Call for better diesel quality

Energy analysts are urging enforcement of the Euro 5 diesel regulations in Thailand, regardless of the impact on motorists.

The enforcement date was previously set for 2009, but that time frame was decried as overly optimistic because Thailand’s diesel standard had just been upgraded to Euro 4 in 2005 at a cost of several billion baht.

The target date is unofficially set for 2022. Anusorn Saengnimnuan, a former president of Bangchak Corporation Plc, said the new diesel standard could cut air pollution by decreasing vehicle emissions fivefold.

The Euro 5 standard may require all five Thai refineries to invest 14 billion baht each and could cost motorists an additional 40 satang per litre of diesel, Mr Anusorn said.

The Pollution Control Department is considering whether to enforce Euro 5, which would cut sulphur emissions to 10 parts per million, down from the 50PPM standard under Euro 4.

The new environmental standard may require another eight years for full adoption.

Dust pollution in Bangkok is a result of many sources, including construction sites and waste incineration, not just vehicle emissions, Mr Anusorn said.

Waste management and construction sites can be managed by local administrations, but vehicle emissions may take longer to regulate.

In 2005, energy policymakers pushed through Euro 3, which cost motorists an average of 20 satang per litre.

In 2012, policymakers launched Euro 4, which added a further 26 satang per litre.

The Energy Business Department reported that the number of diesel-compatible vehicles is growing each year, creating the need for Euro 5 enforcement.

Diesel accounts for 60% of fuel used in transport. The share of diesel has consistently grown in recent years.

The number of diesel vehicles is likely to remain high, even as oil prices surpass the $70-per-barrel mark.

The report said the time is right for Euro 5, as the oil refinery sector is nearing the crest of its cycle and oil refineries are enjoying higher gross margins than last year.

The Pollution Control Department has yet to decide when the new standard will be enforced. The Federation of Thai Industries said the six oil refineries in Thailand may be required to invest a combined 80 billion baht to improve their oil quality.

Only Thai Oil Plc, Thailand’s largest refiner by capacity, has outlined plans to incorporate Euro 5 in its 126-billion-baht capital investment budget, which focuses on boosting output of clean fuels and moving away from bunker oil.