Cleaner Fuels for Asia: The Importance of National Roadmaps

EXECUTIVE SUMMARY

Air pollution continues to pose a significant threat to the environment and the health and quality
of life of Asia’s urban population. The World Health Organization (WHO) has estimated that
more than 530,000 premature deaths in Asia are due to urban air pollution. Motor vehicles,
including passenger cars, motorcycles, scooters, and heavy-duty buses and trucks, are almost
always a major source of this air pollution in Asian cities. Key emissions from motor vehicles
include carbon monoxide (CO), particulate matter (PM), nitrogen oxides (NOX), and volatile
organic compounds including unburned hydrocarbons (HC). Emissions of these pollutants
depend a great deal on the quality of the fuels used, the engine technology, and the emission
control devices used on vehicles.

Vehicle emissions in many Asian countries are expected to increase over the next few decades,
as the vehicle population increases. If no action is taken to clean up fuels and vehicles, urban
air quality will continue to decline. Reducing emissions from motor vehicles depends upon
introducing cleaner fuels for the advanced emission control technologies that require these
cleaner fuels. A key first step has been the worldwide drive to eliminate lead in gasoline, which
has resulted in more than 90% of the world’s gasoline becoming lead-free. It is now time to
address all fuel issues, including sulfur in fuel, additives, and other fuel components.

A Road Map for Cleaner Fuels and Vehicles in Asia is designed to provide decision makers with
up-to-date information on how to clean up fuels in Asia by developing their own road maps. This
regional road map discusses the interaction between fuels and vehicle technologies and the
approaches that Asian refineries can take to produce cleaner fuels, and it recommends next
steps. The following are among the key conclusions drawn from extensive study.

(i) Clean fuels are essential. Pollution control experts worldwide have come to
realize over the past 30 years that cleaner fuels are a critical component of an
effective clean air strategy. In recent years, this understanding of the critical role
of fuels deepened and spread to most regions of the world. Fuel quality is now
seen as not only essential for directly eliminating or reducing pollutants such as
lead, but also as a precondition for introducing many important pollution control
technologies (e.g., the lowering of sulfur content to enable use of diesel
particulate filters). Further, one critical advantage of cleaner fuels has emerged—
its rapid impact on both new and existing vehicles. For example, tighter new
vehicle standards can take 10 or more years to be fully effective, but the removal
of lead in gasoline in Asia has reduced lead emissions from all vehicles
immediately.

(ii) A systems approach is essential. Fuels and vehicles are parts of an integrated
system and must be addressed together. The main benefits of reducing
emissions will be realized through the coupling of cleaner fuels with advanced
emission control devices.

(iii) Fuel quality and vehicle emission standards should be regulated together.
Because most Asian countries have adopted European vehicle (Euro) emission
standards, European fuel parameters are an important reference point, especially
as the fuel quality and emission standards in Europe represent an integrated
approach to reducing air pollution from the transportation sector.

(iv) Reducing sulfur is essential. Once lead has been removed, sulfur levels in
both gasoline and diesel fuels are the primary fuel parameter to be addressed in
developing a country’s fuel road map. Reducing sulfur in fuels is a key measure
in reducing air pollution from motor vehicles. High sulfur levels reduce the
Road Map for Cleaner Fuels and Vehicles in Asia
effectiveness of advanced three-way catalysts for gasoline vehicles and clog
particulate filters in diesel vehicles. Almost all Asian countries will be adopting
increasingly stricter Euro emission standards, which require reduced sulfur fuels,
with an ultimate goal of 50 ppm or less sulfur in diesel and gasoline.

(v) The benefits of reducing sulfur are clear. Extensive studies in both developed
and developing countries, including the United States (US), Mexico, and the
People’s Republic of China (PRC), have estimated that the economic benefits of
an integrated system of clean fuels and vehicles far outweigh the costs. The
estimated benefit cost ratios of these programs are 15:1 in the United States, and
20:1 in the PRC.

(vi) Cleaner fuels are cost-effective. The incremental costs of meeting the
recommended level of fuel sulfur in Asia average 0.2–0.8 US cents per liter for
gasoline and 0.5–0.8 US cents per liter for diesel. Further reductions to 10 ppm
or below would add about 0.6 US cents per liter to the cost of diesel fuel.

(vii) Current refinery expansion creates a window of opportunity. The increasing
demand for transportation fuels in Asia is resulting in the construction of new
refineries, and the upgrading or expanding of existing refineries in the region,
thereby creating a window of opportunity to produce the clean fuels necessary for
reducing emissions.

(viii) There are no technical obstacles to produce cleaner fuels in Asia. The
refining technology needed to produce cleaner fuels that meet Euro 4 or
equivalent standards is well understood and has been successfully implemented
in the United States and Europe.

(ix) Enhancing octane requires careful consideration. Prominent health experts
have raised serious concerns regarding the potential adverse health effects of
metallic additives such as methylcyclopentadienyl manganese tricarbonyl (MMT)
and ferrocene, along with their potential adverse impacts on vehicle emissions
and emission control system components. Therefore, the environmentally
responsible approach for Asian countries is to apply the precautionary principle
for these metallic additives and to not use them until and unless the scientific and
health studies show that they are safe. Other additives, such as ethanol, methyl
tertiary-butyl ether (MTBE), ethyl tertiary-butyl ether (ETBE), and tertiary-amyl
methyl ether (TAME), have not been shown to cause significant health effects.
Longer-term solutions applied by many refineries to meet the gasoline octane
requirements are capital investments in enhanced refining capacity and blendstock
selection, and the use of certain oxygenates.

(x) Taxing policy and other incentives are effective. Experience worldwide
indicates that governments can accelerate the introduction of cleaner fuels and
their uptake in the fuels market through a balanced and thoughtful combination of
tax and pricing policies.

(xi) Fuel adulteration must be prevented. Whatever fuel specifications are adopted
in Asia, it is important to have routine monitoring at the pump and along the
distribution chain to ensure that the actual fuels in the marketplace meet the
required specifications. Penalties should be imposed if limits are not achieved.

(xii) All stakeholders should be involved in making decisions. Decisions on the
introduction of cleaner fuels should include a dialogue among all stakeholders,
including environmental and public health officials, the oil refining sector, vehicle
and engine manufacturers, and ministries concerned with oil pricing and taxation.

(xiii) It is important to raise awareness about air pollution and vehicle emissions.
Intensified awareness-raising at the national and subnational levels is important
Road Map for Cleaner Fuels and Vehicles in Asia
for making the priority of cleaner fuels understood. Efforts in this regard should
focus on both decision makers and the general public.