Electric Vehicles to Mitigate Climate Change - Sen. Bam

Electric, hybrid and alternative fuel vehicles (AFV) will help the country mitigate the risks associated with climate change as they reduce air pollution as result of the country's heavy dependence on petroleum.

Senator Bam Aquino underscored this as he filed Senate Bill Nos. 2150 and 2151, which grant two bills granting fiscal and non-fiscal incentives to manufacturers and buyers of electric and alternative fuel vehicles.

In his explanatory note, Aquino said the Philippines should mainstream programs that mitigate climate change risks and instill climate change adaptation among private sector, communities, and individuals.

"Early adaptation to and promotion of AFVs will help the country mitigate the risks associated with climate change, while opening up potential investment and job opportunities that will ultimately benefit more Filipinos," Aquino stressed.

Based on studies, Aquino said 80 percent of particulates, or particles that cause pollution, come from gas and diesel powered vehicles.

"Electric and AFVs are pro-environment vehicles because they have zero emission," Aquino said.

Aquino also hailed the government's move to ensure the growth of the domestic electric vehicle manufacturing industry through transformation of public major transportation as this was showcased to US President Barack Obama last week.

Key milestones include the Department of Energy's (DOE) goal of putting 100,000 electric tricycles on the road by 2017, and the Electric Vehicles Association of the Philippines' (EVAP) goal of one million electric vehicles by 2020.

Aquino said his bills would provide a stronger policy support needed by the industry to encourage investment and remove key barriers that hinder its growth, such as high initial costs and lack of fiscal incentives.

Under the bill, qualified manufacturers, assemblers and importers of vehicles are exempted from the payment of excise taxes, duties and VAT for spare parts, raw materials, components and capital equipment for nine years.

Aside from that, they will also be exempted from paying Motor Vehicle User's Charge (MVUC) for nine years.

Aquino also proposed several non-fiscal incentives to boost production and drive consumer demand for alternative fuel vehicles.

Among them are priority registration and plate number issuance; priority franchise application; exemption from Unified Vehicular Volume Reduction Program (UVVRP) or Number-Coding Scheme; and the provision of free parking spaces in new establishments for AFV drivers.

"While the costs of electric and hybrid vehicles are higher compared to those of regular vehicles, these non-fiscal incentives will make the acquisition and conversion of vehicles more attractive to consumers and manufacturers alike," Aquino said.

Aquino's bills also aim to help the local electric vehicle industry become a major player in the Asian market.

Aquino said Asia is currently the largest market for hybrid and electric vehicles with 56 percent of shares, based on a study released by international consulting firm Grant Thornton in 2012.

The study added that global sales of hybrid electric vehicles (HEVs) and battery electric vehicles (BEVs) are projected to reach 5.4 million vehicles by 2021 or more than six percent of the automotive market.

Also, the integration of the ASEAN Economic Community in 2015 presents a key opportunity for the Philippines to emerge as a leader in this sector and cater to a regional market.

"This can very well pave the way for more investments, jobs, and livelihood opportunities to reach more Filipinos," the senator said.