Swed Gov’t cost ben Summary (I) The proposed levels of sulphur in EU petrol for 2000 will make it difficult to further reduce automobile emissions with currently available technologies Sulphur has a negative effect on the performance of 3-way catalytic converters and thereby increases the emissions of CO, HC (hydrocarbons) and NOx from petrol driven automobiles - however, the catalytic converter returns to full efficiency if sulphur content is subsequently reduced The proposed standard of 200 ppm sulphur in petrol will: inhibit the introduction of currently available gasoline direct injection (GDI) engines with systems for lean NOx reduction – it has been reported that GDI engines can reduce petrol consumption by up to 35% – GDI engines have already been introduced in Japan because current market levels of sulphur in petrol are less than 50 ppm significantly increase the emissions from vehicles which can meet California low and ultra low emission standards (LEV and ULEV) and which are currently available in Europe 1 1

Swed Gov’t cost ben Summary (II) The proposed standard of 350 ppm sulphur in diesel will inhibit the introduction of technologies to reduce emissions from diesel driven road transport The retro-fit of trucks/automobiles with currently available oxidation catalysts and filters can reduce CO and HC emissions by around 50-70% and Particle Matter (PM) emissions by over 90% - however, diesel with a sulphur content less than 75 ppm is required The introduction of DeNOx catalysts under current development, which have the potential of reducing NOx emissions by at least 30%, presently require a diesel with a sulphur content less than 50ppm 1 1

Swed Gov’t cost ben Summary (III) On the short term, there are environmental and human health benefits which can be gained if there is a further reduction of sulphur levels in road transport fuels Reducing sulphur limits in petrol from 200 to 50 ppm will further reduce CO, HC and NOx emissions by around 3-5% Reducing sulphur limits in diesel from 350 to 50 ppm will further reduce PM emissions by 5-8 % from Heavy Duty Vehicles (HDV) 1 1 According to estimates of unit economic damage(ECU per tonne emitted) derived in other EU studies, the cost benefit in terms of improved human health and reduced building damage are estimated between million ECUs a year

Swed Gov’t cost ben Sulphur’s Affect on Emissions - Automobiles (petrol) The Auto/Oil study concluded that sulphur influences HC, CO and NOx emissions, but has no effect on CO 2 emissions or fuel consumption The effects are linear and can be predicted well A reduction of sulphur from 382 to 18 ppm in petrol (Auto/Oil test fuels) reduced emissions over the composite test cycle (cold start, city and highway driving) HC0.015 g/km or 8.6% CO0.113 g/km or 9.0% NOx0.019 g/km or 10% In an extra urban driving test cycle (warm catalyst) reductions were even larger, but there were larger vehicle to vehicle variations and a higher dependence on sulphur fuel content HC0.015 g/km or 52% CO0.067 g/km or 43% NOx0.027 g/km or 20% 2 2 Source: Auto/Oil Programme: European Programme on Emissions, Fuels and Engine Technologies

Swed Gov’t cost ben Sulphur’s Affect on Emissions - Automobiles (petrol) Sulphur fuel content effects emissions by decreasing catalyst conversion efficiencies Sulphur competes for active surface area sites on the catalyst Palladium catalysts, which are more effective in removing HC and less expensive, are more sensitive to sulphur fuel content Sulphur’s effect on catalytic efficiency is not permanent, the catalyst can return to near optimum levels once it is subjected to low sulphur fuels and higher temperatures (>700°C) There is contradictory evidence that sulphur increases the light-off temperature (i.e. the temperature at which the catalyst begins operating) 2 2 Source: Auto/Oil Programme: European Programme on Emissions, Fuels and Engine Technologies; Appendix: Sulphur in Fuels: Benefits of Sulphur Reduction; 3. Sulphur’s affect on catalyst performance

Swed Gov’t cost ben Sulphur’s Affect on Emissions - Automobiles (petrol) The proposed sulphur and other specifications were derived after a lengthy programme which was initiated in

Swed Gov’t cost ben Sulphur’s Affect on Emissions - Automobiles (petrol) Reductions in CO, HC and NOx emissions can be expected if sulphur is reduced in petrol Calculated emission reductions of CO, HC and NOx from automobiles: Composite cycle *Base emissions were calculated using the composite emission model derived from the regression analysis in the Auto/Oil program and the proposed EU parameters for petrol. Changes in emissions were calculated using the sulphur regression equations derived in the composite test cycles. 2 2

Swed Gov’t cost ben Sulphur’s Affect on Emissions - Automobiles (petrol) The impact is greatest in the extra urban driving cycle since the catalyst is warm Calculated emission reductions of CO, HC and NOx from automobiles: Extra Urban Driving Sequence (EUDC) *Base emissions were calculated using the EUDC emission model derived from the regression analysis in the Auto/Oil program and the proposed EU parameters for petrol. Changes in emissions were calculated using the sulphur regression equations derived in the EUDC test cycles. 2 2

Swed Gov’t cost ben Auto/Oil synthesised existing data and the linear relationship between sulphur content in diesel and PM emissions was determined Sulphur's Affect on Emissions - Trucks (Diesel) 2 2 sulphur fuel content ranged between 500 and 2000 ppm PM emissions ranged between g/kWh for HDV several different type of engines assumed constant fuel consumption Source: Auto/Oil Programme: European Programme on Emissions, Fuels and Engine Technologies; Appendix: Sulphur in Fuels: Benefits of Sulphur Reduction; 1. Auto/Oil and ACEA sulphur correction formulas

Swed Gov’t cost ben Sulphur’s Affect on Emissions - Trucks (Diesel) A recent draft report by ACEA* recommends that the Auto/Oil sulphur correction formula for heavy engines should be modified The Auto/Oil correction formula is only suitable for the ranges in which data was analysed - PM levels between 0.15 and 0.4 g/kWh and sulphur fuel levels between 500 and 2000 ppm Current and proposed levels in the EU are outside the range studied in the Auto/Oil programme Since October, 1996, sulphur content in diesel is regulated to 500 ppm PM emissions from HDV are currently regulated to 0.15 g/kWh (EURO II) The ACEA report contends that the Auto/Oil correction formula is not accurate enough to predict the influence of sulphur fuel content of 10 to 500 ppm on particulate levels between 0.05 and 0.15 g/kWh differences in fuel consumption need to be considered when correcting for nominal sulphur fuel content *Influence of Diesel Fuel Quality on Heavy Duty Diesel Engine Emissions, Draft Report, European Automobile Manufacturers Association 2 2

Swed Gov’t cost ben Sulphur content of fuels (ppm) Sulphur to sulphate conversion factor Cycle weighted brake specific fuel consumption (g/kWh) Particulate emissions at S 1 level (g/kWh) Sulphur’s Affect on Emissions - Trucks (Diesel) ACEA has developed a more accurate HDV sulphur correction formula to be used at sulphur levels below 500 ppm and PM emissions below 0.15 g/kWh 2 2

Swed Gov’t cost ben Sulphur’s Affect on Emissions - Trucks (Diesel) Estimates of PM reductions from HDV can vary significantly between the two models PM 2 - ACEA sulphur correction formula PM 2 - Auto/Oil sulphur correction formula S 1 - S 2 (ppm) Correction of PM emissions to sulphur content in diesel (BSFC = 270 g/kWh; PM = 0.10 g/kWh) 9% reduction in PM emissions S 2 = 10 ppm PM 2 (g/kWh) 25% reduction in PM emissions S 2 = 10 ppm 2 2

Swed Gov’t cost ben Sulphur’s Affect on Emissions - Trucks (Diesel) Using the ACEA sulphur correction formula indicates that a 2-3 times larger reduction in particle emissions can be expected by reducing sulphur levels Estimations of particle emission reductions using the Auto/Oil and ACEA sulphur correction equations (BSFC = g/kWh; PM = 0.10 g/kWh) 2 2

Swed Gov’t cost ben Sulphur’s Affect on Emissions - Trucks (Diesel) The application of the ACEA sulphur correction formula suggests a greater degree of freedom for certain engines in the NOx “Trade off”curves 2 2 I L L U S T R A T I V E Fuel Consumption, CO 2, PM (g/kWh) NOx (g/kWh) Fuel 2 - Auto/Oil Fuel 1 Fuel 2 - ACEA

Swed Gov’t cost ben It is the automotive and catalyst producers’ opinion that sulphur content greater than 50 ppm in both petrol and diesel inhibits the implementation of new technologies New Technologies in Engine Design and Pollution Abatement Devices 3 3 Technologies Reportedly Inhibited by Sulphur in Fuels Gasoline Direct Injection (GDI) engine technology Lean NOx or (DeNOx) catalysts for GDI and diesel engines Continuous Regenerating Trap (CRT) for HDV engines Filters and/or oxidation catalyst for diesel engines

Swed Gov’t cost ben New Technologies in Engine Design and Pollution Abatement Devices Commercially available GDI technology* represents a major breakthrough for greatly reducing fuel consumption in automobiles The fuel is directly injected into the cylinder, this allows for quicker and more precise control of air to fuel ratios In GDI engines pumping losses are reduced under light loads, boosting fuel economy Since the fuel supply is more precisely controlled combustion can occur at much higher air to fuel ratios (> 40:1) Since GDI engines are less susceptible to knocking, they run at higher compression ratios, this provides more torque at low- to mid - rpm ranges, this also aids fuel economy *Not considered in the technology package for determining cost effective strategies for reducing emissions from road vehicles for the year Final Report: A Cost Effective Study of the Various Measures likely to Reduce Pollutant Emissions from Road Transport for the Year 2010, Touch Ross & Co., November 1995, European Commission. 3 3

Swed Gov’t cost ben New Technologies in Engine Design and Pollution Abatement Devices However, new catalytic converter technology is needed since GDI engines produces significantly higher NOx emissions than conventional automobiles Current catalytic converter technology requires an exact air to fuel stoichiometry in order to guarantee a 99% percent reduction in HC, CO and NOx emissions. GDI and Diesel engines run at much higher air to fuel ratios Any increase in the air to fuel stoichiometry, as in diesel or GDI engine technology, inhibits the catalytic converter from reducing NOx since the higher oxygen levels will decrease CO levels While the combustion process at high air to fuel ratios produces significantly less NOx, it is the ineffectiveness of the 3-way catalytic converter to remove NOx which results in higher emissions 3 3 Catalytic Converter Chemistry (illustrative)

Swed Gov’t cost ben New Technologies in Engine Design and Pollution Abatement Devices The major challenge for automotive and catalyst manufacturers is to reduce NOx under conditions of excess oxygen Lean NOx or (DeNOx) catalysts are being developed which create a fuel rich micro- climate where hydrocarbons in the exhausts reduce NOx to nitrogen A DeNOx catalyst will require changes in the structural properties of the catalyst surface Three basic systems are being developed Passive - where no reductant is added Active - where 2 - 3% additional fuel is added upstream of the catalyst Adsorption - NOx is selectively adsorbed and stored until the catalyst is ready to convert it Studies have shown that high sulphur fuel content will greatly reduce the effectiveness of the catalyst DeNOx systems currently under development require fuels with sulphur content less than 50 ppm Studies have shown that high sulphur fuel content will greatly reduce the effectiveness of the catalyst DeNOx systems currently under development require fuels with sulphur content less than 50 ppm 3 3

Swed Gov’t cost ben Mitsubishi and Toyota have successfully introduced GDI automobiles in Japan because sulphur content in petrol is approximately 30 ppm New Technologies in Engine Design and Pollution Abatement Devices A“Gentleman’s agreement” has resulted in market levels of sulphur in petrol of approximately 30 ppm % better fuel consumption % reduction of NOx emissions NOx reduction is accomplished through a high Exhaust Gas Recirculation (EGR) techniques and newly developed DeNOx catalysts The EGR and DeNOx catalyst requires low sulphur fuels EGR - to prevent sulphur corrosion in the engine DeNOx catalyst - sulphur forms an impenetrable barrier on the active surface area

Swed Gov’t cost ben Toyota’s GDI engine employs a NOx storage reduction catalytic converter combined with EGR technology New Technologies in Engine Design and Pollution Abatement Devices 3 3 Lean burn range Stoichiometric range NOx engine emissions NOx storageNOx reduction exhaust from catalytic converter At high air to fuel ratios NO is converted to NO 2 by platinum catalysts and temporarily stored When the engine runs at stoichiometry the NO 2 is released to mix with HC and CO to be catalytically converted to N 2 At 1,200 rpm with 40% EGR, a 95% decrease in NOx emissions is obtained

Swed Gov’t cost ben California has recently introduced a new reformulated gasoline with a 30 ppm sulphur content to ensure the proper functioning of LEV technology New Technologies in Engine Design and Pollution Abatement Devices 3 3 The extremely low sulphur level is to ensure that LEV and ULEV pollution abatement devices work correctly According to Ford higher sulphur levels in fuels disrupts the proper functioning of onboard diagnostic equipment Ford reports that sulphur effects are larger for LEV and ULEV vehicles than with traditional pollution abatement equipment California has been the most pro-active state in the US in reducing emissions from road transport

Swed Gov’t cost ben New Technologies in Engine Design and Pollution Abatement Devices Oxidation catalysts alone or combined with particulate filters can be retro- fitted on to diesel vehicles but require sulphur diesel content under 75 ppm Over 1,000 buses and trucks have been fitted in Scandinavia with oxidation catalysts, filters or CRT (Continuous Regenerating Trap) packages Both technique reduces CO and HC emissions, CRT also greatly reduces particulate emissions While the catalyst does not remove particles it removes the organic material which contributes to particle mass Ceramic wall flow filters have been developed which can remove up to 90% of the particulates contained in diesel exhausts Filter regeneration techniques include fuel additives catalytic coatings to initiate particulate combustion combining filters with oxidising catalyst upstream (CRT) - NO 2 levels are increased in the exhaust which in turn “burns-off” the particles on the filters 3 3

Swed Gov’t cost ben New Technologies in Engine Design and Pollution Abatement Devices There are over 1800 CRT units in operation in Europe 3 3 Reductions of CO, HC and PM by over 90% is achieved Long-term engine tests in Scandinavia have shown that there are no apparent negative effects on engine wear No external muffler is needed Sulphur content in diesel must be lower than 75 ppm No HDV manufacturer sanctions the retro-fitting of CRT technology on existing vehicles or offers it as extra equipment on new units

Swed Gov’t cost ben External Environmental Cost Benefits The external costs of air pollution has been estimated in other EU projects* The purpose of the ExternE project was to develop a unified methodology for quantifying the environmental impact and social costs associated with the production and combustion of energy External costs are defined as costs associated with an activity of a group on a second group which are not fully accounted for by the first group (e.g.): health effect costs for senior citizens from truck transport in cities – corrosion effects on buildings from power generation – crop damage from road transport In the cost benefit study, Coopers & Lybrand summarised the data from the ExternE project into units of economic value damage (ECU per tonne pollutant; net present costs) for airborne NOx and PM from transport for each country in EU-12 * European Commission, DGXII - ExternE, *European Commission, DGXI - Cost Benefit Analysis of the Different Municipal Solid Waste Management Systems: Objectives and Instruments for the Year 2000, Final Report, Coopers & Lybrand, March

Swed Gov’t cost ben External Environmental Cost Benefits There are large uncertainties in determining the true costs of air pollution 4 4 Emissions Dispersion (concentration) Impact on receptors Costs uncertainties in calculating emissions from road transport uncertainties in appointing the source of pollutants - inherent uncertainties associated with air pollution dispersion models uncertainties in the dose response functions receptors (e.g.): - population - crops - buildings - forests and rivers uncertainties associated with the actual costs associated with the response - health care costs uncertainties in the current value of receptors -the value of human life -costs associated with “nonproductive” individuals

Swed Gov’t cost ben External Environmental Cost Benefits There are three important valuation techniques for estimating the costs of pollution from road transport 4 4

Swed Gov’t cost ben External Environmental Cost Benefits Effects on human health represent the largest proportion of unit damage costs estimates 4 4

Swed Gov’t cost ben External Environmental Cost Benefits Unit economic values for damage in Europe per pollutant emitted in each country (ECU per tonne emitted) was estimated as follows 4 4

Swed Gov’t cost ben External Environmental Cost Benefits The estimated benefit in terms of externalised costs of a reduction in sulphur fuel content is between million ECUs per year* 4 4 *Calculated for the current vehicle park. If sulphur levels are reduced, new emission reduction technologies can be introduced and subsequent costs benefits will be different.

Swed Gov’t cost ben Sulphur in Fuels - Benefits of Sulphur Reduction Table of contents 1 1 Summary 2 2 Sulphur’s Effect on Emissions 3 3 New Technologies in Engine Design and Pollution Abatement Devices 4 4 External Environmental Cost Benefits

Swed Gov’t cost ben Sulphur in Fuels - Benefits of Sulphur Reduction Table of contents 1 1 Summary 2 2 Sulphur’s Effect on Emissions 3 3 New Technologies in Engine Design and Pollution Abatement Devices 4 4 External Environmental Cost Benefits

Swed Gov’t cost ben Sulphur in Fuels - Benefits of Sulphur Reduction Table of contents 1 1 Summary 2 2 Sulphur’s Effect on Emissions 3 3 New Technologies in Engine Design and Pollution Abatement Devices 4 4 External Environmental Cost Benefits

Swed Gov’t cost ben Sulphur in Fuels - Benefits of Sulphur Reduction Table of contents 1 1 Summary 2 2 Sulphur’s Effect on Emissions 3 3 New Technologies in Engine Design and Pollution Abatement Devices 4 4 External Environmental Cost Benefits

Swed Gov’t cost ben Sulphur in Fuels - Benefits of Sulphur Reduction Final Report February 12, 1997 Swedish and Finnish Governments Arthur D. Little AB Box Stockholm Telephone Telefax