A six-week debate starting this month will probably determine whether the European Union meets its international commitment to cut emissions of the main global warming gas, carbon dioxide, over the next 10 years.
The forum will be a conciliation procedure, chaired by the UK as European Union president, which will try to find a compromise between the different positions of the European Parliament and the EU member governments on the proposed law to govern vehicle emissions and fuel quality over the next decade.
While CO2 targets per se will not feature in any directive that emerges from the process, the position adopted on the maximum permitted sulphur content of fuel by 2005 will be crucial to the CO2 issue. The transport sector is not only the biggest single contributor to CO2 emissions, accounting for about 50% of the total, but is also one of the most problematic to address for social and technical reasons.
It is politically impossible in a democracy to impose carbon taxes at a level to persuade car owners to reduce their mileage sufficiently. And catalytic converters, while significantly reducing the output of pollutants in exhausts, actually increase CO2 production by catalysing the oxidisation of carbon monoxide and hydrocarbons into CO2.
The focus has consequently shifted to fuel efficiency, which is the only way to reduce the amount of CO2 emitted per mile travelled.
The gasoline direct injection (GDI) engine is currently the best hope to achieve this. But the lean burn engine produces more nitrogen oxides than conventional engines. The two-stage absorbent-based catalytic unit it will require to meet the 2005 standards on emissions of nitrogen oxides will not work with a fuel that has a sulphur content of more than 50 parts per million.
‘The sulphur poisons the absorption ability of the catalyst,’ explains Dr Pelham Hawker, sales and maketing director of Johnson Matthey’s catalyst division.
Automotive manufacturers say they are not prepared to invest billions of pounds in developing GDI engines without an assurance that the low-sulphur fuel they need will be the legal requirement in seven years’ time. The amendments that the European Parliament passed to the proposed directive on 18 February would ensure this stipulating limits of 30ppm for gasoline and 50ppm for diesel whereas the agreed position of the Council of Ministers would only recommend ‘indicative’ levels of 50ppm for both.
‘The car industry is saying we can’t develop these engines unless we have the cleaner fuel,’ says Hawker.
The oil industry claims that at present it cannot produce such fuel at an acceptable cost. The UK Petroleum Industry Association points to the findings of a study for the European Commission’s tripartite Auto/ Oil initiative five years ago, which estimated the cost of modifying European refineries to meet the 50ppm standard at £43bn (Ecu60bn).
‘The oil industry’s view is that if you wish to reduce pollution, you should choose the method that produces the least cost to society,’ says Malcolm Watson, technical officer at the UK Petroleum Industry Association.
The oil industry considers it will not be possible to make properly informed decisions on the optimum cost-benefit trade-offs until the Auto/Oil II initiative completes its deliberations next year.
The European Parliament’s view is that recent US studies show that low-sulphur fuel increases the efficacy of NOx-reducing catalysts to a significantly greater extent than the Auto/Oil I investigation discovered and are sufficient reason to impose tighter limits for 2005. It considers Auto/Oil II should direct its efforts to what more can be done by 2010.
The oil industry also says that the proposals to clean up fuel at the refining stage will increase the volume of crude burnt at refineries from 7% of throughput to about 10.5% with a commensurate increase in the CO2 the plants themselves emit into the atmosphere.
‘Together, they will have a large impact on CO2 emissions,’ says Watson. However, he is not able to say how much of the increase is down to reducing the sulphur content of fuel.
The auto industry and the catalyst makers are not convinced. Hawker says that the sulphur content in random samples of gasoline that Johnson Matthey has bought for analysis has in some cases been zero: ‘That means that someone can make it’.
There is also scepticism over the oil companies’ projected costs. A study by consultant Arthur D Little for the Swedish government since Auto/Oil I indicated that refinery conversion costs could be less than half the estimate and amount to no more than a fraction of a penny on each litre sold at the pump.
The consultant based its cost revision on three assumptions: higher volumes of low-sulphur crude from the North Sea than anticipated five years ago; discounting refineries’ investment in hydrocracking plants on the basis that they will incur the expenditure anyway to meet the growth in demand for diesel; and that cost estimates were probably 50% too high (on the strength of the outturn cost of installing one item of process plant in Sweden).
The oil companies take issue with these presumptions. Watson says, for instance, that European refiners could decide to import diesel to meet additional demand, given the required operating life of hydrocracking plant 15 20 years and the projected future production profile of the North Sea.
All this will have to be taken into account in the conciliation forum, and if there is no agreement the directive fails. Given the political imperatives of the member governments particularly the UK’s to establish ‘green’ credentials, few consider this a likely outcome.
To avert such a scenario, the governments through their Council of Ministers representatives will probably have to compromise.
While the UK presidency, which ends in June, is unlikely to see the directive become law, it will put a high priority on brokering an agreement at the conciliation procedure.