U.S. states sue Trump administration over fuel efficiency rollback

▪ U.S. states sue Trump administration over fuel efficiency rollback

A group of 23 U.S. states and the District of Columbia filed a lawsuit on Wednesday 27-May 2020, challenging a Trump administration decision to weaken Obama-era fuel efficiency standards. In March, the administration issued final rules requiring 1.5% annual increases in vehicle fuel efficiency through 2026 - far weaker than the 5% increases set under former President Barack Obama. The Trump administration also abandoned its August 2018 proposal to freeze requirements at 2020 levels through 2026.

The new rules require the U.S. vehicle fleet to average 40.4 miles per gallon rather than 46.7 under the Obama rules finalized in 2012. In 2019, Ford Motor Co, Honda Motor Co, BMW AG and Volkswagen AG reached an agreement with California over compromise fuel efficiency rules more stringent than Trump's but weaker than Obama's.

The Trump administration said the new rules would reduce future new car costs and save automakers billions in regulatory costs but boost average consumer fuel costs, while lifting oil consumption by about 2 billion barrels and hiking carbon dioxide emissions by 867 to 923 million metric tons. Obama's environmental policies sought to cut carbon emissions that drive climate change, while Trump has ditched numerous environmental regulations his administration deemed harmful to industry.

▪ China: Guangdong province terminates Ethanol gasoline promotion in 2020

According to some local information, the Guangdong Provincial Energy Bureau has slashed its Ethanol gasoline promotion target for the province in 2020, restricting the mandatory use of the biofuel to two, less urbanized cities, namely Zhanjiang and Maoming only. The remaining 19 prefecture-level cities in Guangdong are not involved in the 2020 plan.

This basically indicates the termination of the Ethanol promotion plan in the province.  

The latest roll-out plan for the two cities indicates that Zhanjiang will have 92RON-gasoline available as E10 as from 30-June this year while Maoming will complete this target by 31-Dec 2020. No plans for 95RON and 98Ron gasoline were made available.  

China’s NDRC and the NEA apparently announced in late December 2019 their decision to slow the Ethanol promotion and countrywide roll-out for 2020, as implementation plans were lagging far behind. The suspension of the plan was also due to concerns raised by the oil industry and consumer associations, as well as by other bodies, addressing the environmental impact and the macroeconomic damage the nationwide E10 roll-out would bring with it.

▪ Amid lockdown, India switched to BS-VI emission norms on 01-April

Despite the lockdown, India on 01-Apr officially moved to a regime of tighter emission norms for motorised two- and four-wheelers. At fuel stations of India’s oil majors, only the low-sulphur fuel that complies with Bharat Stage-VI emission norms are being sold; so will cars at stores, whose engines meet the stricter norms.

Indian Oil Corporation started selling BS-VI fuel around March 17 at its 28,500 fuel stations, an official said. Bharat Petroleum Corporation Limited said on Twitter that it had rolled out BS-VI fuel across its network of over 16,000 fuel stations. The fuel outlets of Hindustan Petroleum said in a statement that they had switched to “greener and cleaner fuel” across all retail outlets. “This is a big step towards sustainable development of the nation and we are proud to be a part of it.” Several outlets in the Delhi-National Capital Region had already been selling BS-VI fuel.

“Pan-India roll out of environment friendly BS-6 fuel is a reflection of our commitment towards human and environmental health,” Union Minister for Petroleum and Natural Gas Dharmendra Pradhan wrote on Twitter.

However, car dealers, several of whom were unable to sell their stock of the older BS-IV engines, were unhappy. According to the Federation of Automobile Dealers Association (FADA), dealers nationwide are left with unsold vehicles worth around US$ 1bn, comprising 700,000 two-wheelers, 15,000 passenger cars and 12,000 commercial vehicles. Separately, there are over 1m two-wheelers, 2,250 passenger cars and 2,000 commercial vehicles that have been sold, but are yet to be registered.

As per BS-VI emission norms, petrol vehicles will have to effect a 25% reduction in their NOx, or nitrogen oxide emissions. Diesel engines will have to reduce their HC+NOx (hydro carbon + nitrogen oxides) by 43%, their NOx levels by 68% and particulate matter levels by 82%.

According to Rajan Wadhera, president, Society of Indian Automobile Manufacturers, the emission norms of these new vehicles are now on a par with Europe. The emission norms of all models of two-wheelers in India are ahead of Europe (2021) and Japan (2022), and India is the first country to adopt this level of emission norms. “More than 1,000 models and variants of BS-IV were to be developed to BS-VI emission norms in just 3 years, and the industry in the process is investing ₹70,000 crore (US$ 10bn) for this achievement,” he said in a statement

In 2016, the Narendra Modi government said India would directly progress from BS-IV norms to BS-VI, skipping the intermediary stage. Last October, when discussing Delhi’s air pollution, Minister for Environment Prakash Javadekar said BS-VI norms were a “revolutionary step” in the transformation of fuels. He added that there had been an 80% reduction in particulate matter emissions and a 30% reduction in NOx emissions in BS- IV heavy-duty diesel vehicles, compared with BS-III norms. Nearly US$ 9bn were spent on the switch-over to BS-VI fuels.

▪ Soot-free road transport in Indonesia: A cost-benefit analysis and implications for fuel policy

In February 2020 the International Council on Clean Transportation (ICCT) issued a working paper on “Soot-free transport in Indonesia”. The extensive study by ICCT comprises a cost-benefit analysis of sulphur reduction and other fuel specification changes in order to accomplish Euro IV/Euro VI fuel standards in Indonesia and it looks at the implications this will have for the country’s fuel policy.

ICCT highlights Indonesia’s air pollution issues which have been on the rise since 1990, referring to the country’s fine particulate matter (PM2.5) concentration which consistently fails to meet the 10 micrograms per cubic meter (μg/m3) guideline suggested by the World Health Organization (WHO).

Vehicle emissions are among the top contributors to Indonesia’s air pollution, contributing to elevated concentrations of PM2.5, ozone, and nitrogen dioxide, making the country rank in the top-20 most polluted in the world.

While the country is now implementing Euro IV-equivalent emission standards for light-duty and heavy-duty vehicles, fuel standards necessary to comply with Euro IV requirements, including regulating sulphur content to 50 parts ppm, are not yet in place. There are multiple grades of diesel and gasoline fuels available on the market for which different limits apply. ICCT also highlights that the adoption of Euro IV vehicle emission standards is essential to protect public health, but Euro VI standards could achieve a further 90% reduction in PM2.5 and nitrogen oxides (NOx) from diesel vehicles compared with Euro IV.

Vehicle sales in Indonesia have grown exponentially since the early 1990s, and Indonesia reported more than 138 million registered vehicles nationwide in 2017. Indonesia is well on its way to becoming one of the 10 largest motor-vehicle markets in the world. The rapid growth of the vehicle market has created a growing demand for fossil fuel in Indonesia, which has five major domestic refineries. In recent years, domestic production has only met about half of the gasoline and diesel demand, and the remaining need was met by imports. Historically, fuel quality requirements and improvements in Indonesia have not kept pace with the stringency of vehicle emission standards. The ICCT study shows the disparity between vehicle emission standards and fuel quality requirements, as well as the deviation of actual fuel quality results versus the required specification.

The study looks at three modelled policy scenarios from here in forward in a 2015-2050 time frame. The three scenarios compare the cost and benefits in a Baseline (Euro-IV for 4-wheelers) case, Global Sulphur Strategy case (implementation of different specifications, leading to 10ppm sulphur for all fuel types by 2030) and a Leapfrog case (Euro-VI for 4-wheelers and Euro-V for 2-wheelers by 2023).

Based on the study results, it is suggested that Indonesia considers the following, among a range of other measures:

  • Both domestically produced and imported fuel will need to be brought up to standard

  • Stop the subsidy on dirty fuel

  • The study shows substantial benefits for Indonesia in adopting the Euro 6/VI vehicle standards in conjunction with aligned fuel standards. Establishing a clear timeline for implementation and developing a supporting compliance programme would help ensure that the maximum benefits are achieved. The already set Euro IV vehicle standards lay the groundwork for Indonesia to reduce vehicle emissions, but the health benefits of Euro IV are not as potent in the longer term. Euro VI vehicle emission standards, along with the qualified ultralow-sulphur fuel, reduce all types of emissions for Indonesia even in the longer-term scenario that includes a rapidly growing vehicle market.

    The study also demonstrates the importance and the cost-effectiveness of implementing a 10 ppm fuel sulphur limit along with the vehicle standards. This could be achieved by switching to 50 ppm sulphur imports as soon as possible and then later tightening to 10 ppm while bringing refineries up to speed.

    For our readers’ reference, the full ICCT study can be downloaded from this link.

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