CNG Vehicle Programme

1. CNG Vehicle Programme

2. CNG Vehicle Programme 1. Objective 2. History, Current Status and Future Targets 3. Support Policy on CNG Vehicle Supplies June 2006

3. 1. Objective 1-1. Objective • To replace urban buses with low emission clean natural gas buses (NGV) for air quality improvement in metropolitan cities • Over 65% of air pollution in Greater Seoul Area is caused by automobile exhaust • Over 36% of these automobile exhaust is discharged from large diesel vehicles, which only comprises 5.5% of the total registered vehicles 3/23

4. 1997

6. 1997 47% by HD vehicles

7. PM released (1bus/day)

8. 1. Objective 1-2. Emissions reduction from NGV ( Reduction rate relative to Diesel ) PM : Particulate Matter HC : Hydro Cabon NOx : Nitrogen Oxides CO : Carbon Oxides 8/23

9. Clean Energy

10. 1. Objective 1-3. Characteristics of CNG Bus  Cleanness and Quietness  CNG Bus emits close to 0% particulate matters(PM) and to 70% less ozone substances such as NOx(nitrogen oxides) and VOC(volatile organic compound).  CNG Bus is 2~3dB quieter than Diesel Bus.  Safety  Natural Gas is safer than LPG, Gasoline and Diesel fuel, due to its high ignition temperature, fast dissipatedness into the air and non-toxic fuel.  CNG Bus has on-board gas detectors and other safety equipment specially designed to ensure safe operation  Efficiency and Economy  Because of CNG’s cleaner combustion process, contamination of engine lubricating oil is greatly reduced compared to diesel. This cleaner internal operation results in less engine wear. 10/23

11. LNG garbage truck

12. LNG bus

13. Refueling 13/23

14. Canada Russia Germany China Italy USA Korea Japan Pakistan Egypt Brazil Australia Argentina New Zealand 1. Objective 1-4. CNG Vehicles Over the World There are more than 6 Million of natural gas vehicles operating all over the world. 14/23

18. 2. History, Current Status and Future Targets 2-1. History • 1992 ~ 1998 : CNG vehicles technology development under the joint R&D project by the Ministry of Environment, the Ministry of Commerce, Industry and Energy, and the Ministry of Science and Technology • 1998 ~ 1999 : Test operation of CNG Vehicles • 1999 ~ present : Legal and system improvement to establish a better environment for CNG vehicle supplies • Enactment and amendment of laws and regulations, provide tax exemption, subsidies, and loans • 2000 ~ : CNG vehicle supplies with the government support 18/23

19. 2. History, Current Status and Future Targets 2-2. Yearly status 2-3. Future Targets • 22,000 CNG buses by 2010 • 1,000 CNG garbage trucks by 2010 • 440 CNG refueling stations by 2010 19/23

20. 3. Support Policies 3-1. Subsidies and loans • CNG city bus purchase = Subsidized with USD$22,500 per vehicle from the National Treasury (￦22,500,000) • CNG garbage truck purchase = Subsidized with USD$60,000 per vehicle from the National Treasury (￦60,000,000) • CNG refueling station = Supported up to USD $0.7 million of low-interest loans (4.5% annual interest rate) (￦700,000,000) 20/23

21. 3. Support Policies 3-2. Support for CNG bus operators • Fuel Cost Aid : The fuel price between natural gas and diesel are maintained at USD$0.1/㎥ (￦115) • Empty Operation Cost Aid : compensation for bus operators with nearest refueling stations at a distance of 4km or more. • Refueling Station Operation Cost Aid : The refueling station with the capacity of 100 vehicles/day is compensated if there are less than 31 vehicles refueled per day 21/23

22. 3. Support Policies 3-3. Various Tax Exemption • VAT and acquisition tax deduction for one CNG bus purchase : USD$3,000/bus(￦3,000,000) • Environment improvement charge exemption : USD$1,660/bus(￦1,660,000) • Corporation tax exemption for installing CNG refueling stations : USD$15,000/station(￦15,000,000) • Exemption from basic customsduty when importing parts like cylinders for CNG vehicles 22/23

23. Thank You