Achieving Clean Air and Clean Fuel through MTBE Dr. Graeme Wallace European Fuel Oxygenates Association Clean Fuels & MTBE Workshop Doha, 23rd April 2013

Agenda Introduction European Air Quality History of EU Fuel Quality Standards Ether use in Europe Benefits of MTBE Conclusions

European Fuel Oxygenates Association Founded in 1985 11 members; representing the majority of European ether capacity Non-profit, technical organisation The European Fuel Oxygenates Association (EFOA) is a sector group of CEFIC, the European Chemical Industry Council EFOA is dedicated to the promotion of ethers as fuel components towards a cleaner and sustainable future. EFOA is recognised by the European Commission as a stakeholder on fuel quality and biofuels

Agenda Introduction European Air Quality History of EU Fuel Quality Standards Ether use in Europe Benefits of MTBE Conclusions

European Air Quality Improvements

Over 20 Years of Air Quality Efforts - Auto/Fuel Directives Objective: reach EU urban air quality standards through fuel and vehicle specifications Two parallel directives initiated in 1992, adopted in 1998 and implemented from 2000 One directive setting fuel specifications, another setting car emission standards for new vehicles Gasoline specifications: “undesirable” components/properties have been progressively reduced or removed Lead Sulphur Benzene Volatility Now the focus is on reducing greenhouse gases/ CO2

European Emission Standards for Passenger Cars, g/km Tier Date CO THC NMHC NOx HC+NOx PM P*** Diesel Euro 1† July 1992 2.72 (3.16) - 0.97 (1.13) 0.14 (0.18) Euro 2 January 1996 1.0 0.7 0.08 Euro 3 January 2000 0.64 0.50 0.56 0.05 Euro 4 January 2005 0.25 0.30 0.025 Euro 5 September 2009 0.180 0.230 0.005 Euro 6 (future) September 2014 0.080 0.170 Gasoline 2.2 0.5 2.3 0.20 0.15 0.10 0.068 0.060 0.005** * Before Euro 5, passenger vehicles > 2500 kg were type approved as light commercial vehicles N1-I ** Applies only to vehicles with direct injection engines *** A number standard is to be defined as soon as possible and at the latest upon entry into force of Euro 6 † Values in brackets are conformity of production (COP) limits

Agenda Introduction European Air Quality History of EU Fuel Quality Standards Ether use in Europe Benefits of MTBE Conclusions

Changing EU Fuel Quality Premium Unleaded Petrol (EN228) Year 1993 1995 2000 2005 2010 Sulphur ppm m/m max 1000 500 150 50/10 10 Benzene % v/v max 5 1 Aromatics % v/v max 42 35 Olefins %v/v max 18 Oxygen % m/m max 2.5 2.7 3.7 RVP (Summer) kPa max 80 60 60(+) E100 % v/v min 40(s)/43(w) 46 FBP Deg C max 215 210

Gasoline in Europe Directive 2009/30/EC No change to RON & MON specs Reduction in life cycle GHG emissions 10ppm sulphur limit Increases oxygen content to 3.7% m/m Allows use of up to 22% v/v fuel ethers Sets MMT limit Member States may apply for volatility derogation if using ethanol Subject to Commission approval Demonstration of no negative environmental impact

Reduction in CO2 Emissions Renewable Energy Directive (2009/28/EC) Mandatory national targets designed to deliver at least 20% share of EU energy from renewable sources in 2020 Mandatory 10% renewables in transport by 2020 Minimum GHG savings from biofuels of 35% Savings increase to 50% in 2017 for existing plants and to 60% for new installations Decision required on Indirect land use change (ILUC) New targets for 2030 under discussion Fuel Quality Directive (2009/30/EC) Gradual reduction in life cycle GHG emissions by 10% (per unit of energy) by 2020 versus fuel baseline standard Mandatory: 6% by end 2020 (sustainable biofuels, alternative fuels, reduction in flaring and venting at production sites) Optional Intermediate targets 2% by 2014 4% by 2017 Indicative: further 2% by end 2020 (electric vehicles, clean Carbon Capture & Storage) Indicative: further 2% by end 2020 (emissions trading)

Agenda Introduction European Fuels Market History of EU Fuel Quality Standards Ether use in Europe Benefits of Ethers REACH Conclusions

Gasoline consumption has declined by 25% Due to lower tax on diesel 13

The European Gasoline Market Looks Simple Consumption in 2009 By Grade Source: European Commission

But National Bio-Blending Obligations Create Fragmentation NORWAY 5,0%(v/v) Parallel Targets Petrol & Gasoil FINLAND 6,0%(e/e) Cumulative Petrol + Gasoil UNITED KINGDOM 4,5%(v/v) Cumulative Petrol + Gasoil DENMARK 5,75%(e/e) Cumulative Petrol + Gasoil LATVIA 5,0%(e/e) Parallel Targets Petrol & Gasoil NETHERLANDS 5,25%(e/e) Gasoil 3,5%(e/e) Petrol 3,5%(e/e) IRELAND 4,0%(v/v) Cumulative Petrol + Gasoil POLAND 6,2%(e/e) Cumulative Petrol + Gasoil BELGIUM 4,0%(e/e) Parallel Targets Petrol & Gasoil GERMANY 6,25%(e/e) Gasoil 4,4%(e/e) Petrol 2,8%(e/e) SLOVAKIA 5,75%(v/v) Gasoil 5,2%(v/v) Petrol 3,1%(v/v) CZECH REPUBLIC Gasoil 6,0%(v/v) Petrol 4,1%(v/v) FRANCE 7,0%(e/e) Parallel Targets Petrol & Gasoil AUSTRIA Gasoil 6,3%(e/e) Petrol 3,4%(e/e) PORTUGAL 5,0%(e/e) Gasoil 6,75%(e/e) Petrol 2,5% (e/e) HUNGARY 4,0%(v/v) Parallel Targets Petrol & Gasoil ROMANIA Gasoil 5.0%(v/v) Petrol 4.0%(v/v) BULGARIA Gasoil 4.0%(v/v) Petrol 2.0%(v/v) SPAIN 6,5% (e/e) Gasoil 7,0%(e/e) Petrol 4,10% (e/e) ITALY 4.5%(e/e) Cumulative Petrol + Gasoil

European History of Fuel Ethers MTBE first used in commercial gasoline in Italy in 1973 Snamprogetti (Italy) patented MTBE production process in 1974 (1976 in US) Europe patents further process improvements Hüls, Germany (1980) IFP, France (1981) In 1992 first use of ETBE in gasoline in France Large scale production of TAME began in 1995 in Finland First TAEE unit came on-stream in Germany in 2006

Fuel-Ethers Consumption EU 2011 ~4.5 Million Tons TAME (4%) ETBE (50%) MTBE* (46%) * Some is 2nd generation biofuel produced from methanol from waste Source: Fuel Ether Reach Consortium, EFOA

Fuel-Ethers Content in EU27 Gasoline Source: EU Commission «2009 EU Fuel Quality Monitoring» Report

Fuel-Ethers Content in EU Gasoline: 2006 EU25[1] Ethers Blending Average = 4.7% [1] For LU and MT used 2005 figures as no data provided, Bulgaria and Romania did not participate in 2006 Source: Elaboration from: “EU Fuel Quality Monitoring – Report 2006”

Agenda Introduction European Air Quality History of EU Fuel Quality Standards Ether use in Europe Benefits of MTBE Conclusions

Excellent Octane Improvers Have high octane rating and low volatility, enabling substitution of other octane components such as aromatics                    Motor Octane Number Research Octane Number Blending Vapour Pressure (kPa) Boiling point (°C) ETBE MTBE TAME 102 101 99 118 118 109 28 55 10 72 55 86 Benzene Toluene P-Xylene Ethanol 88 93 98 96 106 114 120 130 11 4 1 138* 80 111 138 78 EU Petrol 82-88 92-98 60-100 26-230 *10% in petrol; 200kPa at 5% in petrol: derived from Abengoa data

Improve Air Quality Reduce emissions from all types of gasoline vehicles, regardless of their emission-control technology How? How much? Direct effect Oxygen allows more complete fuel combustion CO: Reduces emissions by same % as content in petrol Each 1 or 2% of MTBE typically lead to a 1% reduction in total HC emissions it is estimated that for each 1 % of MTBE there is an equivalent percentage reduction in benzene emissions, both evaporative and exhaust. Indirect effect High octane and other properties allow to dilute other, less desirable, gasoline pool components Magnitude depends on MTBE content, vehicle emissions control technology, type/age of engine, driving cycle MTBE reduces direct VOCs' Ozone Forming Potential (OFP); generates about half of the ozone of typical gasoline hydrocarbons and one-tenth that of aromatics and contributes to lower volatility

Best Environmental Outlet for C4’s FCC units & steam crackers produce mixed (linear and iso) C4 stream as co-product Direct use in gasoline is greatly reduced because of: High vapour pressure High atmospheric reactivity Ethers best environmental outlet

Best Environmental Outlet for C4’s For a refinery integrated with petrochemical industry most economic approach is; Convert isobutylene into a fuel ether Use linear butylenes to make alkylate Both alkylate and fuel ethers are clean, high octane, non-aromatic components Ethers superior octane performance offers refiner better blending flexibility

Compatible California State Water Resources Control Board’s Advisory Panel literature assessment for the period 1975-97 No documented materials incompatibility issues for retail stations dispensing reformulated fuels containing ethers up to 15% v/v MTBE At 15% in gasoline, the effects of MTBE (on polymer compatibility) do not compromise equipment integrity

Problem-free for Existing Car Park Car makers current and draft worldwide fuel charters state On the basis of emissions benefits, vehicle performance and existing regulations when oxygenates are used ethers are preferred Ethers have been successfully used in Europe for 30 years at levels up to 15%

European Approach to Chemicals European policy focuses on science and facts relating to health and environmental risks Previously with the Existing Substances Regulation (EEC) 793/93 Now with REACH (EEC) 1907/2006

Ethers: fit as gasoline components MTBE: European Risk Assessment completed 2001 No risks to human health, consumers and atmosphere expected Specific measures to limit the risks in relation to the aesthetic quality of ground water (taste and odour) Proposals mainly dealing with the construction and operation of gasoline underground storage and distribution facilities at service stations

Ethers: fit as gasoline components ETBE: comprehensive physical-chemical, environmental and health data set supplied to EU Same conclusions as for MTBE TAME: European Risk Assessment completed 2008 Similar conclusions to MTBE MTBE will be assessed in 2014 as part of the on-going REACH community rolling action plan

Agenda Introduction European Air Quality History of EU Fuel Quality Standards Ether use in Europe Benefits of MTBE Conclusions

Conclusions European approach to improving air quality by linking vehicle emissions and fuel specifications is being adopted around the world European regulatoryapproach to fuel ethers based on sound science and control of infrastructure has proven successful Due to their technical benefits fuel ethers continue to represent the majority of oxygenates used in Europe despite the rise of biofuels