Fuel For Thought
August 2019

UNECE’s new recommendation on fuel quality will help countries to reduce air pollution

▪ UNECE’s new recommendation on fuel quality will help countries to reduce air pollution

Fuel quality is key to deliver on sustained low emissions from cars, as both cleaner fuels and advanced emission control systems are needed to deliver on cleaner tailpipe emissions.

Since the 1980s, UN Vehicle Regulations have enforced the installation of advanced emission control systems (e.g. catalytic converters) to clean exhaust gases and reduce the emission of harmful pollutants. In order to function properly and ensure reliable performance over time, these systems require minimum standards for fuel quality, in particular the use of unleaded fuel. Regulatory obligations have led to the disappearance of lead in fuel in almost all countries in the world.

Now, the UNECE recommendation on adequate fuel quality, first adopted in 2012, has just been revised to adjust to the latest vehicle emission standards (equivalent to Euro 5, Euro 6), which are in force in most developed economies. This means that Sulphur levels have to remain below 10ppm for both gasoline and diesel.

Reducing Sulphur to minimum levels will not only ensure optimal and reliable operation of emission controls systems, it will also improve air quality, benefitting the environment and human health.

Sulphur dioxide (SO2) contributes to acid rain and adversely impact human health causing skin irritation and inflammation and irritation of the respiratory system.  

Most developed economies already enforce this threshold, mandated in the EU by the Fuel Quality Directive. Advocacy efforts over the past years, in particular under the Partnership for Clean Fuels and Vehicles, have led to substantial reductions of sulphur levels in several developing countries. However, many still have Sulphur limits well above this recommended level for diesel (see map), notably in Africa, the Middle-East, and Latin America, and gasoline.

All countries willing to adopt more stringent vehicle emissions limits in line with applicable UN vehicle regulations, should therefore first upgrade their fuel quality standards according to the UNECE recommendation, which applies to cars and trucks.

André Rijnders, Chair of the World Forum’s Working Party on Pollution and Energy, welcomed the decision as an important milestone, highlighting that “Fuel quality is of paramount importance to deliver on sustained low emissions from cars, as both cleaner fuels and advanced emission control systems are needed to deliver on cleaner tailpipe emissions. Using the right fuel quality represents an essential prerequisite to a successful and long-lasting improvement of air quality”.

UNECE Executive Secretary Olga Algayerova stressed: “This new recommendation will help countries achieve SDGs 3 and 11 for cleaner air and improved human health. We are celebrating this year the 40th anniversary of UNECE’s Air Convention (Convention on Long-range Transboundary Air Pollution), which has helped significantly reduce the emission of a series of air pollutants in Europe and North-America. On this occasion, I actively call on all UN Member States to contribute to improving air quality for their citizens by making sure that only adequate fuel quality is available in their market for all types of motor vehicles.”

About UNECE’s fuel recommendation

The revised recommendation was endorsed by the World Forum for Harmonization of Vehicle Regulations’ Working Party on Energy and Pollution (GRPE) on 24 May 2019.

The amended recommendation reflects the changes incorporated over the past years to various UN Regulations, in particular UN Regulations Nos. 49 and 83.

On-road vehicles

Recommended levels of sulphur in Euro emission standards

Euro Standard Recommended Sulphur Level (ppm)
Euro 2 < 500
Euro 3 <350 and <150
Euro 4 <50
Euro 5 <10
Euro 6 <10

The Convention on Long-range Transboundary Air Pollution was created in 1979. Over the years, it has been extended by eight protocols that identify specific measures to be taken by Parties to cut their emissions of air pollutants. The Convention has 51 Parties, covering North America and almost the entire European continent.

▪ New Oman fuel standards from July 21

According to a news article released by the Oman Observer, standard specifications have been set for unleaded fuel in the Sultanate, as part of the government efforts to ensuring safety of consumers. According to the Ministry of Commerce and Industry, the GSO (GCC Standardization Organization) standard will come into effect from July 21. Hiba bint Yasir bin Saud al Mazrouiya, a chemical product specification expert in the Directorate General of Standards and Metrology, said that these standard specifications are required for unleaded fuel for engines designed to operate with such fuel. “The unleaded fuel is classified excellent if octane number is 95 and normal if octane is 9 (“92”, editor’s correction), ” she said.

The standard fuel specifications were approved by the ministerial order, which was prepared to upgrade the local technical specifications as well as to meet the requirements of the new model vehicles launched in 2018. “This was also to keep pace with the latest characteristics of fuel in the world as the international specifications follow the course of the successive modernisation of fuel from 2004 to 2012 to develop and increase the quality of fuel characteristics”. There is no doubt that the Omani standard specifications of unleaded gasoline matched with Euro 5 in requirements especially in terms of the proportion of sulphur supposed to be in gasoline.

According to Al Mazrouiya, the specifications included the complementary references to the methods of testing which can help in indicating the correct proportions of the fuel components.

The specification also talks about the chemical and physical requirements of gasoline such as the lower octane and allowed limits of heavy metals such as lead, manganese, sulfur, iron etc. It also talks about other requirements such as colour, evaporation pressure and corrosion rate of copper. Al Mazrouiya said that the Ministry of Commerce and Industry was keen to set conditions and technical characteristics of fuel, in line with the developments in the design of the engines of vehicles and to suit the health and safety of consumers, as well as to give priority to the protection of the environment from polluting emissions of engines.

She said that the Omani standard specification “Vehicle Fuel — Unleaded Gasoline” describes the characteristics and requirements of lead-free gasoline for engines designed to work with these types of fuel. She said that the standard specifications included complementary references to the methods of testing which can help in the detection of correct proportions of the components of gasoline. “For this, international references are used which are accredited by international and regional organisations”, she added.

▪ UAW opposes Trump plan to freeze fuel rules at 2020 levels

By end of June 2019 the United Auto Workers (UAW) told Congress that the union opposes the Trump administration's proposal to freeze fuel efficiency requirements at 2020 levels through 2026, according to written testimony. UAW Legislative Director Josh Nassar told two subcommittees of the U.S. House Energy and Commerce Committee that the union shares automakers' concerns that the proposal "could lead to protracted litigation and uncertainty in the industry that will limit growth." The union represents workers at General Motors Co, Ford Motor Co and Fiat Chrysler Automobiles NV. Deputy National Highway Traffic

Safety Administrator (NHTSA) Heidi King told the U.S. Senate Commerce Committee that existing fuel efficiency standards have hiked the cost of new vehicles and may "discourage consumers from replacing their older car with a newer car that is safer, cleaner and more fuel efficient." She raised concerns before the House panel that the United States is "facing an affordability crisis in the new car market," according to her testimony. King said NHTSA and the Environmental Protection Administration are reviewing more than 650,000 comments. King and Bill Wehrum, the EPA's assistant administrator for air and radiation, also testified at the House hearing. The agencies are working to finalize the rule "as soon as possible," according to Wehrum's written testimony. The "preferred alternative will prevent thousands of on-road fatalities and injuries" compared to the Obama-era standards "as more people can afford safer, new cars," his testimony said. Environmentalists and California strongly disagree with that analysis.

California and 17 other states have vowed to sue to block any freeze of the emissions requirements. The Trump administration's "preferred alternative" would increase U.S. oil consumption by about 500,000 barrels a day by the 2030s but reduce automakers' regulatory costs by more than $300 billion, the two agencies contend. Mary Nichols, who heads the California Air Resources Board, will also testify Thursday on a separate panel. The Trump proposal will cost Americans millions more in fuel costs, kill jobs, add smog, undermine the auto industry and worsen the climate crisis, according to her written testimony. She said the White House ended discussions that automakers have urged be restarted. "We have been open to accommodations that would adjust compliance timing and flexibility, that would create new paths to promote innovative technologies and zero emission vehicles, and that would benefit the public," she said, adding her agency estimates "the net cost of the federal rollback nationally at $168 billion."

Louisiana Attorney General Jeffrey Landry told the House panel Thursday that "California should not be able to effectively dictate fuel economy standards, tailpipe emission requirements, and mandates for zero emission vehicles." "California has circumvented Congress and used its size to create a de facto national fuel efficiency framework," according to his testimony. Earlier this month, 17 major automakers including GM, Volkswagen AG and Toyota Motor Corp, urged the White House to resume talks with California to avoid a lengthy legal battle. Automakers backed a compromise, warning that the lack of a deal could lead to "an extended period of litigation and instability." The carmakers urged a compromise "midway" between the Obama-era standards that require annual decreases of about 5% in emissions and the Trump administration's proposal.

Energy company BP Plc weighed into the debate urging the EPA and NHTSA to work with automakers and others to find a path that "continues the impressive trajectory of efficiency improvements" already seen in engines, as they balance vehicle safety and affordability. The June 13 letter was sent to Administrator Andrew Wheeler. Nassar will say that the UAW urged California, the White House and others "to develop balanced regulations that are good for the environment, American workers, U.S. manufacturing, and the economy." David Friedman, a former deputy NHTSA administrator under President Barack Obama and a vice president at Consumers Reports, testified that "automakers have the technology to make better, safer, more efficient vehicles, and federal agencies should strengthen the current standards to save Americans' money."

▪ Diesel demand growth in India on decline as drivers switch to gasoline

India's strong Diesel demand growth is decoupling from the car market as motorists increasingly turn to gasoline vehicles, leaving Diesel more reliant on patchy demand from construction and heavy industry. A slowdown in demand growth in India could add to a persistent glut of Diesel in the region and put pressure on regional refining profit margins.

Transportation has historically accounted for two-thirds of India's Diesel use, but a steady decline in the discount for Diesel over gasoline has seen sales of Diesel-powered cars fall to a record low share of total sales, according to industry body Society of Indian Automobile Manufacturers (SIAM). This diminishing draw from autos means diesel demand growth in Asia's third-largest economy could now depend mainly on government and company infrastructure spending, rather than daily use by an increasingly mobile population.

India's economy grew at its slowest pace in more than four years in the last quarter and the risk of a wider fiscal deficit threatens government spending as private investment falls, leaving the outlook for construction activity appear uncertain over the near to medium term.  

Diesel-powered cars accounted for 19% of total car sales in India in the 2018/19 fincal year, compared with nearly 50% of sales in 2012/13, according to SIAM. That drop in Diesel-fuelled auto sales in turn contributed to slower Diesel consumption growth, from roughly 7% annually from 2010 through 2013, to 3% for 2018-19, according to data from the Ministry of Petroleum & Natural gas. In 2010, Diesel sold at a roughly 23 rupees ($0.33) per litre discount to gasoline, but is now less than 7 rupees cheaper, according Petroleum Planning and Analysis Cell. "The motivation for owning a diesel vehicle is basically the pricing. With that price differential reducing, there is going to be a preference for petrol vehicles," said M K Surana, the chairman of India's third largest state refiner Hindustan Petroleum Corp Ltd. Surana expects diesel demand to grow 2.5%-3% in 2019/20, below the India's petroleum ministry's initial projections of 3.5%.

The auto sector also expects Diesel to struggle. Maruti Suzuki India Ltd, India's biggest automaker, will stop making Diesel cars next fiscal year, blaming uncertain fuel prices and stricter emission standards. Mahindra and Mahindra Ltd, India's third largest automaker, plans to stop production of some Diesel vehicles. Beyond diesel, India's overall auto sales have been sluggish, recording the slowest pace of growth in four years in 2018-19, according to SIAM.

▪ European Fuel Oxygenates Association (EFOA) becomes Sustainable Fuels

On 03-July 2019 EFOA announced its name change to Sustainable Fuels, with the following statement: “Today, EFOA is proud to unveil its new identity: Sustainable Fuels: Driving Cleaner Mobility with Fuel Ethers. We believe this new identity reflects our values and the contribution fuel ethers make to reducing transport emissions across Europe.

Our new identity highlights the role of fuel ethers in helping Europe reduce the emissions of greenhouse gases and air pollutants. By enabling clean, efficient, sustainable and reliable energy to power Europe’s mobility, fuel ethers, components of fuel, are one of the most cost-effective solutions to reduce transport emissions.”

Speaking on the rebranding, Sustainable Fuels’ Chair, Willemien Terpstra, said “nearly half a century ago, fuel ethers were introduced to the European market to substitute lead in our fuels. Fuel ethers have helped Europe to improve air quality and reduce toxic emissions. Since then, ensuring our fuels are clean, efficient and sustainable has been a core objective of our industry. Through this rebranding, we acknowledge that reducing the environmental impact of the transport sector cost effectively will be crucial in building a sustainable future. The fuel ethers industry is ready to play its role in this transition.”

Also commenting, Sustainable Fuels’ Secretary General, Ewa Abramiuk-Lété, said “with its new name, Sustainable Fuels reiterates its commitment to the responsible production, usage and promotion of clean, high quality petrol components. Higher octane fuels containing fuel ethers increase fuel efficiency, reduce fuel costs and transport emissions to benefit consumers and our planet. The EU needs all available technologies to reduce the environmental impact of transport and fuel ethers can play an important role in this regard.

Today, fuel ethers based on bio feedstocks are a significant portion of our market, and are an excellent way to increase the share of biofuels used in transport. Furthermore, Sustainable Fuels is committed to using sustainable production pathways, with our Members producing and developing ethers from a wide range of feedstocks, including from first generation and advanced feedstocks.”

▪ Diesel Car Sales Plunge In The World’s Hottest Electric Car Market

Sales of certain diesel models are in free-fall as Norwegians turn to Tesla and other makers of premium electric vehicles (EV), Rystad Energy finds.

Norway is leading the global shift towards private EV transportation, with the highest EV ownership per capita in the world. More than one in two new cars sold in country this year run fully or partially on electricity.

The biggest loser so far? The premium diesel car.

According to Rystad Energy, the independent energy research firm, sales of some diesel car models are down more than 95% over the last six years.

For instance, Volvo’s top diesel models – the V40, V70 and XC60 – dropped from close to 9,000 units sold in 2013 to around 400 in the first half of 2019.

On average, the market share of diesel and gasoline vehicles stood at 60% and 29%, respectively, in 2013, but fell to just 32% and 17% in the first half of 2019.

“This adoption of electric vehicles has resulted in a dramatic decrease of traditional gasoline and diesel vehicle sales, with the steepest decline seen in the diesel segment,” says Artyom Tchen, senior analyst on Rystad Energy’s oil markets team. “High-range battery electric cars have reduced the sales of high-end diesel vehicles, primarily SUVs and sedans, which are also the most energy-consuming private vehicles on the market.”

These sales trends have resulted in a modest yet continuous year-on-year drop in transportation consumption of diesel and gasoline in the country, dropping an average of 2% every quarter since the beginning of 2018.

“Diesel demand in the country is especially at risk as the adoption of fully electric vehicles continues, displacing traditional vehicle sales,” Tchen added. “But surprisingly, this quick adoption has resulted in only a modest decrease in gasoline and diesel consumption in the transportation sector. The link between higher EV penetration and transportation fuel oil demand is not significantly correlated in Norway just yet.”

In the first half of 2019, electric vehicle sales in Norway expanded to 55% of total personal vehicle sales, a market which hovers around 150,000 units sold per year. This is a huge leap forward from a market share of only 6% in 2013 and a healthy increase from 49% last year. As in years past, the main factors behind this increase are a handful of consumer benefits offered with the purchase of an electric vehicle, including generous tax reductions.

As for the steep decline for new diesel vehicles, two factors are at play. A high proportion of vehicles sold have traditionally been mid- and high-end diesel models which would naturally take the biggest hit in terms of market share. Secondly, sales reductions of new diesel vehicles are tied closely to consumer fears concerning potential restrictions or even a ban against diesel vehicles in the country. Gasoline vehicle sales suffer relatively less, and declines there are spread across both high-end and mid to low-end segments. Sales of plug-in hybrids have also decreased steeply, with Norwegians preferring fully electric vehicles.

▪ Neste announces new 0.5% sulfur marine fuel

From 1 January 2020, the International Maritime Organization (IMO) will enforce a 0.5% global sulfur cap on fuel content for areas currently with 3.5% limit. In these areas, all vessels will be required to use fuel with a maximum sulfur content of 0.5%, unless they use exhaust gas cleaning systems.

Neste helps shipping companies to respond to the tightening regulation on sulfur dioxide emissions by offering them a new IMO 2020-compliant marine fuel. The Neste MarineTM 0.5, containing a maximum of 0.5% sulfur, will be introduced to the market during 4Q19. By choosing Neste’s low-sulfur fuel, shipping companies will have a solution, which is easy to switch to, and guarantees immediate compliance with the global sulfur cap.

“Neste’s has always been in the forefront of developing cleaner and more sustainable solutions. This is also the key driver within our marine fuels business. Neste Marine 0.5 meets the stricter legislative requirements for maritime sulfur emissions, enabling smooth operations,” says Marko Pekkola, Executive Vice President of Oil Products at Neste.

Neste Marine 0.5 is manufactured in Neste’s refinery in Porvoo, Finland. Leveraging on its long-term refining expertise, Neste is able to ensure stable product quality and technical feasibility. These are verified by full scale fuel equipment system and engine tests in laboratory and onboard. The product meets the RMG 0.5 specification and ISO 8217:2017 standard requirements.

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