Pathways for Decarbonizing Transport towards Carbon Neutrality in China

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In order to address the challenges for China’s transport sector to lower its carbon emission and to contribute to the climate goals of the country – emission peaking in 2030 and carbon neutrality by 2060, the Project will include the following components. The GEF grant will finance technical assistance activities only, which includes goods, consulting services, non-consulting services, training and workshops, and incremental operating costs. Component 1: National Roadmap and Policy Framework towards Carbon Neutrality. The component includes (Sub-Component 1A): Develop a roadmap for transport decarbonization, based on emission modeling under various decarbonization scenarios, identifying a timebound policy reforms, investments and technology adoption; (Sub-Component 1B): Develop a national framework of policies and technical standards for decarbonizing transport, built upon the roadmap, further detail policies and technical standards/guidelines that need to be implemented in the near-term (until 2030); and (Sub-Component 1C): Develop accounting and evaluation framework for transport emissions. This sub-component will support the improvement of the carbon emission accounting and monitoring mechanism. This task would involve an assessment of the existing statistical system on transport demand, energy consumption, and carbon emissions, improvement of the accounting and monitoring mechanism, and designing of an institutional arrangement for data collection and monitoring between different levels of government. Component 2: Pilot Implementation towards Transport Carbon Peaking and Neutrality in Selected Provinces through Technical Assistance. Pilot activities (all of them are Technical Assistance) will be carried out in the provinces of Shandong, Henan and Jiangsu, which were selected jointly by the Bank and the MOT based on a review of proposals submitted to the MOT. Proposals were evaluated for their alignment with the PDO, their potential contribution to decarbonization goals and their replicability. The MOT sought to select provinces that (a) have a good track record of implementing low-carbon transport programs and the capability to pilot emerging decarbonization measures; (b) demonstrate strong government commitment to decarbonization at the provincial and municipal levels with more progressive measures; and (c) collectively represent diverse challenges in terms of economic development, geography and technical themes, so that the experiences gained from the Project will be applicable across the country. (Sub-Component 2A): Support Shandong province in decarbonizing transport; The sub-component would support the following: a. Development of a roadmap and strategy for transport decarbonization in support of carbon peaking for Shandong Province, identifying key policy measures, investment areas, technology adoption, and their implementation timelines. Based on the roadmap, the sub-component would support the subsequent activities. b. Development and demonstration of near zero-emission strategy for Shandong Ports, including identification of financially viable clean energy sources, new technologies and policy measures for operation and maintenance of near zero-carbon port operations and ground transport, in line with the broader decarbonization strategy at the provincial level. Some high priority investments identified in the strategy are expected to be taken up by enterprises outside the project scope. c. Demonstration of energy efficiency improvement and clean energy use for vessels. The sub-component supports technical assistance for deployment of clean energy vessels, assessment of technical and economic performance of power units and clean energy vessels, and recommendations for relevant policies, technical standards, and technology improvements to support efficient operation and maintenance of clean energy vessels. The TA findings are expected to be followed by investments from enterprises in manufacturing and operation of clean energy vessels outside the project scope. d. Development of technical guides on hydrogen fuel cell electric vehicle (FCEV), through a comprehensive evaluation of the economic, technical, operational, and environmental impacts of the ongoing FCEV pilot in the province, to identify policies to address barriers to long-term technical and financial viability of the FCEV technology and associated infrastructure development and to develop technical and operational guidelines for FCEV. Shandong Provincial Department of Transport (DOT) intends to apply the developed guidelines for future FCEV projects, which will accelerate the adoption of FCEV in Shandong. The study findings will be disseminated for capacity-building and inform relevant national policies, and technical standards/guidelines.(Sub-Component 2B): Support Henan Province in decarbonizing transport; The sub-component would support the following: a. Development of a roadmap and strategy for transport decarbonization in support of carbon peaking for Henan Province, identifying key policy measures and investments and their implementation timelines. Based on the roadmap, the sub-component would support the subsequent activities. b. Demonstration of deep decarbonization of rural-urban passenger and logistics services, by integrating urban-rural public transport, rural logistics, express and postal services. c. Demonstration of near-zero emission bus depots and terminals. This sub-component will support a technical study on the development of near-zero emission depots, terminals, and interchanges, covering energy conservation building design, green and recyclable construction materials, and renewable energy usage and storage. (Sub-Component 2C): Support Jiangsu province in decarbonizing transport. The sub-component would support the following:a. Development of a roadmap and strategy for transport decarbonization in support of carbon peaking for Jiangsu Province, identifying key policy measures and investments and their implementation timelines. The roadmap would also include research on a province-wide transport carbon emission accounting and monitoring system comprising a thorough database on key enterprises, carbon emission reporting and accounting mechanism. Based on the roadmap, the sub-component would support the subsequent activities. b. Technical assistance for establishment of a green mobility platform, including development of a green mobility indicators, a data monitoring system for green urban transportation in the entire province, Mobility-as-a-Service (MaaS) framework, green mobility credit, and technical assistance to 1-to-2 cities for their pilot application of MaaS. Jiangsu Provincial DOT has committed to leading the process of selecting pilot cities and supporting their MaaS pilot application. c. Development of near-zero emission strategy at Yancheng Port, including renewable energy integration and storage as well as integrated hydrogen generation and refueling. Based on the TA outputs, the local government and enterprises are expected to make necessary investments outside the project scope to demonstrate near zero-emission port operation and maintenance.Component 3: Capacity Building. This component will finance knowledge exchange, workshops, trainings, reports, technical guides, and multimedia presentations on decarbonization strategies, policies and technologies, based on the findings from the pilots and technical assistance. Capacity building activities will include specific modules on inclusive transition to ensure that decarbonization benefits all socioeconomic groups. Improved clarity on technical standards and implementation guidelines is expected to help attract private investment. Component 4: Monitoring & Evaluation. This component will support one national Project Management Office (PMO) and three local PMOs, to be set up in each pilot province/city, to monitor and evaluate (M&E) the different parts of the Project, including M&E of GHG emission