1、Decarbonising Hong Kongs Roads:Pathways towards a Net-Zero Road Transport System1WRI.ORG.CNLULU XUE SU SONG WENYI XI XIAOQIAN JIANG LAWRENCE IU SIMRAN SAWHNEYDECARBONISING HONG KONGS ROADS:PATHWAYS TOWARDS A NET-ZERO ROAD TRANSPORT SYSTEM2WRIDesign and Layout by:Harry Zhang https:/doi.org/10.46830/w

2、rirpt.21.00130ACKNOWLEDGEMENTS This publication is a joint effort by HK 2050 Is Now,an initiative of the World Resources Institute(WRI),Civic Exchange,ADM Capital Foundation,RS Group,and WYNG Foundation.We would like to express our gratitude to those who provided timely and helpful advice,support,an

3、d assistance during the preparation of this publication.Special thanks go to the following individuals and organisations for providing inputs and reviewing draft versions of this document:Addie Lam,Kowloon Motor Bus Derric Cheung,CLP Power Hong Kong Ltd.Helena Lee,CLP Power Hong Kong Ltd.Jonathan Zi

4、ebart,Bravobus Mark Savelli,New Lantao Bus Victor Kwong,The Hong Kong and China Gas Company Limited(Towngas)Wing Tat Hung,The Hong Kong Polytechnic University Benjamin Welle,World Resources Institute Cristina Albuquerque,World Resources Institute Erika Myers,World Resources Institute Li Fang,World R

5、esources Institute Shiyong Qiu,World Resources Institute Wee Kean Fong,World Resources Institute Zhe Liu,World Resources Institute Isabel Qi,World Resources Institute(Intern)Wenwei Bao,World Resources Institute(Intern)Xiaohuan Zeng,World Resources Institute(Intern)Ying Pu,World Resources Institute(I

6、ntern)Yuli Zhu,World Resources Institute(Intern)We are also grateful to Bill Dugan,Ran Wei,Renee Pineda,Romain Warnault,Ruiyun Dou,Shazia Amin,and Ye Zhang for providing editing,administrative,and design support.We are pleased to acknowledge our institutional strategic partners,which provide core fu

7、nding to WRI:Netherlands Ministry of Foreign Affairs,Royal Danish Ministry of Foreign Affairs,and Swedish International Development Cooperation Agency.Funding from the ADM Capital Foundation,the Rockefeller Brothers Fund,and WYNG foundation made this analysis possible.We appreciate their support.Dec

8、arbonising Hong Kongs Roads:Pathways towards a Net-Zero Road Transport SystemITABLE OF CONTENTSIII ForewordV Executive Summary1 Chapter 1 Introduction2 Necessities4 Status quo7 Challenges10 Research scope and framework17 Chapter 2 Zero-Carbon Bus Fleet and Enabling Mechanisms19 TCO analysis31 Future

9、 policy scenarios35 Socioenvironmental implications39 Recommendations43 Chapter 3 Decarbonising Private Cars and Supporting Mechanisms44 TCO analysis54 Future policy scenarios57 Socioenvironmental implications60 Recommendations65 Chapter 4 Goods Vehicles Decarbonisation Potential and Action Plan66 G

10、oods vehicles stock and zero-emission vehicles market share prediction70 Cost-benefit analysis for net-zero scenarios75 Recommendations77 Appendix A.Methodology to Forecast BEV Prices80 Abbreviations81 Endnot82 ReferencesIIWRIDecarbonising Hong Kongs Roads:Pathways towards a Net-Zero Road Transport

11、SystemIIIFOREWORDWhere there is transportation,there is life.Life has progressively changed as we work to achieve carbon neutrality.It is vital that Hong Kong is able to retain its interconnectedness while preserving a sustainable environment for future generations.Decarbonisation of the transport s

12、ector provides a unique opportunity to reach these goals that we must grasp now.The central goal of the Paris Agreement is to limit global temperature rise to“well below 2C above pre-industrial levels and to pursue efforts to limit temperature increase to 1.5C.”The latest science shows that to achie

13、ve this goal,global greenhouse gas emissions need to be halved by 2030 and reach net-zero by 2050.This transformation requires ambitious action across all levels of government and sectors of society including countries,states and provinces,cities,companies,investors,and the public.As global trends s

14、hift towards zero emission transportation,Hong Kong has committed to achieve carbon neutrality by 2050 and will ban the new registration of Internal Combustion Engine(“ICE”)private cars(including plug-in hybrid vehicles)by 2035.All sectors of the society should welcome this initiative.Transportation

15、 is the second-largest source of greenhouse gas emissions in Hong Kong.Road transport accounts for 89 percent of total transport emissions and is also a major source of pollution.Currently,Hong Kong,as a Special Administration Region,is the first Chinese city that has committed to carbon neutrality

16、by 2050 and launched a clear fossil fuel ban on private cars.Decarbonising the transport sector is critical to combatting climate change,but it also poses particular challenges for a economically prosperous and densely populated port city.With oil prices remaining high,the need to decarbonise Hong K

17、ongs public transportation system is stronger than ever.The breakthrough of power battery and hydrogen fuel cell technology and continuous cost reductions have brought new opportunities for emission reductions in road transport.Hong Kong now has a wealth of technological tools at its disposal to sup

18、port a net-zero vehicular transition.Despite the rigorous changes and major efforts required,Full decarbonisation requires an action-oriented long-term plan,and will require momentous changescommensurate with those already underway in Mainland China and globally.This report provides a feasibility an

19、alysis on Hong Kongs decarbonisation of road transport and offers recommendations for the government,private sector,and civil society.The message is clear:we can only achieve net-zero in the transportation sector if government together with society takes collective action immediately.As a wealthy ci

20、ty,Hong Kong has an environmental and social responsibility to contribute to collective climate action in the transportation sector.Together,we have the resources to JOINTLY BUILD a city that is thriving,healthy,and fully decarbonised.Let us begin that journey now.Li FangChief Representative,Beijing

21、 Representative Office,WRI ChinaEvan Auyang Chi-ChunChairman of the Board,Civic ExchangeIVWRIDecarbonising Hong Kongs Roads:Pathways towards a Net-Zero Road Transport SystemVEXECUTIVE SUMMARYHIGHLIGHTS The transport sector is the second-largest greenhouse gas(GHG)emission source in Hong Kong after t

22、he power sector,and road transport is the largest source of transport emissions.Decarbonising road transport is important for realising the citys net-zero emission goal.This report focuses on the top road transport emittersprivate cars,freight vehicles,and buses.The Total Cost of Ownership(TCO)parit

23、y of zero-emission buses could be reached before 2030.We recommend banning the registration of diesel buses by 20302033 with a major acceleration in the testing of zero-emission double-deckers in intensively operated bus routes and rolling out zero-emission bus-specific policy safeguards and transit

24、ion plans.TCO parity of electric private cars(PCs)is close in sight due to generous vehicle registration tax concessions and high petrol prices in Hong Kong.Hong Kong has the opportunity to advance the PCs fossil fuel ban from the current 2035 to 20262030,while managing overall car ownership and usa

25、ge.Hong Kong should prioritise electric trucks in all sizes,including a certain share of hydrogen fuel cell heavy-goods vehicles.Hong Kong should ban new registration of internal combustion engine(ICE)light-goods vehicles by 2030,and ICE medium-and heavy-goods vehicles by 2039.VIWRIIntroductionIn No

26、vember 2020,Hong Kong pledged to achieve carbon neutrality before 2050,making it the first city in China with a time-specific carbon neutrality goal.As the transport sector is the second-largest direct greenhouse gas(GHG)emission source(18.1 percent)in Hong Kong,after electricity generation(65.6 per

27、cent)(Environmental Protection Department 2021a),decarbonising the transport sector is important for reaching the citys carbon neutrality target.In the recently released“Hong Kongs Climate Action Plan 2050”and in“Hong Kong Roadmap on Popularisation of Electric Vehicles”from 2021,electrification of v

28、ehicles(and ferries)is listed as the primary decarbonisation measure.To this end,the Hong Kong government aims that(1)the new registration of fuel-propelled private cars(including plug-in hybrid electric vehicles PHEVs)will be banned by 2035 or earlier(Hong Kong Environment Bureau 2021);(2)for comme

29、rcial vehicles,the government aims to promote electric vehicles(EVs)at a large scale and test out hydrogen fuel cell electric buses and heavy vehicles in the next three years.However,Hong Kongs current vehicle electrification plan is not sufficient to meet the citys carbon neutrality target;banning

30、the sale of internal combustion engine(ICE)private cars(26.9 percent of road transport emissions)is not sufficient to achieve the 2050 carbon neutrality goal.To enhance Hong Kongs zero-emission vehicle adoption goals,this study aims to explore ways to promote zero-emission vehiclesbattery electric v

31、ehicles(BEVs)and hydrogen fuel cell vehicles(FCEVs)at scale in Hong Kong.Three key vehicle segmentsbuses,private passenger vehicles,and trucks with the largest GHG emissions(87 percent of road transport emissions)and fleet sizes(87 percent of the vehicle stock)(Hong Kong Environment Bureau 2021)are

32、chosen for in-depth analysis.Zero-emission transition of franchised buses:More than e-bus trialsIt is crucial to foster Hong Kongs franchised bus electrification without compromising high operational efficiency,passenger comfort,and market competitiveness,particularly considering Hong Kongs bus elec

33、trification faces unique challenges:first,95 percent of the franchised bus fleet are 3-axle double-deckers(DDs)1(gross vehicle weight over 24 tonnes)with limited zero-emission model availability,insufficient ranges(in terms of Hong Kongs intense operation mileages),prohibitive prices,and less passen

34、ger capacity.Second,Hong Kongs buses are operated under the franchise scheme.Private bus operators are responsible for bus acquisition.The study first calculates the total costs of ownership for double-deckers under different scenariosvarying charging infrastructurefunding mechanisms,electric vehicl

35、e availability rates,and electricity/hydrogen costs.The results show the following(Figure ES-1):Due to high vehicle prices and costly infrastructure investments,the total cost of ownership(TCO)parity between diesel double-deckers and electric double-deckers is not yet achieved in 2022.In the future,

36、with lower vehicle prices and improved vehicle energy efficiency,TCO cost parity may be reached in(or before)2030.If replacing a diesel DD requires extra(20 percent)electric DDs and charging infrastructure is built without the governments support,the TCOs of electric DDs will be HK$605,000(8 percent

37、)to HK$1,195,000(15 percent)higher than the TCOs of diesel DDs.For hydrogen double-deckers,TCOs of hydrogen and diesel double-deckers may possibly converge by 2030.However,the TCOs of hydrogen DDs would vary considerably more than the TCOs of electric DDs,because of uncertainties in future hydrogen

38、costs.If hydrogen has supply bottlenecks,and hydrogen cost is above HK$60 per kilogram(kg),the TCO parity of hydrogen buses will be reached by 2030.The TCO of hydrogen DDs would be HK$1,562,000(21 percent,hydrogen cost is HK$60/kg)to HK$3,633,000(49 percent,hydrogen cost is HK$96/kg)higher than dies

39、el DDs TCO in 2030.Decarbonising Hong Kongs Roads:Pathways towards a Net-Zero Road Transport SystemVIIFigure ES-1|Double-Deckers TCO Comparisons as of 2030Vehicle capital costUnit:1,000 HK$Cost of financingVehicle maintenance costCharging facility cost(CAPEX+O&M)Powertrain overhaul CAPEX15-year ener

40、gy costTCONotes:DD=Double-decker;kWh=Kilowatt-hours;kg=Kilogram;O&M=Operations and maintenance;TCO=Total cost of ownership.Charger-gov.indicates government-invested e-bus charging facilities.Charger-operator is bus operatorsinvested e-bus chargers.Charger-3rd party is other private investorfunded e-

41、bus chargers.1:1 and 1:1.2,respectively,indicate one diesel bus is replaced by one e-bus and 1.2 e-buses.Source:Chapter 2 of this study.The study further proposes possible“diesel bus ban”time lines/scenarios,based on possible TCO parity timeliness as well as the measures taken by various stakeholder

42、s.The study assumes three-to-five-year transition periods from the timing of TCO parity to the“diesel bus bans”and,therefore,proposes three possible“diesel bus ban”time lines:2026,2030,and 2033.The socioenvironmental impact analysis shows that to balance public financial viability and environmental,

43、social,and health benefits,banning new registration of diesel buses around 20302033 is viable for Hong Kong.In comparison,a diesel bus ban by 2026 requires considerable public expenditure(Table ES-1).Although the environmental benefits justify these public expenditures,strong political determination

44、 and firm support from franchised operators are also needed.To turn the above scenarios into reality,Hong Kong needs dedicated zero-emission bus trials,a long-term electrification roadmap,and sustainable policy safeguards.First,in the near term,Hong Kongs e-bus trials could be improved with the foll

45、owing recommendations:The government could play a more proactive role in the trials by providing necessary enablers,including support on land planning rezoning,coordination of charging facility installation at terminals and depots,and secure hydrogen supply,as well as removing existing regulatory ba

46、rriers(such as requirements on the maximum gross vehicle weight of double-deckers).A dedicated fund for zero-emission bus promotion could be established,where bus operators are allowed large procurements to reinforce commitments.An advisory group could be established to synthesize the trial results

47、and resolve potential vested interests.The advisory group could help in evaluating trial results,building consensus among different stakeholders,informing policymaking,advising bus operators operations adjustments,and more.012,0002,0004,0006,0008,00010,000Diesel DDElectric DD(1:1,utillity rate=1.75

48、HK$/kWh)Electric DD(1:1.2,utillity rate=1.75 HK$/kWh)Hydrogen DDDiesel DD7,3526,1256,6467,2617,3507,9758,7138,91410,9867,187Charger-gov.Charger-gov.Charger-operatorCharger-operatorHydrogen DD(60 HK$/kg)Hydrogen DD(30 HK$/kg)Charger-3rd partyCharger-3rd partyHydrogen DD(96 HK$/kg)VIIIWRIDIESEL BUS BA

49、N 2026DIESEL BUS BAN 2030DIESEL BUS BAN 2033Policy safeguards Electric buses Purchase subsidy Supports on charging infrastructure delivery Credit enhancement Purchase subsidy Supports on charging infrastructure delivery Credit enhancementNoneHydrogen buses Purchase subsidy Operational subsidy Suppor

50、ts on hydrogen supply Credit enhancement Purchase subsidy Operational subsidy Supports on hydrogen supply Credit enhancement Purchase subsidy Operational subsidy Supports on hydrogen supplyPrivate sector effortsElectric buses Demand charge avoidance Eco-driving training Green finance Demand charge a

51、voidance Eco-driving training Green financeNoneHydrogen buses Manpower training Green finance Manpower training Green finance Manpower training Green financeCumulative GHG emissions reduction(20212050)(compared to diesel bus ban 2033)2.4 million tonnes CO2e1.5 million tonnes CO2en/aCumulative econom

52、ic benefits from avoided emissions (20212050)(compared to diesel bus ban 2033)HK$2.0 billion HK$1.2 billion n/aCumulative public expenditure(20212050)HK$452 millionHK$1.21 billionHK$31HK$592 millionHK$0HK$211 millionTable ES-1|Comparisons of Policy Measures and Socioenvironmental Impact of Diesel Bu

53、s Bans in 2026,2030,and 2033Notes:GHG=Greenhouse gas;n/a=Not applicable;CO2e=Carbon dioxide equivalent.Electric bus=Battery electric bus;Hydrogen bus=Hydrogen fuel cell electric bus.Source:Chapter 2 of this study.Further,given the long service life of buses,Hong Kong needs to plan the phase-in of ze

54、ro-emission buses early on,to be on track to attain Hong Kongs 2050 carbon neutrality target:Minibuses and single-deckers(SDs)are technologically ready for wider adoption,and the adoption of electric single-deckers can now also help franchised bus operators to ease the sharp learning curve and becom

55、e prepared.Starting from 2026,zero-emission double-deckers may be ready for wider adoption.Double-decker electrification can be prioritised:double-deckers travelling in urban centres with short daily mileages,low speeds,and frequent idling would become increasingly ready for EV transition.Double-dec

56、kers travelling long-distance to serve new towns on the outskirts(like the Express Service Route with a route length over 40 kilometres km and average speed up to 70 kilometre per hour km/h)may well be electrified at scale around 20262030,if the technology advances occur as expected.The latter type

57、of double-decker is also a niche application for hydrogen.Decarbonising Hong Kongs Roads:Pathways towards a Net-Zero Road Transport SystemIXSustainable policy incentives must succeed the temporary e-bus trials to continue incentivising the adoption of zero-emission buses:Vehicle purchase and operati

58、onal subsidies:The vehicle purchase subsidy is important to reduce zero-emission buses TCOs and make them affordable for private franchised operators.For hydrogen DDs,apart from a vehicle purchase subsidy,an operational subsidy may also be needed,contingent on at-pump hydrogen prices.Public support

59、on e-buses charging infrastructure delivery:Although charging facilities can be delivered by the private sector or through public-private partnerships(PPPs),public support is essential.This public support takes the form of land zoning and land acquisition for new bus depots as well as capital grants

60、 to install e-bus charging facilities,specifically:First,a proactive role by the government to plan for large pockets of land for new bus depots and to manage land rents is particularly important.Further,in bus terminals where e-bus chargers are shared among multiple bus operators,the government can

61、 fund the installation of shared chargers(from grid expansion and space planning to the construction of chargers)to avoid redundant investments and reduce zero-emission buses TCOs.Public support on hydrogen supply:Public support on hydrogen imports,reservoir construction,inland transportation,and co

62、nstruction of hydrogen-refuelling stations(HRSs)(as well as land rezoning and acquisition)is necessary.Particularly,securing sustained hydrogen supply is important for continued operation of hydrogen DDs.Bus financing mechanisms such as concessional loans,green bonds,and leasing are needed to avoid

63、large up-front investments on vehicle purchase.If necessary,the government could also consider providing guarantees on loans or bonds.Plans on grid integration:With increasing adoption of EVs(including e-buses),the government needs to systematically evaluate the grid impacts of EV charging and ensur

64、e efficient grid integration and minimise impact to the grid(after the deployment of necessary peak-shifting measures such as smart charging devices).Further,proactive efforts are needed from franchised operators,including optimising vehicle procurement and asset management strategy(such as negotiat

65、ion for favourable warranty terms and to cultivate long-term partnerships with original equipment manufacturers OEMs);adopting smart chargingcapable chargers and load management systems,and installing on-site renewable energy to reduce electricity expenses;optimising the operation of zero-emission v

66、ehicles(coordinated with charging and refuelling time);and improving zero-emission vehicles energy efficiency by providing eco-driving training for bus drivers.Private car electrification:“Shift“policies(from private cars to green transport modes)are essentialHong Kong is more proactive with private

67、 car(PC)electrification:it is the citys aspiration to prohibit new registration of internal combustion engine(ICE)private cars by 2035 or earlier.Unlike global front-runners in EV promotion,Hong Kong has the potential of creating a new electrification paradigm by enhancing its vehicle electrificatio

68、n ambition,while controlling overall car ownership and usage.The new paradigm will be achieved by encouraging the rapid electrification of the existing in-use PC fleet,while managing the ownership and usage of electric PCs through travel demand management(TDM)measures.Car ownership and usage in Hong

69、 Kong are subject to intensive policy interventions to alleviate traffic congestion and avoid inefficient land use.Such policies,known as TDM policies,include vehicle First Registration Tax(FRT),annual licence fees(ALFs),parking space purchase costs,and road(tunnel)tolls(Hong Kong Legislative Counci

70、l 2020).As a result,Hong Kongs car ownership levels are low.Under this TDM policy regime,tax concessions are important policy instruments to incentivise EV adoption.Unlike Norway,which also relies on tax benefits to promote EVs,Hong Kongs tax benefits are more favourable for in-use PCs.Under Hong Ko

71、ngs One-for-One XWRINote:The capital cost includes the vehicle retailer prices and First Registration Tax concessions.Some electric SUVs are equipped with autonomous driving functions;therefore,it is not an apples-to-apples comparison between electric SUVs and ICE SUVs.SUV=Sport utility vehicle;ICE=

72、Internal combustion engine;FRT=First Registration Tax.Source:Authors.Figure ES-2|Vehicle Capital Costs as of 2021TYPES OF PCSCAPITAL COST PARITYTCO PARITYCompact carNew EVs20212021 Replaced EVsBefore 2021Before 2021SUVNew EVs2025202620232024Replaced EVs20212022Before 2021Table ES-2|Time Line of TCO

73、Parity for Electric PCs under Current Tax ConcessionsNotes:Red colour denotes parity is not achieved;green colour denotes parity is achieved.TCO=Total cost of ownership;PC=Private car;SUV=Sport utility vehicle;EV=Electric vehicle.Source:Authors.Replacement Scheme,existing car owners who scrap their

74、ICE cars and switch to electric cars(short as“replaced EVs”)enjoy a maximum of tax concessions at HK$287,500,tripling the maximum tax concession of new electric PCs.The approach is compatible with Hong Kongs well-established tradition to temper overall growth in car ownership,including electric PC o

75、wnership.Therefore,it is crucial to design Hong Kongs PC electrification policies to meet its multifaceted goals:(1)promoting vehicle electrification and mitigating emissions;(2)controlling car ownership growth,relieving traffic congestion,reining in urban sprawl;(3)maintaining fiscal sustainability

76、;and(4)avoiding subsidising the wealthy.Due to preferential tax concessions to replace EVs,the capital cost(vehicle prices plus FRT)of replaced EVs is nearly breakeven with that of ICE cars in 2021:for compact cars,replaced EVs have lower capital costs than ICE cars;and for sport utility vehicles(SU

77、Vs),the replaced EVs are only HK$37,000(9 percent)costlier than ICE cars(Figure ES-2).This is a considerable benefit because,without any tax interventions,the study predicts the retail prices of electric compact cars will reach price parity with ICEs around 20252026,and for SUVs around 20292030.For

78、the TCO,the study reveals that unlike elsewhere,because of the high fuel prices and low electricity costs in Hong Kong and generous tax concessions for electric PCs,compact cars and replaced EVs in Hong Kong achieved cost parity in 2021.With continued tax concessions,the TCO parity of new electric S

79、UVs is also rapidly approaching(before 2024)(Table ES-2).Without the FRTWith the FRTUnit:HK$a.Compact car b.SUVReplaced electric carReplaced electric carNew electric carNew electric carICE carICE car-400,000600,000300,000400,000200,000200,000100,000Decarbonising Hong Kongs Roads:Pathways towards a N

80、et-Zero Road Transport SystemXILOW PC STOCK SCENARIOHIGH PC STOCK SCENARIOCURRENT POLICY SCENARIOPolicy interventions ICE vehicle ban 2028 Proactive TDM measures on both ICEs and EVs ICE vehicle ban 2028 Current TDM measures ICE vehicle ban 2035 Limited TDM measuresCumulative GHG emissions reduction

81、(20212050)(compared to the Current Policy Scenario)6.0 million tonnes CO2e4.8 million tonnes CO2en/aCumulative economic benefits from avoided emissions(20212050)(compared to the Current Policy Scenario)HK$3.4 billionHK$2.7 billionn/aCumulative public expenditure(20212050)HK$5.9 billionHK$6.5 billion

82、HK$4.6 billionTable ES-3|Comparisons on Policy Measures and Socioenvironmental Impacts of Different PC Electrification ScenariosNotes:PC=Private car;GHG=Greenhouse gas;TDM=Travel demand management;ICE=Internal combustion engine;EVs=Electric vehicles;n/a=Not applicable;CO2e=Carbon dioxide equivalent.

83、Source:Authors calculations.The study further evaluates three scenarios that balance EV promotion and growth of overall car ownership:On the one hand,with preferential EV tax concessions,Hong Kong has room to further advance the time line of the ICE vehicle ban on PCs from 2035 to 2028.Additional me

84、asures to increase EV adoption will be important in this scenario,such as the subsidy on charging facilities.On the other hand,the continued decline of EV capital costs and TCOs will make EVs a compelling option.These cost advantages of electric PCs would spur car ownership and also make the path to

85、 the fossil fuel ban more funding-intensive.Using the Hong Kong Energy Policy Simulator(EPS)model(WRI and Civic Exchange 2019),three scenarios are simulated for 2050:Hong Kongs car ownership will steadily grow to 809,000,spurred by either ICE car growth resulting from limited TDM measures(the Curren

86、t Policy Scenario),or by electric PC growth resulting from dropped EV prices(the High PC Stock Scenario).Hong Kongs car ownership will grow to 670,000,resulting from the adoption of more proactive TDM policies to manage both EV and ICE growth,such as introducing zero-emission zones,increasing parkin

87、g fees(or congestion charge),and even direct control on car ownership(the Low PC Stock Scenario).The socioenvironmental impact analysis shows that the scenariosthe High PC Stock Scenario(0.88 million PCs by 2050)and the Low PC Stock Scenario(0.73 million PCs by 2050)aiming to increase Hong Kongs PC

88、electrification ambition,would result in comparable emission reduction potentials.However,the two scenarios differ in the amount of public spending.With a smaller PC stock due to TDM policies,in the Low PC Stock Scenario,public spending on infrastructurecharge points,roadways,and public parking spac

89、escan be saved.This saving can be mobilised to improve public transit,walking,and cycling environments for low-and middle-income groups(Table ES-3).Based on the analysis,the study recommends the following:First,Hong Kong has an important opportunity to advance the current ICE vehicle ban time line(2

90、035)to 2028 or earlier and create a new global XIIWRIEV REGISTRATION TAX CONCESSIONEV PURCHASE SUBSIDYVEHICLE REGISTRATION QUOTAACCESS INCENTIVES(ZERO EMISSION ZONE)INCREASED PARKING FEES(OR CONGESTION CHARGES)PARKING INCENTIVECHARGING FACILITY INCENTIVECARBON PRICEEffects on promoting vehicle elect

91、rificationPositivePositivePositivePositivePositivePositivePositivePositiveCar ownership controlNegativeNegativePositiveNeutralPositiveNegativeNeutralNeutralPublic revenue generationNegativeNegativeNeutralNeutralPositiveNegativeNegativePositiveImplementation easinessNegativePositiveNegativePositiveNe

92、gativePositivePositiveNeutralRecommendation of this studyTable ES-4|Scorecards of Different Travel Demand Management Policies on Vehicle Electrification,Car Ownership Control,and Public Revenue GenerationNote:denotes the TDM policy has been implemented in Hong Kong;represents new TDM policies that c

93、an be considered by the city.EV=Electric vehicle;TDM=Travel demand management.“Positive”indicates the TDM policy has positive impacts on the indicator,while“Negative”and“Neutral”mean the TDM policy has negative or neutral impacts.Source:Authors.paradigm in vehicle electrificationprioritising electri

94、fication of the existing fleet on the road.Second,in the near term,tax concessions should be gradually phased out,to offset the continuous drop in EV prices and to avoid boosting car ownership.If tax concessions are not reduced/eliminated in a timely manner,the capital cost of a new electric compact

95、 car in 2030 would be HK$163,000 cheaper(47 percent reduction)than of ICE cars,and the TCO would be HK$220,000 less(45 percent reduction)than for ICE cars.This means the cost of purchasing an ICE compact car would be equal to the cost of purchasing two electric compact cars.The study further shows t

96、hat tax concessions for new electric vehicles could be reduced from 20212023,and completely phased out during 20262027.Because tax concessions for replaced EVs are more desirable to accelerate vehicle electrification,the time line to reduce tax concessions for replaced EVs is contingent on the gover

97、nments trade-off between EV promotion and fiscal revenues.Apart from reducing tax concessions,proactive TDM options could be considered by the city(Table ES-4)to manage car ownership as EV prices drop.By evaluating vehicle electrification potential,extent of control over growth in car ownership,publ

98、ic revenue generation,and implementation feasibility,the study shows four TDM policies can be added to Hong Kongs future policy arsenal,including implementation of zero-emission zones,increased parking fees(or congestion charge),carbon pricing on fuels,and direct car ownership control.Third,to unloc

99、k vehicle electrification potential,government could enhance charging infrastructure provisions in the following ways:By increasing the adoption of private home chargers through institutionalising the building code to mandate all parking spaces of new and retrofitted buildings be 100 percent chargin

100、g-ready;encouraging shared and managed chargers;introducing time-of-use residential rates(to replace current tiered rates);and issuing right-to-charge regulations.Decarbonising Hong Kongs Roads:Pathways towards a Net-Zero Road Transport SystemXIIIBAU SCENARIOBEV SCENARIOHYDROGEN SCENARIOCumulative G

101、HGs(million tCO2e)61.641.444.2Cumulative social benefits from GHGs saving(3.0%discount rate)(billion HK$2020)n/a11.810.3Cumulative life savingsn/a277.0239.0Cumulative social benefits from life savings(billion HK$2020)n/a6.65.7Annual financial support needed on trucking industry(million HK$2020)n/a60

102、 annually,before meeting a breakeven point around 2025 70 annually,before meeting a breakeven point around 2028Cumulative financial support needed on infrastructure(billion HK$2020)n/a1030Annual additional fuel cost compared with the BEV Scenario(million HK$2020)n/an/a31Table ES-5|Comparing Greenhou

103、se Gas Emissions,Social and Economic Impacts of Different Scenarios for Freight Vehicles(20202050)Notes:BAU=Business as usual;BEV=Battery electric vehicle;GHG=Greenhouse gas;tCO2e=Tonnes of carbon dioxide equivalent.Source:Authors.By increasing the coverage of public charging stations,where the numb

104、er of EVs per public charging point could be set to 510(T&E 2020),and build an open,public data platform to facilitate locating charging stations.Freight vehicle decarbonisation We defined three scenarios to analyse how to decarbonise Hong Kongs freight vehicles:the Business-as-Usual(BAU)Scenario,th

105、e Battery Electric Vehicle(BEV)Scenario,and the Hydrogen Scenario.In the BEV Scenario,all light-goods vehicles(LGVs)and 50 percent of heavy-goods vehicles(HGVs)(medium-goods vehicles MGVs included)will be BEVs in 2050 or earlier,while the other 50 percent of HGVs will be hydrogen fuel cell electric

106、vehicles(FCEVs).In the Hydrogen Scenario,all HGVs and 50 percent of LGVs will be FCEVs,while 50 percent of LGVs will be BEVs.The study then assessed and compared the impact of different scenarios against climate impact,public health impact,impact on freight companies,and impact on infrastructure(Tab

107、le ES-5).XIVWRIAnalysis shows that the BEV Scenario produces less GHG emissions and air pollutants and higher social,health,and climate benefits.Recommendations for the electrification of trucks include the following:Advance the current fossil fuel ban time line and expand the coverage to freight ve

108、hicles.Ban new registration of ICE light goods trucks in 2030 or earlier.Ban new registration of ICE medium-and heavy-goods trucks in 2039 or earlier.BEV and FCEV together with clean electricity and green hydrogen are the ultimate solutions for road transport decarbonisation.BEV technology is mature

109、 and the TCO has reached parity for some types of vehicles and would reach cost parity for the remaining types before 2030,which is earlier than for hydrogen vehicles.For the midterm(20252030),we recommend BEV as the solution for light-goods trucks.For the long term(20302050),both technologies can b

110、e considered for medium-and heavy-goods trucks.Finance the expansion of public charging/alternative fuelrefuelling network.Either of the technology roadmapsBEV or FCEVwill need significant amounts of financial support.This could be from government subsidies,public-private partnerships(PPPs),or lever

111、aged capital from the private sector such as green loans and bonds from financial organisations.For freight vehicles,our analysis shows that about 56,000 chargers and 213 HRSs are needed for the BEV Scenario by 2050,and 22,000 chargers and 819 HRSs are needed for the Hydrogen Scenario by 2050.Govern

112、ment can enable continuous financial support through the PPP mechanism.Government should also use the New Energy Transport(NET)Fund(and other budgets)to leverage capital from the private sector to cofinance the infrastructure for zero-emission vehicles(ZEVs).Government should prioritise building hyd

113、rogen-refuelling stations with the help of commercial green loans(zero carbon loans).Decarbonising Hong Kongs Roads:Pathways towards a Net-Zero Road Transport SystemXVXVIWRIDecarbonising Hong Kongs Roads:Pathways towards a Net-Zero Road Transport System1INTRODUCTIONTransportation is the second-large

114、st source of greenhouse gas emissions in Hong Kong.Road transport accounts for 89 percent of total transport emissions and is also a major source of pollution.Decarbonising road transport is vital for the citys carbon neutrality targets,air pollution reduction,and public health.CHAPTER 12WRIElectric

115、ity generation and other energy industries,26,300,66%Agriculture,forestry and other land us,28,0%Transport,7,230,18%Waste,2,940,7%Other end-use of fuel,1,830,5%Necessities Achieve carbon neutrality and improve air quality In November 2020,Hong Kong pledged to achieve carbon neutrality before 2050,ma

116、king it the first city in China with a time-specific carbon neutrality goal.On 6 October 2021,“Hong Kongs Climate Action Plan 2050”was published.It set an interim target of reducing Hong Kongs carbon emissions by 50 percent before 2035 compared to 2005 levels.In the action plan,green transport is ra

117、ised as one of the four strategies to achieve carbon neutrality along with net-zero electricity generation,energy-saving green buildings,and waste reduction.The transport sector is the second-largest direct GHG emission source2(18 percent)in Hong Kong,after electricity generation(66 percent)(Environ

118、mental Protection Department 2021a)(see Figure 1).Within the transport sector,road transport(i.e.,motor vehicles)is the largest source,accounting for 89 percent of GHG emissions.Further,roadside pollutants caused by motor vehicles are also a major source of air pollutants(GovHK 2021).In 2019,motor v

119、ehicles accounted for 16 percent,23 percent,and 50 percent of the citys total nitrogen oxide(NOx),volatile organic compound(VOC),and carbon monoxide(CO)emissions,respectively,(Environmental Protection Department,2021b)(Table 1).Therefore,decarbonising transport is vital for the citys carbon neutrali

120、ty targets,air pollution reduction,and public health.SO2NOXPM10PM2.5VOCCOMotor vehicles(t)4012,7003303004,90030,100Total emissions(t)8,43077,6203,4802,63021,13060,440Share(%)0.4716.369.4811.4123.1949.80Table 1|Air Pollutant Emissions of Motor Vehicles in Hong Kong(2019)Figure 1|Greenhouse Gas Emissi

121、ons in Hong Kong in 2019 by Sector Notes:t=Tonnes;SO2=Sulfur dioxide;NOx=Nitrogen oxides;PM10=Particulate matter;PM2.5=Fine particulate matter;VOC=Volatile organic compounds;CO=Carbon monoxide.Source:Environmental Protection Department 2021b.Note:CO2e=Carbon dioxide equivalent.Source:Environmental P

122、rotection Department 2021a.Industrial processes and product use,1,710,4%2019 kilotonnes CO2eDecarbonising Hong Kongs Roads:Pathways towards a Net-Zero Road Transport System3Preserve global leadership in sustainable transport The transport sectors goal in“Hong Kongs Climate Action Plan 2050”is to ach

123、ieve zero vehicular emissions before 2050.To this end,vehicle(and ferry)electrification is identified as the central approach:for private cars,the Hong Kong government aims to cease new registration of fuel-propelled and hybrid private cars(including plug-in hybrid electric vehicles PHEVs)in 2035 or

124、 earlier;for commercial vehicles,the government aims to promote electric vehicles at a large scale and test out hydrogen fuel cell electric buses and heavy vehicles in the next three years.This means that Hong Kong is ramping up efforts on“improve”measures,which,combined with“avoid”and“shift”measure

125、s,are forging a complete green transport strategy around the ASI(avoid-shift-improve)framework.3 In the past,Hong Kong has been a global leader in“avoid”and“shift”measures:the city is a model for transit-oriented development(TOD)(Suzuki et al.2015).it is also well-known for its highly developed publ

126、ic transit network and large transit dependency.Although the legacy on“avoid”and“shift”should be sustained,the city needs reinforced efforts on“improve”measures.Based on WRIs calculation(WRI et al.2020),“improve”measuresespecially the switch from internal combustion engine(ICE)vehicles to zero-emiss

127、ion vehicles(including EVs and hydrogen fuel cell vehicles)offer the largest decarbonisation potential(Figure 2).Zero-emission vehicle sales mandates could contribute to about 98 percent of transports emission reduction potential for Hong Kong in 2050.Nonetheless,Hong Kong is slow in the global race

128、 of“improve,”especially in vehicle electrification:for the commercial fleet,Hong Kong remains at the early stage of vehicle electrification;by the end of 2021,Hong Kong only had 80 electric single-decker buses and zero electric taxisfewer than its neighbour city,Shenzhen(where 100 percent of the bus

129、es and taxis had been electrified).As a well-known global leader in sustainable transport,Hong Kong needs to remain competitive and preserve its leadership.Figure 2|Effects of Decarbonisation Policies on the Transport SectorNote:Under the Decarbonisation Scenario,Hong Kong has high potential to achi

130、eve net-zero emissions by 2050 at reasonable cost,if more ambitious action is taken now.Source:Hong Kong Energy Policy Simulator(EPS)(https:/hongkong.energypolicy.solutions/).EV Sales MandateTransportation Demand ManagementVehicle Fuel Economy StandardsHydrogen Vehicle Sales MandateMillion tonnes/ye

131、ar04321786520192021 202220182020201720252027 20282024202620232031203320342030203220292037203920402036203820352043204520462042204420412049204820502047Current Policy ScenarioDecarbonisation Scenario4WRIStatus quo At the end of 2021,there were 926,238 registered vehicles in Hong Kong,including 656,973

132、private cars(70.9 percent),119,895 trucks(12.9 percent),21,799 buses(2.4 percent),18,163 taxis(2.0 percent),and 100,557 motorcycles(10.9 percent).4 Although private cars consist of the largest vehicle fleet,because of the integrated transit and land-use planning and well-developed public transit sys

133、tem,Hong Kongs vehicle ownership is low:only 111 vehicles(excluding motorcycles and special purpose vehicles)per 1,000 people,5 compared to 288 in Beijing,and 325 in London.6 Over 90 percent of Hong Kongs passenger trips were completed by transit(Transport and Housing Bureau 2017).Although private c

134、ars account for the highest share of the fleet,trucks emitted the largest emissions,contributing 6.3 percent of Hong Kongs total GHG emissions,followed by private cars(4.2 percent),buses(3.5 percent),and taxis(1.9 percent),as shown in Figure 3.Status quo of zero-emission vehicle adoptionAt the end o

135、f 2021,the total number of EVs in Hong Kong is 27,855(Transport Department n.d.c).However,the EV penetration of total vehicle stocks is still lowonly about 3 percent(Table 2):The electrification of private cars has performed the best due to technological readiness,model availability,and ample incent

136、ives in the promotion of private cars.Hong Kongs market share of electric private cars in new sales has jumped from 0.3 percent in 2017 to 34.0 percent in December 2021(Transport Department 20162021).Contrary to conventional thinking,buses and taxisusually at the forefront of vehicle electrification

137、are least electrified in Hong Kong.Only 34 franchised buses were electrified at the end of 2021,the same number as in 2020;and there are no electric taxis or public light buses(PLBs or minibuses).Although technology barriers can be one explanation,financial barriers,limited make-and-model availabili

138、ty,charging facility availability,and limited public awareness are other reasons.Electrification of trucks is mixed.Light-goods trucks are better performing,while the electrification of medium-and heavy-goods Figure 3|Current Vehicle Stocks and Greenhouse Gas Emissions by Vehicle Segments in Hong Ko

139、ngNote:Vehicle fleet is 2021 data,GHG emissions are 2018 data.Most updated total emissions for the transport sector are for 2019,but there is no information for the breakdown,so 2018 emissions data are used.Source:Adapted from Hong Kong Environment Bureau 2021;Transport Department n.d.(c).Registered

140、 vehicle fleetShare of greenhouse gas emissions in Hong Kongs total emissionsBusesBusesFreight vehiclesFreight vehiclesTaxisTaxisPrivate carsPrivate carsMotor-cyclesMotor-cycles00.0%0.1%1.9%600,0007.0%6.0%5.0%400,0004.0%3.0%200,0002.0%1.0%1.9%1.8%0.9%0.6%0.2%Light-goodsHeavy-goodsPrivate lightFranch

141、ised NonfranchisedPublic lightMedium-goods3.5%0.9%4.2%Decarbonising Hong Kongs Roads:Pathways towards a Net-Zero Road Transport System5trucks has not yet started.There are currently only two medium-goods vehicle deployed in Hong Kong.The Hong Kong Productivity Council is working to research and deve

142、lop electric truck specifications for waste collection,to be produced in 2021 and trialled in 2022.Current policy landscapeThe“Hong Kong Roadmap on Popularisation of Electric Vehicles”has mapped out the zero-emission vehicle(ZEV)transition pathways for different vehicle classes.The roadmap is a livi

143、ng policy,to be reviewed every five years,to adapt targets and policy measures to technology advances and changing conditions.To facilitate the implementation of the roadmap,Hong Kongs government has promulgated dedicated policies for different vehicle classes.Private cars in Hong Kong are heavily t

144、axed to control car ownership.Preferential tax concessions are offered to electric private cars to promote EV adoption.Especially,under the“One-for-One Replacement”Scheme,replaced electric private cars are favourably treatedwhen ICE car owners replace their existing cars with an EV,they receive high

145、er First Registration Tax(FRT)concessions.This scheme has been highly effective for promoting the electrification of existing in-use private cars,and for this reason,the government has opted to extend the scheme from its original end date in March 2021 to March 2024.Compared to tax benefits,subsidie

146、s are often administered on commercial fleets.The HK$800 million New Energy Transport Fund(previously named Pilot Green Transport Fund PGTF)has been in place to encourage trials of low-carbon technologiesincluding electric vehicles,hybrid vehicles,and plug-in hybrid vehiclesfor commercial vehicles(H

147、ong Kong Environment Protection Department 2020).Table 2|Electrification of Different Types of Registered Vehicles in Hong Kong in 2021Notes:LP=Liquefied petroleum;EV=Electric vehicle.Source:Transport Department n.d.(c).PETROLDIESELELECTRICLP GASOTHERSTOTAL EV PENETRATION(%)Private car617,59911,9062

148、7,3580110656,9734.2Buses016,993474,759021,7990.2Franchised buses06,13334006,1670.6Nonfranchised buses06,9905006,9950.1Public light buses075503,59404,3490.0Private light buses03,11581,16504,2880.2Taxis30018,160018,1630.0Trucks562119,12021300119,8950.2Light-goods vehicles56276,4012110077,1740.3Medium-

149、goods vehicles035,63320035,6350.0Heavy-goods vehicles07,0860007,0860.0Motorcycles100,438011900100,5570.1Special purpose vehicle631,78711819322,1635.5Total718,665149,80627,85523,112112919,5503.06WRINumerous commercial vehiclesincluding buses,public light buses,taxis,and trucksare eligible.Moreover,an

150、other HK$180 million subsidy was dedicated for franchised bus companies to procure electric single-deckers.In addition to subsidies,enterprises are entitled to 100 percent profit tax deductions for capital expenditure on EV acquisition in the first year of procurement.Further,the FRT is fully waived

151、 for commercial electric vehicles(such as buses,light buses,taxis,and special purpose vehicles).Concerning charging infrastructure,the installation of home chargers is prioritised,and various incentives have been sought to equip Hong Kongs high-density,multidwelling units with charging facilities:Fo

152、r new buildings,gross floor area concession was used to incentivise real estate developers to equip parking spaces of new constructions with charging facilities since 2011.TYPE OF VEHICLE INCENTIVES ON ZEV PURCHASEINCENTIVES ON CHARGING INFRASTRUCTURE PROVISIONPrivate cars Tax benefits,such as vehic

153、le registration tax concessions(including the“One-for-One Replacement”Scheme)Gross floor area concessions for real estate developers EV-Charging at Home Subsidy Scheme(EHSS)(retrofit 60,000 private parking spaces)Public charging network subsidy(government car parks)Taxis Subsidy for ZEV trialsNew En

154、ergy Transport Fund Corporate profit tax benefit Waiver of vehicle registration tax Subsidy for ZEV trialsNew Energy Transport FundPublic light buses Subsidy for ZEV trialsNew Energy Transport Fund and HK$80 million for electric public light bus trials Euro IV diesel commercial vehicle scrappage sub

155、sidy Corporate profit tax benefit Waiver of vehicle registration tax Subsidy for ZEV trialsNew Energy Transport FundFranchised buses Subsidy for ZEV trialsNew Energy Transport Fund and HK$180 million for electric single-decker trials Corporate profit tax benefit Waiver of vehicle registration tax Su

156、bsidy for ZEV trialsNew Energy Transport FundTrucks Subsidy for ZEV trialsNew Energy Transport Fund Euro IV diesel commercial vehicle scrappage subsidy Corporate profit tax benefit Waiver of vehicle registration tax Subsidy for ZEV trialsNew Energy Transport FundTable 3|Public Incentives on Zero-Emi

157、ssion Vehicle PromotionNotes:Orange-colored policies are subsidies.ZEV=Zero-emission vehicle.Source:Authors summary.For existing buildings,government rolled out a HK$2 billion pilot subsidy schemeEV-Charging at Home Subsidy Scheme(EHSS)in 2020to retrofit 60,000 existing parking lots in residential c

158、ommunities to be charging-ready(Hong Kong Environmental Protection Department 2022b).Due to the effectiveness of this scheme,an additional sum of HK$1.5 billion has been injected to extend the scheme for four years to 202728.It will further support the installation of EV charging-enabling infrastruc

159、ture for about 140,000 parking spaces,accounting for approximately half of the eligible parking spaces in Hong Kong(Government of Hong Kong 2022).Further,a 20192020 budget of HK$120 million was created to extend the public charging network at government car parks.Table 3 summarizes the public incent

160、ives on zero-emission vehicle promotion in Hong Kong.Decarbonising Hong Kongs Roads:Pathways towards a Net-Zero Road Transport System7ChallengesMultiple challenges stand in the way to electrify Hong Kongs vehicle fleet,including common challenges like high costs of EVs as well as Hong Kongspecific c

161、hallenges such as limited availability of EV models.High costs and technological unreadiness of some vehicle segmentsAlthough private cars,taxis,(public and private)light buses,and light-goods trucks are ready for widespread transition to zero-emission vehicles,there are complications with double-de

162、cker buses and heavy-goods trucks.For example,many of Hong Kongs franchised buses are 3-axle double-deckers.The technology of these double-deckers is still developing and there are very few ZEV models available.The TCOs of zero-emission heavy commercial vehicles would possibly reach parity around 20

163、252035(Phadke et al.2021;California Air Resources Board 2019;Mao et al.2021).Moreover,their passenger carrying capacity and energy efficiency still cannot meet the operational needs in Hong Kong(Hong Kong Legislative Council 2019).Although the Hong Kong government plan to test the FCEV technology fo

164、r 3-axle double-deckers in recent years,the cost of FCEVs is higher than BEVs at present.Current heavy-duty FCEV technology also have limitations:for example,the fuel cell systems 5,00015,000 hours lifetime for heavy-goods vehicles is too short,smaller than the interim target of 25,000 hours set for

165、 fuel cell systems by the U.S.Department of Energy for class-8 tractor trailers(Marcinkoski et al.2019);7 further,the current power ratings of the fuel cell system is below 200kW,less than(at least)300kW power ratings that are common for heavy-duty vehicles;therefore,FCEVs are unsuitable for a hilly

166、 driving cycle.Limited make-and-model availability Although limited make-and-model availability for EVs is a global phenomenon,the problem is more acute in Hong Kong.Without local original equipment manufacturers(OEMs),Hong Kongs vehicle market relies on imports.The government has been proactive in

167、approving new EV models for entry into Hong Kongs market,as long as the models meet basic safety and functional requirements.At present,164 EV models have been type-approved by the Transport Department,including 126 electric models for private cars and 38 models for commercial vehicles(Hong Kong Env

168、ironmental Protection Department 2022b,Transport Department n.d.b).However,in mainland China,there were 425 BEV models for private cars and 1,603 models for commercial vehicles in 2021(MIIT 2021)(Figure 4).Because no suitable electric public light bus(e-PLB,i.e.,minibuses)models are available,the ci

169、ty still does not have an e-PLB.Figure 4|Numbers of BEV Models Type-Approved by Hong Kong and Mainland ChinaNote:BEV=Battery electric vehicle.Source:Hong Kong Environmental Protection Department 2022b,MIIT 2021.06008001,0002001,2004001,4001,6001,800Private carsCommercial vehiclesHong KongHong KongMa

170、inland ChinaMainland China8WRIThe reasons for Hong Kongs shortage in EV models could be the following:(1)with limited market demands,vehicle dealers or corporates may lack leverage with manufacturers to diversify EV models in Hong Kongs market;(2)the governments regulation on EV models appropriate f

171、or Hong Kongs roads is too stringent to introduce more EV models(see explanation in subsection“Lack of government determination and policy safeguards”below);and(3)the unique vehicle models used in Hong Kongespecially public light buses(PLBs)and 3-axle double-deckers are less common in the global mar

172、ket,and few OEMs are developing zero-emission buses with these characteristics.Public interventions are essential to resolve the challenge.To tackle the problem of few OEMs producing the PLB models used in Hong Kong,the government has asked the Hong Kong Productivity Councilresponsible for fostering

173、 market-oriented research and development(R&D)and commercialisation of R&D prototypesto develop e-PLB specifications and identify local businesses to design and manufacture the vehicles.When e-PLB models are available,the Hong Kong government plans to trial e-PLBs in 2023 and from there devise an el

174、ectrification roadmap for e-PLBs(Hong Kong Legislative Council 2021).Lack of government determination and policy safeguardsThe EV roadmap launched in 2021,although setting a time line to phase out the new registration of ICE private cars,still lacks the ambition to match its carbon neutrality vision

175、.Commercial vehicles need a clearer roadmap besides EV trials.In Hong Kong,private cars,buses,taxis,and freight vehicles consist of 26.9 percent,12.9 percent,17.6 percent,and 42.2 percent,respectively,of road transport-related carbon dioxide(CO2)emissions(Hong Kong Environment Bureau 2021).Therefore

176、,only banning the sales of ICE private cars(26.9 percent of the road transport emissions)is not sufficient to attain Hong Kongs 2050 carbon neutrality goal.Further,current small-scale trials on e-buses and light-goods trucks are insufficient to create commitments from operators.For example,although

177、the Pilot Green Transport Fund was established in 2011 to promote the trials of electric single-deckers,over a decade,it led to the adoption of 34 electric single-deckers and did not create the momentum for their continuous adoption.Interdepartmental coordination,which is important in promoting zero

178、-emission vehicles,is lacking.Promotion of zero-emission vehicles in Hong Kong involves multiple departments,including the Transport Department,Environmental Protection Department,Environment Bureau,and Housing Department.Without concerted action from all the departments,it is difficult to address t

179、he challenges enumerated in this chapter.Decarbonising Hong Kongs Roads:Pathways towards a Net-Zero Road Transport System9To implement the roadmap,current regulatory obstacles need to be overcome,including,but not limited to,the following:The“Road Traffic Regulations”on maximum weights and lengths o

180、f vehicles hinder the adoption of zero-emission vehicles.Only vehicles meeting the regulations can be imported to Hong Kong.However,the regulations were originally designed for ICE vehicles and are not appropriate for BEVs,especially considering BEVs tend to have greater lengths and weights than ICE

181、 vehicles.Because many electric double-deckers and e-PLBs do not meet these regulations,they face market entry barriers.Hong Kongs existing safety standards and guidelines on the handling of hydrogen are outdated.Hong Kongs Dangerous Goods Regulation(Cap.295,Section 5)states that compressed or refri

182、gerated liquid hydrogen,as well as fuel cell cartridges,are only permitted in Hong Kong at the general level at 75 litres,and at the industrial level of 150 litres(Hong Kong e-Legislation 2012).The maximum package size for fuel cell cartridges is 120 millilitres(ml)(Hong Kong e-Legislation 2012).Unw

183、illing private operatorsSince Hong Kongs buses and light-goods trucks are primarily privately owned and operated,without clear returns on investments,it is challenging for cost-conscious corporate decision-makers to switch to ZEVs,even though they acknowledge the importance of the zero-emission tran

184、sition.The COVID-19 pandemic further reinforced this reluctance.Our interviews show that private operators running at low margins are concerned that the transition to EVs may undermine financial resilience in times of crises.Barriers with infrastructure deploymentLack of charging/hydrogen refuelling

185、 infrastructure is a crucial barrier for users and corporates to switch to ZEVs.However,Hong Kong has limited land spaces.The ratio of parking spaces to private cars in Hong Kong had declined from 1.51 to 1.1 from 2006 to 2019,the lowest point during the decade(Hong Kong Legislative Council 2019).Si

186、milar challenges can be found for buses and trucks.For example,Hong Kongs bus terminals or bus interchanges are often located in buildings owned by large estates;finding spaces to accommodate extra zero-emissions buses(due to operational inefficiency),charging/refuelling facilities,and electrical eq

187、uipment is challenging and expensive.Further,for BEVs,the capacity of distribution grids poses another constraint.Upgrading a transformer costs millions of Hong Kong dollars.Without a smart charging management system,the growth of BEVs will stress out Hong Kongs grid.10WRIEnergy transition should oc

188、cur simultaneously Hong Kongs zero-emission vehicle transition also places requirements on the sources of energy:For electricity,around 75 percent of Hong Kongs electricity is sourced from fossil fuels50 percent from natural gas and 25 percent from coal.Further,Hong Kongs power system has unique cha

189、racteristics:the potential of domestic renewable energy is limited,due to limited land spaces.Therefore,Hong Kong needs to seek new ways to decarbonise its power system.For hydrogen,because Hong Kong has limited land spaces or renewable energy to produce hydrogen,it relies on imports from Australia,

190、the Middle East,and mainland China.Finding affordable and stable sources of(green)hydrogen would be important for Hong Kongs hydrogen bus trials and future day-to-day operation.Research scope and framework This study aims to explore ways to promote zero-emission vehicles on scale in Hong Kong.In thi

191、s report,we will only focus on three key vehicle segments:buses,private vehicles,and trucks(Figure 5).These three vehicle classes are the largest carbon emitters in the road transport sector,consisting of 87 percent of the total vehicle population,serving 52 percent of passenger journeys and 7 perce

192、nt of freight movements(in tonnes).8 The zero-emission vehicle technologies considered in the study include battery electric vehicles(BEVs)and hydrogen fuel cell electric vehicles(FCEVs)(Table 4).Other low-carbon options such as hybrid vehicles(including PHEVs),biofuels,and e-fuels are not considere

193、d,due to the following reasons:Hybrid vehicles:The Hong Kong governments attitude towards hybrid vehicles is varied by vehicle classes.For private cars,the recently Figure 5|Vehicle Segments Covered by the StudyNote:GHG=Greenhouse gas.Sources:WRI,based on data sources from Hong Kong Environment Bure

194、au 2021;Transport Department 2021.Vehicle types that are covered in this reportTransportPassengerFreightMotorcycleBusMetroAirplaneCarTaxiTrainTruckShipShare of vehicle fleet:2.4%Share of GHG emissions in transport:22%Share of Hong Kongs total carbon emissions:2.6%Mode share:40%Share of vehicle fleet

195、:12.9%Share of GHG emissions in transport:39%Share of Hong Kongs total carbon emissions:6%Mode share:7%Share of vehicle fleet:70.9%Share of GHG emissions in transport:26%Share of Hong Kongs total carbon emissions:4.5%Mode share:12%Decarbonising Hong Kongs Roads:Pathways towards a Net-Zero Road Trans

196、port System11announced fossil fuel ban stipulates that PHEVs and ICE vehicles will be banned before 2035 or earlier.This is because PHEVs are not zero-emissiontheir emissions depend on whether car owners turn on the EV mode.Moreover,hybrid vehicles use more fuel than conventional vehicles(Kao 2016;O

197、ckenden 2020).According to the monitoring and evaluation of Hong Kongs hybrid vehicle trial between 2018 and 2020,with government subsidy support,the hybrid light bus spent more than twice as much on fuel and operating costs than LPG light buses and had more downtime due to maintenance(Lo Ka Wah et

198、al.2020).Therefore,if the cost of ZEVs drops further,ZEVs will be cost-competitive.Given that limited public funding must be prioritised,the study focuses on BEVs and FCEVs.Biodiesel:With advances in technology,second-generation biodiesel from plant cellulose and food waste has the advantages of eli

199、minating the need of vehicle and infrastructure upgrades and of alleviating food security risks that commonly arise around first-generation biodiesel.However,biodiesels supply remains limited,and there is risk that an increase in demand for biodiesel may result in accelerated loss of biodiversity as

200、 rainforests,etc.,are felled.At present,a total of three petrol stations in Hong Kong supply biodiesel(Government of Hong Kong 2019).Moreover,the mandatory usage of biodiesel is only limited to nonroad construction machinery in all newly tendered public works projects.In the future,using waste feeds

201、tock to produce second-generation biofuels faces supply bottlenecks in Hong Kong because the most sustainable waste management strategy is to reduce(food)wastes.Furthermore,besides biofuel,waste feedstock has competing usesfor instance,compost production(Royal Academy of Engineering 2017,de Blas et

202、al.2020).On the other hand,considering the rapid evolution of zero-emission vehicle technology,the technology will be better poised to decarbonise motor vehicles(Ziegler and Trancik 2021).Therefore,this report does not consider biofuel.E-fuel:e-fuel is hydrocarbon fuel synthesised from hydrogen and

203、CO2.It has the advantage of reducing emissions without vehicle switch or infrastructure upgrade.However,e-fuel is expensive and has limited decarbonisation potential.For example,significant conversion losses of e-fuel could potentially lead to three to four times more emissions than would fossil fue

204、l(Ueckerdt et al.2021).Therefore,this long-term solution is not considered in the study.PRESENT2021POSSIBLE LOW-CARBON ALTERNATIVESCURRENT POLICY FOCUSTHIS STUDYPrivate car Petrol(94.0%)Diesel(1.8%)EV(4.2%)BEV,FCEV,Hybrid,Biodiesel,E-fuelBEVBEVBus Diesel(78.0%)LPG(21.8%)EV(0.2%)BEV,FCEV,HybridBEV,FC

205、EVLD truck Diesel(99.0%)Petrol(0.7%)EV(0.3%)BEV,FCEV,HybridBEV,FCEVMD&HD truck Diesel(100.0%)EV(0%,with only 1 MD truck)BEV,FCEV,HybridBEV,FCEVTable 4|Zero-Emission Vehicle Technologies Covered by This StudyNotes:LD=Light duty;MD=Medium duty;HD=Heavy duty;EV=Electric vehicle;LPG=Liquified petroleum

206、gas;BEV=Battery electric vehicle;FCEV=Fuel cell electric vehicle.Source:Table is authors summary,and data are from Transport Department 2021.12WRIThe analytical framework of this study is illustrated in Figure 6.The objective of the research is to enhance Hong Kongs zero-emission vehicle ambition in

207、 alignment with the citys climate change targets,while not significantly increasing public fiscal burden,worsening traffic congestion,compromising businesses(such as franchised bus operators)viability,or affecting public access to transit and logistic services.Because the cost aspect is the key driv

208、er to affect zero-emission vehicles market shares,the study first calculates the current and future total costs of ownership(TCOs)of ZEVs to identify the cost differences with ZEVs and ICE vehicles.The study further explores contextualised policy options that can close the cost gaps.Based on the tim

209、ing of cost parity between ZEVs and ICEs as well as the time cycles for vehicle turnovers,the study proposes possible time lines for“ICE vehicle bans”for different vehicle segments,where new registrations of vehicles will be 100 percent zero tailpipe emissions.It further evaluates the socioenvironme

210、ntal implications of the proposed time lines of“ICE vehicle bans.”The detailed methodology is explained below.Total cost of ownership estimationThe total cost of ownership(TCOs)for zero-emission buses and private cars is estimated by the authors,using the methodologies explained below.Due to limited

211、 data availability,the TCO estimation of trucks is based on literature review.The TCO includes the vehicle capital cost(including taxes and fees,cost of financing),cost of charging(including charging infrastructure delivery costs and electricity bills),and maintenance costs incurred over the vehicle

212、 service life,and the residual value of the vehicle when the vehicle is scrapped(Lutsey et al.2021;Mao et al.2021;EBRD 2021).t=1TCO=Costcapital+(1+r)t-1CostoperationtTCostoperationt=Costenergyt+Costmaintenancet Where:TCO is the present value of the total cost of ownership for the ownership period.Co

213、stcapital is the purchase cost,which can be paid one time at procurement or financed over the lifetime of the bus,and includes taxes and fees.Costoperationt includes insurance and fees,electricity or fuel cost,and annual maintenance cost.r is the annual discount rate.T is the service life.Vehicle ca

214、pital cost:The capital cost of ZEVs is affected by multiple factors,including battery sizes,subsidies and tax exemptions,and extra vehicle accessory requirements(Lutsey et al.2021).The current vehicle capital costs in this study are obtained based on retail prices of mainstreamed ZEV models,intervie

215、ws with Hong Kong local stakeholders,and literature review.The future vehicle capital cost of BEVs is projected using the Figure 6|Research FrameworkNote:TCOs=Total cost of ownership.Source:Authors.Current and future TCOs and cost parity by vehicle segment Possible time lines for fossil fuel bans su

216、pported by reinforced policy incentives Carbon neutrality in 2050 Fossil fuel ban on private cars by 2035 or earlier Future vehicle ownership Future vehicle technologe mix Socioenvironmental impactsAlign with the strategic objectivesDesign future policy scenarios to bridge cost gapsProject vehicle o

217、wnership and technology mixEvaluate socioenvironmental implicationsEstimate TCOs of vehiclesDecarbonising Hong Kongs Roads:Pathways towards a Net-Zero Road Transport System13method outlined in Appendix A,considering the continuous reduction in battery pack costs,R&D expenses,warranty costs,and impro

218、vement in energy efficiency(Lutsey and Nicholas 2019),while the future capital cost of FCEVs is forecasted based on literature review.Energy costs:ZEVs energy costs hinge on the infrastructure delivery costs,local electricity tariff structures,and hydrogen production costs.Among all the cost element

219、s,infrastructure delivery costsincluding the capital expenditure(CAPEX)and operational(and maintenance)expenditure(OPEX)of charging/refuelling stations(and sometimes including grid upgrade and land acquisition investments)are crucial but highly variable.For simplicity,the study assumes the investmen

220、ts on hydrogen-refuelling infrastructure are recouped by at-pump hydrogen costs that are available at hydrogen refuelling stations.However,charging infrastructure delivery costs have a variety of forms(Table 5).This study classifies the charging infrastructure delivery mechanisms into four ways:Gove

221、rnment-invested public chargers:City government contracts with a supplier to install the charging facilities and operate them for a set period.The capital cost is funded by the government;in this case,the infrastructure delivery costs are the lowest for EV users.Public chargers under public-private

222、partnership(PPP):City government sets up a concession with a supplier to install e-bus charge points and operate them for a set period.The capital cost is jointly funded by the government and private investors.Charging Table 5|Comparisons of Different Charging Infrastructure Delivery MechanismsNotes

223、:EV=Electric vehicle;PPP=Public-private partnership;kWh=Kilowatt-hours;CAPEX=Capital expenditure;OPEX=Operational expenditure.Source:Authors based on literature review and interviews.PRIVATE HOME CHARGERSPUBLIC CHARGERS:GOVERNMENT INVESTMENTPUBLIC CHARGERS:PPPPUBLIC CHARGERS:PRIVATE INVESTMENTFLEET

224、OPERATOR INVESTMENTTHIRD-PARTY INVESTMENTInvestorIndividual EV ownersGovernmentGovernment and private entitiesFleet operatorsUtility companies or commercial charging point operators(CPOs)Advantage Simple to implement Improved coordination among departments,leading to fast network expansion Improved

225、coordination among departments,leading to fast network expansion Expertise on charging facility supply and management(such as smart charging)Eased public burdens Eased public burdens Expertise on charging facility supply and management(such as smart charging)Disadvantage Slowed infrastructure delive

226、ry due to land Heavy public burdens Slowed infrastructure delivery due to contractual negotiations Slowed infrastructure delivery due to land and grid constraints Slowed infrastructure delivery due to land and grid constraints Demonstrated project financial viabilityExamplesMany regionsUK,the Nether

227、landsUK,the NetherlandsMainland Chinese citiesSantiago,ChileMainland Chinese citiesEnergy costs Electricity bills CAPEX for charge point installation Electricity bills Electricity bills A fraction of CAPEX and OPEX for charge point installation and grid upgrades Regulated charging service surcharges

228、 Electricity bills CAPEX and OPEX for charge point installation and grid upgrades Electricity bills Charging service surcharges14WRIservice surcharges are usually imposed in addition to utility tariffs for EV users,to recoup private investments.Private-invested public chargers:Private investors fund

229、 the installation and operation of chargers.If utility companies or charging point operators(CPOs)invest,service surcharges will be imposed on EV users.If fleet operators invest,charging facilities CAPEX and OPEX will be included.Private home chargers:EV users pay up-front costs of the charger unit

230、and electrical wiring costs.Different charging infrastructure delivery mechanisms are chosen for different vehicle segments,as explained in the following chapters.Other costs:maintenance costs of different vehicle classes are based on literature review.The study assumes the residual value of zero-em

231、ission vehicles is zero,and the residual values of ICE vehicles are based on local interviews.Projection on vehicle ownership and technology mixThe projection of future vehicle ownership by vehicle class is performed in the Energy Policy Simulator(EPS)model,based on assumptions of population growth,

232、mode shift,and travel demand management measures outlined in the report“Towards a Better Hong Kong:Pathways to Net Zero Carbon Emissions by 2050”(WRI and Civic Exchange 2020).The future market share of zero-emission vehicles in annual sales and the zero-emission fleet penetration ratios in vehicle s

233、tocks are predicted based on TCOs,using the“vehicle turnover”approach in EPS that takes vehicle age profiles,stock turnover cycles(vehicles useful life),and proposed“ICE vehicle bans”into account.Socioenvironmental impact analysis Socioenvironmental impacts in this study include reductions in GHG em

234、issions and air pollutants,benefits of avoided climate damages and premature deaths,and impacts on public expenditure.The impacts on public expenditure are calculated based on the TCO estimation and future market share of ZEVs,while the GHG emission and air pollutant reduction benefits are computed

235、in EPS using the methods and assumptions outlined below:Reductions in GHG emissions and air pollutants:GHG emissions in this study are well-to-wheel(WTW)emissions,including tank-to-wheel emissions(i.e.,tailpipe emissions)and well-to-tank(WTT)emissions(i.e.,emissions from power generation,hydrogen pr

236、oduction,and oil refineries).In contrast,air pollutant emissions only include tailpipe emissions because the WTT emissions are not entirely within Hong Kong.Since WTW CO2 emissions of ZEVs hinge on upstream emissions from power generation and hydrogen production,this study assumes the following:Emis

237、sion factors for power generation:Hong Kong is still heavily relying on fossil-based power.In 2020,71 percent of electricity was sourced from fossil fuels48 percent from natural gas and 23 percent from coal,and the remaining 29 percent from imported nuclear power(27 percent)and other sources(2 perce

238、nt).In this study,the future power mix and emission factors of power generation in Hong Kong are built on the World Resources Institute(WRI)and Civic Exchange study“Powering a Carbon-Free Hong Kong:Pathways towards a Net-Zero Emissions Power System for Hong Kong”(WRI and Civic Exchange 2021),in whic

239、h the most ambitious Fossil-Free Scenario is selected that ensures the achievement of zero-emissions in 2050.In the scenario,the power mix in 2050 will comprise 60 percent imported nuclear,30 percent hydrogen-based power,and 10 percent local renewable energy.The projected emission factors of power g

240、eneration in this study are shown in Figure 7.Emission factors for hydrogen production:The study assumes that in the near term(20212030),the cost-effective solution is to source 100 percent(gaseous)hydrogen from adjacent cities in the Greater Bay Area(GBA)with hydrogen generated as a by-product from

241、 industrial processes(such as from chlorine)or from stream methane reforming(SMR).In 2030,when liquefied hydrogen becomes Decarbonising Hong Kongs Roads:Pathways towards a Net-Zero Road Transport System15economically viable,imports of hydrogen from global or regional markets will be feasible,the stu

242、dy assumes 50 percent(liquid)hydrogen will be sourced from green hydrogen;that is,centralised water electrolyser with 100 percent renewable energy(Figure 8).In 2050,100 percent of hydrogen will be green hydrogen.The emission factors for different hydrogen production methods are estimated using GREET

243、 2.0(ANL 2014).Benefits of avoided climate damages and premature deaths:Based on the projected emission reductions,the monetised benefit from GHG emission reductions is calculated by multiplying the amount of emission reductionsin comparison to a reference scenariowith the future social cost of carb

244、on(U.S.Government 2015).The reduced air pollutant emissions could also lead to less premature mortality,which could be calculated by multiplying the health-related incident factor and projected pollutant emissions reductions.The economic benefits from avoided health impacts are obtained by multiplyi

245、ng the localised Value of Statistical Life(VSL)9 and avoided premature death.The detailed methodology is documented in the technical note,“Hong Kong Energy Policy Simulator:Methods,Data,and Scenario Results for 2050”(WRI and Civic Exchange 2019).Notes:g=Grams;kWh=Kilowatt-hours;CO2=Carbon dioxide.So

246、urce:2021 data are provided by CLP Power Hong Kong,and the rest of the data are calculated by WRI.Note:The emissions from transportation and distribution of H2 are not included.Using Hong Kongs local grid power to produce hydrogen(H2)(through electrolyser)emits highest amount of CO2 emissions;theref

247、ore,this approach is not considered in the study.g=Grams;CO2=Carbon dioxide;kg=Kilograms;H2=Hydrogen;HK=Hong Kong;SMR=Stream methane reforming;PV=Photovoltaic.Source:Authors calculation using Hong Kong 2021 power mix and GREET 2.0.Figure 7|Projected CO2 Emission Factors of Power Generation in Hong K

248、ongFigure 8|CO2 Emission Factors of Different Hydrogen-Generation Approaches(Unit:g CO2/kg H2)005,0004,00010,0006,0002,00015,0008,00020,00010,00025,00012,000Gaseous H2 via electrolyser(HK power mix 2021)2021Gaseous H2 byproduct of chlorine2040Gaseous H2 via SMR2030H2 via electrolyser(100%solar PV)20

249、502021202920442025204020332048202320382031204620272042203520502022203720302045202620412034204920242039203220472028204320360500400gCO2/kWh30020010016WRIDecarbonising Hong Kongs Roads:Pathways towards a Net-Zero Road Transport System17ZERO-CARBON BUS FLEET AND ENABLING MECHANISMSBus services accounted

250、 for 40 percent of Hong Kongs mode-share for mechanised trips(excluding walking and cycling)in the most recent travel survey(Transport Department 2014),outnumbering rail transit and private cars.Hong Kong needs dedicated zero-emission bus trials,a long-term electrification roadmap,and sustainable po

251、licy safeguards to decarbonise bus-related emissions.CHAPTER 218WRITo meet the large and unevenly distributed demands,Hong Kongs bus services and vehicle types are diversified(Figure 9)and include(1)franchised bus services that capture the majority of Hong Kongs bus ridership and consist of 27 perce

252、nt of the mode-share.The operation of the franchise bus routes is granted to five private bus operators.To accommodate large ridership,only high-capacity double-deckers10 are deployed for franchise services;and(2)public light bus services,which capture the remaining bus ridership,account for 13 perc

253、ent of Hong Kongs mode-share.The services are carried out solely by minibuses.The pace of e-bus adoption in Hong Kong is lagging(Figure 10):Minibuses:Before 2022,no electric minibuses had been introduced in Hong Kong because of limited make-and-model availability.The situation is improved:an electri

254、c minibus will be available for trial in 2022,and the government plans to purchase 40 minibuses for a 12-month trial from 2023.Single-deckers:Since the first trial of single-decker e-buses in 2015,the number of electric franchised single-deckers registered in Hong Kong has been stagnant at 34(0.6 pe

255、rcent of the franchised bus fleet).Double-deckers:Before 2020,no electric double-deckers were procured.In 2021,46 electric double-deckers were purchased and confirmed for delivery.The number is equivalent to one-third of the franchised bus procurements in 2021.Figure 10|Number of e-Buses Registered

256、in Hong KongFigure 9|The Status Quo of the Bus Services in Hong KongNote:The statistics on single-deckers and double-deckers refer only to franchised services.Source:Transport Department 20162021.Notes:*Although MTR is not among the franchised bus companies,there are 15 bus routes operated by MTR Co

257、rporation to complement its railway services with a fleet of 142 buses(131 double-decker;11 single-decker).km=kilometres.Source of data:Transport Department 2021c.Hong Kong Extras n.d.Source of pictures:WSJ https:/ Kong photos http:/www.hongkongphotos.info/hong-kong-tram-120.html;Hong Kong Extras ht

258、tp:/ MinibusTYPE OF BUSES#OF BUSES#OF ROUTES ANNUAL MILEAGE PER BUSANNUAL PASSENGER TRIPS PER BUSPublic light bus serviceMinibuses4,35036087,984 km540,200,000Franchised bus service*Single-deckers28270265,327 km1,544,680,000Double-deckers5,76084,249 kmDecarbonising Hong Kongs Roads:Pathways towards a

259、 Net-Zero Road Transport System19TCO analysis For the total cost of ownership(TCO)analysis,typical franchised bus modelsthe 3-axle double-deckers and 12-metre single-deckersare chosen(Table 6).Because there are cost and technology barriers obstructing the electrification of minibuses,they are not em

260、phasised in this analysis.Compared to other cities,Hong Kongs transition to zero-emission buses is confounded by unique challenges,including the following:The large share of the heavy-duty and high-capacity 3-axle double-deckers.95 percent of the franchised bus fleet is composed of 3-axle double-dec

261、kers11(gross vehicle weights over 24 tonnes),with the remaining 5 percent of single-deckers.However,the availability of electric makes-and-models is limited on the market.For those that are available3-axle double-deckers like the BYD ADL Enviro500EV,vehicle ranges(240280 km12)for Hong Kongs over 230

262、 kilometres(km)daily operating mileages,the prices are prohibitive.According to a few local bus operators,Table 6|Technical Characteristics of Representative Single-Deckers and Double-Deckers in Hong KongSINGLE-DECKER(12M)(SD)3-AXLE DOUBLE-DECKER BUS(DD)Battery electric busDiesel busBattery electric

263、 busHydrogen busDiesel busBus length(metres)12.212.013.5X12.0Gross vehicle weight(kg)19,000 18,00027,800X24,000Maximum passengers or seats90/3295-100/10-46144/92X140/91Annual mileage(km)66,00065,32766,00084,29484,294electric 3-axle double-deckers could also have the issue of lower passenger capacity

264、.Intensive operation of Hong Kongs franchised buses.Although intensive operation is critical to maintain the citys bus operation efficiency,this hampers bus electrification;the annual mileage of diesel double-deckers is 84,294 km,over 20 percent higher than 67,970 km in the United Kingdom(EBRD 2021)

265、and 66,000 km in Shenzhen(World Bank 2021).To meet the high annual mileage requires either larger battery capacities13 or more rapid charging speeds.14 Hong Kongs bus franchise system.As with London and Singapore,Hong Kongs buses are operated under the franchise scheme(Table 7).Private bus operators

266、 are responsible for capital investments on bus acquisition and for operating them for a maximum of 18 years,while the city government adjusts bus fares to ensure operators have sufficient revenues to recover their costs.However,if the current practice persists where private bus operators take on th

267、e risks associated with zero-emission Notes:Seat numbers of 137/90 mean 90 seats,with a total passenger capacity(including standing passengers and the driver)of 137.Annual mileage of electric single-decker is derived from the 1:1.2 replacement rate used in the Hong Kong Legislative Council(2019),and

268、 the annual mileage of electric double-decker is derived from the 1:1.5 replacement rate assumed by the authors.m=Metres;kg=Kilograms;km=Kilometres;X=Not available.Source:Transport Department 2020,Alexander-Dennis,BYD,and Yutong websites.Parity is not reachedParity is reached20WRIvehicle procurement

269、 and charging equipment supply,the switch to zero-emission buses will either erode operators financial sustainability or raise bus fares.Therefore,franchise reforms or other policy safeguards may be warranted.Key TCO considerationsAssuming the existing bus franchise remains unchanged,the section fir

270、st calculates the TCOs of zero-emission buses(including electric buses and hydrogen buses)for zero-emission bus ownersthat is,private franchised operators.The cost breakdowns of zero-emission-buses TCOs are listed in Figure 11.Of note,a crucial cost itemthe large land acquisition/leading costs for b

271、us depots and hydrogen-refuelling stations are not included in the TCO calculation.The study assumes the government will take on the costs;if not,the cost burden on bus operators will increase and further deter the zero-emission bus transition.Capital cost of buses:The capital cost of zero-emission

272、buses is affected by a basket of factors,including battery ranges,the replacement Table 7|Comparisons of Bus Contracting Models between Hong Kong and Other CitiesFigure 11|TCO Cost Breakdowns for Zero-Emission BusesHONG KONGSINGAPORELONDONSANTIAGO(before the introduction of e-buses)Bus contracting m

273、odelNet-cost contractGross-cost contract Gross-cost contractMixed modelBus capital risksOperators purchase the buses to meet requirements set by government.Government retains ownership of the buses and leases to the operators.Operators purchase the buses to meet requirements set by government.Operat

274、ors purchase the buses to meet requirements set by government.Demand/revenue risksOperators are renumerated based on passengers transported.Operators are renumerated based on vehicle miles travelled.Operators are renumerated based on vehicle miles travelled.&Operators are renumerated based on vehicl

275、e miles travelled and passengers transported.Note:denotes governments,and denotes bus operators.Source:Authors summary based on London information from http:/content.tfl.gov.uk/uploads/forms/lbsl-tendering-and-contracting.pdf;Santiago information from https:/www.itf-oecd.org/sites/default/files/docs

276、/reforming-bus-concessions-santiago-de-chile.pdf.Notes:Land acquisition costs are not included.TCO=Total cost of ownership.Source:Authors.Capital costCost of charging/RefuellingCost of charging/RefuellingVehicle priceVehicle replacement ratioInfrastructure delivery mechanismSubsidiesBattery replacem

277、ent&warrantyCost of financingElectricity rates/At-pump hydrogen costRegular and overhaul maintenance costDecarbonising Hong Kongs Roads:Pathways towards a Net-Zero Road Transport System21Box 1|Considerations on Vehicle and Charging Technologies The study considers two zero-emission vehicle technolog

278、iesthe battery electric bus(shortened to“e-bus”)and the hydrogen fuel cell bus(shortened to“hydrogen bus”).Globally,with dropped prices and proven technologies,e-buses have emerged as a viable solution ready for large deployment.In contrast,the deployment of hydrogen buses remains at the early stage

279、,given the technology uncertainty and high costs.E-buses have several variants in terms of charging technologies.Based on different charging technologies impacts on bus operation,costs of infrastructure delivery,and public objection,the study recommends plug-in charging(see Table B1.1).Table B1.1|Co

280、mparison of Different Zero-Emission Bus Charging TechnologiesNotes:Induction charging is not considered due to limited global adoption.Charging time duration refers to the charging time in the actual operationit would be a full charge or partial charge.BEB=Battery electric bus;HK=Hong Kong;FCEBs=Fue

281、l cell electric buses.Source:Authors.BATTERY ELECTRIC BUSHYDROGEN FUEL CELL BUSPlug-in charging or pantograph charging in terminals and depotsOn-road pantograph chargingBattery swapping at battery swapping stationsImpacts on operationDepends(charging time3 minutes to 5 hourswill affect operation)Dep

282、ends(charging time3 to 10 minuteswill affect high frequency operation)Depends(limited number of battery swapping stations will affect operation)Depends(refuelling time1020 minuteswill affect high frequency operation)Capital investments on infrastructurePantograph charging is 23 times the capital inv

283、estment of plug-in charging23 times the capital investment of plug-in chargingHigher than plug-in charging due to extra battery reserves neededHigher than plug-in charging facilities due to weak supply chainsLand space requirementsModerate to large land spaces needed to accommodate chargers and subs

284、tations.Moderate land spaces(especially public spaces)needed to accommodate chargers and substations.Large land spaces needed to accommodate battery swapping stations.Moderate to large land spaces needed to accommodate hydrogen storage,refuelling stations,and safety zones.RangeCurrent BEB technology

285、 requiring plug-in charging does not provides sufficient range for certain intensively operated routes in HK.BEB technology requiring on-road pantograph charging could provide sufficient range for HK.BEB technology requiring battery swapping could provide sufficient range for HK.Hydrogen FCEBs could

286、 provide sufficient range for HK.Other considerations Public objection(not-in-my-backyard challenges)and lengthy approval(visual appearance and grid connection)can impede on-street charger installation.Limited land spaces affect the supply of battery-swapping stations.Safety operation of refuelling

287、stations and buses is a concern.Green hydrogen supply is challenging.Applicability to Hong Kong22WRIratio between diesel buses and electric buses,procurement sizes(bulk procurement tends to receive large discounts),extra vehicle accessory requirements,and subsidies and tax exemptions.This study assu

288、mes the following:first,both single-deckers and double-deckers will have 250 km ranges,and replacing one diesel single-decker would require 20 percent additional e-buses(Legislative Council 0f Hong Kong 2019),whereas replacing one diesel double-decker would require 50 percent additional e-buses due

289、to loading capacity and operating mileage loss.For hydrogen buses,the study assumes one hydrogen fuel cell bus would replace one diesel bus squarely.Second,the prices of e-buses in this study are assumed to be the prices for small purchases,which is in keeping with the current situation.Therefore,th

290、e prices are higher than bulk procurement prices.If the Hong Kong government or bus operators pool the procurement in large sizes,the prices would be lower.Additionally,the useful life of a bus is 17 to 18 years in Hong Kong,whereas battery packs have only five to eight years.Therefore,an e-bus woul

291、d require battery replacement two to three times.To manage battery replacement investments,bus operators have three procurement strategies(Table 8 and Figure 12):Scheme 1.Bus operators operate the e-buses for eight years and then scrap the vehicle.Thus,one diesel bus is replaced by two e-buses over

292、the lifetime,not accounting for operational efficiency loss.This scheme is only adopted by mainland Chinese cities because of the mandatory eight-year scrappage limit.Scheme 2.Bus operators operate the e-bus for 12 to 18 years,and batteries are replaced two to three times in the buss lifetime.Becaus

293、e currently in the European market,where the scheme is common,Scheme 2 has a warranty period of two to five years,bus operators undertake the battery replacement costs(EBRD 2021).Scheme 3.Differing from Scheme 2,original equipment manufacturers(OEMs)provide long-term warranties,either at an addition

294、al cost or for free.Therefore,few battery replacement costs are imposed on bus operators.Table 8|Three Procurement Strategies of e-BusesSCHEME 1SCHEME 2SCHEME 3E-bus service life 8 years1215 years 1215 yearsWarranty periods8 years25 years 810 years Battery replacement for operators01 replacement23 r

295、eplacements01 replacementExamplesMainland Chinese cities such as ShenzhenLondon and European citiesHong KongSource:Authors updated based on EBRD 2021.Decarbonising Hong Kongs Roads:Pathways towards a Net-Zero Road Transport System23The TCO in Scheme 2 and Scheme 3 is lower than for Scheme 1 because

296、of the maximum utilisation of the vehicle chassis and lower battery costs when they are replaced.Although Scheme 2 is more common,operators need to ensure compatible battery packs are available.As battery durability improves,Scheme 3 will become more prevalent.Based on the survey of recent e-bus pro

297、curement in Hong Kong,Scheme 3 is chosenit is also recommended that franchised bus operators in Hong Kong negotiate for better warranty terms at the procurement stage.Cost of financing:E-bus procurement would require financing mechanisms to ease capital investments as e-bus prices are high,and their

298、 cost of financing could be higher than the cost of financing for diesel buses.However,zero-emission buses are also entitled to low-cost financing options,such as lower-interest concessional loans and green bonds.At present,no low-cost financing mechanisms are available for Hong Kongs bus operators.

299、This study assumes the annual interest rate for both diesel buses and Figure 12|Bus Operator Procurement Strategies to Manage Battery Replacement Investments(2)Note:The graphs are for illustrative purposes only.Source:Authors updated based on EBRD 2021.Year 0Year 0Year 4Year 4Year 8Year 8Year 12Year

300、 12Year 2Year 2Initial investmentInitial investmentOperating periodOperating periodDisposalDisposalWarrantyWarrantyYear 6Year 6Year 10Year 10Year 14Year 14Year 1Year 1Year 5Year 5Year 9Year 9Year 13Year 13Year 3Year 3Year 7Year 7Year 11Year 11Year 15Year 15Scheme 2Scheme 1Scheme 3Year 0Year 4Year 8Y

301、ear 2Initial investmentOperating periodDisposalWarrantyYear 6Year 1Year 5Year 9Year 3Year 724WRIzero-emission buses is 5.5 percent,and the loan amount is 50 percent of vehicle prices for a three-year period.However,if Hong Kong bus operators could access green finance,the concessional loan would hav

302、e a 2.5 percent annual interest rate for zero-emission buses.Energy efficiency:Zero-emission buses energy efficiencyparticularly e-busesvaries with speeds,the usage of air conditioning,the slope of the road,drivers driving habits,and other factors(Table 9).The issue with energy inefficiency is promi

303、nent in Hong Kongthe hilly terrains,air-conditioning usage,and local driving cycles increase e-buses energy consumption.Based on literature reviews,the study assumes that in 2021,the energy efficiency of electric single-deckers(SDs)and double-deckers(DDs)in Hong Kong was 135 kilowatt-hours per 100 k

304、ilometres(kWh/km)(the median of Hong Kong test results)and 234 kWh/100 km(the median of Singapore test results),respectively.The energy efficiency of hydrogen double-deckers is 9.3 kilograms(kg)/100 km(UK test results).In 2030,the electric DDs energy efficiency will be improved to 165 kWh/100 km(Lon

305、don test result),and that for hydrogen double-deckers will be improved to 7.5 kg/100 km(London test result).Cost of charging and refuelling:The cost of charging for e-buses hinges on the charging infrastructure delivery mechanisms and the local electricity tariff structures(Table 10).For charging in

306、frastructure delivery mechanisms,the study considers two extreme casesgovernment investments and private investments(see Section 1.4).For electricity tariff structure,Hong Kongs rate design has different tariff rates to cater to the various customer segments.For the category of large energy and powe

307、r users,which includes bus operators,the bulk tariff or large power tariff may apply.The time varying rates(time-of-use rates)with additional demand charges Table 9|Summary of Real-World Energy Intensities of Zero-Emission Buses in LiteratureNotes:SD=Single-decker;DD=Double-decker;kWh=Kilowatt-hours

308、;km=Kilometres;X=Not available.Source:Authors summary based on literature review.LOCATIONELECTRIC SD(kWh/100 km)ELECTRIC DD(kWh/100 km)HYDROGEN DD(kg/100 km)SOURCESLondon and other UK cities Median:112 Median:165XEBRD 2021;WRI based on interviewsX Median:256 Median:9.3EU NewBusFuel project 2020XX Ra

309、nge:6.37.9Doyle et al.2020 Shenzhen Range:94126XXWorld Bank 2021Singapore Median:160 Median absolute deviation(MAD):24 Range:110220 Median:234 MAD:34 Range:160 320XGallet et al.2018Ontario,CanadaX Light traffic:230 Congested traffic:248 XEl-Taweel et al.2020Hong Kong Median:135 Range:125192XXHong Ko

310、ng Legislative Council 2019Decarbonising Hong Kongs Roads:Pathways towards a Net-Zero Road Transport System25imposed on peak hours(and off-peak hours)cause variability in operators electricity bills.Using the CLPs tariff rates as an example,if all e-buses are charged during night hours using the bul

311、k tariff rate structure,the tariff would be 1.14 HK$/kWh.In contrast,some e-buses charging during daytime peak hours(such as 30 percent of e-buses energy consumption)using the bulk tariff rate structure would lead to a rate around 1.75 HK$/kWh.This study considers two possible extremes of utility ra

312、tes1.14 HKW/kWh and 1.75 HK$/kWh.The study assumes the investments to hydrogen-refuelling infrastructure are recouped by at-pump hydrogen costs,known as“levelised cost of refuelling.”Because Hong Kongs local generation is insufficient to meet the demand,the citys at-pump hydrogen cost is affected by

313、 the global or regional supply of hydrogen,the maturity of green hydrogen production technology,and hydrogen transport and distribution costs.Therefore,in addition to the costly green hydrogen production costs and expensive shipment costs for gaseous hydrogen,the import dependency and the exposure t

314、o international market fluctuations would pose a challenge to Hong Kongs hydrogen availability and price affordability(Fraunhofer 2020).In this study(Table 11):The hydrogen cost in 2021 is between 60 and 96 HK$/kg,based on the authors interview with FCEV bus operators and FCEV light-duty truck opera

315、tors in the Greater Bay Area.Table 10|The Levelised Cost of Charging for Bus Operators under Different Delivery MechanismsTable 11|The Levelised Cost of Hydrogen Refuelling for Bus Operators under Different Market ConditionsNotes:Assumes the charge point to vehicle ratio is 1:2 and annual electricit

316、y consumption of an e-bus is 164,286 kWh.kWh=Kilowatt-hours;O&M=Operations and maintenance;CAPEX=Capital expenditure;OPEX=Operational expenditure.Sources:Chargers capital and O&M costs are from World Bank 2021.The rest are authors assumptions.Notes:Kg=Kilograms;FCEV=Fuel cell electric vehicle.Source

317、s:Interviews with FCEV bus operators and FCEV light-duty truck operators in the Greater Bay Area conducted by WRI authors;Hope-Morley et al.2019.GOVERNMENT INVESTMENTSPRIVATE INVESTMENTS:BUS OPERATORSPRIVATE INVESTMENTS:THIRD-PARTY INVESTMENTSTypes of cost of charging forbus operators Electricity bi

318、lls Electricity bills CAPEX and OPEX for charging points and grid upgrades Electricity bills Charging service surcharges Charger capital cost per bus(1,000 HK$)02300Charger O&M cost per bus(1,000 HK$)02910Charger service surcharge(HK$/kWh)000.8Levelised cost of charging(HK$/kWh)1.141.75 1.352.161.94

319、2.752020Hydrogen supply mix=100%industrial by-products2030Hydrogen supply mix=50%industrial by-products+50%green hydrogenMarket equilibriumUnder supplyMarket equilibriumUnder supplyLevelised cost of refuelling(HK$/kg)609630609626WRI The hydrogen cost in 2030 is between 30 and 96 HK$/kg,based on the

320、assumption that 50 percent of the hydrogen is sourced from green hydrogen.The cost varies due to uncertainties in hydrogen supply and the costs of“green hydrogen.”Maintenance cost:Because the electric powertrain is simple,the maintenance cost of e-busesincluding regular and overhaul maintenanceis lo

321、wer than for diesel buses.Further,e-buses maintenance cost is closely related to the warranty periods.Under the extended warranty period of 10 years,most maintenance work is undertaken by OEMs,and the remaining maintenance costs fall on operator labour(World Bank 2021).Based on the literature review

322、,the maintenance cost of e-buses is estimated to be 50 percent of that for diesel buses(Quarles et al.2020;Deliali et al.2021).The case differs for hydrogen buses(Eudy and Post 2018).Because reliable supply chains for spare vehicle components are lacking,the maintenance cost for hydrogen buses remai

323、ns high(NREL 2021).Without any pilot on hydrogen buses and localised maintenance data,the study assumes current maintenance costs for hydrogen buses are 30 percent higher than for diesel buses based on literature review(Deliali et al.2021),and that future maintenance costs will be the same as for di

324、esel buses.TCO calculation for 2021The TCO calculation follows the method outlined in Section 1.4.Given that under Hong Kongs franchise system,zero-emission buses are procured by private operators,Table 12 lists the key assumptions for the TCOs borne by private operators.In the TCO calculation,the d

325、iscount rate is set at 7 percent.Notes:Under the asset management Scheme 3,the battery replacement cost is covered by the warranty.TCO=Total cost of ownership;n/a=Not applicable;kWh=Kilowatt-hours;L=Litres;kg=Kilograms;CAPEX=Capital expenditure.Source:Authors summary based on Section 2.1.1,World Ban

326、k 2020,and World Bank 2021.Table 12|Assumptions for Hong Kong Zero-Emission Buses TCO Calculation in 2021SINGLE-DECKER(12-METER)(SD)3-AXLE DOUBLE-DECKER BUS(DD)Electric busDiesel busElectric busHydrogen busDiesel busCAPITAL COSTVehicle price(in 1,000 HK$)2,5001,5004,4505,6702,890Present value of bat

327、tery/fuel cell powertrain replacement CAPEX(in 1,000 HK$)0n/a0332n/aCost of financing(in 1,000 HK$)192261311436503Additional vehicle required0n/a20%0n/aENERGY COSTSUtility rate/hydrogen price1.14HK$/kWh or 1.75 HK$/kWh12.5 HK$/L1.14HK$/kWh or 1.75 HK$/kWh60 HK$/kg or96 HK$/kg12.5 HK$/LEnergy intensi

328、ty135 kWh/100 km32 L/100 km234 kWh/100 km9.3 kg/100km39 L/100 kmMAINTENANCE COSTAnnual maintenance cost (in 1,000 HK$)32.765.432.785.065.4Decarbonising Hong Kongs Roads:Pathways towards a Net-Zero Road Transport System27The results show the following:For single-deckers,the TCO cost parity would be r

329、eached in the case where the government is responsible for funding e-buses charging facility installation,and e-buses avoid charging at daytime peak hours(Figure 13).However,in most caseswhen the responsibility of e-buses charging facility installation falls on bus operators and e-buses charge at da

330、ytime peak hours,the TCO of e-buses would be from HK$314,000(6 percent)to HK$1,048,000(21 percent)higher than the TCO of diesel buses.For double-deckers,the TCO cost parity between diesel and zero-emission double-deckers is far from being achieved(Figure 14).For electric double-deckers,the TCO as of

331、 2021 is around HK$714,000(10 percent)to HK$3,246,000(44 percent)higher than the TCO of diesel buses.The relatively high TCO of electric double-deckers is due to the following reasons:High vehicle capital costs:The price of electric double-deckers is greater than that of diesel buses.In addition,it

332、takes 1.5 electric double-deckers to replace one diesel bus.Altogether,the capital cost of electric double-deckers is about two times the capital cost of diesel buses.Charging infrastructure delivery:Different charging infrastructure delivery mechanisms lead to different TCOs.By this studys estimate

333、s,the overall cost burden of charging infrastructure delivery for bus operators varies from zero to about one million Hong Kong dollars per e-bus.Among all options,the government-led charging infrastructure investment incurs almost no cost for bus operators,since the costs are covered by the government.If bus operators fund the installation of charging facilities,the infrastructure capital and O&M