U.S.:  Proposed 2013 RFS2 Rule Still Not at White House OMB
Jul. 5, 2012

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The U.S. Environmental Protection Agency (EPA) has yet to send the Notice of Proposed Rule-Making (NPRM) for the 2013 RFS2 requirement to the White House Office of Management and Budget’s Office of Information and Regulatory Review (OIRA) for the mandatory interagency review. OIRA reviews draft (and final) regulations under Executive Order 12866, and develops and oversees the implementation of government-wide policies impacting the regulatory process (like peer review practices). OIRA accomplishes this directive through an interagency review during which other executive branch departments and independent agencies can consider and comment on the proposed (and final) rules. Under the executive order, the OIRA review is limited to 90-day time frame (there is no minimum review period). The rulemaking agency can extend the review period if necessary to resolve any issues raised during the interagency review.

Once the proposal reaches OIRA, the interagency review typically takes four to five weeks. When OIRA signs off on the proposed rule, the EPA will announce the NPRM on the 2013 RFS2 requirements in the Federal Register, provide for a public comment period and likely schedule a public hearing. For the current 2012 RFS2 standards, EPA published the NPRM on July 1, 2011 (the pre-publication copy was signed by the administrator on June 21, 2011).

Under the Energy Independence & Security Act of 2007, the EPA is to finalize the RFS2 standards for the succeeding year by Nov. 1. Any extended delay in having the NPRM issued could back up the time lines to complete the regulatory process. The EPA, in discussions with Hart Energy, has indicated that the specific timetable to send the NPRM to OIRA is uncertain.  The proposed rule is apparently ready and awaits authorization from the administration to forward to OIRA.

U.S.:  California ARB Issues Reminder on Marine Fuel Regulations Changes
Jul. 3, 2012

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California’s Air Resources Board (ARB) has issued a Marine Notice reminding ship operators that tighter marine fuel sulfur limits apply under ARB regulations as of Aug. 1, 2012. On the same date, IMO’s Marpol Annex VI fuel sulfur limits for the North American Emission Control Area (ECA) come into effect. Both changes have been reported previously by IFQC.

IMO and ARB regulations are not identical. Ships must comply with both sets of regulations where applicable.

The IMO-designated North American ECA generally extends 200 nautical miles from the U.S. coastline (and from much of the Canadian coastline). All ships operating within the ECA must use fuel with a sulfur content not exceeding 1.00 wt%, or alternatively can use emission abatement technology.  

ARB regulations apply within a designated area, generally 24 nautical miles from the California coast and outlying islands, although they apply only to ships which are calling at a California port or offshore terminal. Under ARB regulations, only distillate fuel may be used. Fuel sulfur limits from Aug 1, 2012, are 1.0 wt% for Marine Gas Oil (DMA grade in ISO 8217), and 0.5 wt% for marine Diesel Oil (DMB grade in ISO 8217). Use of abatement technology as an alternative to using compliant fuel is not permitted.

Both ARB and IMO fuel sulfur limits will be lowered further in future. ARB regulations will limit fuel sulfur to 0.1 wt% for both Marine Gas Oil and Marine Diesel Oil and be in effect as of Jan. 1, 2014. Within IMO-designated ECAs, a limit of 0.10 wt% will apply as of Jan. 1, 2015.

Republic of South Africa: Regulation Requires Nationwide Low-Sulfur Fuels by 2017
Jul. 4, 2012

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The Republic of South Africa’s Department of Energy, after more than a year of official consultations, published an official Schedule: Amendment of regulations regarding petroleum products specifications and standards of 23 June 2006.

This regulation will introduce significant improvements in required quality of gasoline and diesel, making RSA the first African country with low-sulfur fuels nationwide. Changes will be enforced as of July 1, 2017. IFQC summarized the new legislation in a Flash Report to its members.

Russia:  Progress in Refinery Modernization to Produce Clean Fuels
Jul. 2, 2012

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Several Russian refiners recently completed modernization programs to allow them produce cleaner fuels, specifically gasoline and diesel of Class 5 quality containing maximum 10 ppm of sulfur.

TNK-BP, Russia’s third-largest oil company and owned by BP and AAR consortium, launched 10 ppm diesel production at the Saratov refinery in June 2012 after the reconstruction of diesel hydrotreater. By the end of 2012, a new isomerization unit allowing for production of high-octane 10 ppm sulfur gasoline is expected to be commissioned at the same refinery.

OAO Slavneft, owner of the YANOS Refinery in Yaroslavl, reported in June it plans to supply only Class 5 (10 ppm sulfur max) gasoline and diesel from July 1, 2012, when new taxation regime with decreased excise tax on clean fuels comes into effect. Ongoing modernization (started already in 2002) and commissioning new units during 2011 made this step possible. Future plans include revamp of catalytic cracker, MTBE unit and alkylation units.

Lukoil, a major international verticlally-integrated oil and gas company, announced in June that production of Class 4 (50 ppm sulfur max) gasoline will end by July 1, 2012. While Lukoil has supplied only 10 ppm diesel already since 2006, 10 ppm sulfur gasoline (RON 98) started to be produced in May 2011. From July 1, 2012, all gasoline (RON 92, 95 and 98) and diesel produced by Lukoil will contain 10 ppm suflur max. While no other reason than ongoing modernization has been quoted, it is expected that the change in taxation regime (incentives for cleaner fuels) played a significant role in the timing of the decision.

Russia has already made plans to switch to 10 ppm sulfur fuels before 2020.

Australia: Regulation Requires Nationwide Low-Sulfur Fuels by 2017
May 24, 2012

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The Australian Department of Sustainability, Environment, Water, Population and Communities released a position paper on setting a fuel quality standard for B20, i.e., diesel fuel blends containing at least 5 vol% but not more than 20 vol% biodiesel. The department noted that the development of the B20 standard is expected to provide certainty for the biodiesel industry and bolster consumer confidence in the product.

The proposed B20 specifications are primarily based on the B6-B20 blend specifications (ASTM D7467-10) in the U.S and the European Union’s diesel fuel standard (EN 590:2009) which allows up to 7 vol% biodiesel. When approved, labeling of B20 will be required to identify biodiesel and biodiesel blends at the point of sale. The position paper also includes a literature review on diesel cetane and density by Hart Energy. Submissions for public comments closed May 4, 2012, but it is not known at this stage when the standard will be implemented.

EU: Results of EU Consultation on Reducing Vehicle CO2 Emissions
May 2, 2012

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The European Commission released the results of a public consultation considering options to reduce road vehicle GHG emissions. This work is important because it is designed to gather input in preparation for a revision of the regulations governing CO2 from cars and from light commercial vehicles, and for the development of a heavy-duty vehicle (HDV) greenhouse gas emissions (GHG) strategy scheduled for 2013. Overall, there was support for a continued reduction in road vehicle GHG emissions, including a reduction in the heavy-duty sector. There appeared to be a divergence of opinion, with individual citizens’ responses recommending further reductions in targets for the light-duty sector and the auto manufacturing sector stated that current GHG reduction goals were already extremely difficult to achieve.
Main discussion points included:

• Strong support for greater GHG reductions;
• Criticism of current legislation;
• Possible confirmation of 2020 target for light commercial vehicles; and
• Opinions on setting future CO2 targets.

Concerning the CO2 measurement of HDVs, other measurement metrics were suggested such as CO2/ton-km, or per passenger/km, m3/km of goods, as opposed to g CO2/km. The allowance to have longer HDVs (thus increasing load capacity) was noted. There was a suggestion that CO2 standards should also be extended to non-road machinery.

A range of possible future options to achieving lower GHG emissions were noted by respondents:

• Taxation, including taxes on vehicles and fuels, setting lower taxes for low-emitting vehicles and also with carbon taxes. Taxation policies that promoted alternative transport options for freight (such as rail and river), and for individuals (walking, cycling, etc.) were recommended;
• Promote local production and consumption by Member States;
• Develop policies aiding the R&D and promotion of alternative fuels;
• Consider a life-cycle energy approach to regulating future road vehicle emissions; especially important when considering emissions involved in electricity generation for electric vehicles;
• Other pollutants emitted during the construction of the automobile should be considered;
• Charge for the external costs of transportation (such as air pollution, accidents, climate change), however the transport industry argued that transport companies already incur costs which are internalized in the form of excise, taxes and charges; and
• Consideration should be made toward measuring additional GHG emissions in the future, specifically methane, NOx and black carbon.

Hong Kong: Euro V Emission Standards Take Effect Starting June 2012
Apr. 4, 2012

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On March 23, 2012, the Hong Kong Environmental Protection Department (EPD) noted that the 2012 Air Pollution Control (Vehicle Design Standards) (Emission) amendment regulation has been gazetted. Subject to the Legislative Council’s approval, the amendment tightens emission standards for new vehicles to Euro V levels starting June 1, 2012, except for new diesel light goods vehicles with design weight less than 3.5 tons, which will only take effect starting Dec. 31, 2012.

Earlier, the Hong Kong EPD planned to implement Euro V emission standards for new heavy-duty vehicles (HDV) and light-duty diesel vehicles (LDV) by October 2009 and January 2011, respectively. However, as the Japanese vehicle manufacturers required more time to produce Euro V compliant vehicles for the Hong Kong market, the government was not ready to implement Euro V emission standards at that time. Thus, Euro IV emission standards remain in force even though 10 ppm sulfur fuels have been required since July 2010.

Since April 2008, the government offered tax incentives to encourage the early introduction of Euro V compliant vehicles to the domestic market. By January 2012, the number of Euro V models grew to about 490 for HDVs and 530 for LDVs. It was further noted that, compared with Euro IV vehicles, Euro V heavy diesel vehicles emit 40% less NOX, while light diesel vehicles emit 80% less RSP and 30% less NOX. On the other hand, Euro V gasoline or LPG vehicles emit 30% less NOX.

The amendment was expected to be tabled at the Legislative Council on March 28, 2012.

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Argentina: Biodiesel Quota Means Likely Blend Increase in Some Segments
Mar. 21, 2012

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On March 16, 2012, Argentina’s Secretariat of Energy published Resolution 56/2012, which continues the government's practice of allocating specific production quotas for compliance with the biodiesel blend mandate and granting a preference to small producers. It also marks a step forward in the government’s desire to raise the blend mandate from B7 to B10.

In Argentina, the government allocates specific quotas to biofuels producers. For 2012, the total quota volume allocated rose to approximately 1.5 billion liters, representing an incremental advance of 271 million liters from the two previous years. According to the resolution preamble, provided that market conditions are suitable, there is a chance that the government will decide in favor of implementing B10, given diesel consumption of 14.1 billion liters in 2011.

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Hart Energy Breakfast Series: Marine and Bunker Fuel Markets

Aug. 2, 2012 in Houston, Texas, U.S.

DETAILS

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

SAE 2012 Shale Gas Impact on Vehicle Development Symposium

Aug. 28, 2012, in Pittsburgh, Pennsylvania, U.S.

DETAILS

Contact Liisa Kiuru-Griffith for the discount code if you are a Hart Energy member, or if you would like to meet with us during this event.

From Crude Oils to Biofuels: Trends Impacting Global Fuels

Oct. 9, 2012, in Rio de Janeiro, Brazil.

DETAILS

Contact Tammy Klein if you would like to meet with us during this event.

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2012 Global Sulfur Limits Poster

DOWNLOAD MAP

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U.S. & Brazil Ethanol Outlook to 2020: Whitepaper

LEARN MORE

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Hart Energy Breakfast Series: Marine and Bunker Fuel Markets

Aug. 2, 2012
Petroleum Club of Houston, Texas, U.S.

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

Enjoy a complimentary breakfast as you network with industry contacts and hear insights from two of the industry’s most knowledgeable speakers – Tony Teo, Business Development Director, DNV North America Maritime and Liisa Kiuru-Griffith, Executive Director, International Fuel Quality Center.

The featured presentation will include a discussion on

• Future policy and compliance challenges: ECAs, SOx, NOx compliance and fuel availability
• The new H2S limit and how to measure it
• LNG as a compliance option?

DETAILS | REGISTER

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