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India’s steep path to Euro VI equivalence in 2020

By Alison Gaines

India announced last February that it would leapfrog from the current Bharat Stage IV (BS IV)  emissions standards, to BS VI, which is equivalent to Euro VI, by 2020. Fuel quality standards have also been laid down which are near equivalent to Euro VI, with certain relaxations deemed necessary to meet fuel volume demands, and taking into account what is achievable by 2020.  During F+L Week 2016, SSV Ramakumar, who was recently appointed executive director of Indian Oil Corp.’s (IOC) R&D Centre, delivered a presentation on the shared task ahead of India’s two largest GDP contributors, the oil and auto industries.

Citing data from the Global Burden of Disease database, he noted that outdoor pollution is the fifth largest killer in India. So the cause of this “very bold decision” is no mystery, he said.

SSV Ramakumar

Ramakumar outlined the timeline for India to reach this goal. BS IV has already been implemented in 50 major cities in India, but the rest of the country is one step behind.

“This dichotomy is going to end” in April 2017, when BS IV compliance for both fuels and emissions will be mandatory nationwide. This also coincides with the implementation date of mandatory fuel economy  (FE) standards for vehicle manufacturers . Current FE norms are applicable  to vehicles with nine seats or less and weigh less than 3,500 kg. FE norms for heavy-duty vehicles  are not yet finalised. Testing procedures, as well as target norms, are still being  discussed with stakeholders. Current FE norms for vehicles weighing less than 3,500 kg are linked to a formulae which takes into account the laden weight of the vehicle and should be used to calculate corporate average fuel consumption to meet the norms. For average vehicle weight of 1,037 kg, OEMs will need to achieve a fleet average fuel consumption of 5.5 litres per 100 kilometers (l/100 km) in 2017-2022 and 4.78 l/100 km in 2022-23 for vehicles with average vehicle weight of 1,145 kg.   Since these norms are for average fleet fuel economy, OEMs can produce or sell a mix of vehicle models using  different fuels. As an extension to the FE mandatory norms for vehicle manufacturers, it is also mandated that every vehicle carry a certificate of fuel economy, so that a buyer can make an informed decision.

In April 2020, BS VI-compliant fuel will be available nationwide while OEMs can get BS-VI fuel a year ahead to conduct their vehicle validations. BS VI-fuel quality requirements will be largely equivalent to Euro VI., but the specifics are still in the draft stage, Ramakumar said. For petrol, some of the main differences between BS IV and VI requirements are the research octane number (RON), which is moving from 91 to 95 only  for premium-grade . This specifically means that “the retail outlets in major cities stock BS VI in two grades as far as motor spirits is concerned,” a regular grade with a 91 RON and a premium-grade of 95 RON. Outside major cities, “at least 25% of motor spirits that would be available in any retail outlet on the national basis would have 95 RON.”

According to G.K. Sharma, an independent consultant in India, who explained the rationale behind the deviations in BS VI- and Euro VI-fuel, the auto industry has long requested for a 95 RON fuel to help them introduce higher compression ratio engines to meet FE norms. However, the oil industry has indicated its inability to meet this request due to pressing refinery processing demands for maximizing LPG. While there are genuine refinery constraints for high octane components and LPG maximisation, he said oil companies alternatively can blend  ethers  to meet the auto industry’s demand for high-octane fuel. But while blending 10% ethanol has been mandated in petrol, there is not enough ethanol supply for blending with petrol at a cost-effective price.

For BS VI-compliant petrol, maximum sulphur content will be reduced from 50 parts per million (ppm) to 10 ppm, in line with Euro VI specifications.

For BS VI-diesel fuel, maximum sulphur content will also drop from 50 ppm to 10 ppm. There are other deviations which have been allowed in BS VI, for example, the minimum flash point will be 35 degrees C. India traditionally has been allowing lower flash point than Euro specifications, because India maximises diesel production. As a result, both fuel density and distillation (T95) in BS VI are planned to be relaxed in BS VI.

“Almost all the refineries” will have to make modifications or additions to their current facilities to supply BS VI-compliant products, Ramakumar said. It is estimated that between 2000 and 2020 (BS II to BS VI), upgrading fuel quality standards in India will cost refiners approximately INR 80,000 crore (USD 12 billion). Upgrading from BS IV to VI alone is estimated to cost INR 27,500 crore (USD 4.1 billion). Sharma estimates that the auto industry in India will have to invest at least double what the oil sector plans to invest to upgrade fuel quality from BS IV to VI.  Thus, India is poised to receive heavy investments to make BS VI happen.

Some of the changes that refiners will need to make include the following: hydro-processing units, capacity de-bottlenecking (or the addition of new capacity), sulphur recovery blocks and catalyst replacement in hydrotreating units. Many of these changes are geared towards reducing sulphur content.

India’s auto industry has reservations about the draft specifications because the emissions requirements necessitate the use of after-treatment devices, the cost of which will be shouldered by the end user. There is concern that consumers won’t want to pay for the new vehicles that will be more expensive due to these devices.  The automotive industry, according to Sharma, may feel constrained to meet both BS VI emission and fuel economy targets in such a short period. Relaxation of fuel properties in BS VI, relative to Euro VI, is cited as a stumbling block by the auto industry. The auto industry often cites the difficulty in meeting future corporate average fuel economy targets due to the non-availability of 95 RON and the registration ban on 2000 cc and above fuel-efficient diesel engines in cars/SUVs in Delhi. The auto industry views a mix of fuel-efficient diesel engines in their production plans as a strategy in meeting FE norms, but a negative sentiment for diesel cars is being propelled by public litigations.

BharatVI-Gas-pump-nozzles-in-service-station-000034716964_XXXLargeFor diesel vehicles, the after-treatment options include diesel oxidation catalysts, diesel particulate filters, exhaust gas recirculation, lean NOx traps and selective catalytic reduction. For petrol engines, direct injection technology, as well as three-way catalytic reductions, are the main options. “We have to fast-track all these adaptations,” said Ramakumar, because of the small window before 2020. These devices all depend on low-sulphur fuels and lubricants because high levels of sulphur and ash can plug particulate filters. According to Ramakumar, many global OEMs in India are working on the necessary BS VI technology for vehicles. “I think that people will go for the less space-intensive options in passenger cars,” such as lean NOx traps, he said.

Sharma pointed out that urea infrastructure, which is most favoured for implementing fuel-efficient SCR technology for Nox reduction for heavy-duty trucks and buses, is currently lagging in India. As India debates the fuel economy norms for heavy-duty vehicles, OEMs will certainly opt for urea based-SCR which was not considered seriously for BS IV due to lack of urea infrastructure.

Skipping BS V makes sense because Europe has seen several shortcomings to Euro V during its rollout. Chief among these shortcomings was underwhelming reductions of NOx emissions. According to the International Council on Clean Transportation (ICCT), many of the problems with Euro V were addressed with Euro VI, so “Indian policymaking on vehicles and fuels should exploit lessons learned in the European market.” Since heavy-duty vehicles especially have a long lifetime, it makes sense to implement the standards that will give economic benefits far into the future—“the early adoption of Bharat VI standards will continue to generate emission reductions and corresponding reduction in premature mortality well into 2040s,” the ICCT report said.

Sharma said that the Indian government is working on a vehicle scrap policy and a draft will be sent out for stakeholders’ comment before implementation.  The latest thinking on the scrap policy is to automatically de-register all private vehicles older than 15 years and it  would be left to state governments  to either  re-register with fitness checks or allow scrapping.

India is very much a “dieselised” economy, Ramakumar said. Diesel-engine cars outnumber petrol-engine cars by about 3.7:1.But, he said, “maybe two years back, this ratio used to be 4:1 or above.” Petrol  growth is there, he said, and will continue through the next five years. “This is what all the world energy surveys are also showing,” he said. Statistics from India’s Ministry of Petroleum and Natural Gas show that between 2003 and 2015, petrol consumption grew annually at 8.4%, while diesel consumption grew 5.9%.

India is an oil-consuming nation, depending heavily on imports, which is another reason why skipping Euro V makes sense. Ramakumar said that according to rough calculations, just a 1% reduction in fuel consumption could save about INR 9,000 crore (USD 1.323 billion) in crude oil imports. The move to BS VI will also help India’s goals to reduce its GDP emissions intensity by 33-35% below 2005 levels by 2030, which it had set during the COP21 forum in Paris last December. It also aims to achieve 40% cumulative electric power installed capacity from non-fossil fuel sources. According to BP’s Statistical Review of World Energy, oil currently accounts for 28% of India’s energy use and coal 57%. The road toward more energy independence and reduced fossil fuel consumption is a long one, but India seems to be taking the right steps by leap frogging to BS VI and adopting fuel economy standards for passenger cars.  India also plans to  implement  fuel economy norms for heavy-duty trucks and buses.