Sustainable Transport in Asia Case Study of Korea and Russia

Sustainable Fuel Partnership, Regional and Sustainable Development Department, Asian Development Bank
This essay seeks to answer major questions in the project; these include, why do great ideas of "green transportation" projects have good initial momentum then often fail? It is based on case study of Korea`s successful CNG bus project vs. challenged and failed LNG truck, CNG taxis and bio-methane projects. Suggestions on: What mechanisms are required?
BACKGROUND:Korea is known for its most successful CNG bus project in the world; for instance, an implementation of 25,000 heavy duty CNG buses to run on natural gas, just within a 10 year time span. On one side, it was a huge "green transport" success case. On the other hand, it was the impact on the other side that caused failures of advancements of future similar projects.
WINNERS: Based on research by the Korean government the Korea`s CNG bus program 2000-2010, created $1.5 BN environmental benefits; in addition, $338 MN of the investments by government resulted in $1.15 net economic benefit. In Korea, 95% of all city buses are running on CNG. A CNG bus currently costs to fuel about $1000/ mo versus a diesel bus which would require $2000/mo, meaning $1000 a month in fuel cost savings. CNG station owners enjoy ongoing growth in gas sales. This means that a bus fleet owner of 100 buses would equal to annual company savings of $2,400,000, and for the nation, CNG bus energy expenditure savings are $300 million/year. Korea as a nation is absolutely benefiting with money being re-circulated domestically, which contributes to strengthening the national economy. Each year since 2000 there has been continuously enjoyed CNG bus sales growth, with Hyundai and Daewoo producing 6000 units in 2012, and growing export sales to 22 countries. Monopolistic government gas company; Korea Gas Corporation enjoys sales of 1.1 BN ㎥/ year which is consumed as a vehicle fuel; approximately $300 MN of natural gas sales, and small percent of bio-methane sales annually. Furthermore, as a country that does not produce one drop of oil, has hope of becoming energy producing country by fueling turning waste into energy to fuel their vehicles by bio-methane. With bio-methane plants currently operational, Korea has hope to utilize and convert their waste into energy, and positioned to fuel their all of the 25,000 city bus transport and reduce on their waste and dependence on foreign oil.
LOSERS: Due to the CNG bus program success, every year, oil companies` loss is $600 MN of diesel sales market. This was a business failure for oil companies, also for Saudi Arabia Armco, Korea`s main supplier of crude oil. Government budget which relies on 50 percent oil taxation, also suffered due to loss of government budget. Korean government is impacted, and as a result in 2012, due to limited government funds, needing to cut back on major national projects.
WHAT HAPPENED AS A RESULT? After a painful lesson, government an...