1. Developing Fuel Quality Roadmaps in Asia
Presented by Bert Fabian, Transport Specialist
Kong Ha, Chairperson
Cornie Huizenga, Head of Secretariat
CAI-Asia
Automobile Fuel Quality Workshop
22 August 2006
Manila, Philippines
Sustainable Urban Mobility in Asia
A CAI-Asia Program

2. Background
This is the result of CAI-Asia and the Oil Industries’ Dialogue for Cleaner Fuels in Asia
The dialogue was launched in a meeting in Singapore on 21 July 2003, which included representatives from - Bangchak Petroleum Public Company, BP, ChevronTexaco, ExxonMobil, Indian Oil Corporation, Pakistan State Oil, Petron Corporation, PTT Public Company Ltd, Shell, Showa Shell Sekiyu K. K., Singapore Petroleum Company, Thai Oil Company Limited
Adoption of Singapore Statement kicked of the Dialogue and was followed by the formulation of a detailed ToR for a document on Roadmaps for cleaner fuels and vehicles in Asia
The draft document was presented and discussed in a regional workshop in ADB on May 2006
The full draft document and proceedings of this workshop is available online at

3. Fuel Quality Roadmaps in Asia
Rationale: Support the development of roadmaps for Cleaner Fuels and Vehicles in Asia

4. Integrated Approach
Fuels and vehicles are part of an overall, wider, air quality context
AQM efforts will usually also include activities aimed at reducing emissions from stationary sources and area sources
Emission reduction from mobile sources will also have to include I/M and transport demand oriented measures
The absence of detailed emission inventories and source apportionment studies should not prevent Asian countries from developing cleaner fuel roadmaps
Fuels and vehicles are an integrated system

5. Build on existing plans and strategies
Certain individual countries have already decided on their future fuel specifications:
Thailand, Euro 4 equivalent fuels by 2010
Korea, Singapore, Taipei,China and Hong Kong already have Euro 4 Fuels or will have them shortly
ASEAN- Ministry of Economy, Trade and Industry (Japan) Economic and Industrial Cooperation Committee (AMEICC) Working Group on Cleaner Fuels has called for non binding commitment for Euro 2 in 2006 and Euro 4 in
Partnership for Cleaner Fuels and Vehicles (PCFV) has adopted an objective of 50 ppm for sulfur levels in gasoline and diesel by 2010 for Asian countries
Individual refiners have started the production of cleaner fuels or are planning for it, such as Reliance in India and Petron in the Philippines

6. Fuel Specifications (1)
Fuel quality does not only influence emissions but also drivability, engine wear and fuel efficiency
Supportive research for fuel specifications has been well established and generally there is no need for Asian countries to replicate such research
Asian countries should implement all fuel parameters as defined in fuel specifications linked to European emission specifications
Asian countries with warm climate can apply variation in RVP
In some cases the adoption of a comprehensive set of fuel properties will delay the introduction of cleaner fuels substantially. In such cases the option to reduce sulfur first may be considered

7. Fuel Specifications (2)
Leapfrogging from Euro 2 to Euro 4 emission standards makes good technical and financial sense
Some Asian countries where air pollution from transport is severe should consider Euro 5 standards
Asian countries with large domestic refining capacity can consider applying US flexibility principle. Importing countries should not do so.
Fuel quality monitoring is essential, especially where different fuel standards exist in the same country

8. Timing of Introduction of Cleaner Fuels
Technology for fuel improvement is well established and can be applied in Asia on a no-risk basis
Euro 4 vehicle technology well established in Asia
Maximum lead time to move to Euro 4 or stricter is 4-6 years but in many cases can be shorter
Import of Euro 4 fuels can be considered pending the construction or modification of refineries to shorten the lead time for introduction of cleaner standards
Refinery expansion in Asia should be based on Euro 4 or stricter standards

9. Cleaner Fuels and In-use vehicles
Main driver for cleaner fuels are new vehicles, there is an impact on in-use vehicles as well but more research required on the impact of cleaner fuels on in-use vehicles
Cleaner fuels, especially with less than 50 ppm sulfur allow for retrofit of gross polluting diesel vehicles:
Technology is established now and pilot projects have demonstrated impact
Current cost levels justify focus on retrofit of high use fleet vehicles
Phasing-out remains to be the best alternative approach when dealing with gross polluting vehicles

10. Introduction Scenarios
Uniform introduction across country:
Advantages in terms of AQ impact provided specifications are strict enough
High short term costs to refining sector
Avoids misfueling
Flexibility provision for special markets (off-road and stationary)
Prioritized introduction in selected cities:
Can be considered for large countries, e.g. India and China
Requires availability segregated fuel marketing and distribution system
Price differential whereby cleaner fuel should be cheaper
Fuel quality monitoring important to ensure misfueling
Harmonized standards across Asia:
Security of availability of cleaner fuels
Reduction in complexity for the vehicle industry

11. Facilitation of Introduction of Cleaner Fuels
Fuel Quality regulations, combined with emission standards should be the backbone of any policy or strategy on cleaner fuels
Government policy to accelerate production or uptake of cleaner fuels:
Public outreach and consensus building
Combination of tax and pricing policies
Temporary incentives can be used to speed up acceleration of market uptake of cleaner fuels
Cost for producing cleaner fuels needs to be passed on to consumer:
Controlled pricing, still prevalent in some Asian markets precludes the opportunity to pass on costs
Increasing Asian markets are being deregulated opening up the possibility to pass on costs

12. Role of the International Development Community
Many countries in Asia have a limited administrative and monitoring capacity, this has hampered the introduction and implementation of cleaner fuel standards.
Development organizations can and should consider assistance for:
Further awareness raising on importance of cleaner fuels as part of an integrated AQM strategy
Capacity building for regulators to formulate, implement and monitor fuel quality improvement strategies and legislation
Financing of refinery upgrading or new construction through loans or partial guarantees

13. Context for the Philippines
The government must quickly move to institutionalize Euro 2 standards for fuels and vehicles
A clear roadmap needs to be put in place for the implementation of stricter new and in-use vehicle emissions standards and higher quality fuel
Strengthen efforts to coordinate activities of concerned government agencies and consultations with other stakeholders