Title: Cleaner Fuel Specifications
1Cleaner Fuel Specifications
Date 13 December 2005 Venue Parliament DME
Presentation to the Portfolio Committee Cabinet
decision on clean fuel specifications
2Why Cleaner Fuels
- Lead is toxic especially malnourished children
- Introduction of unleaded in SA medical reports
showing improvements in health - World has moved is moving to unleaded
- Implications for local car manufacturers
- Keep up with world technology trends
- WSSD commitments
- Dakar declaration
- International pressure
3Broad Approach to Fuel Specifications
- Follow EU
- Euro 2 - from 2006
- Euro 3 from 2008
- Euro 4 - from 2010
- Alignment within SADC
- SADC moving in groups in introduction of clean
fuels - Each country decision on which grades to avail
- Timing within months of each other
- Vision compatibility throughout the region
4So are many other countries
5Diesel is the same
6(No Transcript)
7(No Transcript)
8(No Transcript)
9(No Transcript)
10Key issues to consider
- Investment
- Reliance on imports
- Loss of jobs
- Security of supply
- Foreign exchange impacts
- Loss of skills
11Challenges for fuel specs
- Refinery investments
- Oil industry claimed approx R10-12 billion
- Optimal future petrol octane structure
- Infrastructure, supply and logistics issues
- Cross contamination of heavy metal additives and
petrol without heavy metals - Some oil companies refuse to sell heavy metals
- Some car manufacturers demand metal free petrol
12Options for refineries
- Increase reformer severity
- Loss of volume due to lower yield
- Increases emissions
- Refining investments
- Most preferred
- Opportunity for refineries to upgrade refineries
- Do not invest but reduce refining capacity
- Use of high octane imports (Reformate, MTBE, MMT)
- Final product import refining value-add is lost
13Preparation and Consultation
- Octane study July 2003
- Jointly funded by DME, SAPIA NAAMSA
- Interdepartmental
- DEAT, the dti, National Treasury, DoT, DST,
- Legal Resources Centre
- Publication for public comment of doc
- 2003 Nov Vehicle Emissions Strategy gazetted and
post on the DME Website - World Bank March 2004
- Stakeholder Committee
- Clean Fuels Committee 2003
- Participants
- SAPIA, Government Dept, NAAMSA
- Sub Committees
- Pricing tax, logistics, technincal, and
Communication
14Current Position
- How does altitude affect the need for octane
- Different engine technologies have different
altitude responses - Some engine technologies are able to fully
compensate for altitude and thus have similar
octane requirements at all altitudes - Many motorists believe octane puts whooma in de
wiele - Much octane wastage
- Octane wastage has macro economic impacts
- Unleaded petrol market penetration is at 30
15Current Position
- Can our refineries produce 100 95RON without
importing octane enhancers - Without additional investments only 50
- With additional investments - up to 75
16South African Government Decisions
- December 1991
- Cabinet approved introduction of unleaded petrol
(introduced 1996) - April 2002
- Cabinet approved a recommendation to phase-out
lead from petrol by 2006 - Approved that sulphur in diesel be reduced to
maximum of 0.05 per cent by 2006 - 16 March 2005
- Cabinet confirmed 2002 decision
- Approved National Octane Structure w.e.f. 2006
17New Octane Structure from 2006
- Coastal Region
- 91
- 93
- 95
- 95LRP
- Inland Region
- 91
- 93
- 95
- 93LRP
18Price Differentials
- Price differentials between different octane
grades - Only be BFP differentials
- Retail price differentials between ULP LRP same
octane - None
- Motorist will not pay more for cleaner fuels
- New grades of fuels
- 95ULP Demand levy inland
19Labeling
- Anti valve seat recession additives will be
available at the pump - Pumps dispensing petrol containing heavy metal
additives will be clearly labeled as such
20Diesel specifications from 2006
- Sulphur standard grade
- 500ppm
- Sulphur niche grade
- 50ppm
21How will fuel specs be regulated
- Through the Petroleum Products Amendment Act of
2003 - The Minister of Minerals and Energy to promulgate
fuel specification regulations - Will be regulated in cooperation with SABS, which
currently has only voluntary regulations
22Demand management levy
- The levy to be imposed through the Equalisation
Fund levy mechanism to allow for regular
adjustments - Limited to the inland region
- Will be between 0cpl 50cpl depending on the
demand level of 95 ULP - DME to draft the rules for the triggers in
consultation with the industry - Will commence at 10cpl
23Current supply patterns
- The inland region defined as the zones in Grey
- Defined by areas that are currently predominantly
93RON
24Vehicle compatibility database
- The National Association of Automobile
Manufacturer of South Africa in conjunction with
SAPIA is developing a detailed VFCDD - Ready by mid April 2005 for public access
- Intended to inform consumers which octane grade
is recommended for their particular vehicle
25Stakeholder complaints
- Concern has been raised from some quarters about
the removal of lead - Which comes first?
More efficient vehicles
Cleaner fuels
26Benefits
- Access to new efficient vehicle technology
- Improved health
- Cleaner environment
- Reduced operating and maintenance costs
- Money in your pocket
- Promotion of use of the Platinum
- Increased local production of catalytic converters