In Focus
June 2012

Malaysia to implement Euro 4M in 2015

Malaysia had more than 21 million registered cars, motorcycles, trucks, buses and commercial vehicles on its roads last year. According to the Petaling Jaya-based Malaysian Automotive Association, the country added about 600,000 vehicles in 2011, with passenger cars accounting for 89% of the increase. That surge caps a seven-year span that saw about a half million new cars and trucks registered every year.

Vehicle growth is adding to the country's air quality problems. The capital city of Kuala Lumpur and the surrounding federal district have had significant air quality issues in the past. Results from Malaysia's Department of Environment showed that most areas of the country fell in the good air quality status category on a recent April day. However, a few locations were rated unhealthy, particularly late in the day and for sampling stations in or near Kuala Lumpur.

Modern emission reduction technology demands an adequate supply of low sulphur fuel, with levels of 50 or 10 parts per million (ppm). Currently, the sulphur limit for Malaysian petrol and diesel is 500 ppm, which has implications for air pollution control efforts.

"The main obstacle has been lowering sulphur in gasoline and diesel," said Eric Holthusen, who spent the past decade closely involved in the development of the Malaysian market while working for Shell Global Solutions. "The time to upgrade refineries is the defining factor."

The introduction of the next step up in fuel quality in Malaysia, Euro 4M, has been delayed many times. Most recently, its implementation was pushed back from 2012 to 2015.

According to Transport Minister Datuk Seri Kong Cho Ha, oil companies requested this later date as they were not ready to complete the refinery upgrades that will enable them to produce lower sulphur fuels. He added, "Although the government has agreed to the extension, the delay is ultimately hindering the progress of diesel usage in the country."

Even when implemented, the new specifications won't be an exact duplicate of Euro 4, as evidenced by the "M" in the Malaysian version of the standard. For example, the level of benzene, a known carcinogen and an anti-knock agent, in the specification won't be the same as the Euro 4 spec. According to Department of the Environment Air Division Principal Assistant Director Shafe'ee Yasin, the benzene level in the Malaysian Euro 4M spec will be 3.5 percent volume. In contrast, the Euro 4 spec calls for benzene content of 1% maximum by volume. That is a fifth of what is allowed under Euro 2M, Malaysia's current fuel specification.

The sulphur content for Euro 4M has been set at 50 ppm, however, similar to Euro 4. Other fuel parameters can be found in the accompanying tables.

In order to meet Euro 4M requirements, the country's refineries will have to upgrade their hydrotreatment units, to further remove sulphur from the fuel stream. All refineries are said to have now started the upgrading process. However, details are vague. A spokesperson for Shell Malaysia, which operates a 155,000 barrel-per-day refinery in Port Dickson, said that the company "will comply with the government's regulation on fuel specification (for Euro 4) and will work towards meeting the enforcement deadline," without giving any specifics. The Esso Malaysia refinery in Port Dickson, which was recently purchased by a Philippine-based food conglomerate, has not publicly announced any upgrading plans yet. Two other refineries in the country are operated by Malaysia's state-owned oil and gas company Petroliam Nasional Berhad or PETRONAS, which has not made any public announcements as to their upgrading plans. However, recently, the company announced that it will construct a new 300,000 barrel-per-day refinery that will come on stream in 2016 called the Refinery and Petrochemicals Integrated Development (RAPID) project.

"RAPID's refinery will produce gasoline, jet fuel, diesel and fuel oil. Its gasoline will meet the Euro 4 standards; diesel Euro 5," said PETRONAS Spokesman Azman Ibrahim.

Cleaner fuels, of course, are only part of any air pollution solution. Vehicle emissions also have to be regulated. New vehicle emission standards have been finalized for both diesel and petrol vehicles, according to the Department of the Environment's Yasin. By the end of 2012, new light- and heavy-duty diesel vehicles will have to meet Euro 2. Petrol passenger cars and light-duty vehicles will have to meet Euro 3. Consequently, NOx emissions will be capped at 0.15 grams per kilometer and total hydrocarbons will be set at no more than 0.20 g/km for petrol passenger cars. In comparison, the equivalent figures for Euro 4 are 0.08 and 0.10, respectively. Euro 5 is even more stringent, with Nox emisssions capped at 0.06 and THC at 0.10.

Those figures are important for the future air quality of Malaysia, because they are targets the country means to hit in the years to come. As Yasin noted, "In 2015, both petrol and diesel engines must comply with Euro 4 and in 2018 with Euro 5."

Chart 1: Selected petrol specifications

Properties

“Euro 2M”
“Euro 4M”
Euro IV
Euro V

Benzene, % vol

5
3.5
1
1

Max

RVP, kPa

Max 65
Max 60
Max 55
55

Sulphur, ppm

500
50
50
10

Aromatics % vol

-
-
35
35

Chart 2: Selected diesel specifications

Properties

‘Euro 2M’
‘Euro-4M’
Euro 4
Euro 5

Cetane number

Min 49
Min 51
Min 52
Min 55

Distillation 95%, deg C

Max 370
Max 360
Max 340
Max 340

Sulphur, ppm

Max 500
Max 50
Max 50
Max 10

Polyaromatic Hydrocarbon (PAH )

-
-
11 % wt
2 % wt

Chart 3: Petrol vehicle emission limits

Chart 4: SUMMARY OF NEW PASSENGER & COMMERCIAL VEHICLES REGISTERED IN MALAYSIA FOR THE YEAR 1980 TO YTD MARCH 2012

Year

Passenger Cars
Commercial Vehicles
4x4 Vehicles
Total Vehicles

1980

80,420
16,842
-
97,262

1985

63,857
26,742
4,400
94,999

1990

106,454
51,420
7,987
165,861

1995

224,991
47,235
13,566
285,792

2000

282,103
33,732
27,338
343,173

2005

416,692
97,820
37,804
552,316

2006

366,738
90,471
33,559
490,768

2007

442,885
44,291
-
487,176

2008

497,459
50,656
-
548,115

2009

486,342
50,563
-
536,905

2010

543,594
61,562
-
605,156

2011

535,113
65,010
-
600,123

YTD March 2012

122,837
15,707
-
138,544

Source: Malaysian Automotive Association

Note:
Passenger Vehicle industry reclassified in January 2007 and includes all passenger carrying vehicles. i.e. Passenger Cars, 4WD/SUV, Window Van and MPV models. Commercial Vehicles also reclassified on 1 January 2007 and includes Trucks, Prime Movers, Pick-up, Panel Vans, Bus & Others.

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