Is India Ready to Embrace Euro VI by 2020?
- By Rakesh Roy

The recent trial phase of odd-even formula for vehicles running in Delhi afterward the Honourable Delhi High Court slammed the Union & State governments after the recent report by the World Health Organization (WHO) which has observed that - Delhi's air ranks among the worst in the world, has sparked much needed debate, particularly on vehicular emission management practices in the country. The situation is not just limited to the capital, but most of the metropolitan cities and now to a significant extent even the B tier cities are facing this issue. In December 2014, WHO had reported that in addition to Delhi, 12 other cities of India featured among the world's top 20 cities with the highest annual average particulate matter (PM) levels. The report also claimed India to be at number 155 in an environmental quality survey conducted by the World Bank across 172 countries, and unfortunately rated last in terms of air pollution. This is crucial, since the pollutants such as particulate matter (PM) and Oxides of Nitrogen (NOx) form vehicular exhaust are believed to be the major pollutants of the air quality in Indian cities.

Over the last decade, many Indian cities have undergone rapid urbanisation and witnessed significant increase in number of motor vehicles which has led to an increase in vehicular pollution, a matter of great concern!! Recently, the Union government has announced developing 100 smart cities across the country, which willfurther add to the number of vehicles and add to the pollution woes.

The government has benchmarked the vehicular emission standards and dened maximum permissible limits for pollutants such as PM and Oxides of Nitrogen (NOx) to match the European (Euro) Standards since 2000. Currently, for light and heavy-duty vehicles, India follows the Bharat Stage (BS) IV standards (based on Euro 4) in major cities and BS-III (based on Euro 3) in the rest of India.

In global comparison, implementation of best-in-class emission norms presently - Euro V & VI, where many Western & European countries and even its Asian counterpart Japan and China have already implemented Euro V & VI (equivalent to BS V & VI) in their major cities, India is still far behind and has a long way to go. Considering a long-term air quality improvement plan, a robust commitment requires to integrating clean transport strategies that fundamentally change both fuel and technology currently in use.

The 'Auto Fuel & Vision Policy 2025' of India, proposed rolling out nationwide BS-IV, BS-V, and BS-VI (based on Euro IV, Euro V, and Euro VI) over a staged timeline by 2017, 2020, and 2024 respectively. However, with the increasing air pollution in India, the latest government's decision to skip Bharat Stage V (equivalent to Euro V) emission diesel & petrol fuel norms to advance the standard for cleaner motor vehicles and leapfrog to Bharat Stage-VI (equivalent to Euro VI) emission norms countrywide by April 2020 can be perhaps be seen as India's boldest move to curb air pollution.

Compliance with Euro VI (equivalent to BS VI) in the stipulated timeframe would require adherence from two key sets of stakeholders - Oil Refineries and Automobile Manufacturers. Refineries are required to manufacture, test and supply fuel meeting the prescribed norms of Euro VI and Automobile Manufacturers will have to produce and sell vehicles with the requisite engine emission control technologies and engine compatibility. Changes in the Refining Business and Implementation of Euro VI by 2020
The changing global oil & gas business environment has mandated Indian refineries to switch over to cheaper crudes, which in general are heavy and contain high sulphur to keep higher refining margins. Also refineries have to comply with the stricter regulations and fuel compliances like BS IV & V in the stipulated time earlier fixed by the government. For enhancing the processing capability of such crudes and comply with the fuel compliances, huge investments have been made in some refineries and are required in others for upgrading bottom of the barrel to maximise distillate yields. Amidst this situation, switching over to 100 percent Bharat Stage VI (Euro VI) quality by 2020 will result in further technological intervention /innovations to meet the stipulated auto fuel quality. Indian refiners need to invest USD 4.5 billion (300 billion) to produce Euro VI complaint fuel, according to Nitin Gadkari, Union Transport Minister.

B K Datta: BPCL is fully geared up to produce 100 percent BS VI auto fuels as per the government plans. All BPCL group refineries have completed the required configuration studies and finalised the technologies /projects which are required to be implemented for production of BS VI auto fuels. Some of the projects are already under execution and necessary approvals for two new projects will be btained by 12th February 2016.

BPCL group refineries i.e. Mumbai, Kochi, subsidiary Numaligarh and JV refinery at Bina are expected to invest approx 5,000 crores to produce BS VI auto fuels in addition to approx 10,000 crores already being spent for BS IV auto fuels production. All new projects will be completed in a span of maximum 3 years after obtaining environment clearance which means all BPCL refineries will be fully ready to produce 100 percent BS VI auto fuels by the end of the year 2019. Skills available in our Refineries are fully capable to adopt the new technologies for production of BS VI auto fuels.

Mumbai Refinery will install new Gasoline Hydro-treater Unit (GTU) at an estimated Capex of 554 crores for BS VI MS and replace the catalyst in DHDS unit at a cost of approx 100 crores for BS VI HSD production.

Kochi Refinery will set up new NSU, NHT/CCR and ISOM units at a capex of Rs 3325 crores for production of BS VI MS. Units being installed as part of ongoing Integrated Refinery Expansion Project (IREP) at Kochi will be capable of producing 100 per cent BS VI HSD on completion of new MS units.

BPCL's joint venture refinery at Bina (BORL) has taken fuel quality upgradation to BS VI level for existing refinery capacity also as part of debottlenecking project to increase capacity from 6 to 7.8 MMT with total capex of Rs 3075 crores. Project is expected to be completed during the year 2018.

Numaligarh Refinery (NRL) is installing a new DHT unit which is expected to be completed by March 2018. With minor debottlenecking of existing MS block, NRL will be able to produce 100 per cent BS VI auto fuels.

H Kumar: Mangalore Refinery, a subsidiary of Oil and Natural Gas Corporation Limited (ONGC), with 15 MMTPA Refinery capacity and Nelson Refinery complexity index of around 10.0 is a blend of state-of-the -art technologies and a motivated work force.

MRPL's Phase I - Refinery, with capacity of 3.69 MMTPA was commissioned during March 1996, and Phase - II Refinery of 6 MMTPA capacity during November 1999. MRPL has further expanded its capacity to 15 MMTPA in March 2012 under the Phase-III refinery expansion cum up-gradation project which also aims at bottoms upgradation and production of petrochemical feedstocks. All the units of the Phase-3 expansion project have been commissioned, the last unit PFCCU commissioned in August-2014. In addition, MRPL has also set up a 0.44 MMTPA Polypropylene Unit and a Single Point Mooring (SPM) facility off the Mangalore Coast. The commercial production from the Polypropylene unit was commenced from 16th June 2015 onwards. The total cost of the projects undertaken by MRPL was at around Rs 15,000 Cr.

With the above expansion MRPL today can produce entire quantity of HSD and MS, compliant to the BS IV grade specification. Notably MRPL was also one of the first in the country to make this quality. It is presently supplying this quality as per the demand of Oil Marketing Companies (OMC).

Earlier Ministry had constituted an Expert Committee on 19.12.2012 under the chairmanship of Dr Saumitra Chaudhary, Member, Planning Commission for drafting the Auto Fuel Vision & Policy, 2015. The Committee has, interalia, been entrusted to recommended roadmap for Auto Fuel quality till 2025 for the country. The Committee submitted its report on 02.05.2014. As per recommendations of the Committee, Ministry has notified vide letter dated 19.1.2015 a schedule for supply of BS IV fuels in the entire country by 1.4.2017 in a phased manner. Further, Ministry has instructed OMCs to prepare for introduction of BS-VI fuels w.e.f. 2020.

MRPL can make certain quantity of BS-VI diesel today also with the present configuration but the entire quality can be converted to BS VI with certain changes in catalysts in the diesel treatment units. For meeting BS VI MS, MRPL would need to treat some of its MS blend pool streams for which some additional hardware has been envisaged. MRPL has already applied for the statutory clearances for the project to commence work. The project schedule has been worked out and the target is kept to produce BS VI grades HSD and MS before 2020, meeting the product specification as mandated by the Auto fuel Policy 2025.

The talent pool and skill set of MRPLís workforce have been nurtured by way of performance oriented meritocratic systems and a healthy work culture. The management is focused to keep the refinery nimble and alert to changes in the environment and to encash any opportunity presented by changes in the global hydrocarbon scenario.

The changes in the oil sector are unprecedented by its speed and depth. Given the able guidance of the political leadership in the country, the refining industry is coaxed to be become adept to the ground shaking changes. Emphasis on cleaner fuels and leap frogging to BS VI instead of BS V are certain signals of this policy framework. It can be summarized that the leadership of the country and management are in perfect synch to understand the policy objective and MRPL is committed to achieve the set objectives.

P Padmanabhan: NRL has always been proactive in adopting green technology and its products have been in compliance with specified norms. At present, the Refinery is producing its entire quantity of MS conforming to BS-IV grade along with limited quantity of HSD conforming to BS-IV grade.

Moreover, the Company is taking actions to meet requirements of Auto Fuel Policy and will be ready to produce HSD and MS with BS-VI specifications by 2020. We are currently setting up a DHDT (Diesel Hydrotreater) of 0.7 MMTPA capacity at a cost of 1,031 crores to produce HSD with BS-IV specification. The plant will be commissioned in the year 2018. The same plant with minor modification will be capable of producing HSD to meet BS-VI standards as specified by 2020.

Numaligarh Refinery is currently producing Motor Spirit (MS) with BS-IV specification in its MS plant. For production of BS-VI grade of MS, the existing plant will require minor de-bottlenecking. These modifications will be completed well in time to produce MS which meets BS VI standards as specified by 2020.

NRL's present manpower is highly skilled and capable of operating the above mentioned plant. Required functional training and recruitment will be carried out as and when required to fill the gap, if any.

Fall in Line: Automakers Agree to Comply Euro VI by 2020 Amidst the rising concerns portrayed by the Indian automotive industry, the government has decided to stand by its decision of pushing forwards the date of implementation of Bharat Stage VI (Euro VI) emission norms to 2020. According to Automotive Industry, the change to BS-VI is reported to cost the entire industry and its supporting industries, anywhere between 70,000 crore-90,000 crore.

Vinod Dasari: To implement Euro VI emissions norm on the stipulated time by 2020 will be extremely challenging task but as an industry in whole, we will work a way so that all new models will come with BS VI from 2020. As the capacity of Ashok Leyland, our company will invest whatever resources required to comply with regulations.

Shekar Viswanathan: The current levels of pollution in major cities such as Delhi and Mumbai have jackknifed the government into action. Very recently the government's legal representative committed before the Honorable Supreme Court that the government will make all efforts to supply Bharat Stage 6 (equivalent to Euro VI) fuel by 2020. Currently the government supplies a mix of Bharat Stage 3 and Bharat Stage 4 fuel across the country and has again reconfirmed that Bharat Stage 4 fuel will be available pan India by 2017. So far so good but it affects the players - the oil industry, the auto industry, the consumer and the government in different ways.

But first the levels of pollution - if one examines the daily Plume report which gives on a real time basis the extent of pollution in different cities New Delhi and Mumbai are the worst cities to live in. The Plume index which captures all pollutants and arrives at an index shows the 2 Indian cities to be above 250, that is Extreme Pollution, while an equally densely populated city like Tokyo shows the index to be at a benign 25 and denotes the pollution level as Fresh Air.

Other fuels such as gasoline and CNG which do not spew as much PM 2.5 as diesel nevertheless give out other pollutants such as carbon monoxide and carbon dioxide in greater quantities. There is therefore much merit in moving quickly to Bharat Stage 5 and Bharat Stage 6 fuels which drastically reduces the extent of pollutants and in the case of diesel reduces particulate matter (PM) & enables it to come on par with gasoline.

While the oil industry has tentatively found the financial resources to make available Bharat Stage 6 fuel by 2020 it is going to be a tough road ahead for them to implement this project given the short lead time to make compatible the tank farms and product pipelines to the newer fuel. In the past too when there was an upgradation sequentially from BS-I to BS-IV, the oil industry has been unable to meet the targeted timelines.

For the auto industry in particular, this will prove to be a difficult task in adapting the engines and drive trains to the new Bharat Stage 6 fuel particularly since the country will be leapfrogging the Bharat Stage 5 fuel availability. Cars need to be tuned to an India driving cycle and it is only through a process of iteration can vehicles be optimised in fuel efficiency and emission levels. It must be recognised that cars in India need to be designed in such a manner that it accommodates the diesel particulate filter (DPF) and the selective catalytic reducer (SCR).

This may violate length norms which forms the basis of excise taxation of vehicles in India. So as a result if cars cannot meet the sub 4 meter category then such cars would implicitly get taxed at an excise rate of 24 pct instead of the more benign 12 pct.

The impact on the consumer is going to be financial particularly as he has to pay for cleaner fuel (BS 6). The cost of such vehicles would also tend to increase though it is very uncertain by how much this would increase. But at the end of the day even with advent of Bharat Stage 6 fuel would pollution levels come down? The answer is NO unless the government mandates a scrapping policy that will effectively remove Bharat Stage 1&2 and Bharat Stage 3 vehicles off the roads in a systematic manner.

It must not be forgotten that vehicles account for less than 20 pct of PM 2.5 pollutant the government must focus on reducing the remainder of the PM 2.5 pollutant from non-vehicular sources.

Euro VI by 2020 - A Great Step Forward: CSE CSE welcomes the landmark decision of the Union government to skip Euro V emissions standards and leapfrog to Euro VI standards in 2020. With this, India will take the first step towards fuel-neutral standards that will lower the gap between emissions standards for diesel and petrol vehicles. CSE research shows that this step was urgently required to address the concerns over emissions from the current diesel technology. As India leaps from Bharat Stage IV to Euro VI, particulate emissions from diesel cars will be reduced by 68 percent; NOx emissions can come down by 82 percent. Reduction from heavy duty vehicles will be 87 percent and 67 percent, respectively, for particulates and NOx.

We believe this is a game-changer decision and will help India leapfrog to much cleaner emissions. This is needed at a time when India is motorising very rapidly. The number of vehicles that India will add in the next decade is over twice the current vehicle stock in the country. Stringent emissions standards are needed to reduce the pollution impact of this immense motorisation. The current emissions standards of Bharat Stage IV in a few cities and Bharat Stage III in the rest of the country are 10 to 15 years behind the norms followed by Europe. These outdated emissions standards allow diesel vehicles to emit several times more nitrogen oxides and particulate matter compared to petrol vehicles. The government's latest move will reduce the time lag with Europe to just six years in 2020.

It is unfortunate that India has already lost a lot of time in announcing the next level of emissions standards roadmap. After implementing Bharat Stage IV emissions standards and Bharat Stage III in 2010, India had virtually remained without any further roadmaps for improvement in emissions from vehicles. This also means that until 2020 -- other than expanding the current Bharat Stage IV emissions standards -- India would not have moved forward. All this while, motorisation would continue to explode based on 10 -15 year old emissions control measures. It is noteworthy that the decision to leapfrog to Euro VI has been possible because Indian refineries have agreed to supply Euro VI-compliant fuel by 2020. This paves the way for introducing advanced emissions control systems in vehicles that are needed to clean up the exhaust more efficiently. Only 10 ppm sulphur fuels will allow use of these advanced systems.

CSE research says the immediate next step should be to ensure that the current Bharat Stage IV emissions standards in force in Delhi and a few other cities is made uniform nation-wide by March 2016. This is urgently needed to cut emissions from Bharat Stage III trucks by 80 percent. Alongside, it is important to restrain diesel cars as diesel exhaust is extremely toxic. As India now gears up to bring in a new genre of emissions control technology, it should also have in-use compliance regulations in place to ensure that these systems work optimally throughout the useful life of vehicles on our roads, and manufacturers are held accountable - as it the global good practice.

While welcoming this proactive move by Central government, CSE hopes that the automobile industry will enable scheduled implementation of this decision to help reduce public health risk in the country.