(Originally published on 05/08/2015)

The United Nations Development Programme (UNDP) in China today conducted a Project Appraisal Committee (PAC) meeting to formally review the design of the “UNDP-GEF Accelerating the Development and Commercialization of Fuel Cell Vehicles (FCV) in China” project and seek recommendations from stakeholders.

UNDP Assistant Country Director Mr. Carsten Germer chaired the meeting and reviewed the project design with partner China Ministry of Science and Technology (MOST) alongside government officials and experts from research institutes, the automobile industry and private sector.

China is facing severe air pollution (which negatively affects human health) due to increasing energy consumption, in particular fossil fuels. Rapid industrialisation and urbanisation are increasing energy demand from the transport sector, which is expected to account for 30 per cent of China’s final energy consumption once urbanisation levels have stabilised.

The government has pledged to increase its non-fossil energy consumption to 20 percent by 2030 in the effort to mitigate climate change and reduce greenhouse gas. UNDP and MOST have been working together since 2003 to find solutions for the transportation sector by introducing FCVs into China. These green, low carbon cars operate on renewable hydrogen and emit nothing but water.

Despite the progress that has been made by past work, the commercial success of FCVs faces barriers including a lack of advanced FCV technology, hydrogen fuel infrastructure, policy support and consumer awareness. This third phase of the FCV project will address these issues with policy recommendations and technical exchanges. It will also build international knowledge exchange platforms to facilitate the commercialised production of FCVs in China by 2020.

To ensure the feasibility and cost-effectiveness of the project, the floor was opened to all stakeholders to voice their suggestions and opinions. Mr. Yu Qing, Director of Shanghai Municipal City Science & Technology Commission, emphasised the importance of an effective coordination mechanism and clear definition of responsibilities on matters such as the issue of license plates and technical standards, between the central and local government.

Private sector representatives also voiced their needs for unified standards. Mr. Liu Jihong, Executive Deputy Director of the Technical Automotive Center in Futon said that the overall framework of FCV development should be built in order to realize its commercilization and private sectors should be the main force in this effort.He hoped that the project can help create synergies among the national and local governments and private sectors to fulfill the goal.

Mr. Zhang Jie, Director of the Energy Research & Development Center of the Investment Association of China (IAC) made a suggestion based on his research into government subsidy policy on new energy vehicles. “In the past, subsidies for NEVs came from both central and local government, which meant that local governments tend to show preference in supporting local automobile manufacturers. This favouritism hindered the development of local market.” He suggested that a new form of carbon tax on traditional vehicles could generate funds for NEVs, which encouraging consumers and the market to naturally adopt the NEVs.

“All the suggestions from the participants are of great importance, and we will try to reflect them into the project design” said Mr. Germer. “These constructive comments will help make the project more feasible and solve pressing issues.”