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“The experience of India on producing cleaner fuels”

by

Dr. AA Gupta - IndianOil &

NS Murthy - Reliance Industries Ltd.

23rd May 2006

Regional Workshop, ADB, Manila

Developing Fuel Quality Roadmaps in Asia

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Clean Fuels Initiatives - India

1. Glimpse of Oil Sector in India

2. Indian Clean Air Programme

3. Clean Fuels – Experiences

4. Clean Fuels - Redefined

5. Road Ahead

3

Glimpse of Oil Sector in India

4

HPCL Vizag

BRPL

Haldia

Barauni

Panipat

Mathura

RIL, JN

HPCL,BBY

Digboi

GuwahatiNRL

BPCL, BBY

KRL

CPCL, Chennai

CPCL, CB

MRPL, ONGC

Vadodara

ONGC, Hz

Operating Refineries in India

18 operating refineries & 6 more coming up.

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Indian Refineries

RIL IOCL BRPL CPCL HPCL BPCL KRL NRL MRPL-ONGC

ONGC

Of the refining capacity of 126MMTPA, IOC & RIL share nearly 60%.

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Fuel logistics Scenario in IndiaSurplus / (Deficit) – Y 2003/04

Diesel - 6.18 MMTPA.

Gasoline - 2.98 MMTPA.

LPG - (2.18) MMTPA

Kerosene - Nil (after stopping import by parallel Mkt)

ATF - 1.66 MMTPA

Gasoline & Diesel remain surplus for next 10 years while LPG & Natural Gas continue to be deficit.

Surplus Gasoline and Diesel push quality competitiveness.

Source: Petrofed

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Indian Clean Air Programme

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Air Quality Standards in India

In Indian context CO pollution, Particulate (PM10 , PM2.5 & PM0.1) and NOx (in select cities) are areas of concern. Internationally concerns are raised about ground level Ozone, Benzene & other air toxins such as 1,3 butadiene, aldehydes, alkenes, etc.

WHO /

US EPA

PM10 µg / m3 50 50 100 282 + 97

Oxides of nitrogen - do - 100 80 63 + 22

Sulphur Dioxide - do - 80 105 80 25 + 10

Carbon monoxide - do - 2,000 2000 5450 + 2947

Ozone - do - 235 180 NA 30 + 15

Unburnt HC - do - - 160 NA

Indian Std

Typical cityPollutants Unit CARB

Each nation devices & adopts a balanced approach for BAQ.

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Ambient air quality – Factors involved

– an integrated approach pays rich benefits for the cost spent

Ambient air qualityI & M

practices

Traffic Mgt & Road Maint.

Point emission& Construction

activities

Product QualityAssurance

Trans-borderissues

Tail pipedevices

EnforcePUC

Vehicle Tech& retiring

Adulterationmenace

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Stakeholders in Auto Oil Program & AAQ

Growing awareness in India for BAQ amongst key stakeholders

Vehicle owners

Transport sector

• NGO• Academia• Judiciary• Agriculture sector such as sugar

• IP: GOI-MOP&NG, MOI,MOST, MOEF, CPCB, MOCA, BIS, ARAI, NEERI, IICT, etc.• State Govts & PUC Implementing Departments

OEMs& Garages

Oil Companies

For the health of common man on the kerb-side

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I CAP – Mission

Right combination of technology & fuel to combat auto emissions.

1. Conduct a scientific ambient air quality study in metros involving source identification, emission factors generation and apportionment thru modeling.

2. Provide a cost benefit solution for BAQ considering issues like ‘in use vehicles’, I&M practices, traffic mgt, product quality assurance, developments in Tail Pipe devices, etc.

3. Set road map starting with least cost but max returns.

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Clean Fuels – Experiences

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Worldwide – Diesel Quality

Source - IFQC

Despite WWFC effort, there is variance in approach to fuel quality.

2.7

500

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Diesel Quality – Stakeholders’ needs

CN of 51 min is for high speed LCV running in Euro Autobahn. For heavy duty vehicles, NCWM (National Conference of Weights and Measures) specified 47CN Min. EMA recommended CN of 50min.

Assessment of ‘Right Quality’ calls for a balanced approach.

1. Excellent Lubricity to enhance life of fuel pump & engine parts.

2. Very Good fuel stability with least deposit formation tendency.

3. Better fuel filter performance.

4. Min viscosity limit to minimize / eliminate drip from injector.

5. Best fuel economy, acceptable emissions.

6. Lowest sulphur for longevity of tail pipe devices.

7. Lowest delivered cost to consumers.

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1. India spends 26$ Billion / yr on diesel alone.

2. With Bharat III (similar to Euro III) grade in 13 metros, India spends additionally ~ 150MM$/yr on account of control spec of T95% in BS III.

Diesel Quality Change - India

10000

25002500

500 35050050

10000

1980 1995 2000 2005 2010

Year

Su

lfu

r co

nten

t in

p

pm

Rest of the country 13 cities

Cost of HSD Quality change - Did it provide the AQ benefits?

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LCV – PM Vs Diesel grades Vs Technology Source - ARAI

Technology plays a key role in abating vehicular emission..

PM Vs Fuels Vs Technology LCV

0.000

0.100

0.200

0.300

0.400

0.500

0.600

0.700

0.800

0.900

1.000

1.100

1.200

Vehicle Technology

PM

,g/K

m

500 ppm BM 500 ppm AM Euro III Euro IV 50 ppm

91-96 96-00 91-96 96-00 2000+ 2000+91-96

Euro II 0.08 gm/km

Euro III 0.05 gm/kmEuro IV 0.025 gm/km

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Euro IV 0.03 gm/Kwh

HCV – PM Vs Diesel grades Vs Technology Source - ARAI

Technology plays a key role in abating vehicular emission..

PM Vs Fuels Vs Technology HCV

0.0000.1000.2000.3000.4000.5000.6000.7000.8000.9001.0001.1001.2001.3001.4001.5001.6001.7001.8001.9002.0002.1002.2002.3002.4002.5002.6002.700

Technology Type

PM

, g

/Km

500 ppm BM 500 ppm AM Euro III Euro IV

91-97 96-00

Euro II 0.15 gm/km

Euro III 0.10 gm/km

Euro IV 0.02 gm/km

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Diesel Effects on Emissions - SummaryHeavy Duty (Euro 2 / 3)

Fuel Change CO HC NOx PM

Reduce Density

Reduce Poly-aromatics

Reduce T90/95

Reduce Sulphur

0/ 0/ 0/

0/ 0/

0 /

0 / implies conflicting results (dependent on engine technology)

T95% has no impact on PM. However, it impacts diesel production.

Source - Shell

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Worldwide - Gasoline QualityAttibutes Unit India Euro III Japan Korea New Zealand China Taiwan South Afirica

RON min 91 91 / 95 89 / 96 91 / 94 91 / 95 90/93/95 92/95/98 95 / 97

Sulphur ppm min 150 150 100 130 350/150 800 80/120/180 1000/1500

Aromatics vol % max 42 42 - 30 or 35 48/42 40 ** -

Olefins vol % max 21/18 21/18 - 23 or 18 20 or 25 35 ** -

RVP KPA 35-60 60 & 70 44-78 70 - S, 96 -W 45 KPA min

74 (S)88 (W) 59/59/61** 45-75

** Taiwan follows emission models to allow refiners to choose limits on olefins and aromatics.

Japan does not have olefins or aromatics spec. and intends to meet emission norms with tail pipe & technology combination

Despite WWFC effort, there is variance in approach to fuel quality.

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Gasoline Quality – Stakeholders’ needs

India mandated deposits control thru use of EPA regd additives.

1. Deposit Control (IVD, PFI, CCD, Carburetor rating, etc.)

2. Fuel Economy, better acceleration & Acceptable emissions.

3. Longer life of tail pipe cat.

4. Enhanced Engine / Component Life.

5. Lowest Delivered cost to consumers

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Gasoline vehicles (2W) Emission test -HC

No significant impact by Fuel. 2W technology near static till 2000.

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Gasoline vehicles (2W) Emission test -CO

No significant impact by Fuel. 2W technology near static till 2000.

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Emission test – Cal. Fuel Economy

Need to work on higher fuel efficiency vehicles to reduce GHG.

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Gasoline Effects on Emission - Summary catalyst cars non catalyst cars

Fuel Change HCExhaust. Evapn CO NOx Benzene

Add oxygenate

Reduce aromatics

Reduce Olefins

Reduce Sulphur

Reduce RVP Source: Shell

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Clean Fuels - Redefined

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Clean Fuels - Redefined

1. Voice of stakeholders

2. Lessons learnt

3. Technological advancements

4. Product / Market segmentation approach

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Vehicle Owners / Engine OperatorsMostly unorganized barring STUs, Fleet operators, etc. Issues are:-

Cost of fuel and mileage sole concerns

No serious attention to vehicular emission - in-use vehicles.

Depend ‘next door garages’ for I & M needs.

Perception on fuel adulteration is high though reducing.

Restrained mobility arising from two fuel policy in India.

There is “Quality overkill’ in some sectors.

Oil companies on most occasions address all these issues

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OEMs

‘One Nation One Fuel’ and or ensure right fuel to sustain mobility

The issues are: -

Engine warranty Vs ‘Right fuel’ availability / Adulteration

No firm vehicle retiring policy

Auto Garages – Consistency in Quality Output

Mismatch in auto fuel quality, which is neither on European nor Japanese model.

Reliability of tail pipe devices & synergy thereof with engine technology to combat auto emission.

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Oil Companies

Forums like I CAP, BIS and SIAM / Petrofed to lead the nation

The issues are: -

Mounting fuel bill and the need to innovate and supply ‘right fuels’ for appropriate end applications.

Wrath of unpleasant intervention by judicial and other lobbies – In the process put on reactive mode.

Tamper proof system of delivery to Retails and ability to demonstrate at forecourt.

Lopsided subsidies in fuels failing to reflect true cost to nation.

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Vehicle technology impact is substantial than fuel quality.

Lessons Learnt - Factors on AAQ

Future Scenario Modeling - NZ IPIECA study

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40

60

80

% r

ed

ucti

on

in

mob

ile

em

issio

ns

VEHICLES ONLY FUELS ONLY TRAFFICMANAGEMENT

VEHICLES & FUELS

PM NOx CO VOC

0

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Effect of Sulphur change – Diesel vehiclesStudy Vehicle

TechnologySulfur Range

(ppm)Emissions Reduction, %

(high to low sulfur)

    High Low HC CO NOx

AQIRP Tier 0 450 50 18 19 8

EPEFE Stage 2+ 382 18 9 (52*)

9 (43*)

10 (20*)

AAMA/AIAM LEV & ULEV

600 30 32 55 48

* Reduction achieved during hot EUDC (extra-urban) portion of test.

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Lessons Learnt - Gasoline Deposit Control

Right MFA and not base gasoline quality helps to reduce deposits.

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Briefly, as far as history of the EU gasoline olefins spec is concerned, the EPEFE study, basis for EU Auto/Oil 1, did not investigate olefins effects as, at the time, this was not considered to be of sufficient priority - the emphasis was on aromatics, E100 and sulphur.

Auto industry, however insisted on its inclusion into the air quality modeling stage, the argument put forward was that higher olefins were linked to higher NOx and hence higher ozone. The data for this came from the earlier US Auto/Oil (AQIRP) programme and was questionable, being based predominantly from non-catalyst vehicles or ones fitted only with Oxycats (no three-way catalyst vehicles - thus different from all the EPEFE data).

Despite all this, politics prevailed & EU ended up with an olefins spec.

Olefins Spec – EU story

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Cat devices reduce exhaust emission-NOx

Tail pipe devices facilitate Euro II engine / vehicle technology with Euro II gasoline to comply with Euro III norms.

Source: Mico

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‘Right Fuel’ Campaign

54%

5%

18%

8% 15%

Metros India Rest Railways Tractor Industry

Diesel

Urgency to differentiate diesel for on road & off road applications.

Source - Petrofed

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Proposed Roadmap on Fuel Segmentation

Oil companies could ensure control in supply chain to reach right product to appropriate market.

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Clean Fuels Redefined

In short,

there is a need to harness technology advancements in tail pipe devices, segment the market to use appropriate fuels and ‘twig’ the fuels to create “win – win” situations in combating air quality issues.

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Road Ahead

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Diesel Fuel Quality - Proposed

Attributes Unit Current Bharat III To be for Metros

• Density kg/cum 820 - 860 820 - 845 820 – 860 ##

• T95% recovery deg C 370max 360max 370 ##

• Sulphur ppm 500 350 50 ^^

• Cetane Number - 48 min 51 min 48 min ## Adopt group average concept too.

^^ Encourage voluntary reduction by oil companies to help installation of tail pipe devices in older technology in-use vehicles.

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Gasoline Fuel Quality - Proposed

Attribute Unit Current Euro III To be for Metros

Sulphur ppm m 500/150 150 <50

Benzene % vol max 1 & 3 1 1 Aromatics %vol max no spec 42 No spec

Olefins %vol max no spec 18 /21 No spec Ethanol %vol max 5 Optional Optional

Also, there is need to harmonize gasoline spec on BS II & BS III with respect to density & distillation.

Mandate tail pipe devices thru retrofit in metros.

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Forward path: Critically examine Japanese Model including FQMs for appropriate inputs.

For Sustainable Mobility (safe and environment friendly transport solutions) right fuel availability across India is a must.

Mandate installation of tail pipe devices on all in-use vehicles plying in hot spots.

Segment fuels based on market needs and encourage retrofits in reducing exhaust emissions.

Emphasis only on induction of fuel efficient vehicles from 2007.

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Emission NormsEuropean Exhaust Emission Standard, 1996 -2008

Light Duty Diesel Emissions Limits ( g/Km )Pm NOx HC CO HC +NOx Test Cycle

Euro 2 -1996 0.080 - - 1.06 0.71 ECE + EUDCEuro 3 -2000 0.050 0.50 - 0.64 0.56 ECE + EUDC( I)Euro 4 -2005 0.025 0.25 - 0.50 0.30 ECE + EUDC( I)

Heavy Duty Diesel Emission Limits ( g/kWh )Pm NOx HC( iii ) CH4 CO Smoke Test Cycle

Euro 2 -1996 0.15 7.0 1.1 - 4.0 - ECE R 49Euro 3 -2000 " conventional " + advanced Diesel ( iv ) , ( v)0.10 5.0 0.66 - 2.1 0.8 ESC and ELR ( viii)Euro 3- 2000 " advanced diesel + gas ( v) 0.16 5.0 0.78 1.60 5.45 - ETC ( ix)Euro 4 -2005 all engine except gas ( vi) 0.02 3.5 0.46 - 1.50 0.5 ESC and ELR ( viii)Euro 4 -2005 all engine ( vi) 0.03 3.5 0.55 1.10 4.00 - ETC ( ix)Euro 5 -2008 all engine except gas ( vi) , ( x ) 0.02 2.0 0.46 - 1.50 0.5 ESC and ELR ( viii)Euro 5 -2008 all engine ( vi) , ( x ) 0.03 2.0 0.55 1.10 4.00 - ETC ( ix)EEV ( vii) all Engine except gas ( vi ) 0.02 2.0 0.25 - 1.50 0.15 ESC and ELR ( viii)EEV ( vii) all Engine ( vi ) 0.02 2.0 0.40 0.65 3.00 - ETC ( ix)

Emission norms for off road applications are different.

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Vehicular Emission Euro Norms

European Exhaust Emission Standard, 1996 -2008Light Duty Gasoline Emission Limits ( g/Km )

Pm NOx HC CO HC +NOx Test CycleEuro 2 -1996 - - - 2.20 0.50 ECE + EUDCEuro 3 -2000 - 0.15 0.20 2.30 - ECE + EUDC( I)Euro 4 -2005 - 0.08 0.10 1.00 - ECE + EUDC( I)

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Emission norms (2W)

Sl.no Vehicle CO HC NOx HC+ NOx PM Two wheeler (Petrol)

1. 2stroke Current (India) 2.0 2.0 2. 2stroke (Bharat 2) 1.5 1.5 3. 2stroke Current (Euro) 8 4 0.1 4. 4stroke Current (India) 5. 4stroke (Bharat 2) 6. 4stroke Current (Euro) 13 3 0.3

Figs in gm/KM

Indian two wheeler emission norms tougher than Europe and it is possible only due to perhaps better technology and use of tail pipe catalyst devices.

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India’s growth forecast

India is a fast growing economy in the region

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India’s Energy needs – A profile

Oil to continue the dominant role to fulfill India’s energy need

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Crude Oil Geographical Production

North East14%

Gujarat 18%

Mumbai High53%

Rest 13%

Tamil Nadu + AP2%

2003-04 Source Petrofed

17.68

India imports Crude oil ~ 70+MMTPA, this will be 140MTPA by 2012

0.66

4.67

6.13

4.24

Figs MMTPATotal 33.38MMTPA

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Private / JVCs Offshore

24%

OIL12%ONGC

64%

Natural Gas Recoverable ReservesSource Petrofed

6.28

34.76

13.09

Figs TCFTotal = 54.13 TCF = 1163 MMTOE

Considering R/P ratio of gas reserves, Oil dependence to continue

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Vehicular Emission Norms: Road MapCoverage Passenger cars,

LCV, and Heavy duty vehicles

2/3 wheelers

Entire Country

Bharat II – 1.4.2005 Bharat II – 1.4.2005Euro III equivalent – 1.4.2010

Euro III equivalent* – preferably from 1.4.2008 but not later than 1.4.2010

13 Major Cities:(Delhi, Mumbai, Kolkata,

Chennai, Pune, Hydrabad, Surat,

Kanpur, Ahmedabad, Bangalore,

Agra, Sholapur & Lucknow)

Bharat II -1.4.2003Euro III equivalent -1.4.2005Euro IV Equivalent* – 1.4.2010

*The schedules would be reviewed in end 2006

No forward path given for in-use vehicles as well retiring policy

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Cat devices reduce tail pipe emission - HC

Tail pipe devices facilitate Euro II engine / vehicle technology with Euro II gasoline to comply with Euro III norms.

Source: Mico

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Cat devices reduce tail pipe emission - CO

Tail pipe devices facilitate Euro II engine / vehicle technology with Euro II gasoline to comply with Euro IV norms.

Source: Mico

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Emission test –Total Aldehyde (2W)

Aldehyde showed increase with Ethanol in blend.