South Africa to put forward new fuel specifications

1. South Africa to put forward new fuel specifications

South African Energy Minister Dipuo Peters has announced a draft specification that will meet the new European Euro 5 fuel emission standards. This new legislation, if implemented, will require South African refineries to make some expensive upgrades to their plants. The new specifications will require that the allowable levels of benzene in petrol and diesel fuel be reduced from 5% to 1%. Sulphur will also have to be reduced from 500 parts per million (PPM) to 10 PPM. The goal is to have cleaner fuels to be available to the public by 2013, though refiners will have until 2017 to upgrade their plants.

2. Philippine DOE reinstates minimum inventory levels for oil supply

In an effort to provide for stable fuel supply, the Philippine Department of Energy has reinstated minimum inventory requirements for both oil companies and bulk suppliers. These requirements mandate that all oil companies, with the exception of refiners, must maintain 15 days’ supply of petroleum products, excluding liquefied petroleum gas (LPG), which is seven days. Refiners must maintain a minimum inventory equivalent to 30 days' supply of crude oil and refined products.

3. Sinopec plans to expand capacity of Jinling refinery

China Petroleum & Chemical Corp. (Sinopec) announced that it will expand the capacity of Jinling refinery to 360,000 barrels per day (bpd) by 2015. Currently, the plant has a capacity of 270,000 bpd.  Sinopec will add a 160,000 bpd crude oil unit, a sulphur recycling unit with a capacity of 100,000 tons per year before the end of 2011 and a 3.5 million ton per year fluid catalytic cracker in 2012. The plant, which is located on the Yangtze River in the eastern province of Jiangsu, will keep its crude runs at full capacity of 270,000 bpd this year, according to former Jinling Chairman Zhang Dafu.

4. Saudi Aramco and CNPC agree to build refinery in China

Aramco Overseas Company B.V., a subsidiary of Saudi Aramco, and PetroChina Company Ltd., a subsidiary of CNPC, signed a memorandum of understanding related to the planned development of a 10 million metric ton per annum (200,000 barrel per day) grassroots full conversion refinery in Yunnan Province in China. The proposed refinery will be designed to process Arabian crude oil and will produce high-quality refined products, such as ultra-low-sulphur petrol and diesel fuel that meet China's current and future product specifications. The announcement did not specify project costs or timeline. The joint venture will be Saudi Aramco’s second oil refining joint venture in China.

5. Korea launches new emissions standards

In an effort to combat pollution and climate change, South Korea's Ministry of Environment is implementing new carbon dioxide emissions and mileage standards. These stringent standards apply to all registered cars and buses using compressed natural gas (CNG). Under these new regulations, compact vehicles will be subject to Euro 6 engine emissions standards by 2014, while diesel cars will have additional ammonia level standards. By 2013, CNG buses will have emissions standards that require a reduction in gases that is 13% higher than Euro 6 standards, in addition to new standards for methane and ammonia emissions.

6. UN's clean fuels initiative could pay off in Africa

A global initiative coordinated by the United Nations Environment Programme (UNEP) has three campaigns underway to reduce vehicle emissions.  The first reduces sulphur in fuels, the second eliminates leaded petrol and the third adopts cleaner vehicle standards and technologies. UNEP reports that the use of low sulphur fuels in Sub-Saharan Africa alone would save US$1 billion per year in health-related costs.  Kenya has begun importing low-sulphur diesel fuel and Tanzania is beginning a similar program.  Financial projections for savings from using a low-sulphur diesel fuel and cleaner vehicles are US$43 billion in Africa over a 10-year period.

7. India's refining capacity seen to rise by 30% by 2012

India's annual crude refining capacity is expected to increase by 30% to 240 million tons in two years, according to Oil Secretary S. Sundareshan, which is in line with 2012 targets. India's refining capacity was at 184.39 million tons in Apri1 2010, a 4% increase from the 177.97 million tons the previous year. Sundareshan also said the country could be exporting 80-90 million tons of oil products annually in two years' time. India, which is the world's fourth largest importer of crude oil, exported 50.97 million tons of petroleum products against imports of 23.49 million tons in 2009-10, official data showed.

8. EU proposes new stronger emissions for light commercial vehicles

The European Union will introduce legislation that slashes commercial vehicles fuel consumption. By 2014 vehicles up to 3500 kg will have to meet new stricter CO2 emissions of 175 grams a kilometer, with a 2020 target of 147 g/km. In 2014, 60% of a manufacturer’s new vehicle fleet will have to meet the tighter standard, and by 2017 all must.  Vehicles covered by the new rules comprise 1.5% of total EU CO2 emissions and 12% of the new vehicle market. If manufacturers pass on all of the cost, the price increase will be about US$1,300. Manufacturers with less than 22,000 vehicles registered yearly in the EU can apply for relief.

9. Cleaning the Air in Beijing

China is tightening emission standards for some parts of the country. At the 11th National People’s Congress in Beijing in March, Zhang Lijun, Vice Minister of Environmental Protection, revealed that the Chinese capital would see National Standard V, equivalent to Euro 5, in 2012. The number of cars in Beijing grew from 1 million in 1997 to 4.76 million in 2010. Authorities limited the number of new license plates to 240,000 in 2011, a third that of 2010. With such measures, the city’s air quality has improved steadily. In 2010, Zhang said, 78.4% of days rated excellent in air quality, as compared to less than 65% in 2005.

10. India Turns to the Market for Emission Control

Two recent actions show India turning to people’s pocketbooks to fight emissions. First, he Delhi state government proposed a 25% increase in the tax on diesel vehicles. This will help level the field between petrol- and diesel-powered cars. However, the bordering state of Haryana won’t have such a tax and it also has less stringent fuel standards. Secondly, in March, India launched a pilot cap-and-trade pollution control scheme. Permits covering various airborne pollutants from stationary sources will be issued that can be bought and sold. The steady reduction of allowable emissions cuts pollution and rewards improvements. If funding can be secured, trading could begin in early 2012.

11. A Reprieve in the Philippines

The biofuel push in the Philippines has been pushed back, with the National Biofuels Board allowing an extra six months for ethanol content in petrol to increase from 5 to 10%. This was due to concerns about the local ethanol supply, said Department of Energy (DOE) Undersecretary Jose M. Layug, Jr. The DOE will now start a partial implementation of a requirement that ethanol blends comprise at least 10% of the total petrol sold. Three grades will be exempted: 81 RON for farm machinery and fishing vessels, 87 RON for motorcycles, and 97 RON for high-end passenger vehicles. Full implementation of the E10 mandate will be in February 2012.

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