Quality mitigation through fuel in China in particular

 Scope of Work I. During the past decade, developing countries have implemented programs for mitigation of air pollution, particularly in the metropolitan areas through fuels reformulation. The development of such programs has been based on a careful analysis of ambient air quality, emission of pollutants from the transport sector, projected growth of vehicle fleets and energy consumption. A cost and time effective option has been that of fuels reformulation. Fuels reformulation is both technically a complex subject and capital intensive. Hence development of fuels formulation programs require substantial technical resources which most countries lack. The Bank has over the past decade built technical expertise through involvement in fuels reformulation programs world-wide and is therefore in a position to engage experts with the required skills to prepare such programs. 2. In addition to the technical input required, when a program is identified, means also have to be found to fund these programs. Given the limited resources available, funding environmental programs will often require the restructuring of an enterprise to facilitate the involvement of the private sector. Audience 3. The study is strongly supported by the Bank's Oil and Gas Division and the regional management of South Asia. 

The audience will be the Ministry of Finance, Ministries of Production and Petroleum, the Refining Industry, and the Environmental Regulatory Agency of Government of Pakistan (GOP). Study Objective 4. The objective of the study are to: (i) identify pollutants which are a major health hazard in Pakistan; (ii) assist GOP to establish clean fuel standards; (iii) develop a fuels reformulation program encompassing the refineries currently in operation and those planned; and (v) develop a funding strategy by the state-owned refineries, including a strategy for involvement of the private sector by appropriate changes in the ownership structure. Suggested Model Countries 5. Thailand is an appropriate model for the type of study and program envisaged. The Bank assisted Thailand to develop a cost effective environmental mitigation and fuels reformulation program, restructured the refinery to involve the private sector and provided 20% of the funding requirements. Work Process 6. There is considerable accumulated experience in the Bank both with respect to fuel reformulation, refinery restructuring, including involvement of the private sector and project implementation. The initial work will be carried out by Bank staff and selected consultants. Output 7. The report will identify the current state of ambient air quality, pollutants which have or likely to reach critical levels, the fuels option for mitigation, restructuring of the refineries, including addition of new facilities and change of ownership, leading to a dialogue with the GOP. Budget 10. As shown in Annex 1, the budget requirement for this study is US$37 1,400. Annex 1 Preliminary Budget Pakistan - Air Quality Mitigation Through Fuels Reformation Budget Line Description US $ 11.01 ESMAP Supervision 50,400 11.50 Consultant Fees 1 1.60 Consultant Travel 13.01 Administrative Support 15.00 ESMAP Staff Travel 16.00 Bank Staff Travel 17.00 Local Costs 21 .OO Sub-contract 32.00 Training 52.00 Reporting Costs 53.00 Sundries 2,000 99.00 Unallocated Costs Sub-Total 371,400

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