500 US Dollars/ unit/ jeepney (*2) 2.3 Battery information collection system 10,000 US Dollars/ jeepney

Note: (*1) 8 batteries/ set. 2 battery sets for operation of an electric jeepney. (*2) In a battery charging and swapping unit, an electric jeepney uses 4 slots (rows) for a charging. Each of battery slot

can charge 2 batteries. Source: Estimation by METI Study Team

PUES assumes yearly production of around 500 electric vehicles at early stage of dissemination in the

Philippines.

60

3.4.2 Financial analysis result

Based on rough estimate of project cost in Sub-subchapter 3.4.1, METI Study Team conducted

financial analysis of direct operation of battery swapping electric jeepneys by each project site owner

without commissioned operation by operators for the potential project site.

Payback years for overall initial invest cost for electric jeepney project at each potential project site are

estimated in Table 3.16 in assumption of full payment of overall initial invest cost by project site owner

to evaluate economic feasibility of project plan.

Table 3.16 Payback years of initial investment cost for electric jeepney project for each potential project site

Potential project site name Payback years Clark Freeport Zone 6.35 years

John Hay Special Economic Zone 4.86 years

Filinvest Alabang area 7.41 years

3.4.3 Result of consultation with project site owners based on financial analysis result

Based on estimation and analysis in Sub-subchapter 3.4.1 and 3.4.2, METI Study Team explored

possibility of financial procurement by the Philippine side for electric jeepney introduction, during

consultations with each potential project site owner.

As result of consultation, site owner of Clark Freeport Zone and John Hay Special Economic Zone (i.e.

CDC and JHMC) showed an interest in budget proposal to BCDA, their supervising agency. In parallel,

METI Study Team and they agreed on necessity in improvement in original financial analysisl in Sub-

subchapter 3.4.2 to increase revenue for each potential project site.

Separately, regarding Filinvest Alabang area, METI Study Team confirmed that EVEEI has a will to

procure necessary financial resources for up to 20 electric jeepneys and a battery swapping and charging

station from their investor. On this basis, METI Study Team has to revise project plan to reduce project

investment cost and increase project profits for their continuous consultation for further proposal after

this F/S period. Furthermore, based on the acknowledgement that EVEEI is a private company, METI

Study Team will consider possibility of additional financial procurement through investor and financial

institution networks under the Private Financing Advisory Network (hereinafter referred to as “PFAN”)

for which ICETT had worked as secretariat since 2016JFY for finance for future project stage.

3.4.4 Project cost reduction

Based on understanding of financial analysis result in Sub-subchapter 3.4.1 and comments from the

Philippines side in Table 3.7, METI Study Team will consider possibility of cost reduction through

combination of following efforts in demonstration phase and beyond:

- Decrease in capacity of batteries on an electric jeepney for battery cost reduction,

- Cost reduction through reduced battery and equipment cost by improved operation efficiency

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under condition of mimimum battery capacity for operation, (No spare battery capacity, and

Consumption of electricity in a battery as much as possible, without spare battery capacity.)

- Reduction of cost for battery data collection system from 10,000 US Dollars/ jeepney at stage of

March 2017 for entry into mass production phaseAt the end of this F/S stage, and

- Consideration on possibility of reduced electricity cost burden through solar power generation to

meet a part of electricity demand at battery swapping and charging stations, based on larger

amount of solar radiation in the Philippines and higher electricity tariff in comparison with Japan.22

Furthermore, for reduction of battery cost which consitutites a large proportion of project cost, it is

estimated that the cost will be decreased by 30%-50% from the present level in view of decreasing

lithium ion batteries cost in recent years.

Note: 1 US Dollar = 113 Japanese Yen

Source: Battery RM2013, NEDO

Figure 3.4 Roadmap of dissemination of secondary batteries

Also, it is forecasted, if market of battery swapping electric jeepney will be expanded from annual

production of several hundered units to several thousand units at dissemination stage, cost reduction as

result of mass production will be expected.

3.5 Appraisal of environmental impact of electric jeepney introduction

3.5.1 Approach for appraisal

During this F/S period, METI Study Team made an appraisal of environmental impact from electric

jeepney introduction in the Philippines from following two aspects:

22Amount of solar radiation in Metropolitan Manila Region is 3.9-5.9kWh/m2, and is larger than Tokyo’s by 31- 82%, according to NEDO Standard Solar Radiation Database.

62

- CO2 emissions reduction through electric jeepney introduction to replace diesel oil (fossil fuels)

consumption at diesel jeepneys for public transport services which can be introduced in the

scenario of no electric jeepney introduction under the Project in the Philippines,

- Air pollutant emission e.g. NOx, CO from diesel jeepneys in case of no electric jeepney

introduction under the Project in the country.

For evaluation of air pollutant emissions reduction, METI Study Team evaluated air pollutant

emissions amount in case of no electric jeepney intrtoduction under the Project in the country.

3.5.2 Consideration of applicable MRV methodologies

a. Situation of existing methodologies

METI Study Team conducted a literature survey on existing approved JCM methodologies and

registered CDM methodologies for evaluation of CO2 emissions reduction from introduction of battery

swapping electric jeepney technology under this F/S.

As of March 2017, it is confirmed that following 2 methodologies are available:

- Approvied JCM methodology VN_AM001 under Vietnam-Japan JCM “Transportation energy

efficiency activities by installing digital tachograph systems, Version 1.0”

- Approved small-scale CDM methodology AMS-III.S “Introduction of low-emission vehicles/

technologies to commercial vehicle fleets (Version 04.0)”

Result of appraisal of applicability of above methodologies to evaluation of CO2 emissions reduction

from battery swapping electric jeepney introduction is summarized in Table 3.17.

Based on appraisal result, METI Study Team prepared MRV methodology for introduction of the

technology in the Philippines.

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Table 3.17 Result of evaluation of applicability of existing JCM and CDM methodologies JCM methodology name

Eligibility crirteria Terms and definitions, and methodology summary

Establishment and calculation of reference emissions

Calculation of project emissions

Data and parameters fixed ex ante

VN_AM001 ”Transportation energy efficiency activities by installing digital tachograph systems, Version 1.0”

Partially applicable (Only definition of target activities and approach for requirement of identification of fuel consumption and travel distance by vehicles in scenario of no project implementation are applicable. However, it is difficult to apply other criteria as they do not match with electric jeepney project.)

Partially applicable (The methodology mentions to required system specification and function for definition of introduced technology (digital tacograph system), which can be applicable to electric jeepney project. However, the methodology does not assume fuel conversion to EVs and this methodology is regarded only partially applicable to the project.)

Applicable (Following components are applicable to methodology preparation for electric jeepney project:

Approach for setting conservative reference emissions compared to BAU emissions

Approach for calculation of reference emissions by multiplying overall annual cruising distance under this project by fuel economy of introduced vehicles and CO2 emission factor of used fuels under the project,)

Not applicable (No assumption of fuel switchfrom fossil fuel driven vehicles to EVs)

Partially applicable (Approach for setting crusingdistance and fuel economy of introduced vehicles in reference scenario under the project can be applied to electric jeepney project.)

CDM methodology name

Scope, applicability, and entry into force

Others (Introduction, Definitions, etc.)

Baseline methodology (Baseline emissions) Baseline methodology (Project activity emissions)

Monitoring methodology (Data and parameters monitored)

AMS-III.S ”Introduction of low-emission vehicles/ technologies to commercial vehicle fleets (Version 04.0)”

Partially applicable (The methodology assumes of broad rangeof vehicle type including EVs, hybrid vehicles, LPG vehicles, but it is necessary to scope application range to EVs for electric jeepney project. Other criteria are not applicable as they do not correspond to electric jeepney project contents.)

Not applicable (No description on GHG emissions reduction approach for JCM methodology.)

Partially applicable (Approach for estimation of baseline emissions by multiplying overall annual crusing distance by CO2 emission factor under GHG emission reduction project is useful for electric jeepney project.)

Applicable (There is description on approach for estimation of project emission in case of introduction of EVs and other types of vehicles. This methodology estimates project emissions by multiplying overall annual electricity consumption amount by CO2 emission factor of electricity grid. For electric jeepney project, it is necessary to adjust description for EV introduction only.)

Partially applicable (This methodology requires calculation of grid electricity CO2 emission factor as a parameter with CDM Tool “Tool to calculate baseline, project and/or leakage emissions from electricity consumption”. Other information on emission factor of fuels of introduced vehicles and fuel economy can be applicable to electric jeepney project.)

Source: VN_AM001, AMS-III.S

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b. Establishment of eligibility criteria

Based on literature survey result, METI Study Team set eligibility criteria for battery swapping

electric jeepney technology as follows:

- The Project installs a new electric jeepney system

- The Project purchases electricity from the national grid and covers electricity demand at

electricity charging unit(s) at a potential project site.

- The net amount of travel distance, daily trips and operating days for electric jeepney system

operation at the potential project site are measurable based on the monitoring plan.

- The electricity consumed for the Project is separately measured and assessed in a quantitative

manner.

The electric jeepney system is defined as a collection of electric jeepney bodies, battery swapping and

charging units and other necessary equipment for electric jeepney operation in a draft methodology in

item e of Sub-subchapter 3.5.2, and it is secured that the draft methodology is surely applied to battery

swapping electric jeepney technology.

c. Confirmation on appropriateness of reference scenario

METI Study Team confirmed and evaluated each of candidate reference scenarios on Table 3.18.

In addition to study in Japan, METI Study Team had a meeting with Climate Change Division under

Environmental Management Bureau of DENR during F/S period to invite their comments and feedbacks

on selection of reference scenario for the draft methodology. As result of the meeting, METI Study

Team confirmed appropriateness of setting operation of Euro4-standards-compliant diesel jeepneys with

B2 biodiesel (2% mix of bio fuels in diesel oils) under the existing Philippine law in the near future.

Table 3.18 Result of confirmation on appropriateness of candidate reference scenarios Candidate reference

scenario Applicability to

MRV methodology Background of applicability

Euro4 diesel jeepneys

Yes DOTr issued their administrative order to mandate propulsion of internal combustion engines of diesel vehicles to comply with Euro4 standard from January 2017. Under the administrative order, dissemination of Euro4 diesel jeepneys as reference scenario for this MRV methodology is expected.

Conventional diesel jeepneys (Non-Euro4)

- After introduction of Euro-4 standard, conventional diesel jeepneys e.g. Euro-2 diesel jeepneys can be operated, according to DENR. As DENR has a plan to promote introduction of Euro4 standard under the Clean Air Act from viewpoint of emissions reduction from transportation sector at later stage, conventional diesel jeepneys are not assumed as reference scenario case.

CNG-driven jeepneys

- At stage of December 2016, there is no CNG bus in the Philippines. Furthermore, there is less possibility that CNG jeepneys will be popular enough to replace conventional diesel jeepneys in public utility transportation services, due to lack of infrastructure for CNG supply.

LPG-driven jeepneys

- There is an effort for introduction of LPG jeepneys by a part of private companies. However, unit calorific value of LPG is lower than that of diesel oil, and there is less possibility that LPG jeepneys will replace conventional diesel jeepneys.

Biodiesel-driven jeepneys

Yes Republic Act No. 9367 “An Act to Direct the Use of Biofuels, Establishing for this Purpose the Biofuel Program, Appropriating Funds Therefor, and for Other Purposes” in 2006 (RA9367) mandates all of new engines and motors in

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Candidate reference scenario

Applicability to MRV methodology

Background of applicability

the market of the Philippines in 2008 and after to use B2 biodiesel. In light of this situation, dissemination of biodiesel-driven jeepneys as reference scenario for this MRV methodology is expected.

Bioethanol-driven jeepneys (Gasoline jeepneys)

- RA9367 mandates all of new engines and motors in Philippine market in 2010 and after to use B10 bioethanol (gasoline with 10% of ethanol by quantity). However, due to following reasons, there is less possibility that B10 bioethanol jeepneys (gasoline jeepneys) will be popular enough to replace conventional diesel jeepneys in public utility transportation services in the Philippines:

According to EV industry in the Philippines, gasoline-propelled jeepneys for public transportation have disadvantage compared to diesel jeepneys in output power.

Furthermore, gasolines are much expensive than diesel oils, and jeepney manufacturers have had good access to used or redundant 4-cylinder diesel engines for jeepneys production in the Philippines. Therefore, gasoline jeepneys rarely exist in Philippine market.

Abolishment of jeepneys for public transportation services (full replacement by buses)

- Replacement of all of existing diesel jeepneys by bus transportation system requires following costs, and there is less possibility that this replacement will be possible as reference scenario for this MRV methodology:

- High amount of initial investment (including construction cost and contingency cost related to compensation to local residents),

- Training for conversion of vehicle type for jeepney drivers and support to the drivers for secured employment

- Negotiation with jeepney association Abolishment of jeepneys for public transportation services (full replacement by LRT

- LRT construction requires tremendous amount of cost including construction cost, land procurement cost (including compensation for local residents). From fiscal viewpoint, replacement of all of existing diesel jeepneys by LRT is not considered feasible and possible.

At a meeting with DENR, DENR side pointed out abolishment of jeepneys for public transportation

services (full replacement by LRT) might be appropriate as well. However, METI Study Team did not

select the scenario of jeepney abolition in replacement by LRT as most probable reference scenario, as

they considered the scenario can only happen as a long-term trend of transport mode in the Philippines.

In a short term, the scenario will only bring huge economic and social impact with abundant of LRT

construction cost and unemployment/ re-employment of existing diesel jeepney drivers in the

Philippines.

d. Approach for MRV (Implemetation method, data parameters, appropriateness of GHG monitoring and estimation method)

METI Study Team considers

use of battery information

collection system. The system

collects operational data

recorded on embedded data tags

on batteries for electric

jeepneys, and collected data by

the system are transmitted to collection system. Transmitted data types include operational distance for

Figure 3.5 Concept of battery information collection system

66

each vehicle which uses the batteries per trip, number of vehicle operation on designated operational

routes, yearly operational days of each vehicle and overall yearly charged electricity amount for each

battery. Use of this system does not require manual calculation for entire monitoring process.

Frequency of monitoring on each data parameter is listed in Table 3.19.

Table 3.19 Monitoring by battery information collection system Monitoring item Approach Frequency

Number of diesel vehicles in entire diesel-driven transportation system (units)

Submitted working records from electric jeepney drivers

Once a month

Route length per trip for each electric jeepney (km/trip) Collected EV operational data from information collection system embedded on electric jeepney batteries

Daily Volume of daily trips by a diesel jeepney at each operational route (Trips/ day) Daily

Volume of yearly operating days by entire diesel-driven transportation system (Days/ year) Daily

Volume of annual net charged electricity at batteries in entire electric jeepney system (kWh/year) Once a month

Also, following parameters needs to be fixed before project impelementation as shown in Table 3.20.

Table 3.20 List of parameters to be fixed ex ante Data parameter Parameter contents Approach for parameter setting

EF CO2,B2biodiesel, y CO2 emission factor for B2-biodiesel fuels in year y (t-CO2/ ℓ)

It is set based on maximum amount of CO2 emission factor of available B2-biodiesel fuels in domestic market of the Philippines.

ηREF Fuel economy of an Euro 4 diesel vehicle (ℓ/ km)

It is set considering the specification of prevailed Euro4 diesel vehicles in the Philippines

EF CO2,electricity, y CO2 emission factor for electricity grid in year y (t-CO2/MWh)

National Grid Emissions Factor as demonstrated by IGES in the Philippines in year 2012 (0.508t-CO2/MWh), as confirmed as the latest value by DENR.

LOSSPJ, C, y Electricity loss at overall battery charging units in year y (%)

It is set based on confirmed maximum electricity loss of available battery charging units in domestic market of the Philippines, from industrial association in EV sector in the Philippines.

e. Preparation of draft methodology

Based on information on above item a.- d., METI Study Team prepared following draft methodology.

(Methodology title)

Replacing diesel-driven public transportation system by electric jeepney system

(Terms and definitions)

Terms Definitions Diesel vehicle Diesel vehicle indicates a vehicle with diesel-powered internal combustion engine

for its propulsion. Diesel-driven transportation system

A fleet of diesel passenger vehicles for transportation services.

B-2 biodiesel fuel Mixed fuel in which a vegetable oil or animal fat-based diesel fuel consisting of long-chain alkyl (methyl, ethyl, or propyl) esters is blended with diesel oil in concentration of 2 percent

Electric jeepney A jeepney that uses electricity stored in its on-board battery as the only power

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Terms Definitions source to drive an electric motor for its propulsion.

Electric jeepney system

A fleet of Electric jeepneys, their electricity charging and swapping unit(s) and other relevant supporting equipment for their operation

(Summary of the methodology)

Items Summary GHG emission reduction measures

Electricity stored in its on-board battery as a power source of Electric jeepneys replaces fossil fuels, such as diesel fuels, which emit CO2 for in combustion process for propulsion of diesel vehicles. While CO2 is emitted during process of generation of electricity which is transferred to and stored at electricity charging units at power plants, introduction of Electric jeepney system replaces diesel-driven public transportation system resulting in GHG emission.

Calculation of reference emissions

Reference emissions are calculated by multiplying the emission factor of B2-biodiesel fuel by the amount of monitored net B2-biodiesel fuel consumption by diesel-driven public transportation system.

Calculation of project emissions

Project emissions are calculated by multiplying consumed electricity through electric jeepney operation and considered value of battery charging loss by CO2 emissions factor of grid electricty to ensure net reduction of emissions by the project.

Monitoring parameters - Number of Electric jeepneys in operation under the Project (unit) - Length of route k per trip (km/trip) - Volume of daily trips by an Electric jeepney at route k (trips/ day) - Volume of yearly operating days of Electric jeepney system (days/ year) - Volume of net charged electricity at batteries in entire Electric jeepney system

in year y (kWh/year)

(Eligibility criteria)

Criterion 1 The project installs a new Electric jeepney system Criterion 2 The project purchases electricity from the national grid and covers electricity demand at

electricity charging unit(s) at project site. Criterion 3 The net amount of travel distance, daily trips and operating days for electric jeepney system

operation in the project site are measurable based on the monitoring plan. Criterion 4 The electricity consumed for the project is separately measured and assessed in a quantitative

manner.

(Emission Sources and GHG types)

Reference emissions

Emission sources Emission sources

B2-diesel fuel consumption B2-diesel fuel consumption

Project emissions

Emission sources Emission sources

Electricity loss at battery charging and swapping unit(s) at project site Electricity loss at battery charging and swapping unit(s) at project site

(Establishment of reference emissions)

Reference emissions are calculated by multiplying the CO2 emission factor of B2-biodiesel fuel by the

amount of monitored net B2-biodiesel fuel consumption by diesel-driven public transportation system.

In order to ensure conservativeness, B2-biodiesel fuel consumption is assumed for propulsion of

internal combustion engines of diesel vehicles in compliance with Euro4 Standard which was introduced

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in January 2016 in the Philippines. Section 5 of the Republic Act (RA) 9367 titled An act to direct the

use of biofuels, establishing for this purpose the biofuel program, appropriating funds therefor, and for

other purposes in 2006 stipulates that use of a minimum of 2% blend of biodiesel into all diesel fuel was

mandated within two years from effectivity of RA9367, i.e. from year 2008. This methodology assumes

full-scale enforcement of national regulation for biodiesel promotion under RA9367 at national level.

(Calculation of reference emissions)

REy = FCy * EFCO2, B2Biodiesel, y (1)

FCy = DTREF,y* ηREF (2)

DTREF,y = n * DREF, k * TRREF, d * ODREF, y (3)

Where,

REy Reference emissions in year y (t-CO2/year)

FCy The net quantity of B2-biodiesel fuel consumed by diesel-driven public transportation system in year y, which is calculated by multiplying fuel economy of a diesel vehicle by overall yearly operational distances by entire diesel-driven public transportation system.

(ℓ/year)

EF CO2,B2Biodiesel, y CO2 emission factor for B2-biodiesel fuels in year y. (t-CO2/ℓ)

DTREF,y Volume of yearly travel distance by entire diesel-driven public transportation system

(km/year)

ηREF Fuel economy of a B2-biodiesel vehicle (ℓ/km)

n Number of B2-biodiesel vehicles in entire diesel-driven public transportation system

(units)

DREF, k Volume of length of route k per trip by a vehicle (km/trip/unit)

TRREF, k Volume of daily trip by a B2-biodiesel vehicle at route k (trip/day)

ODREF, y Volume of yearly operating days by entire diesel-driven public transportation system

(days/year)

Note: Consumed electricity at battery swapping and charging units is supplied from national grid during maintenance period.

(Calculation of project emissions)

PEy = ECch,y * EFCO2, electricity, y * (1+LOSSPJ, C, y) (4)

Where,

PEy Project emissions in year y (t-CO2/year)

EC ch, y Volume of net consumed electricity at electric jeepneys in entire E-jeepney system in year y

(kWh/year)

EF CO2,electricity, y CO2 emission factor for electricity grid in year y. (t-CO2/kWh)

LOSSPJ, C, y Maximum electricity loss at overall battery charging units in year y, which will be set ex ante

(%)

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（Calculation of emissions reductions）

Emission reductions are calculated as the difference between the reference emissions and project

emissions, as follows:

ERy = REy – PEy (5)

Where,

ERy Emission reductions in year y (t-CO2/year)

(Data and parameters fixed ex ante)

The source of each data and parameter fixed ex ante is listed as below.

Parameter Description of data Source EF CO2,B2biodiesel, y CO2 emission factor of

B2-biodiesel fuels in year y

It is set based on maximum amount of CO2 emission factor of available B2-biodiesel fuels in domestic market of the Philippines.

ηREF Fuel economy of an Euro-4 diesel vehicle

It is set considering the specification of prevailed diesel vehicle in the Philippines

EF CO2,electricity, y CO2 emission factor for electricity grid in year y

National Grid Emissions Factor information published by Department of Energy, Republic of the Philippines

LOSSPJ, C, y Electricity loss at overall battery charging units in year y

It is set based on confirmed maximum electricity loss of available battery charging units in domestic market of the Philippines. Confirmation is made with industrial association in EV sector in the country.

(Calculation sheet for estimation of emissions reduction amount)

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f. Estimated CO2 emissions reduction amount

METI Study Team estimated projected CO2 emissions reduction at each potential project site with

prepared draft methodology.

REy = FCy * EFCO2, B2Biodiesel, y (1)

FCy = DTREF,y* ηREF (2)

DTREF,y = n * DREF, k * TRREF, d * ODREF, y (3) Where,

REy Reference emissions in year y (t-CO2/year)

FCy The net quantity of B2-biodiesel fuel consumed by diesel-driven public transportation system in year y, which is calculated by multiplying fuel economy of a diesel vehicle by overall yearly operational distances by entire diesel-driven public transportation system.

(ℓ/year)

EF CO2,B2Biodiesel, y CO2 emission factor for B2-biodiesel fuels in year y. (t-CO2/ℓ)

DTREF,y Volume of yearly travel distance by entire diesel-driven public transportation system

(km/year)

ηREF Fuel economy of a B2-biodiesel vehicle (ℓ/km)

n Number of B2-biodiesel vehicles in entire diesel-driven public transportation system

(units)

DREF, k Volume of length of route k per trip by a vehicle (km/trip/unit)

TRREF, k Volume of daily trip by a B2-biodiesel vehicle at route k (trip/day)

ODREF, y Volume of yearly operating days by entire diesel-driven public transportation system

(days/year)

PEy = ECch,y * EFCO2, electricity, y * (1+LOSSPJ, C, y) (4)

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Where, PEy Project emissions in year y (t-CO2/year)

EC ch, y Volume of net consumed electricity at batteries in entire E-jeepney system in year y

(kWh/year)

EF CO2,electricity, y CO2 emission factor for electricity grid in year y. (t-CO2/kWh)

LOSSPJ, C, y Maximum electricity loss at overall battery charging units in year y, which will be set ex ante

(%)

Estimation of emissions reduction for electric jeepney introduction in Clark Freeport Zone based on

considered introduction plan in Table 3.3 is shown below, as an example of the estimation.

For estimation of emissions reduction from electric jeepney operation in each of two operational routes,

METI Study Team assumed followings as parameters to be fixed ex ante:

- Yearly operational days of introduced electric jeepneys in the Zone are set as 365 days.

- METI Study Team prepared CO2 emission factor of B2 biodiesel (0.00267246t-CO2/kl) by

multiplying prepared CO2 emission factor of diesel oils (0.002727t-CO2/kl)23 by 0.98

- METI Study Team adopted 5km/kl as fuel economy of Euro4 compliant diesel jeepneys based on

confirmation on existing old diesel jeepneys in the Philippines with EVAP. According to EVAP,

the fuel economy of such old diesel jeepneys is around 5km/l.

- Based on confirmation with Climate Change Division of DENR in February 2017, METI Study

Team adopted the latest value of CO2 emission factor of domestic electricity grid in the Phlippines

(0.000508t-CO2/kWh), which were calculated and set in the country by IGES in year 2012.

Emission.

- METI Study Team adopted 10% as a conservative value of electricity loss at battery charging

component of battery swapping and charging units. This is based on the fact that electricity

efficiency of EV battery charging unit by Japanese manufacturers was more than 90% (e.g. Nissan

Leaf). For estimation during this F/S period, METI Study Team used value of amount of overall

supplied electricity for batteries under electric jeepney system as followings, based on prepared

introduction plan in Table 3.3. Electricity economy of an electric jeepney is tentatively set as

0.322kWh/km.

Route 1(Main Gate of Clark Freeport Zone- M.A. Roxas Avenue- Clark Freeport Zone Main

Loop): 7 (jeepneys)* 26.75 (km/trip) * 12.57 (trips/day)* 365 (days/year)* 0.322 (kWh/km)

＝276,666(kWh/year)

Route 2 (Mabalacat Gate of Clark Freeport Zone- Prince Balagtas Avenue- Clark Freeport

Zone Main loop): 7(jeepneys)* 25.2(km/trip)* 12.57(trips/ day)* 365(days/ year)

*0.322(kWh/km)＝260,635(kWh/year) 23 36.8 MJ/l [Net calofic value of diesel oils] / 1000 * 0.0741 t-CO2/GJ [CO2 emission factor of diesel oils] = 0.002727t-

CO2/kl

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Route 1 Route 2 REy＝7(jeepneys)* 26.75(km/trip/jeepney)* 12.57

(trips/day)* 365(days/year) *0.0026725(t-CO2/ℓ)* 0.20 (l/km)* 0.98

＝450 (t-CO2/year) PEy＝276,666(kWh/year)* 0.000508(t-CO2/kWh)* (1+

10/100) ＝155(t-CO2/year) ERy＝295 (t-CO2/year)

REy＝7(jeepneys)×25.2(km/trip/jeepney)* 12.57(trip/ day)* 365(days/ year)* 0.0026725(t-CO2/ℓ) * 0.20(l/km)* 0.98

＝423 (t-CO2/year) PEy＝260,635 (kWh/year)* 0.000508(t-CO2/kWh)* (1+

10/100) ＝146 (t-CO2/year) ERy＝277 (t-CO2/year)

As result of above calculation, yearly CO2 emission reduction from electric jeepney introduction at

Clark Freeport Zone is estimated as 572 t- CO2.

Using the same approach, estimated yearly CO2 emission reduction at all of 3 potential project sites

are listed in Table 3.21.

Table 3.21 Esimated CO2 emission reduction from electricity jeepneys introduction for potential project sites

Potential project site name Estimated CO2 emission reduction (t- CO2/year)

Clark Freeport Zone 572

John Hay Special Economic Zone 141

Filinvest Alabang area 248

Total 961

3.5.3 Estimation of air pollutant emissions reduction

Under identified reference scenario as confirmed in Item c. of Sub-subchapter 3.5.2, METI Study

Team estimated air pollutant emissions reduction amount under situation of replacement of Euro4

compliant B2-biodiesel-driven diesel jeepneys in absence of electric jeepney introduction in the

Philippines under the Project.

For estimation, METI Study Team made an assumption that emission of each air pollutant from

Euro4-compliant B2-biodiesel-driven diesel jeepneys with same weight of that of battery swapping

electric jeepneys is equal to emission limit under Euro4 standards.

Estimated emission reduction of each air pollutant was calculated by multiplying projected annual

operational distance of electric jeepneys under the introduction plan for each potential project site by

value for each air pollutant under Euro4 standards on Table 2.11.

Estimation result is shown in Table 3.22.

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Table 3.22 Estimated air pollution emissions reduction from electric jeepney introduction at each potential project site

Pollutant name Site name

CO(t/year) NOx(t/year) HC+NOx(t/year) PM (t/year) [*Reference] Annual operational distance (km/year)

Clark Freeport Zone 0.834 0.417 0.501 0.042 1,668,634 John Hay Special Economic Zone

0.123 0.062 0.074 0.006 246,332.8

Filinvest Alabang area 0.324 0.162 0.194 0.016 647,959.5 Total 1.281 0.641 0.769 0.064

Source: Calculation by METI Study Team based on information on Table 3.3

3.6 Roadmap for battery swapping electric jeepneys introduction in the Philippines including Metropolitan Manila Region

3.6.1 Schedule for project implementation in the Philippines

a. Dissemination of battery swapping electric jeepney technology in consideration of character and market trends of the Philippines (including MRV and related support for capacity building)

On the basis of study by METI Study Team, PUES has a plan for technology introduction in

nationwide in the Philippine after technological verification at selected 3 project sites with different

characteristics.

i. Expansion to development area under BCDA

PUES considers project implementation at other former US base sites under conversion and

development under BCDA, based on project activities in Clark Freeport Zone and John Hay Special

Economic Zone in demonstration phase. At present BCDA has jurisdiction over 9 areas and each of

them has potential for further development. These sites face challenges for development of public

transport system. METI Study Team, during this F/S period, confirmed from a part of site owners among

the areas that they are conscious of environmental performance of introduced public transport system, in

view of insufficient ambiental air quality and traffic congestion in other areas including Metropolitan

Manila Region as negative examples at this stage. With this background, it is expected there are strong

demands of electric jeepney introduction to such areas, and it is considered potential of electric jeepney

introduction in the areas are very high.

ii. Expansion within Metropolitan Manila Region

PUES considers project implementation in other areas within Metropolitan Manila Region, based on

success in Filinvest Alabang area in demonstration phase. Possible projects by PUES in the Region

cover replacement of conventional diesel jeepneys by battery swapping electric jeepneys. The Projects

will meet a part of demand for replacement of around 20 thousand old jeepneys for every year, instead

of new introduction, in the Region.

PUES will promote electric jeepney technology introduction through demonstration of its advantage in

environmental and economic performance such as zero emission of GHG and air pollutants, in

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comparison with Euro4-compliant diesel jeepneys.

b. Roadmap for development of electric jeepneys (including prototype manufacture)

After this F/S period, PUES has consulted with PhUV Inc. about possibility of appraisal of primary

technology elements and promotion to potential users in preparation of demonstration test by

manufacture of 1-2 prototypes, as it is found difficult for Japan and Philippine sides to quick entry into

demonstration phase.

After appraisal and data collection with prototypes, PUES will embark on demonstration test for

vehicle development and manufacture. Demonstration activities are scheduled for a year, in cooperation

with OC Global and ICETT.

In parallel of demonstration activities, PUES will start their preparation for commercial operation

including on-demand sales for owners of project sites other than Clark Freeport Zone, John Hay Special

Economic Zone and Filinvest Alabang area and business launch.

Through demonstration test, PUES will inspect technical challenges and engage in transfer of Japanese

technology pertaining to electric jeepney manufacture to the Philippine side. The technology transfer

activities need to cover technologies and knowledge in the fields including handling of high-voltage

parts or components and quality management during manufacture process. In parallel, partnership with

local partners in maintenance and service fields and implementation strucuture in these fields will be

establishment, along with necessary technology transfer.

c. Collaboration with PFAN and Commercial Section, Embassy of the Philippine in Tokyo

During this F/S, METI Study Team considered electric jeepney introduction plan including financial

plan in collaboration with Mr. Charles Cole B. Navarro, the PFAN Area Coordinator in the Philippines.

At the same time, they received liaison and advisory supports from Commercial Section, Embassy of the

Philippine in Tokyo for implementation of field survesy under this F/S.

METI Study Team considers collaboration with PFAN and the Comercial Section after this F/S period

as shown in Table 3.23.

Table 3.23 Collaboration with PFAN and Commercial Section, Embassy of the Philippines in Tokyo after this F/S phase

Collaboration approach

PFAN - Preparatory phase for JCM Demonstration

Introduction of PFAN network on investors and financial institutions (governmental and private banks) for promotion of financial procurement for commercial operation,

Transfer of knowledge on relevant tips including documentation for presentation and loan application to domestic investors and financial institutions in the Philippines

- Commercial operation phase after demonstration

Request of support from or cooperation with PFAN or its experts depending on progress at project sites at this stage

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Collaboration approach

Commercial Section, Embassy of the Philippine in Tokyo

- Preparatory phase for JCM Demonstration phase

Consideration on possibility of periodical opinion exchange by EVAP, the Commercial Section, OC Global, PUES and ICETT in support of efforts for legislation of EV Incentive Bills by EVAP in the Philippines, and

Consideration on possibility of advisory support in relation to law system development for promotion of battery swapping electric jeepney technology introduction in the Philippines from the Commercial Section.

- JCM Demonstration phase

Consideration on possibility of continuous advisory support from the Commercial Section in above item.

Consideration on possibiility of introduction of stakeholders of candidate project sites, including 7 project sites which were not selected us project site for demonstration, for electric jeepney introduction at commercial operation phase by the Commercial Section.

3.6.2 Application to various support programs and incentives

METI Study Team will consider application to following support programs and incentives in Japan

and the Philippines for project implementation at later stages after this F/S, on the basis of result of

confirmation in the F/S period.

Table 3.24 Applicable support programs and incentives for project impelementation Program or incentive Support contents

Japan JCM Demonstration Program under NEDO

- Full support of initial investment cost (*Procurement at the price of depreciated cost at the stage after demonstration period by the program applicant)

The Philippines

Incentives from BOI for registered companies under EO226

- Exemption of corporate tax (*ITH for targeted investment project under the IPP. Possibility of extension of ITH period up to 8 years if registered as Pioneer enterprise under EO226)

- Exemption of duties, VAT and other taxes

- Exemption from quayages, export taxes and levies.

- Additional exemption for labor cost

- Simplified clearance process at the custom, etc.

Preferential measures from CDC for business in Clark Freeport Zone area

- Following preferential measures for locators in Clark Freeport Zone area after regislation as registered companies of the Freeport Zone (in condition of successful registeration after preliminary examination and examination on project feasibility by CDC)

Exemption of national and regional taxes as special taxes duties and VAT (Imposion of 5% of gross income tax in exchange of this exemption)

Exemption from quayages, export taxes

Additional exemption of labor costs

Simplified clearance process at the custom

Issuance of special visas, etc.

Subsidy from DOST and other departments

- Support on manufacture cost of prototypes

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Program or incentive Support contents

EV Incentive Bills (To be legislated)

- Exemption of excise taxes for EV manufacturers

- Incentives for operators, etc.

In addition to above programs and incentives, METI Study Team will consider possibililty of

application to PFAN for which ICETT, a member institution of METI Study Team had worked as the

Secretariat, Japan Fund for Joint Crediting Mechanism (hereinafter referred to as “JFJCM”) and Green

Climate Fund (hereinafter referreed to as “GCF”) as candidate financial source for project

implementation at later stages.

Among them, METI Study Team has identified advantages and disadvantages of JFJCM and GCF, and

found out there is a necessity in further consideration on application to these two schemes as result of

their meeting with staff in charge of both schemes in ADB, as shown in Table 3.25.

Table 3.25 Characteristics of JFJCM and GCF schemes Scheme name Advantage Disadvantage

JFJCM - Financial and technical support for ADB loan projects for their project implementation aunder the JCM (Financial support in amount of around 10 million US Dollars in maximum and technical support on MRV)

- Subsidy to the Soverign Projects with national central government (especially MOF) as borrowing institution from ADB

- Interest subsidy to decrease ADB loan rate for Non-Soverign Projects by private sector

- Advanced low carbon technology for reduction of GHG with energetic origin with record of introduction in countries other than the Phillippines. (*According to another ADB expert, it is confirmed battery swapping electric jeepney technology can be eligible as EV technology has been introduced in Malaysia.)

- Necessity in loan application to ADB as Soverign or Non-Soverign Projects in prior to application to JFJCM

Loan application as a Soverign Project requires prior consultation with ADB and contact with DOF through ADB.

Loan application as a Non-Soverign Project needs loan application to ADB which requires long time.

- Eligibility criteria for proposed projects

Every proposed project shall pass cost efficiency test based on the value which divide its overall project cost by the product of its annual GHG emission reduction amount and its project period. The value shall be 40 US Dollar or lower. (4520 Japanese Yens, if 1US Dollar= 113 Japanese Yen)

It is necessary for electric jeepney project to consider applicability of this scheme, in consideration of condition for project implementation, cost reduction for commercial operation phase.

GCF - Finance for both mitigation and adaptation projects with financial support in amount of around 0.25 billion US Dollars

- Possibility of support to large-scale projects which have wide-range, irrevasible, unpredecendted and serious impact on environment and society

- Financial support for projects in amount more than 10 million US Dollars by ADB (*Electric jeepney projects in selected three potential project sites are not eligible due to lower amount of project cost in total)

- Necessity in payment of cost for due diligence process in prior to procurement under GCF scheme through ADB, in amount of around 0.1-0.4 million US Dollars by project proponents (*Additional payment for the due diligence)

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Scheme name Advantage Disadvantage - Fixed cost share among project proponent, ADB,

bank loan from financial insittutions including private banks and GCF as 25% for each.(*High risk of additional payment of 25% for ADB by project proponent or financiail institutions due to possibility of withdrawal by ADB)

Source: Information from ADB officers

Regarding PFAN, METI Study Team assumes advisory support and individual lectures for loan

application to private financial institutions for battery swapping electric jeepney technology introduction

by private small and medium enterprises among project site owners. This is based on understanding of

activity objective of PFAN that they support private financial loan procurement by project owners and

entreprenurs in field of clean energy, renewable energy and energy efficiency improvement fields for

promotion of technical transfer to developing countries and transitional economies as its ultimate goal.

Also, PFAN covers 9 project fields including renewable energy use (e.g. solar, wind), waste energy

generation/ recovery and clean transport, and electric jeepney introduction is included within scope of

clean transport project fields. Furthermore, requirement of intial investment cost of targeted project

amounts for 1-50 million US Dollars (or equivalent foreign currency) and overall project cost of the

electric jeepney project is 3.28 million US Dollars within scope of PFAN program.

3.6.3 Challenges to be overcome

In order to secure project implementation after this F/S period, METI Study Team will continue

consultation and considertation on countermeasures against following 4 challenges with Philippine

stakeholders including EVAP.

Firstly, it is necessary to revise project and financial plans, business model and plan for demonstration

phase, watching carefully trends of JCM support program budget of METI and NEDO.

Secondly, it is necessary for METI Study Team to confirm necessity in acquisition of franchaise

certificate for operation in Clark Freeport Zone and John Hay Special Economic Zone in demonstration

phase.

Thirdly, METI Study Team will communicate with local operators at preparatory phase for

demonstration and demonstration phase, based on understanding that establishment of close partnership

with local operators is vitally important for commercial operation in potential project sites especially

Clark Freeport Zone after demonstration phase.

Fourthly, it is vital for METI Study Team to involve local electric companies and local private

companies which may take charge of equipment of battery charging station in project implementation

structure for each potential project site area for establishment of operation scheme for battery swapping

and charging stations at commercial operation phase after demonstration phase.

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Chapter 4 Result of Seminar on Battery Swapping Electric Vehicles Technology and the Joint Crediting Mechanism

4.1 Seminar overview

METI Study Team and EVAP jointly organized a seminar titled Seminar on Battery Swapping Electric

Vehicles Technology and the Joint Crediting Mechanism for stakeholders in governmental agencies and

EV industry in the Philippines in Makati City in the afternoon of 9 February 2017. At the seminar,

presentation topics included outcomes of this F/S, and the seminar overview was shown in Table 4.1.

Table 4.1 Seminar overview Seminar name Seminar on Battery Swapping Electric Vehicles Technology and the Joint Crediting Mechanism

Date and time 1:30p.m.- 4:20 p.m., Thursday, 9 February 2017

Venue Cicely Hall, 8th Floor of City Garden Grand Hotel, Makati City, Metropolitan Manila Region

Participants 46 participants (BOI: 2 participants, DENR/ Climate Change Commission 3 participants, DOTr: 2 participants、DOE: 1 participant, BCDA 2 participants, DOST-PCIEERD 3 participants, CDC 1 participant, JHMC 3 participants, Muntinlupa City 3 participants, UP-NCTS: 1 participant, MERALCO: 3 participants, EVAP 5 participants, EVEEI 1 participant, local companies in Philippine EV industry 7 participants, Embassy of Japan in the Philippine: 1 participant., JETRO Manila: 1 participant, JICA Philippines Office: 1 participant, METI Study Team: 6 participants)

Seminar contents

1:30p.m.- 1:40 p.m. Opening remarks by Ms. Ma. Corazon Halili-Dichosa, Executive Director, Industry Development Group, Board of Investment, Department of Trade and Industry

1:40 p.m.- 1:50 p.m. Welcome remarks by - Mr. Rommel T. Juan (President, EVAP) - Mr. Masahiko Fujimoto, Team leader of METI Study Team, OC Global

1:50 p.m.- 2:15 p.m. Presentation 1: Overview of JCM scheme by METI by Mr. Kentaro Ofuji, OC Global

2:15 p.m.- 2:40 p.m. Presentation 2: Outcomes of METI Feasibility Study by Mr. Masahiko Fujimoto

2:40 p.m.- 3:05 p.m. Presentation 3: Overview of Battery Swapping EV Technology by Mr. Izumi Miyashita, PUES

3:05 p.m.- 3:30 p.m.

Presentation 4: Result of Financial Analysis for E-jeepney project and Available Financial Schemes for Introduction of Battery Swapping EV Technology in the Philippines at later stage by Mr. Charles Cole B. Navarro, ICETT

3:30 p.m.- 3:55 p.m.

Presentation 5: Desirable financial/ non-financial incentives by Government of the Philippines for introduction of Battery Swapping E-jeepneys in the Philippines by. Mr. Mark Anthony Delumen, Deputy Executive Director, EVAP

3:55p.m.- 4:25 p.m. Opinion exchange

4:25 p.m.- 4:30 p.m. Closing remarks by. Mr. Junichiro Suzuki, Trade and Commercial Attachè, Embassy of Japan in the Philippines

Overview - Overview of JCM, i.e. JCM scheme overview, situation of registerd JCM projects and approved methodologies and support programs by Government of Japan,

- Site selection result, introduction plan and MRV plan for each potential project site and roadmap for battery swapping electric jeepney technology introduction in 2017JFY and after,

- Overview of battery swapping EV technology, i.e. technology concepts and characteristics, examples of technology introduction in other countries, characteristics of technology by PUES (battery equipment and battery management technology), overview of technology appraisal result and plan for demonstration phase based on the F/S result,

- Comparison on costs and benefits between electric and conventional diesel jeepneys, assumed financial

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flow in demonstration phase, composition of financial model for battery swapping electric jeepney projects, financial model for battery swapping and charging station operators as an example of project financial model and applicable financial schemes for technology introduction e.g. PFAN,

- Overview of legislation efforts for introduction of fiscal and non-fiscal incentives for EVs promotion in the Philippines, overview of EV Incentive bills and previously submitted bills to the Congress and overview of applicable incentive measures for EVs promotion in the Philippines.

Overview of comments and feedbacks from seminar particpants are listed in Subchapter 4.2.

Also, METI Study Team displayed a full-scale battery for battery swapping electric jeepneys for

introduction in the Philippines based on the F/S result at seminar venue for introduction to seminar

participants.

Photo 4.1 Opening remarks by BOI

Photo 4.2 Welcome remarks by team leader

of METI Study Team

Photo 4.3 Overview of seminar venue

Photo 4.4 Presentation by METI Study Team

Photo 4.5 Presentation by EVAP

Photo 4.6 Q&A session between

presentations

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Photo 4.7 Closing remarks by Embassy of

Japan in the Philippines

Photo 4.8 A full-scale mockup of battery for

battery swapping electric jeepneys 4.2 Comments and feedbacks from seminar participants and revision of project plan

METI Study Team received several comments and feedbacks on topics including JCM scheme, F/S

outcomes, battery swapping electric jeepney technology and incentives for EVs promotion from seminar

participants, as shown in Table 4.2.

Table 4.2 Overview of comments and feedbacks from seminar participants Item name Contents

JCM scheme - Possibility of acceptance of unilateral JCM project(s) under the Philippine-Japan JCM,

- Possibility of utilization of existing CDM methodologies for JCM,

- Inquiry on Philippine members of the Joint Committee for the Philippine-Japan JCM, and

- Inquiry on limitation of volume of registered projects under respective JCM between Japan and each partner country

F/S outcomes - Concern on higher cost of electric jeepneys compared to existing diesel jeepneys and necessity in incentive measures including preferential measures by BOI and use of carbon credits by Government of the Philippines for reduced burden in the Philippine side,

- Inquiry on O/M cost in demonstration phase, and

- Inquiry on frequency of replacement of electric jeepney bodies and batteries

Battery swapping electric jeepney technology

- Inquiry on background of selection of lithium ion batteries and battery swapping system for electric jeepneys, and

- Concern on inefficiency of battery charging in peak periods.

Technology introduction plan including financial plan

- Inquiry on concept of estimation of battery swapping cost,

- Inquiry on volume of loaded batteries on an electric jeepney,

- Possibility of revenue from advertisement fee by another institutrion to be included in project financial plan,

- Possibility of fnd procurement from financial institutions and battery industry for reduced burden of invest on equipment by operators under project business model,

- Concern on battery swapping cost as a barrier from viewpoint of jeepney drivers,

- Inquiry on appropriate standard of jeepney fare to gain sufficient revenue to cover expenditures for equipment cost and driver’s salary in the operator side under situation of project management by project site owner in contract with operators, and

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Item name Contents

- Possibility of inclusion of environmental budget concept in consideration of zero exhaust gas and noice emission from electric jeepneys for development of more practical financial model.

Incentives for EVs promotion - Inquiry on approach for submission of bills which were not legislated during previous congress

sessions to the congress by EVAP,

- Necessity in commitments including support to component of equipment procurement after NEDO JCM Demonstration phase by the Philippine side,

- Necessity in support for legislation of the EV Incentive Bills from seminar participants from the Philippine side, and

- Concern on lack of incentives for operators of EVs including electric jeepneys in the latest version of the EV Incentive Bills in consideration at the Congress, and possibility in inclusion of such incentives in the Incentive Bills.

METI Study Team will revise electric jeepney introduction plan based on following remarks, among

listed comments and feedbacks in above chart, at later stages after this F/S period:

- METI Study Team will discuss possibility of advertisement on electric jeepneys and consideration

on financial plan including advertisement fee revenue with each potential project site owners. In

parallel of financial plan consideration, METI Study Team will consider appropriate standard of

battery swapping cost in the operators’ side.

- METI Study Team will consider possibility of fnd procurement from financial institutions and

battery industry for reduced burden of invest on equipment by operators under project business

model with Philippine stakeholders including each potential project site owner and EVAP. METI

Study Team will also consider possibility of introduction of environmental budget to consider

positive impact on CO2 emissions reduction and ambiental air quality improvement through

implementation of project of battery swapping electric jeepneys as clean and low carbon transport

mode, for invester relations activities.

- METI Study Team will observe overall situation of legislation process of EV Incentive Bills by

EVAP, for further consultation with Philippine stakeholders including potential project site owners

for introduction of battery swapping electric jeepney technology. In detail, METI Study Team will

consider cumulative impact of the possible introduction of incentives under the Incentive Bills,

including possible incentives for operators, on reduction of project costs in to revise project

financial plan with reduced overall invest cost in the Philippine side; with this effort, METI Study

Team will make best efforts to obtain consent from the Philippine side for technology introduction.

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Chapter 5 Policy proposal for battery swapping electric jeepney technology introduction under the JCM

As summarized in Chapter 2, preparation of several policies, laws and regulations for EVs promotion

has been in steady progress in the Philippines, and there still have a room for further efforts, from

viewpoint of EV promotion and introduction of battery swapping electric jeepney technology under the

policies, laws and regulations at this stage.

Based on this idea, METI Study Team made policy proposals to Government of the Philippines with

EVAP to promote introduction and promotion of battery swapping electric jeepney technology from

Japan in the Philippines under the JCM, during the F/S period.

5.1 Policy proposal

5.1.1 Introduction of tax exemption for import of battery swapping electric jeepney bodies and parts

METI Study Team identified higher cost of electric jeepney bodies, batteries and equipment of battery

swapping and charging system in local governments and private companies including operators as users

of the technology as a great challenge for technology

introduction and dissemination through this F/S.

These costs are higher compared to costs of existing

diesel jeepneys.

As an action for reduction of this barrier, lobbying

of legislation of EV Incentive Bills including tax

burden reduction in field of import tax for importers

of EV and battery swapping and charging system parts

from Japan and other countries in the Philippines has

been in progress.

In this situation, METI Study Team strongly urged Government of the Philippines to make actions for

legislation of the Incentive Bills during upcoming JCM Demonstration period.

Furthermore, at Seminar on Battery Swapping Electric Vehicles Technology and the Joint Crediting

Mechanism on 9 February 2017, EVAP made a presentation on the EV Incentive Bills for seminar

participants from governmental institutions in the Philippines and requested their support for legislation

of the Incentive Bills. As result of discussion at the seminar, EVAP will continue their efforts for

legislation of the Incentive Bills based on remarks from seminar participants.

5.1.2 Manufacture of prototype of battery swapping electric jeepneys and battery swapping and charging system

Battery swapping electric jeepneys has not yet manufactured and operated in the Philippines, resulting

in low visibility in the side of potential users i.e. local governments and private companies including

operators, as a barrier for their decision for purchase of electric jeepney system equipment by the users’

Photo 5.1 Meeting with officer in charge

of EV Incentive Bills

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side.

Based on understanding of this barrier, METI Study Team requested Government of the Philippines

for their support to manufacture of prototypes of battery swapping electric jeepneys. It is expected that,

with the prototypes, stakeholders in the potential users’ side can confirm their performance, getting in

touch with full-scale vehicles to Government of the Philippines.

METI Study Team is with a goal of production of the prototypes for promotion for the said

stakeholders including exhibition and introduction of their features, in parallel with possible entry into

JCM Demonstration phase for technology introduction in the Phiilipines.

5.2 Contribution to preparation of standards for modernized electric jeepneys under future Jeepney

Modernization Program in consideration by Government of the Philippines

During the F/S period, METI Study Team conducted several meetings with EVAP and confirmed that

preparation of standards for modernizaed jeepneys by DOTr in consultation with EV Industry

stakeholders including EVAP is in progress. METI Study Team confirmed the standards include

additional requirements for ethe electric jeepneys including safety standards and requirements on

specification.

During future process of introduction of the Jeepney Modernization Program, as well as battery

swapping electric jeepney technology introduction and dissemination based on the F/S outcomes, it is

assumed that duplicated investment on equipment for compliance with numerous overllaping standards

and concern on safety of modernized jeepneys including electric jeepneys under the Program in the

potential users’ side can be barriers for technology introduction.

The consultation process on modernized jeepney standards has been in progress, and early preparation

of the standards is expected. In this situation, METI Study Team will make efforts to propose DOTr to

incorporate knowledge and expertise which are acquired from actual operation of battery swapping

electric jeepney bodies and equipment during demonstration phase into the standard preparation process

through EVAP.

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