More on transitioning to ultra-low sulfur diesel in India
The ICCT recently released a new consultant report looking at the costs of transitioning to ultra-low sulfur fuels (ULSF) in India and other countries. Two important issues came up during a webinar on key findings of the report: one about sulfur’s role as a lubricant, and another about the amount of diesel being transitioned to ultra-low sulfur diesel (ULSD).
Concerning the first, someone asked if ULSD would reduce diesel lubricity. And what would the costs of that be? To get some answers, we turned to the Chevron Diesel Fuels Technical Review. As it turns out, producing ULSD will reduce fuel lubricity, but not necessarily because of the low sulfur content. For example, biodiesels usually have good lubricity, while containing no sulfur or aromatics. More important than sulfur content is the process of hydrotreating, which is likely the option India will choose to produce ULSD. Heavy hydrotreating reduces fuel lubricity, and indeed problems occurred because of this in Sweden in the early 1990s.
But this issue has since been resolved, thanks to a number of available fuel lubricity additives. Often, these additives also help prevent wear of fuel pumps and injectors too. Mono-acid additives are the most effective, requiring addition at low levels, while amide and ester additives need to be mixed in at slightly higher levels. Whichever additive a fuel refiner chooses, the main point is that they can restore fuel lubricity to necessary legal levels without compromising vehicle emissions. More important is assuring lubricity additives are effective. The good news here is that India already mandates the recommended test (ISO 12156-1) that ensures that the lubricity of fuel supplied in the market meets a minimum benchmark. Costwise, the US Energy Information Administration (EIA) estimated the cost of adding lubricants to be 0.053¢ (Rs. 0.026) per liter in the US—very inexpensive.
With respect to the second issue, the ICCT consultant report also stated that only on-road diesel was considered, meaning diesel used for other applications (industry, agriculture, etc.) would not be evaluated. Nevertheless, a closer look at the numbers reveals the modeling for India actually involves other diesel applications, as well as discussed below.
The report estimates total demand for diesel (including on-road, industry, agriculture, etc.) in 2010 was 1,250 thousand barrels per day. This is close to the 1,188 thousand barrels per day of diesel consumed that India’s Petroleum Planning and Analysis Cell (PPAC) reported for the 2010–2011 fiscal year. But when calculating costs for producing ULSD, the report did so for a diesel refining capacity of 1,363 thousand barrels per day, well above total current demand. The same can be said for the year 2015. Demand is expected to rise to 1,568 thousand barrels per day, but cost calculations were conducted for over 2,000 thousand barrels per day of diesel throughput.
All this means the ICCT consultant report is actually assuming all diesel production in India (save, possibly, some exports) is being transitioned to ULSD. Hence, the cost of transitioning only the on-road portion (currently roughly half of total diesel use) would be significantly less.