Developing Fuel Quality Road Maps in Asia

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Developing Fuel Quality Road Maps in Asia
Kong Ha Chairperson CAI-Asia Workshop on
Developing Fuel Quality Roadmaps for Conventional
Fuels in Asia 22-23 May 2006 Manila, Philippines
Sustainable Urban Mobility in Asia A CAI-Asia
Program
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Fuel Quality Roadmaps for Asia
Rationale Support the development of roadmaps
for Cleaner Fuels and Vehicles in Asia
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Integrated Approach

• Fuels and vehicles are part of an overall, wider,
  air quality context
• AQM efforts will usually also include activities
  aimed at reducing emissions from stationary
  sources and area sources
• Emission reduction from mobile sources will also
  have to include I/M and transport demand oriented
  measures
• The absence of detailed emission inventories and
  source apportionment studies should not prevent
  Asian countries from developing cleaner fuel
  roadmaps
• Fuels and Vehicles are an integrated system

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Build on existing plans and strategies

• Certain individual countries have already decided
  on their future fuel specifications
• Thailand, Euro 4 equivalent fuels by 2010
• Korea, Singapore, Taipei,China and Hong Kong
  already have Euro 4 Fuels or will have them
  shortly
• ASEAN- Ministry of Economy, Trade and Industry
  (Japan) Economic and Industrial Cooperation
  Committee (AMEICC) Working Group on Cleaner Fuels
  has called for non binding commitment for Euro 2
  in 2006 and Euro 4 in 2010-2012
• Partnership for Cleaner Fuels and Vehicles (PCFV)
  has adopted an objective of 50 ppm for sulfur
  levels in gasoline and diesel by 2010 for Asian
  countries
• Individual refiners have started the production
  of cleaner fuels or are planning for it, such as
  Reliance in India and Petron in the Philippines

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Fuel Specifications (1)

• Fuel quality does not only influence emissions
  but also drivability, engine wear and fuel
  efficiency
• Supportive research for fuel specifications has
  been well established and generally there is no
  need for Asian countries to replicate such
  research
• Asian countries should implement all fuel
  parameters as defined in fuel specifications
  linked to European emission specifications
• Asian countries with warm climate can apply
  variation in RVP
• In some cases the adoption of a comprehensive set
  of fuel properties will delay the introduction of
  cleaner fuels substantially. In such cases the
  option to reduce sulfur first may be considered

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Fuel specifications (2)

• Leapfrog from Euro 2 to Euro 4 emission standards
  makes good technical and financial sense
• Some Asian countries where air pollution from
  transport is severe should consider Euro 5
  standards
• Asian countries with large domestic refining
  capacity can consider applying US flexibility
  principle. Importing countries should not do so.
• Fuel quality monitoring is essential, especially
  where different fuel standards exist in the same
  country

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Timing of Introduction of Cleaner Fuels

• Technology for fuel improvement is well
  established and can be applied in Asia on a
  no-risk basis
• Euro 4 Vehicle technology well established in
  Asia
• Maximum lead time to move to Euro 4 or stricter
  is 4-6 years but in many cases can be shorter
• Import of Euro 4 fuels can be considered pending
  the construction or modification of refineries to
  shorten the lead time for introduction of cleaner
  standards
• Refinery expansion in Asia should be based on
  Euro 4 or stricter standards

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Cleaner Fuels and In-use vehicles

• Main driver for cleaner fuels are new vehicles,
  there is an impact on in-use vehicles as well but
  more research required on the impact of cleaner
  fuels on in-use vehicles
• Cleaner fuels, especially with less than 50 ppm
  sulfur allow for retrofit of gross polluting
  diesel vehicles
• Technology is established now and pilot projects
  have demonstrated impact
• Current cost levels justify focus on retrofit of
  high use fleet vehicles
• Alternative approach of dealing with gross
  polluting vehicles remains phase out.

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Introduction Scenarios

• Uniform introduction across country
• Advantages in terms of AQ impact provided
  specifications are strict enough
• High short term costs to refining sector
• Avoids misfueling
• Flexibility provision for special markets
  (off-road and stationary)
• Prioritized introduction in selected cities
• Can be considered for large countries, e.g. India
  and China
• Requires availability segregated fuel marketing
  and distribution system
• Price differential whereby cleaner fuel should be
  cheaper
• Fuel quality monitoring important to ensure
  misfueling
• Harmonized standards across Asia
• Security of availability of cleaner fuels
• Reduction in complexity for the vehicle industry

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Facilitation of Introduction of Cleaner Fuels

• Fuel Quality regulations, combined with emission
  standards should be the backbone of any policy or
  strategy on cleaner fuels
• Government policy to accelerate production or
  uptake of cleaner fuels
• Public outreach and consensus building
• Combination of tax and pricing policies
• Temporary incentives can be used to speed up
  acceleration of market uptake of cleaner fuels
• Cost for producing cleaner fuels needs to be
  passed on to consumer
• Controlled pricing, still prevalent in some Asian
  markets precludes the opportunity to pass on
  costs
• Increasing Asian markets are being deregulated
  opening up the possibility to pass on costs

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Role of the International Development Community

• Many countries in Asia have a limited
  administrative and monitoring capacity, this has
  hampered the introduction and implementation of
  cleaner fuel standards.
• Development organizations can and should
  consider assistance for
• Further awareness raising on importance of
  cleaner fuels as part of an integrated AQM
  strategy
• Capacity building for regulators to formulate,
  implement and monitor fuel quality improvement
  strategies and legislation
• Financing of refinery upgrading or new
  construction through loans or partial guarantees

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Next steps

• Results of discussions in the workshop and the
  comments received will be integrated in the
  report
• Final conclusions and recommendations will be
  presented to the First Governmental Meeting on
  Urban Air Quality, 13-14 September in Indonesia
• Final consensus will form the basis for policy
  dialogue on cleaner fuels and vehicles by
  CAI-Asia and its local networks.
• See for full text of the report
  http//www.cleanairnet.org/caiasia/1412/articles-7
  0655_paper.pdf. Please submit your comments
  before 5 June