EURO NORMS VS REFINERY

CHALLENGES..
What are Euro Norms?
Euro norms refer to the permissible emission levels from both
petrol and Diesel vehicles, which have been implemented in
Europe. However in India, the government has adopted the
Euro norms for available fuel quality and the method of
testing. Euro-1 norms in India are known as INDIA 2000since
it will be implemented from 1/4/2000. The norms equivalent to
Euro-2 are called 2005 norms but these have not yet been
specified by the Indian Government.
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
Financial Impact to meet
BS-II/III/Euro-IV
BS-II/III Production
Investment over Rs.16,000 Crore
Increase in production cost by approx.Rs.1.00
per litre

BS-III/IV Production
Investment over Rs.20,000 Crore
Increase in production cost by approx.Rs.1.50
per litre
Oil companies have together invested about Rs
36,000 crore in refinery upgradation to meet
the deadline
@aditya
Price hike due to cleaner fuel.
Consumers across the country will pay about
Rs 0.20-0 .40 a litre more for Euro-III fuel.
Prices of Euro IV fuels have already gone up by
Rs 0.50 a litre.

@aditya
Staggered approach
Petroleum ministry issuing a fresh deadline for oil
companies to sell cleaner fuels.
Goa is selling Euro-III fuel from April 1, 2010.
India will switch over to Euro-III petrol and diesel
on October 1
Chhattisgarh, Madhya Pradesh and Maharashtra
will adopt the standard from June 1
17 other states will adopt it from July 1.
Now a different thing
@aditya
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.
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

MAJOR REFINERY UPGRADATIONS
REFINERY UPGARADATIO
N
PROJECT
COMMISIONNI
NG
DATE
COST
INCURRED
UNITS
UPGRADATION
GUJRAT MS/HSD
IMPROVEMENT
& DIESEL
UPGRADATION
MARCH-JUNE
2010
Rs. 5882 Crore VGO-HDT,
ATFMerox, FCC-
Merox, LPG-
Merox, ISOM,
Coker, DHDT,
HGU (PDS) and
SRU.
HALDIA DIESEL
QUALITY &
CAPACITY
EXPANSION
February 2010 RS. 2869

Hydrocracking ,
Hydrogen,
Sulphur
Recovery,
revamp of
Crude
Distillation
Units, related
utilities &
offsite facilities.
PANIPAT
(HARYANA)
NAPTHA
CRACKER AND
POLYMER
COMPLEX
March 2010 Rs. 14,439.00
crore
hydrogenation,
butadiene
extraction,
benzene
extraction.
polymer units-
Swing Unit
(LLDPE/HDPE),
a dedicated
HDPE Unit,
Polypropylene
Unit and MEG
Unit
MATHURA FCC GASOLINE
DESULPHURISAT
ION UNIT
February 2010 Rs. 348.00 crore FCC Gasoline
Desulpurisation
BARAUNI MS QUALITY
UPGRADATION
: June 2010 Rs. 1492 CRORE Isomerisation,
Naphtha
Hydrotreater,
Reformate
Splitter, FCC
&Hydrogen
Generation
GUWAHATI MS QUALITY
UPGRADATION
June 2010 372.00 crore Isomerisation,
Light Naphtha
Splitter,
Naphtha
Hydrotreater
and Indmax
Gasoline
Splitter.
DIGBOI MS QUALITY
UPGRADATION
Rs. 356.00
crore
June 2010 Isomerisation,
Naphtha
Splitter,
Naphtha
Hydrotreater
and Reformate
Splitter.
Factors Hindering Euro Norms

The following are a set of lacunae found in the pollution control and
implementation of Euro norms in India.

1)These standards have not been implemented for the entire country.

2)The issue of pollution by the existing fleet of old technology vehicles still
remains.
Estimates show that 70 per cent of the cars are from the pre-catalytic
converter era. It is established that the catalytic converters substantially
reduce emissions of carbon monoxide and hydrocarbons.

3)The current set of diesel vehicles on our roads emits inordinate amounts
of particulate matter, NOx and sulphur dioxide which are highly
carcinogenic and carry toxic heavy metals with them.

It is time the government set standards to particularly address emissions. The
answer may lie in control technologies such as particulate traps, oxidation
catalysts, and NOx catalytic controls.

4)The poor maintenance of vehicles in India, there is a tendency for vehicles to
pollute more as they get older. Solution could lie in mandatory periodic
fitness certification for all such vehicles. A rigorous maintenance schedule
by the owner and genuine certification by authorised service stations would
be the key elements of any such effort.

5) The Motor vehicles Act of 1988 and the Central Motor Vehicles Rules of
1989 place no limit on the age of vehicles plying on the road and also lack
any provision that addresses the scrappage of old commercial vehicles
being challenged in a court of law. Even with the best of maintenance
standards, the older vehicles may still cause an unacceptable level of
pollution.

6) The courts directives do not apply to old personalised vehicles.

BS IV MS & HSD 13 specified cities 01.04.2010
BS III MS Kerala, NE States,
Bihar, Jharkhand,
Eastern UP
01.10.2010
Rest of the country 01.04.2010
BS III HSD Kerala & NE States 01.10.2010
Rest of the country 01.04.2010
The following road-map for implementation of BS III & BS
IV MS and HSD:

Committee of Directors (COD)
Committee of Directors (COD) comprising of Directors (Mktg.) &
Directors (Refinery) of OMCs, MDs of stand-alone PSU
refineries and the Addl. Director (Demand & IC), PPAC was
constituted in March 2009 to

(a) Assess the demand and supply situation of the BS III/ IV fuels;
(b) Ascertain the capacities of Refineries to supply these fuels;
(c) Identify the gaps between demand & supply and put in place
specific action plan to fill up such gaps, including the
requirements for imports, if any, and
(d) Chart out the strategy for smooth supply and distribution of
the required quantities of these fuels as per the road map w.e.f.
1.4.2010.

Delay in Projects
Refinery challenges
Reasons for delay - Challenges

Large capital expenditure required Rs 37,000
crore
Though govt increased prices but increments are not
compliant with the capital expenditure required
Increment in production cost of EURO IV is Rs1/lit
and EURO III is Rs 1.50/lit
Expensive input custom duty on crude oil
Price increased of Diesel and MS
Space limitation for new units and capacity
expansion
Technological hindrance have to import
technology
Estimated Rise in Construction Costs
0
20
40
60
80
100
120
140
Fabricated
Structured Steel
Pumps and
Compressors
Pipes (Seamless
and Welded)
Pressure Vessels
and Heat
Exchangers
%

I
n
c
r
e
a
s
e
Average Rise in Costs, 2003-06 Average Rise in Costs Projected, 2007-09
Source: Fluor Corporation Data
Spiraling construction costs and tightness in contractor availability
are taking a toll on refining construction and upgrading
Estimated Increase in Delivery Times
0
10
20
30
40
50
60
Fabricated
Structured Steel
Pumps and
Compressors
Pipes (Seamless
and Welded)
Pressure Vessels
and Heat
Exchangers
%

I
n
c
r
e
a
s
e
Average Increase in Delivery Time, 2005-06
Average Increase in Delivery Time, 2007-08
Source: Fluor Corporation Data
Construction costs have risen on
average 40-50%.
Delivery times have risen on average
20-30%.
Contd
Delay in supply equipments by suppliers
BHEL and CP&CL delayed in supply of recycle
gas compressors (for DHDT by 8 months and
ISOM by 5 months) by BHEL,
The fuel quality up-gradation projects in IOC
Koyali refinery have been delayed.
Commissioning of captive power plants being
executed by BHEL
Supply of recycle gas compressor and off-gas
make up compressor -Bina and CPCL refineries.

Special case of Bongaigaon refinery

Both petrol and diesel projects are delayed.
Delayed to end-June because working
environment is not very conducive there for
project implementation.
Major contractors are not willing to go there and
local contractors are not able to do the job.

Euro norms in Asian countries
- option to export

Bangladesh 5,000 No date The country adopted Bangladesh 1 and 2 emission
standards in line with the Euro emission norms (Euro 1 and
2) in March 2006.
Cambodia 1,500 No date Formal emission standards for petrol and diesel fuels exist.
Indonesia 3,500
(average) /
500ppm
No
date
Adopted the Euro 2 emission standards in 2007, but sulphur
levels are above 4000ppm due to high sulphur imports and
standard not met. Small amounts of Euro 2 (500ppm) fuel
available in Jakarta only in packages. Plan to adopt Euro 3
standard in 2016.
Nepal 500 No
Date
Imports from India at 500ppm (which will be 350ppm in
2010 same as India) though National specifications as per
standard still retains 10,000 ppm as sulphur limit. Vehicles
at Euro 1 standards. Second Hand vehicle imports banned
from 2005/6?
Philippines 500 2010 Implementing Euro II. Discussions ongoing in
Thailand 350 2012 In 2006 planned to adopt Euro 4 standards (50 ppm now
modified to 2012.
Vietnam 500 No date Plans in discussion to lower sulphur levels to Euro IV by
2018. Euro II emissions standards for new vehicle effected
from 2005.
Srilanka
In 1998 EFL filed a fundamental lawsuit before
supremecourt against MoF&E
JUNE 2000 standards for mobile emission, fuel
quality and vehicle importation were finally
published
It became effective in 2003
1997 Cabinet decision planned for Pb free
gasoline in 2010
2002 joint cabinet memorandum for lead free
gasoline
July 2003 Gasoline for high and low octane
has been unleaded
according to NER no.01
For 2003 sulphur level max 5000ppm
For 2004 sulphur level max 3000 ppm
For 2007 sulphur level max 500 ppm
Malaysia
1977 govt enacted The Motor Vehicle rules
1sept 1996 the environmental quality regulation
for diesel engine
1 nov 1996 the environmental quality regulation
for petrol engine
1997 adopted Euro 1 for Light duty vehicle
2000 Euro-2 standard for gasoline vehicle
2007 (1
st
quater) Euro-2 for diesel vehicle and
Euro-3 for Gasoline vehicle
2009 Euro -4 standard
SOUTH AFRICA
- Euro norms

PRICES(Currently)


PETROL: 840 TO 858 Cents/lts.
DIESEL:751 TO 754 Cents/lts.
In South Africa Euro 2norms were
introduced in the year 2006 and is
still continuing.
RON (Research Octane No., mostly used by Japan and Europe)
AKI ( Anti-knock Index, used by USA)
RON Octane Rating x 0.95 = AKI Octane Rating
PAH- Polycyclic aromatic hydrocarbon

Car Standards in Asia
Most Countries Starting To Move Forward
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
Bangladesh Euro 1 (proposed) Red =proposed
Cambodia
Hong Kong Euro 1 Euro 2 Euro 3
India Euro 1 Euro 2 (4 Metros) Euro 2**(proposed) ** = Euro 3 in 7 Megacities
Indonesia Euro 1 (proposed) Euro 2 (proposed)
Malaysia Euro 1 Euro 2
Nepal Euro 1
Philippines Euro 1
PRC Euro 1 Euro 2
Singapore Euro 1 Euro 2
Sri Lanka Idle CO & HC/Diesel Smoke Standards
Taipei,China US Tier 1
Thailand Euro 1 Euro 2 Euro 3 Euro 4
Vietnam Euro 1
Refining Capacity &
Demand
CAPACITY
(Million of lts per
annum)
DEMAND
(Million of lts per
annum)

PETROL 10571 11069
DIESEL 9205 9762
KEROSENE 3261 2908
Source: South African Petroleum Industry
Association(SAPIA)
Supplying upgraded fuel

Indian Oil Corp, the nation's largest refiner, and other state-run
refiners will supply Euro -IV grade petrol and diesel in 13 big
cities from April 1, but supply of the cleaner fuel to rest of the
country may be delayed by three to six months.
Refiners feel no problems in supplying Euro-IV petrol and
diesel in 13 notified cities. But have problems regarding Euro-
III. Since some refineries would not have upgraded to produce
cleaner fuel by then, the three companies are seeking extension
in the deadline for supply of Euro-III fuel.

IOC's Barauni refinery in Bihar and Digboi and Guwahati
units in Assam faced about six-month delay in
commissioning facilities to produce Euro-III norm
compliant diesel. Its Koyali unit in Gujarat was one
month behind while Hindustan Petroleum Corp's Mumbai
and Vizag refineries faced up to two years delay in
commissioning facilities to produce Euro-III grade fuel.
Chennai plant and Numaligarh refinery also faced
between six to 10 months delay.
All the major plants of state-run Indian Oil Corp will start
producing superior-grade petrol from April, but its four
smaller units would miss that deadline by three months.

At Guwahati, Digboi and Barauni only petrol project is
delayed.
It is expected that project at its Digboi and Guwahati plants in
the northeast would be completed by April and commissioned
by June. India partly compensates state-refiners for selling fuel
at lower state-set prices, but uncertainty over the extent and
time of compensation restricts oil firms' investment
capabilities.

process optimization


blending optimization
environmental regulations
better dispersion of pollutants.
FACING CHALLENGES :
Refinery schedule is as under for
supplying the upgraded fuel:

Product Grade Oil Co. Refinery Original Current
MS EURO-IV IOC Koyali Jan'2010 Apr'2010
IOC CPCL Jan'2010 Apr'2010
BPC Kochi Jan'2010 Jul'2010
BPC Bina Jan'2010 Jul'2010
EOL : No Euro-IV
MS during entire
2010-11
EOL : No Euro-IV
MS during entire
2010-11
EOL : No Euro-IV
MS during entire
2010-11
EOL : No Euro-IV
MS during entire
2010-11
EURO-III IOC Koyali Jan'2010 Jul'2010
IOC Barauni, Guwahati,
BGR & Digboi
Apr'2010 Jul'2010
BPC Bina Jan'2010 Jul'2010
HSD EURO-IV IOC Koyali Jan'2010 Apr'2010
BPC Kochi Jan'2010 Jul'2010
BPC Bina Jan'2010 Jul'2010
HPC Mumbai &
Vizag : No Euro-IV
HSD during entire
2010-11
HPC Mumbai &
Vizag : No Euro-IV
HSD during entire
2010-11
HPC Mumbai &
Vizag : No Euro-IV
HSD during entire
2010-11
HPC Mumbai &
Vizag : No Euro-IV
HSD during entire
2010-11
EURO-III IOC BCR Apr'2010 Jul'2010
BPC Bina Jan'2010 Jul'2010
IMPACT ON REFINERY OPERATIONS
Futuristic Refinery
Highly automated, integrated and energy efficient with high level of
heat integration.
Capable to process variety of crude oils to reduce cost of raw
material
-Heavy and sour crude, High Acid Crude with
appropriate metallurgy
-Alternative crude oils derived from Tar sands and
shale oils
Matching desulphurisation capability for production of 10 ppm
sulphurauto fuels (Euro-V spec.) including ATF and Kerosene.
High performance fuels and lube oil basestocks
Zero residue
Zero flare
Cont
Hydrogen, power and steam production through Gasification of coal/coke
and biomass.
Integration with biorefining: Production of second generation bio-fuels and
co-processing of biofuels in existing refinery units.
Technology innovation to develop and adopt processes based on
biotechnology, super efficient catalysts & fuels additives through
application of nano-science.
The performance of refineries in future will be judged more by their
success in conserving resources like energy and water and minimizing
carbon footprints.
-Adoption of clean technologies for reduction of GHG emission
-CO2 sequestration and revenue from carbon credits
-Zero effluent, rain water harvesting and seawater desalination for
coastal refineries
WAY FORWARD- FUTURE CONCERN
The Future
West coast refineries would continue to cater to the western markets
High refining margins will allow competitive exports (RIL)
Most Asian/SEA countries like Taiwan, Indonesia, Vietnam, Philippines, Sri Lanka,
Pakistan and Bangladesh are expected to have a deficit of petroleum products
Middle East refineries would be key competitors
Way Forward
The opportunity to emerge as a refining hub seems to be real and attractive
Cost competitiveness and timely project commissioning is key
Competitiveness to be driven by product slate and ability to process a wide range of
crude
Integrated refining and petrochemical facilities for higher value-addition
Environmental and product quality specs in export markets



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