Developing Fuel Quality Road Maps in Asia

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Developing Fuel Quality Road Maps in Asia
Kong Ha Chairperson CAI-Asia BAQ 2006 13-15
December 2006 Yogyakarta, Indonesia
Sustainable Urban Mobility in Asia A CAI-Asia
Program
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Fuel quality and Air Quality

• Mobile sources of pollution contribute in a
  significant manner to urban air pollution in Asia
• Fuel quality is an important factor for emissions
  from mobile sources
• Direct tail-pipe emissions
• Impact on performance of emission control devices
• CAI-Asia has with the support of ADB been working
  on the development of a Roadmap for cleaner fuels
  in Asia
• This presentation is based on the draft final
  recommendations final report will come out in
  March-April 2007

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Vehicle Emission Standards in Asia
Insert updated slides and notes
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Sulfur levels in Diesel in Asia
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Integrated Approach

• Fuels and Vehicles are an integrated system
• 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 Inspection and Maintenance (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

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Build on existing plans and strategies

• Certain individual countries and cities have
  already decided on their future fuel
  specifications
• Korea, Singapore, and Hong Kong, SAR already have
  Euro 4 Fuels or will have them shortly
• Thailand, Euro 4 equivalent fuels by 2010
• 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
  by 2006 and Euro 4 before 2010-2012
• Partnership for Cleaner Fuels and Vehicles (PCFV)
  has adopted an objective of 50 ppm for sulfur
  levels in gasoline and diesel before 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 preferably implement all
  fuel parameters as defined in fuel specifications
  linked to European emission specifications and
  can apply variation in specific parameter such as
  Reid Vapor Pressure
• 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
  but no relaxing of the current properties.

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Fuel specifications (2)

• Leapfrog from Euro 2 to Euro 4 emission standards
  makes good technical and financial sense
• 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 or neighboring country.

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Fuel Specifications (3)

• The Roadmap Documents main focus is on the
  providing recommendations on the introduction of
  cleaner fuels in Asia
• Following the distribution of the consultation
  draft and the consultation workshop in May 2006
  in Manila, Philippines comments were received on
  the limited attention on fuel additives,
  especially octane enhancers.
• In response to these comments and feedback
  received it has been decided to conduct
  supplemental analysis on the impact of fuel
  additives, especially octane enhancers such as
  MTBE, ethanol, MMT and Ferrocene on health and
  emissions before the final report is issued.

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Timing of Introduction of Cleaner Fuels

• Technology for producing clean fuels is well
  established and can be applied in Asia on a
  no-risk basis
• Euro 4 Vehicle technology is well established and
  can also be applied in Asia on a no-risk basis
• 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 to determine the extent
  of these benefits.
• Cleaner fuels, especially with less than 50 ppm
  sulfur allow for retrofit of diesel vehicles
• Technology is established now and pilot projects
  have demonstrated feasibility and effectiveness
• Priority should be on retrofit of high use fleet
  vehicles
• Alternative approach of dealing with gross
  polluting vehicles remains a rapid 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 or
  regions
• Can be considered for large countries, e.g. India
  and P.R 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 and priority of
  any policy or strategy on reducing vehicle
  emissions
• 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