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Should the refineries fail to get extra funding, they may not be able to supply Euro 5-equivalent fuel until the end of 2024, according to the draft. Photo: Ramesh Pathania/Mint
Should the refineries fail to get extra funding, they may not be able to supply Euro 5-equivalent fuel until the end of 2024, according to the draft. Photo: Ramesh Pathania/Mint

India may upgrade fuel emission standards by 2021, recommends panel

Deadline suggested by auto fuel policy panel is contingent on state-run refiners getting funds needed to upgrade their facilities

New Delhi: India may upgrade nationwide fuel standards to eliminate cancer-causing particle emissions from vehicular exhaust by 2021, nine years behind other developing countries such as Turkey and Brazil.

The country’s pumps may start selling fuels of the same quality currently sold in Europe by April 2021, according to a draft copy of recommendations by the oil ministry’s auto fuel policy panel, obtained by Bloomberg News. The deadline is contingent on state-run refiners such as Indian Oil Corp. Ltd getting the funds needed to upgrade their facilities, according to the draft.

“There are real constraints, to upgrading emission standards," said Saumitra Chaudhuri, head of the panel and a member of the Planning Commission, adding that the recommendations are a working draft and not meant to be public yet. “Our refiners are not the most profitable in the world."

State-run refiners lose money on diesel, which is subsidized to keep inflation in check. That dissuades them from making the investment needed to produce cleaner fuels. While both Prime Minister Manmohan Singh’s Congress Party and the main opposition Bharatiya Janata Party (BJP) acknowledge the need to reduce fuel subsidies, refiners refrained from raising diesel prices this week and referred the decision to the country’s election commission, which will conduct national polls starting next week.

In the time it will take India to upgrade its emission norms, annual sales of light vehicles are projected to almost triple, making it the world’s biggest market behind the US and China, according to KPMG.

Deadly pollutant

The World Health Organization said last week that air pollution causes more deaths worldwide than AIDS, diabetes and road injuries combined. It identified an airborne pollutant, PM2.5, as one of the most dangerous.

In India, which suffers from some of the world’s worst air pollution, PM2.5 emissions are emitted by diesel vehicles, whose tailpipe emissions can carry 10 times the carcinogenic particles found in gasoline exhaust. Diesel car sales in India are surging because the subsidized fuel is 23% cheaper than petrol and more efficient on a per-kilometer basis.

The auto fuel policy committee’s draft target would put India 15 years behind the US. “Fuel quality in Beijing is on par with Europe, while the rest of China is expected to switch over by January 2018," said Anup Bandivadekar, India program director at the not-for-profit International Council on Clean Transportation.

“The timeline will essentially put India on par with Vietnam," he said.

Sulfur content

Eliminating PM2.5 emissions requires upgrading to Euro 5- equivalent fuel that cuts sulfur content to a level that allows diesel particulate filters to be fitted to cars. India’s Bharat V standard would require all diesel passenger cars to have those, though diesel trucks and buses would be exempt until the next jump in standards.

Should the refineries fail to get extra funding, they may not be able to supply Euro 5-equivalent fuel until the end of 2024, according to the draft.

“Upgrading one refinery to make Euro 5-equivalent fuel will cost 2,500 crore," S. Roy Choudhury, the former chairman of state-run refiner Hindustan Petroleum Corp. Ltd, said before he retired in February. India has about 20 state-owned refineries, according to data compiled by Bloomberg.

The committee will make a final recommendation to the government on auto fuel policy in mid-April, Chaudhuri said. Bloomberg

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