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Cover story!

Dirty on Diesel

Tokyo law delivers promise of cleaner air,

but Japanese trucking companies are wheezing.

 

By Catherine Pawasarat

Denizens of the Tokyo metropolis can breathe a deep sigh of relief. Implementation in October 2003 of the Tokyo Ordinance on Environmental Preservation mandates that diesel trucks, buses and other heavy vehicles within the metropolitan area meet national standards for emissions of particulate matter (PM). This means cleaner, fresher air.

Diesel vehicles have been tagged as the source of almost all PM (4,300 tons in 200 alone) discharged into the air over Tokyo. PM is a known health villain. It has been linked to problems like bronchial asthma and chronic hay fever, and is a suspected carcinogen.

“We don’t fully understand the relationship [between PM and these ailments] yet, but we’re very concerned, so we’re moving fast to take definite measures,” comments Shinji Wakamatsu, chief of a research project on diesel exhaust particles at the National Institute for Environmental Studies in Tsukuba.

About 420,000 diesel-powered vehicles are registered in Tokyo, and approximately another 180,000 come into Tokyo daily, according to the Tokyo Metropolitan Government (TMG). Vehicles in both categories will be required to meet the new standards.

New law has teeth

Somehow, trucks have become Japan’s logistics medium of choice, which is puzzling for a small and mountainous archipelago with a crowded and expensive highway system. Measured in ton-kilometers, trucks transport a hefty 55% of Japan’s domestic cargo, reports Shinichi Ishii, a transport-system consultant at Nomura Research Institute, Ltd. (NRI). About 40% goes by ship, leaving just 5% on the rails.

Under the new law, existing diesel vehicles must be fit with an approved PM reduction unit (a diesel particulate filter or acid catalyst), or replaced entirely. The replacements may be non-diesel or standards-compliant “light diesel” vehicles. Eight inspectors, empowered to levy fines of up to 50,000 yen [about US$500], are enforcing the ordinance. 

Since late 2000, national law has set the emissions standard at 0.25 grams of PM per kilowatt-hour (g/kWh), and required that all new models comply. “Until now, there have been lots of trucks running on the roads that don’t meet this standard," says Takuma Inooka, in charge of PR at Nissan Diesel Motor Co., Ltd. "The Tokyo ordinance is no stricter than the national law – the difference is enforcement.” 

Most truck and bus owners are buying new vehicles, according to Soichi Yamamoto of the TMG auto pollution countermeasures division. This is because the writing has been on the wall for some time. In the mid-1990s the central government introduced a “NOx - PM law," which set stricter standards on nitrous oxide and PM emissions, and set a time frame for phasing out older diesel-powered vehicles. Also, Japan’s current PM standard is scheduled to be cut again, to 0.18 g/kWh, in 2005. 

"The fundamental reason for air pollution is the national government's neglect of vehicle exhaust gas regulations."

“With the regulatory standards getting stricter and stricter, eventually they’ll require low-emission vehicles," says Yamamoto. This will certainly be so if, for example, zero-emission fuel cell vehicles are mass-produced by 2010, as some pundits predict (see The Journal, July, 2001).

The trend is spreading. Already the nearby prefectural governments of Saitama, Chiba and Kanagawa have introduced similar restrictions.

TMG is not shy about pointing out that the national government is not enforcing its own standards. In November 2002, 99 Tokyo residents won a court case against the TMG, the national government, the Metropolitan Public Expressway Corp., and auto manufacturers, claiming compensation for their bronchial asthma. The TMG, the national government and the expressway corporation were ordered to pay 49.5 million yen. Though the TMG didn’t appeal, it pointed out that “… the fundamental reason for air pollution is the national government's neglect of vehicle exhaust gas regulations. In any future cases, TMG will stress the responsibility of the national government for exhaust gas regulations.”

Cutthroat competition

The trucking industry was one of many that was deregulated in the late 1990s. As the economy weakened and companies cut logistics budgets, competition intensified and the number of new trucking companies actually increased … and so did bankruptcies. Fiscal 1999 saw 499 trucking companies go under, followed by 725 in fiscal 2000, and 893 bankruptcies in FY2001.

“Though lots of companies are going bankrupt, because of deregulation, many more are coming in,” said Shozo Murata, in charge of public relations at the Japan Trucking Association (JTA).

While 46, 638 trucking companies operated nationwide at the end of March 1997, the number had climbed 22% by the end of March 2003, to 56,871, according to Murata. And the numbers are still climbing.

“Competition’s really tough, so we have to lower prices, and can barely make our costs. But we can’t use old trucks anymore so we have to spend money on new ones," he groans. “The only companies that will make it are ones with some power behind them.”

The TMG is offering up to 5.5 billion yen in subsidies, but these are only available for 20,000 vehicles, and only to cover half the interest costs and some of the fees related to a loan. The Ministry of Infrastructure, Land and Transport provides another 40 billion yen in assistance, with an additional 60 billion yen coming in from some local governments. “It’s only a little,” sighs Murata. “Next year we’re asking for more.”

A single new diesel-engine truck costs between two and 15 million yen, depending on the size and model, according to a representative at leading truckmaker Mitsubishi Fuso Truck & Bus Corp.

The days of trucks dominating Japanese logistics may be numbered.

“Big trucks in particular are expensive, so people can’t afford to replace them,” points out Ishii at the NRI. “Many can’t continue in this business, but if they quit, there’s no other work for them to do. The unemployment rate’s going to go up. And these people probably don’t have any savings.” On the other hand, he adds, truckers who drop out do ease the intensity of competition for the survivors.

The days of trucks dominating Japanese logistics may be numbered for other reasons as well. To achieve Kyoto Protocol targets for reduction of greenhouse gas emissions, Japan's official Outline for Promotion of Efforts to Prevent Global Warming sets a goal of slashing 4.4 million metric tons of carbon dioxide emissions through “modal shifting.” This would entail switching truck shipments of approximately 20 billion freight metric ton-kilometers to railways and coastal shipping.  “The modal shift movement hasn’t come down to things like tax benefits yet, but various industries are doing case studies,” notes Ishii. 

Modern management

And the TMG is publicly enamored with the concept of transportation demand management. It is investigating practices like park-and-ride (when public parking is provided near public transport on the urban fringe, to encourage suburban dwellers to use mass transport into the city), and is already promoting increased public transport efficiency and ease of use, and improved bicycle traffic conditions.

Moreover, Tokyo Governor Shintaro Ishihara has made public his interest in road pricing (motorists pay a fee for access to certain parts of the city during certain hours, simultaneously contributing to maintenance revenues and easing congestion), such as the system introduced in downtown London in early 2003.

The new laws aren’t tough on everyone’s business: new vehicles and PM reduction units have to be purchased to help get more than half a million trucks on Tokyo streets go clean.

Proving that environmental regulations can also stimulate industry, domestic sales of Nissan Diesel’s medium-sized trucks were up 60% in April and May, 2003, over the same period in 2002. As a result, the company increased production at a Saitama truck plant by 60% (to 2,700 units) percent for July to September, 2003  -- with a wait-and-see attitude beyond that. Nissan Diesel (whose main stockholders are Renault and Nissan Motors) is also a major player in compressed natural gas (CNG) vehicle production, and is developing other low-pollution engines. A large Nissan Diesel CNG-engine truck handles a payload of 14.6 metric tons and features a price tag of just over 20 million yen, about twice the cost of a diesel-engine truck of the same size.

Production boost

Mitsubishi Fuso expects the overall domestic market for trucks to increase by 25% for fiscal 2003, to 250,000 units, with its own sales projected to be 79,000 units. It has raised monthly production from 1,300 to 1,700 for large trucks, and from 1,500 to 1,700 for midsize trucks.

The replacement of diesel-powered buses promises another juicy market for makers of low-emission vehicles (LEV). Certified LEV buses will make up an estimated 15% of total bus sales volume in FY2003 for domestic market leader Mitsubishi Fuso, whose largest stakeholder is DaimlerChrysler (43%). By fiscal 2005, they will probably account for nearly all of Mitsubishi Fuso's domestic bus sales, about 4,000 buses per year. “The national government and local organizations heavily subsidize buses, so these are easier to buy,” explains Mitsubishi Fuso PR head Tetsuro Miyano. “Trucks don’t get as many subsidies, so it’s hard to say how well the environmentally-friendly ones will sell.“ About 6,000 public and private buses operate on Tokyo city routes, according to TMG.

The Tokyo Ordinance also mandates that, by the end of FY 2005, companies using 200 vehicles or more in the Tokyo area must introduce LEVs, and five percent or more must be TMG-designated ultra-LEVs, such as ones running on methanol, CNG or electricity.

At the end of FY1997, there were 319 low-pollution trucks in 10 prefectures. Now there are 5,050, according to Murata at the JTA. CNG leads the pack by a long shot, with 4,907 vehicles, followed by 125 fueled with methanol. “This is because the association has subsidies for CNG vehicles,” says Murata, “and fuel is easy to get and inexpensive, since it’s a byproduct of oil exploration.” CNG is also tax-free, making it cheaper than gasoline.

Most agree that Tokyo’s enforcement of diesel emission standards is just one step on the way to a day when all road vehicles are environmentally friendly. Besides giving a boost to LEV sales, it will also probably spur further interest in research for the likes of electric and fuel cell vehicles.

Hopefully, Tokyo residents will be able to tangibly appreciate this latest environmental friendliness via their olfactory senses. “I think the results will be immediately apparent," says Wakamatsu at the National Institute for Environmental Studies. "Vehicle makers have been shifting in this direction for some time, so we can expect a marked improvement in air pollution.”

 

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