Cost efficiency, incentives driving India's new auto-fuel policy; CNG monopolies seen as big mistake

Diesel Fuel News, Oct 28, 2002 by Jack Peckham

New Delhi -- A committee of India's top scientists and government experts recommends cost-efficient deadlines, fuel neutrality and incentives for "clean" fuels and technologies, in one of the world's most intensively dieselized economies.

The recommendations are especially significant in the wake of India Supreme Court orders forcing big cities to convert diesel buses and taxis to compressed natural gas (CNG), supposedly to cut air pollution. India's 80% diesel fuel sales ratio, its 70% dependence on oil and gas imports, and its lack of any cheap or abundant source of alternative fuels underlie the new expert committee recommendations.

Yet near-universal clean-fuel/clean-vehicle lessons can be learned from the report, written under the leadership of R.A. Mashelkar, Council of Scientific & Industrial Research (CSIR), among India's most respected scientists.

Tapping expertise from industry, government, environmental/health advocates and worldwide experience, the Mashelkar committee's 225-page report (see: www.petroleum.nic.in/afp_con.htm) is likely to be adopted as official government of India policy, various refining and government officials told us at the International Symposium on Fuels & Lubes (ISFL) and International Fuel Quality Center (IFQC) meetings here.

The Mashelkar report calls for an ultra-low sulfur diesel (ULSD) mandate by 2010, at least for the 11 mega-cities initially, and concurrent Euro-IV vehicle emissions limits (see Diesel Fuel News 9/30/02, p12). While some environmental advocates have been pushing for a speedier, nationwide ULSD rollout and acceleration of Euro-IV or even Euro-V emissions limits, Mashelkar emphasized in a speech here that such schemes wouldn't be cost-efficient, especially given India's financial limitations and serious shortcomings with emissions inventory studies and related analysis.

Ironically, much the same might also be said for "advanced" North America, where California Air Resources Board (CARB) and U.S. EPA are pushing the regulatory envelope with extreme reductions in diesel nitrogen oxides (NOx) emissions, even though such limits ironically would lead to higher ozone emissions (see Diesel Fuel News 9/30/02, p1). New studies indicate that cutting hydrocarbon (HC) emissions seems a more effective ozone strategy, while low-sulfur diesel fuels, diesel particulate filters (DPFs) and oxidation catalysts can clean up the particulate matter (PM) and "toxics" of diesel vehicles.

Ram Naik, India's Minister of Petroleum & Natural Gas, implied at the ISFL conference here that he was satisfied with the thoroughness of the Mashelkar study. But Naik emphasized that further public comment will be open until October 31. Final government action on the report's recommendations probably would be delayed until early next year, several sources here predicted.

"We appointed the auto-fuel policy committee, and even if it were a one-man committee [just Mashelkar], it would have been a very fine document," Naik told the ISFL conferees. "This was the cream of Indian intelligence."

However, while cleaner fuels and cleaner vehicle emissions limits will help clean India's polluted big-city air, such measures won't do much to help the vast rural population, which has a different set of priorities, Naik pointed out.

* First Water, Then Fuel

"The common man in the village asks me, 'what about drinking water?' Naik said, likely in reference to the country's weakest monsoon season in decades. Lack of rain is a serious threat to farming and water supplies here, for a huge population that lives precariously.

Even when refiners clean-up India's fuels, government also must ensure against criminal retail adulteration by kerosene or naphtha, a widespread practice today due to large tax differences among fuels. "The consumer needs an unadulterated fuel at an affordable price," Naik pointed out. A planned five-year phase-down in the fuel tax subsidies likely would eliminate this problem, the Mashelkar report indicates.

Meantime, it doesn't make any sense to set fuel or vehicle emission standards so strict as to prevent the widespread use of cleaner technology, Naik pointed out.

This lesson probably could apply to India's slap-dash conversion to compressed natural gas (CNG) or LP-Gas (LPG) in buses and taxis in Delhi and other cities, with no long-term gain in energy security or even air quality assured, especially when costs far exceed benefits.

While India's Supreme Court ordered the massive CNG or LPG conversions because of concerns that fuel adulteration wouldn't ensure a clean-diesel alternative, the fact is that CNG conversions here have caused problems similar in scale to adulteration, the Mashelkar report points out.

Just driving around Delhi proves the point. Several recently converted CNG taxis we spotted on the road were already belching white smoke, a clear sign of oil burning. One converted CNG taxi we rode in always turned off the engine at stop-lights.

That's a fuel-savings scheme owing to the inherently poor driving range of CNG and extremely long lines at CNG refueling sites. This scheme -- high CNG vehicle cost, long delays in CNG refueling, high cost of building CNG refueling infrastructure -- penalizes the long-term economic incentive to upgrade today's inferior technology to new, cleaner, lower-cost clean-diesel technology. Many CNG engines here bang and lug at acceleration due to the large power penalty of CNG, compared to diesel.