Clean Fuel Norms/Payment Banks
Last month engineers in automotive R&D converged at a conference in Chennai to debate engine design and processes. They seemed keen on meeting the new April 2020 deadline for the Bharat Stage VI emission and fuel standards, or the Euro norms, as they are popularly known. Through the day they delved into nuances of particulate filters, selective catalytic reduction (SCR) and other technologies to clean up vehicular emissions but a worry nagged them. Can Indian refineries deliver upgraded Euro VI fuel by the date as promised? All the tinkering they will do with their vehicles and supply chains will be rendered futile if the superior fuel doesn’t flow from fuel stations on the day.
While the auto industry has been articulating their Euro VI challenges vocally, as always, the oil refineries have been quite frugal with baring their plans. A curt ‘we will deliver’ statement and that an investment of around ₹ 40,000 crore will be made in refinery preparedness is all that is proffered. Skeptics abound. “As a country we are not going to be ready with even BS IV fuel before 2017,” says Vishnu Mathur, director general of t he Society of I ndian Automobile Manufacturers (SIAM) hinting at the efficacy, or lack of it, of the oil sector. “The oil companies — they have taken seven long years to reach here.”
BS IV grade fuel was introduced in 2010 and is now available in 39 cities; the rest of the country continues to be saddled with vintage BS III fuel. The government, under pressure from the citizenry, has now decided to skip the Euro V stage and move straight to Euro VI as the air quality across cities, especially in Delhi, has taken a turn for the worse. Vehicular emissions — especially nitrogen oxides (Nox), benzene, combustion products of sulphur and particulate matter (PM) — have been a major factor in the deterioration of the air we breathe in. A recent global burden of disease study indicates outdoor air pollution caused 712,000 deaths in 2010 in South Asia.
India was expected to move to Euro V standards in 2020 and Euro VI only by 2024 or so. In view of the emerging crisis situation, it was imperative for the government to do something, and it did, by advancing the kick-in of Euro VI. Emission largely is a play of engine design and sulphur in fuels. Regulation has ensured a drop in fuel sulphur from 2500 parts per million (ppm) in BS I grade fuel to 50 ppm in BS IV fuels. The idea is to take it to 10 ppm in BS VI. The new norms address these issues. Unfortunately, it has also triggered a slugfest between the auto and oil industries. The manoeuvres by these two powerful industry sectors were bared last month with the draft notification on the Euro VI fuel norms issued by the Ministry of Road Transport and Highways.
SIAM went ballistic with the ‘highly diluted’ fuel norms and insisted that it wanted the exact characteristics of the Euro VI fuel as prescribed in Europe. The bone of conten- year Pre emission test 10 year Major Cities Benefits of avoided premature mortality Nationwide Net benefit Costs of vehicle control technology tion was the research octane number (RON) at 91 for gasoline, and a whole lot of other dilutions including density and poly-aromatics in diesels. RON basically is a measure to determine a fuel’s ‘anti-knock’ quality and resistance to detonation.
“Octane 91 fuel will adversely impact fuel efficiency of vehicles,” explains CV Raman, executive director- engineering, design, R&D, Maruti Suzuki. SIAM says the hit is expected to be around 3% in fuel efficiency in a situation when fuel efficiency norms are turning more stringent.
Mathur questions the relaxation given to oil refineries. “The RON of fuels commercially available in Europe is 95, we want that,” he insists. The auto sector is keen on a higher RON as it enables higher compression engines which in turn leads to im- Expected Regional sulphur content in gasoline and diesel across the globe
12 30 435 500 180 875 195
13 15 870 1,130
325 10 10 80 75 45 235
10 15 155 130
80 890 105 20xx proved fuel efficiency. RK Malhotra, former director (R&D), Indian Oil Corporation, now director general of the Petroleum Federation of India (Petrofed), a platform of the oil companies, describes the display of agitation by the auto companies as uncalled for nit- picking.
Busting the holier-than-thou attitude, he recalls that auto companies had in the past lobbied for and secured concessions on emission testing norms. So, they shouldn’t be really miffed at this fuel norm relaxation, given for a reason. Coming to the RON crux, Malhotra explains that the European directive - 98/70/ EC with amendments - allows for both 91 and 95 RON, giving member countries a degree of adoption flexibility. India has been largely following the Euro norms over the years.
Next, RON has ‘no correlation whatsoever with emissions’ which is the primary concern of the citizenry right now and the reason for advancing Euro VI. Data also indicate that two-wheelers, which constitute about 72% of vehicles in India, consume about 61. 4% of gasoline; a higher octane level has no bearing on engine performance or emission levels on this category.
Petrofed maintains that the refiners are committed to achieve desulphurization to 10 ppm by the 2020 deadline, which is quite an achievement by global norms (see box) but if higher octane is insisted upon there will be considerable delays as the refineries will have to set up elaborate alkylisation plants which are actually not needed, for now.
“Can the auto industry commit that if we give high octane fuel all their engines will be of high compression,” Malhotra asks. High -compression is limited to high-speed, highperformance cars, the numbers of which are few. In any case, he argues, premium grade RON 93 fuel is available even today.
He does, however, concede that fuel efficiency may be hit but then, it can also be argued that high-compression is not the only route to improve fuel efficiency. It can be done with better engine design, lightweighting or even better aerodynamics. Why should high-compression bear the entire responsibility for fuel efficiency?
The auto sector, which is bristling by the turn of events, indicates that the extreme reluctance shown by the oil companies to provide RON 95 fuel is due to crass commercial reasons. The oil companies are open about this and concede that there is indeed a commercial angle to it.
Refineries processing crude oil have to work on a product mix — gasoline, diesel, kerosene, LPG and other minor products. “If we focus on alkylisation for higher octane, the biggest casualty will be LPG production, and also diesel,” concedes Malhotra.
He goes on to give a social twist to it; he would like to expand on providing LPG to rural women, as is the plan, rather than cater to a small number of high performance cars driven by the elite. The government is readying to provide LPG connections to over five crore below- poverty- line families.
The fact that India is a diesel economy also cannot be ignored. Anything impeding diesel production can have far reaching consequences. The May 2014 report of the expert committee -Auto Fuel Vision and Policy 2025- does predict a mismatch in diesel demand and public sector refining capacity in the country by 2020. The LPG and diesel stick, therefore, is being used liberally by the oil industry to beat auto.
The concern over cooking gas production was reportedly put across in a joint meeting called by the government earlier this month and it is understood that, this time, it was the oil industry that pointed a finger at the auto sector for laying red-herrings in the form of RON 95 insistence when the real intent is to derail the entire transition process to Euro VI.
The oil industry hinted the auto sector was being driven by commercial priorities and profitability. It wasn’t taken kindly by the auto representatives present and there was a call for withdrawing of the ‘allegation’ made, and it was done. The animosities boiled over.
Why would the auto sector want to derail or prolong the transition process? The auto sector, it is argued, would want to stretch the period for recovering costs and investments made in existing models. ‘reference fuel’ and the worrying dilution of fuel standards. Ideally, upgraded fuel should be ready and in the market before upgraded vehicles are introduced.
Raman also hints at the futility of the exercise in the absence of a simultaneous vehicle end-of-life or scrapping policy. While we will soon have vehicles with better emission control running on superior fuel, our roads will also be clogged with millions of older, polluting clunkers. They have to be taken off the roads.
While, the auto and oil industries await the final fuel notifications, the big issue, which both recognize and lament, is the absence of a holistic view on the future of mobility. Multiple ministries involved — power; heavy industry; road transport & highways; petroleum & natural gas; environment, forest & climate change — work in silos.
“Even if different ministries cater to their individual spaces, someone should be thinking holistically, looking at the big picture,” says Raman. A National Automotive Board was firmed up some time ago. But it fell flat due to lack of mandate and teeth.
Pre-Euro Euro1 Euro2 BS1 Euro3 BS2 BS1 Euro4 BS3 BS2 Euro5 BS4 BS3 Euro6 Source: World Oil Outlook 2013, OPEC