The Times of India newspaper carried a cartoon this month of U.S. President Barack Obama wearing a gas mask when he attends the Republic Day parade in New Delhi on Jan. 26. Next to it was table showing air quality, or rather the lack of it.
New Delhi’s residents have long suffered from bad air — readings on the morning of Jan. 20 were “very unhealthy,” mostly because of trucks and cars running on dirty diesel. The Obama cartoon sums up the city’s pollution problem, but the plunge in crude oil prices may offer a solution.
The drop has handed oil refiners fatter profits from diesel and gasoline sales and the wherewithal to speed up plans to produce cleaner burning fuels. Refiners such as Bharat Petroleum Corp. will spend as much as 800 billion rupees ($13 billion) by the end of the decade to upgrade refineries, according to the oil ministry’s auto fuel vision and policy 2025 document.
It couldn’t come sooner. Shortened life spans of the urban population because of air pollution are costing India $18 billion annually, according to a World Bank report.
India uses the equivalent of a European numerical measure for assessing fuel emission standards. The higher the number, the lower the emissions.
Much of Europe is on a standard known as Euro-V, while 39 large Indian cities, including New Delhi, adhere to the equivalent of Euro-IV. The rest of the country is at Euro-III, or more than a decade behind Europe.
The government has identified 24 additional cities to be brought under Euro-IV by March, before covering the entire country by August 2017. India initially planned to move to Euro-VI by 2024, said Saurabh Chandra, the top bureaucrat in the country’s oil ministry.
“We are now planning to migrate directly to Euro-VI fuels by 2020,” he said. “Indian refineries are capable of upgrading units for Euro-VI fuels with little incremental cost.”
The pollutant India is trying to get out of its air is known as PM2.5, mostly emitted by diesel engines. These are airborne particles and liquid droplets measuring less than 2.5 micrometers or one-thirtieth the width of a strand of hair.
In 2013, the World Health Organization classified PM2.5 as a Group 1 carcinogen, similar to asbestos and tobacco, saying exposure can cause lung cancer, complicate births, and increase the risk of bladder cancer. Short-term spikes can kill, triggering strokes, heart failure and asthma attacks, according to the American Lung Association.
Both Euro-VI and Euro-V diesel have very low sulfur content, which allows engines to use filters to scrub exhaust gasses of PM2.5. Euro-VI vehicle engines adhere to tighter emission norms than Euro-V ones.
India has about 17 state-owned refineries, half of which are more than 50 years old, according to oil ministry data. Most of these refineries are capable of producing only Euro-III equivalent fuels.
“We are already upgrading the units at two of our refineries,” S. Varadarajan, chairman of Bharat Petroleum, India’s second biggest state-run refiner, said last week. “Therefore, we can think about moving toward Euro-VI fuels.”
The refiners can invest in upgrades because of increased cash flow and lower debt after Prime Minister Narendra Modi’s government ended state control on diesel pricing in October.
State refiners, which already sell gasoline at market rates, now have the freedom to set their own diesel prices as well.
“We will have to produce fuels according to the government’s policy and timeline,” said K.V. Rao, finance director at Hindustan Petroleum. “The state refiners are in better financial position now than they were at the beginning of last year.”
Vehicle makers will also need to play a part in upgrading engines to run on the fuels.
The oil and automobile industries have to “invest a lot when the fuel standard is upgraded and some of that additional cost will probably have to be passed on to consumers,” Sugato Sen, the New Delhi-based deputy director-general of the Society of Indian Automobile Manufacturers, said in a phone interview.
Automobile companies in India currently produce both Euro-III and Euro-IV compliant vehicles for sale within the country and Euro-V for exports, Sen said.
“It will be a bigger challenge for the automotive industry to upgrade vehicles,” said Saumitra Chaudhuri, head of the panel that wrote the auto fuel vision and policy 2025 document.