_Table 4: Projected road transport activity (million vehicle-kilometers) for each mode of transport in scenarios with and without SUMP implementation._

||**2020**||**2025**<br>|||**2030**<br>||
|---|---|---|---|---|---|---|---|
|||**Reference**|**SUMP**|**SUMP &**<br>**Tram**|**Reference**|**SUMP**|**SUMP &**<br>**Tram**|
|**Buses**|68|73|102|102|78|136|136|
|**Light commercial vehicles**|1,917|2,057|2,031|2,031|2,197|2,144|2,144|
|**Motorcycles**|208|223|198|198|238|204|188|
|**Passenger cars**|6,753|7,245|6,423|6,423|7,737|6,633|6,093|
|**Heavy duty vehicles**|317|340|346|346|364|374|374|

The development of the tram line in Nicosia, which is planned to come into operation in 2028, is closely related to the SUMP implementation. This project will further enable the adoption of sustainable modes of passenger transport, contributing to a greater modal shift (Table 4). It is estimated that it can reduce the annual mileage of private passenger cars and motorcycles by 540 million and 16 million vehicle-kilometers respectively. According to the feasibility study conducted by national authorities, the tram line will have an upfront cost of approximately €225 million and annual operation and maintenance costs of €12 million (Ministry of Communication and Works, Public Works Department, 2015). It is estimated that it will serve up to 17.9 million passengers in year 2030, while it will have an annual electricity demand of about 9,130 MWh. According to these assumptions and based on results extracted from OSeMOSYS, in the first three years of its operation (i.e. 2028-2030), the added modal shift enabled by the tram line will result in final energy savings of 87 ktoe (mainly gasoline) and a reduction in GHG emissions of 249 ktons CO2 eq.

The third measure that relates to the transport sector is the scrappage of vehicles, which have a first registration date older than 15 years, and their replacement with battery electric vehicles. For a maximum replacement rate of 200 vehicles per year with a grant of €5,000 per vehicle, this measure will require public funds of €1 million annually. Overall, it is assumed that 400 vehicles will be replaced through this scheme. This will allow short-term annual energy savings amounting to 0.2 ktoe in 2023, leading to a GHG emission reduction of 0.5 ktons CO2 eq in the same year. Given that OSeMOSYS projections about the power generation mix indicate that the carbon intensity of electricity will decrease over time, it is estimated that the annual GHG emission reduction will increase to 0.6 ktons CO2 eq by 2025.

Implementation of a carbon tax on fuels for sectors that do not fall within the EU ETS can be considered as an ambitious but useful measure to promote early action towards an energy transition aligned with the Paris Agreement goals. This envisioned tax is assumed to be implemented gradually and reach €120 per ton of CO2 by 2025. This will encourage the adoption of energy efficiency measures and increasing the attractiveness of low-carbon energy technologies, such as heat pumps in the heating and cooling sector and electric vehicles in the transport sector. In the period up to 2023, this measure is projected to lead to final energy savings of 78 ktoe and a GHG emission reduction of 302 ktons CO2 eq. By 2030, this measure can lead to cumulative energy savings of 766 ktoe, while it will reduce GHG emissions by 4,356 ktons CO2 eq over the same period. Most of the savings are achieved towards the end of the period; final energy demand is reduced by 121 ktoe and GHG emissions are lower by 700 ktons CO2 eq in 2030.

Since the 13 examined measures are of different scales, their effectiveness should be compared against each one’s initial cost of implementation. With regard to energy savings and GHG emission reduction, as indicated in Table 5, the best-performing measures in the short-term (i.e. 2021-2023) are the fiscally neutral carbon taxation (which is a regulatory measure and hence has very low 12