1. Product Quality- Future Road Map Dr. R.K. Malhotra Executive Director (R&D) Indian Oil Corporation Ltd.

2. Road Map-Background Expert committee constituted to recommend Auto Fuel Policy for the country on 13.9.2001 Report submitted in August 2002 Govt. announced Auto Fuel Policy in October 2003

3. Objective of the Policy  To recommend an Auto Fuel Policy for the country and devise roadmap for its implementation  To recommend suitable auto fuels and the specifications thereof  To recommend attributes of automobile technologies  To recommend monitoring and enforcement measures

4. Roadmap as per Auto Fuel Policy  Adoption of Euro-II, Euro-III & Euro-IV equivalent Bharat Stage(BS) Emission Standards and Fuel quality New vehicles except 2-3 wheelers: Entire country: BS-II 1.4.2005 BS-III 1.4.2010 11 major cities: BS-III 1.4.2005 BS-IV 1.4.2010

5. Roadmap as per Auto Fuel Policy  Emission norms for new 2-3 wheelers to be uniform all over the country: BS-II 1.4.2005 BS-III preferably from 1.4.2008 but not later than April 2010  These schedules would be reviewed in the year 2006, after BS-II (Euro-II equivalent) norms are implemented.

6. Major Changes in Gasoline Specification ParameterBIS-2000 BS-II BS-III EU-IV Eq. Sulphur ppm max.1000/500 500 150 50 Benzene Vol%max. 5/3 3 1 1 Aromatics Vol% max. - - 42 35 Olefins Vol% max. - - 21(18#) 21(18#) RON 88/93(#) 88/93(#) 91/95(#) 91/95(#) (#) Premium grade

7. Major Changes in Diesel Specification Parameter BIS-2000 BS-II BS-III EU-IV Eq. Sulphur ppm max.2500/500 500 350 50 Cetane No. * 48 48** 51** 51** Cetane Index (CI)* - 46** 46**46** Distillation 0 C 370 370 360 360 at 95% max. Polycyclic Aromatics - - 11 11 (Wt % max.) * Lower by 3 nos. for Assam Crude ** Either Cetane No. or CI

8. Fuel Quality Improvement - Challenges Gasoline -Reduction of Benzene & aromatics - Reduction of olefins - Reduction of sulphur - Increase in octane Diesel - Sulphur reduction - Cetane increase - Poly-aromatic control - End point & density reduction

9. Impact of MS & HSD (BS-III/Euro-IV) on Refinery operations Space limitation in refineries for new facilities Increase in complexity of refinery operations and safety concerns Shrinkage in flexibility of operations w.r.t. crude mix, processing capacity, product slate.

10. Impact of MS & HSD (BS-III/Euro-IV) on Refinery operation  Non-availability of any one component affects product availability (viz FCCU gasoline, Reformate, Isomerate) Impact of T-95 recovery at 360 Deg C for HSD – Disposal of Heavy ends  Increasing demand of skilled manpower for operating plants with advanced technology

11. Financial Impact to meet BS-II/III/Euro-IV BS-II/III Production Investment o ver Rs.8,000 Crore Increase in production cost by approx.Rs.1.00 per litre BS-III/IV Production Investment over Rs.15,000 Crore Increase in production cost by approx.Rs.1.50 per litre

12. Auto Fuel Policy Review MOP&NG vide O.M. No. R-29011/19/2004- OR.I dated 22nd March 2007 constituted the three member Committee: Shri M.B.Lal (Chairman, Scientific Advisory Committee) Dr.K.S.Balaraman (Executive Director, CHT) Dr.R.K.Malhotra (Executive Director, IOC- R&D) Auto Fuel Policy to be reviewed based on Air Quality and Source Apportionment studies

13. Status of Implementation Supply of Auto Fuels:  In the initial stages of implementation in 2005, some slippage in supply of fuels  Refineries working against tight schedule for meeting April 2010 norms

14. Pollution Reduction from In-use Vehicles :  PUC system up-gradation to identify polluting vehicles: yet to be done by MOSRT&H  Introduction of I&M system for vehicles starting 2005 to 2010 in phases for reducing emissions : not in practice Old and poorly maintained vehicles are gross polluters Status of Implementation

15.  Checking of Emission warranty for new vehicles: no system in place to verify  Mandatory performance checking of catalytic converter from 2005 in 11 cities: no system developed  Schemes with incentives for Retrofitting of devices on old vehicles: need to develop a programme  Declaration of fuel economy: in km / litre rather than CO 2 norms Status of Implementation

16. Preparedness for BS-III/IV Facilities Preparation of switchover plan  Firming up of manufacturing specs for products for pipeline transfer of products  Firming-up the Pumping sequence for pipeline transfer  Pipeline Inter-phase absorption plan

17. Air Quality Monitoring and Source Apportionment Studies  Oil Industry initiated and funded the programme  MOE&F monitoring the studies in 6 six cities: Delhi, Bangalore, Mumbai, Chennai, Pune and Kanpur  Interim Report received in July 2008

18. Air Quality Monitoring and Source Apportionment Studies Major findings:  Levels of PM 10 and PM 2.5 high.  Industries, construction activities, re- suspension of road dust are major contributor to PM in most of the cities  Vehicles are major contributor to PM in Bangalore, with considerable share in Delhi, Kanpur, Pune and Chennai  DG sets are major source of fine particles

19. Air Quality Monitoring and Source Apportionment Studies  Final report is expected by December 2008  It will provide city level emission inventories,  sources, and  their emission loads, and  Future projections for next 5-10 years.

20. Auto Industry Preparedness  SIAM confirmed readiness for compliance with new emission regulations for vehicles from 1 st April 2010.  Vehicle manufacturers requested the Oil Industry to supply BS-IV fuels one year in advance for undertaking trials.  BS-IV fuels can not be supplied before 2010 from domestic sources. Requirement can be met through imports.

21. Auto Industry Preparedness  Selective Catalytic Reduction (SCR) technology for NOx reduction in BS-IV diesel vehicles need Urea to be dispensed from retail outlets along with diesel.  Urea availability to the oil companies need Govt. intervention  Auto industry also need to incorporate systems to check by-passing of SCR device by vehicle operators

22. Oil Industry Preparedness  Most of the refineries will be producing both BS-III and BS-IV fuels to meet the requirements of 13 major cities  Most of the refineries stated completion of the projects by March 2010  Should be possible for refineries to meet the April 2010 target of BS-IV on overall basis

23. Future Specifications may require MS/HSD of Sulphur less than 10 ppm in line with Global Trends

24. MS of Sulphur less than 10 ppm Hydro-treatment of Gasoline produced from FCCU, Coker, Straight Run Naphtha and Visbreaker Naphtha Limitation- Octane loss by over 2 to 2.5 units Hydrotreatment of FCCU feed Alkylation -For Sulphur reduction and Octane Improvement Augmentation of Existing treating facilities for H2S and Mercaptan Technological Options

25. HSD of Sulphur less than 10 ppm Technological Options l Hydrotreating for Sulphur reduction & Cetane Improvement Hydrocracking for HSD maximisation with Sulphur reduction /Cetane Improvement Installation of additional deep de-sulphurisation units for treatment of Straight run gas oil from crude distillation unit Vacuum gas oil from Vacuum distillation unit Total cycle oil from FCCU Gas oil from Cokers & Visbreaker units

26. HSD of Sulphur less than 10 ppm Technological Options Replacement of catalyst of existing DHDTU/DHDS/HCU/OHCU by next generation catalyst to reduce sulphur in diesel streams of these units Augmentation / revamp of various sections of existing units De-sulphurisation units for Kerosene to meet the plug requirement of pipeline for pumping MS and HSD from refineries

27. MS and HSD of Sulphur < 10 ppm Magnitude of investments Considering present and future blend of Gasoline and HSD, existing and required configuration of process units of refineries, utilities, offsite and environmental requirements, Estimated investment : Over Rs 37,000 crore for IOCL refineries at current market rate of Project execution.

28. Issues related to Production of HSD of Sulphur less than 10 ppm Space limitation : A number of projects installed since commissioning of refineries for capacity augmentation, profitability improvement of refinery, product quality improvement and meeting other statutory norms leaving hardly any.

29. Impact of changes made in Fuel Specification made till date need to be assessed Air Quality Monitoring and Source Apportionment Study report yet to be received Further, moving to Euro-V / 10 ppm sulfur fuel may be decided after receiving the above data Issues related to Production of HSD of Sulphur less than 10 ppm

30. Thank You