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Global Fuel Quality Trends

Happy New Year and welcome to 2012’s first issue of the International Fuel Quality Center’s complimentary bulletin!

The global mission to produce cleaner fuels lurched forward in 2011. Across the regions covered by International Fuel Quality Center experts, policy agreements were reached, mandates implemented and road maps drawn. It didn’t always work out, however. The Russian Federation switched to 150 ppm sulfur gasoline in January 2011, a move that led to a severe fuel shortage by May because of the inability of several refineries to modernize their facilities in time. Enforcement of the regulation was delayed and the standard temporarily reverted to 500 ppm. And in Germany, motorists shied away from filling their tanks with E10, fearing that the fuel would cause engine damage. For the most part, these fears were unjustified as 90% of gasoline-powered vehicles in the country were compatible with E10. Nevertheless, consumers’ collective reluctance created a shortage in March because suppliers had shifted their production from E5. Producers readjusted their output and a marketing effort ensued to ease the public’s reservations about E10.

Elsewhere in the world, countries have been busy advancing their fuel quality agendas. Brazil published draft standards for both gasoline and diesel, New Caledonia announced its new specifications for 2012, Vietnam established standards for 2016 and Australia proposed mandatory fuel economy standards.

IFQC members received separate notifications on all of these recent developments with summaries on the changes in specification limits and time lines.  These developments were covered in more than 80 different Special Reports and Flash Reports, and hundreds of What’s News briefs delivered to IFQC members during the year. Additionally, our analysts shared their expertise in no fewer than 26 presentations made during 16 Webinars and numerous worldwide conferences in 2011, all of which continue to be available to members on our Web site. Interested in membership? Contact us.

In this newsletter you will find a few sample items of policy or market developments as reposted by our regional experts. IFQC’s role is to provide industry and government bodies with critical fuel quality information to help them achieve their respective organizational goals while providing for a cleaner environment.

Let us know what you think, or if you would like to learn moreabout IFQC membership. We hope you find our report and newsletter useful.

Kind Regards,

Liisa Kiuru
Executive Director, International Fuel Quality Center
+1.713.260.6474

IN THIS ISSUE


INDUSTRY NEWS


WHERE WE WILL BE


EXPERT PRESENTATION


FEATURED REPORT


UPCOMING EVENTS


ON-DEMAND WEBINARS


Join the Email List


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China: China IV Emissions Standards for HDVs Delayed
Jan. 17, 2012

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On Dec. 29, 2011, the Ministry of Environmental Protection announced that the implementation date for China IV (similar to Euro IV) emission standards (GB 17691-2005) for heavy-duty vehicles (HDV) has again been delayed from Jan. 1, 2012, to July 1, 2013. As required by GB 17691-2005, the original implementation date was set for Jan. 1, 2010, and was delayed to Jan. 1, 2012 at the request of auto manufacturers because the nationwide supply of 50 ppm diesel was insufficient.

Currently, China requires a nationwide sulfur limit of 350 ppm max for auto diesel, along with a stricter limit of 50 ppm max in Beijing and Shanghai as well as the cities of Guangzhou, Shenzhen and Dongguan in southern Guangdong province. Although the government’s 12th Five-Year Plan (2011-2015) expects to introduce 50 ppm sulfur diesel fuel by 2015, refiners have indicated that this will not be possible until 2017 at the earliest.

On the other hand, compression ignition engines and vehicles running on gaseous fuels were required to meet China IV emission standards as scheduled on Jan. 1, 2012. LDVs running on gasoline, gas and dual-fuel have already been required to meet China IV emission standards (GB 18352.3-2005) since July 1, 2011. The China IV implementation date for LDVs running on diesel is now the same as for HDVs, i.e., July 1, 2013.

EU: Council Discusses Sulfur Limits in Marine Fuels
Dec. 27, 2011

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In December, the Council of the European Union in a configuration of ministers of environment (Council) of all 27 Member States (MS) discussed a project for a directive referring to the sulfur content of marine fuels. The major decision undertaken by delegates was to agree that the directive will be subject to the Council’s work under the forthcoming Danish presidency (January to June 2012). Under comitology procedure, Council’s decision is required for the draft directive to become law. This decision must be taken in agreement with the European Parliament, which is studying this draft. During the first discussion, MS expressed their opinions that:

  • Some MS would like to see more stringent sulfur limits in European SOx Emission Control Areas (SECAs); however, certain MS said that this could lead to distortion in competition because other non-EU SECAs will not apply same limits;
  • Some MS said that new rules will require shipowners to install new units on their vessels that will be costly and a transitional period for them is needed; and
  • Some MS expressed doubts about the availability of lower-sulfur fuels in Europe on the date of entry into force of this directive.

 

Australia: Draft Energy White Paper Released
Dec. 23, 2011

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On Dec. 13, Australia’s Department of Resources, Energy and Tourism released a draft Energy White Paper on “Strengthening the Foundations for Australia’s Energy Future” for public consultation. The draft paper was released alongside the 2011 National Energy Security Assessment and the Strategic Framework for Alternative Transport Fuels. The last energy white paper was published in 2004.

The draft paper sets out a series of proposed government priorities to address challenges confronting Australia’s energy sector and identifies four priority areas for further action:

  • Strengthening the resilience of Australia’s energy policy framework;
  • Reinvigorating the energy market reform agenda;
  • Developing Australia’s critical energy resources, particularly gas; and
  • Accelerating clean energy outcomes.

In particular, transportation activity is projected to continue its strong growth through the period, even though significant changes are expected in the fuel mix and technologies. These changes will decouple activity from emissions, with greenhouse gas projections for the sector in 2050 expected to be close to those of today. Higher oil prices are likely to drive these outcomes as much as any other factor, including carbon costs.

Road transportation activity is projected to more than double by 2050, waterborne transport activity will triple, and rail and air transport activity will increase fourfold. Growth in light commercial vehicles and heavy truck activity is expected to be faster than in private and passenger vehicles. This will influence the types of fuels used as well as the transport infrastructure required.

The increasing urbanization of Australia’s population presents challenges and opportunities for the use of energy in the transportation sector. For the remainder of this decade, greater use of gasoline blends is likely in heavy and light road vehicles, combined with switching to diesel in light vehicles. Australia is largely a technology taker in transportation, in which the vehicle fleet is relatively old and has a low turnover rate. The combination of these factors means that alternative fuels are unlikely to make a significant impact until after 2020. Despite their higher upā€front costs, these technologies will become more commercially attractive with rising oil and carbon prices over time. Conventional vehicle efficiencies will also improve, driven by higher fuel prices, tighter emissions standards and the need to remain competitive against hybrid and electric vehicles.

Colombia: Update on Methanol Blend and FFV Mandates
Dec 7, 2011

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E10 has been mandated in Colombia since January 2006 in metropolitan areas with populations greater than 500,000 and since January 2010 in the entire country. However, most regions have been distributing E8 since May 2010.

The E10 nationwide mandate was set by Decree 2629 in July 2007, which also required a nationwide adoption of E20 by Jan. 1, 2012. Almost two years later, in March 2009, to ensure that the country’s light-duty vehicle fleet would have enough vehicles to take on higher blends, the government enacted Decree 1135, which required that all new Otto-cycle vehicles sold in the country would have to be E85-compatible flex-fuel vehicles (FFV) by 2016.

In late 2010, the Ministry of Mines and Energy circulated a new ethanol phase-in schedule. This draft made explicit mention of the need for a timetable that would be feasible for the automotive sector. It removed the FFV mandate and instituted in its place a gradual substitution of the premium gasoline sold in service stations with a gasoline containing higher levels of ethanol.


Sri Lanka: Lanka IOC Introduces 150 ppm Sulfur Gasoline
Nov. 22, 2011

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Lanka IOC, a wholly-owned subsidiary of Indian Oil Corp. (IOC), recently introduced gasoline with max sulfur content of 150 ppm for the first time in Sri Lanka, matching the current national gasoline sulfur limit in India. Lanka IOC currently markets two gasoline grades: regular (RON 90) and premium (RON 95) gasoline.

Japan: Final Report on 2020 Passenger Vehicle Fuel Efficiency Standards
Oct. 24, 2011

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On Oct. 20, Japan’s Ministry of Economy, Trade and Industry and the Ministry of Land, Infrastructure, Transport and Tourism held a joint meeting to finalize the report on new passenger vehicle fuel efficiency standards for 2020. The new standards specified in the final report require the improvement of the fuel efficiency of passenger vehicles by 24.1% over 2009 average levels by 2020, provided that the percentages of vehicle shipments in 2020 are the same as those in 2009.

Six joint meetings have been held since June 2010. The meetings comprised the Automotive Criteria Subcommittee, (under the Energy Efficiency Standards Subcommittee and the Advisory Committee for Natural Resources and Energy), and the Automotive Fuel Efficiency Standards Subcommittee (under the Automotive Traffic Subcommittee, the Land Traffic Committee and the Traffic Policy Making Council).

The final report is due to be approved by the Energy Efficiency Standards Subcommittee, the Advisory Committee for Natural Resources and Energy, the Automotive Traffic Subcommittee, the Land Traffic Committee, and the Traffic Policy Making Council. By April 2012, the government will make necessary amendments to the Act on the Rational Use of Energy (Energy Conservation Act).

The new fuel efficiency standards adopt the Corporate Average Fuel Economy (CAFE) standards, instead of the conventional scheme requiring vehicles in all weight categories to fulfill the standards (i.e., weight-based fuel economy regulations). The CAFE standards allow individual manufacturers to be flexible in meeting the standards in accordance with their technological characteristics through a process of selection and concentration and are therefore expected to be more effective as a means of promoting energy conservation.

China: Update on Methanol Specification
Oct. 17, 2011

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The national M15 standard – expected to be approved by mid-2011 – has yet to be released. In fact, implementation of the standard was expected to follow shortly after the national fuel methanol and M85 standards were approved in November 2009 and December 2009, respectively. However, the approval process has been delayed since 2009 and several release dates were given during 2009-2011.

Nevertheless, provincial-level M15 standards have already been set (IFQC Members can also view the specification in the Fuel Specifications database). In the absence of a national M15 standard, Hebei was the most recent province to implement its M15 standard, in October 2010, and is also currently in the process of approving its local M30 and methanol gasoline blendstock standards. No standards relating to methanol fuel were implemented in other provinces during 2011.

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Where We Will Be

Diesel Emissions Conference Russia 2012
Feb 7-9, 2012 in St. Petersburg, Russia

Contact Dr. Petr Steiner if you would like to meet with us during this event.

EVENT WEBSITE


Diesel Emissions Conference & AdBlue® Forum Asia 2012
Mar 27-29, 2012 in Beijing, China

Contact Huiming Li if you would like to meet with us during this event.

EVENT WEBSITE


AFPM  Annual Meeting
Mar 11-13, 2012 in San Diego, CA, U.S.

Contact Terry Higgins or Kristine Klavers if you would like to meet with us during this event.

EVENT WEBSITE


World Refining & FUEL Conference
Mar 14, 2012 in San Diego, CA, U.S.

Contact Liisa Kiuru-Griffith if you would like to meet with us during this event.

EVENT WEBSITE


SAE 2012 World Congress
Apr 24-26, 2012 in Detroit, MI, U.S.

Meet us at Booth 414. Contact Kuntal Vora or Liisa Kiuru-Griffith if you would like to meet with us during this event.

EVENT WEBSITE

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Expert Presentations

Distillates: Quality, Supply and Demand

Dec. 6, 2011
Presented at: ASTM Cocktail Reception, New Orleans, Louisiana, U.S.
Presented by: Liisa Kiuru-Griffith

DOWNLOAD PRESENTATION

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World Refining & Fuels Service: Global Crude, Refining and Clean Transportation Fuels Outlook to 2030

LEARN MORE

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Unconventional Feedstocks and Fuel Mandates -
Operating Amid Change

Mar. 14, 2014
Manchester Grand Hyatt, San Diego, CA, U.S.

The objective with this conference is to bring together global thought leaders – refining, fuels, additive, technology, government, biofuels, automakers and engine manufacturers’ communities to discuss and debate on how the current and future regulatory constraints be met with unconventional resources, biofuels, alternative fuels and new technologies.  The format of the conference will be interactive discussion panels addressing the panel questions. Each panel topic will be introduced by the moderator with a brief presentation, which will then be continued by panel discussion lead by each session moderator.

DETAILS | REGISTER HERE

 

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Emerging GTL/BTL Opportunities in North America: Gas-to-Liquids, Biomass-to-Liquids

This webinar was held in Sep 2011.
Where: Online

Cost: $100 USD

Webinar Outline:

This webinar will cover the emerging opportunity for gas-to-liquids (GTL), biomass-to-liquids (BTL) and coal-to-liquids (CTL) in North America. An unprecedented price spread between natural gas and crude oil in North America is sparking new proposed GTL projects, both large and small.  Meanwhile, the continuing push for “low carbon” fuels (especially jet fuel and diesel) is supporting proposed BTL projects and BTL/CTL combination projects, which can produce “drop-in” fuels (no engine or infrastructure changes required) unlike conventional biodiesel or ethanol. This webinar will explain the market opportunities emerging for companies of all sizes, as well as the technologies to be employed.

What you will learn:

  • What is happening with natural gas and oil prices – the arbitrage opportunity for GTL in North America
  • Which companies are proposing new GTL/BTL projects in North America
  • What technologies will be employed to exploit the opportunities
  • What are the potential risks and rewards of GTL/BTL
  • What are the market and regulatory drivers for GTL/BTL/CTL
  • What are opportunities for cutting the CTL “carbon footprint.”

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This newsletter is complimentary and sent about every 6 weeks. Join the email list here. Please send all questions or comments to IFQC@hartenergy.com.

 

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