Costs and benefits of cleaner fuels and vehicles in India

Numerous studies have shown that sulfur in gasoline and diesel contributes to higher vehicular emissions. The emissions performance benefits of reducing the sulfur content of fuel come in two forms. First, it enhances the performance of existing emission control devices. Second, it permits adoption of advanced emission control technologies.

Still other studies have established the relationship between fuel sulfur and public health. One such study, for example, found that five years after Hong Kong lowered fuel sulfur content to a maximum of 5,000 ppm in 1990, annual all-cause mortality fell 1–2%. While this may seem minimal, it represents the benefits of only sulfur reduction in fuels. If low-sulfur fuels are used as an impetus for stricter emission standards, the benefits are substantially higher.

India has come a long way in tightening fuel quality and vehicle emission standards. Between 2000 and 2010, emission standards went from Bharat I to Bharat III/IV. During the same period, gasoline sulfur content fell from 2,000 ppm to 150 ppm, and diesel sulfur content fell from 10,000 ppm to 350 ppm. Cities mandating Bharat IV standards have seen even more progress; they now have fuels with no more than 50 ppm sulfur. But even these cities often cannot fully realize the benefits of low-sulfur fuels because many vehicles operating within their limits refuel in other areas with higher sulfur levels.

Investing in ultra-low-sulfur fuel (< 10 ppm sulfur content) and clean vehicle technologies in India will not come without costs. But the benefits of these investments, in terms of reduced healthcare costs and higher productivity, far outweigh them. This paper summarizes the issues involved.