Fuel Changes Ultra Low Sulfur Diesel and Biodiesel

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1 Fuel Changes Ultra Low Sulfur Diesel and Biodiesel The U.S. Environmental Protection Agency s (EPA) emissions standards for diesel engines manufactured after January 1, 2007 require significant emissions reductions. These reductions will be accomplished through the use of after treatment equipment, such as particulate filters (DPF) and oxidation catalysts. To achieve these emissions reductions and protect these after treatment emission devices, Ultra Low Sulfur Diesel (ULSD) must be used in 2007 and later diesel-powered engines. ULSD has less than 15- ppm of sulfur, as compared to (Federal) Low Sulfur Diesel with a 500-ppm sulfur limit or California Air Resources (CARB) Diesel with a 150-ppm sulfur limit. ULSD may be used in all diesel-powered engines, generally with no modification to the engine or fuel system. The primary benefit of using ULSD is emissions reductions. Without particulate filters or oxidation catalysts, using ULSD can provide up to a 13 percent reduction in particulate matter (PM) or soot, a 13 percent reduction in hydrocarbons (HC), a 6 percent reduction in carbon monoxide (CO), and a 3 percent reduction in nitrogen oxide (NOx). When ULSD is used with particulate filters or oxidation catalysts, the reductions are percent in PM, 90 percent in HC, 90 percent in CO, and percent in NOx. 1 Diesel-powered on-highway engines manufactured after January 1, 2007, are designed to operate only with ULSD fuel. Improper fuel use will reduce the efficiency and durability of engines, permanently damage many of the engine s advanced emissions control systems, reduce fuel economy, and possibly prevent the vehicles from running at all. Manufacturer s warranties are likely to be voided by improper fuel use. Additionally, burning Low Sulfur Diesel (<500-ppm) fuel (instead of ULSD fuel) in 2007 and later model year diesel cars, trucks and buses is illegal and punishable with civil penalties. The EPA has mandated that by October 15, 2006, 80 percent of the nation s on-road diesel fuel contain less than 15-ppm sulfur. Except in California, all retail diesel fuel dispensers must be labeled if they dispense ULSD. (See for sticker information.) The Federal phased implementation allows refineries time to complete the extensive and costly equipment changes required to produce ULSD. (The cost of these equipment changes to refiners is about $8 billion.) By October 1, 2010, all diesel fuel nationwide, for both on- and off-road use, must be ULSD, except in California, all diesel fuel for both on- and off-road use, must be ULSD by October 15, What is ULSD? Ultra Low Sulfur Diesel (ULSD) is a new class of diesel fuel required to enable dieselpowered engines meet stricter emissions regulations around the world. Severely hydrotreating diesel fuel reduces its sulfur levels. However it also produces a diesel fuel with slightly lower energy density, less lubricity, less oxidative stability, less cold flow, and 1 Source: National Association of Fleet Administrators, Aug

2 anti-static characteristics than Low Sulfur Diesel fuel. As a result, ULSD will contain additional additives to improve its lubricity. Lubricity: Lubricity is a measure of the fuel's ability to lubricate and protect the various parts of the engine's fuel injection system from wear. The processing required to reduce sulfur to 15-ppm also removes naturally occurring lubricity agents in diesel fuel. To manage this change the American Society for Testing and Materials (ASTM) adopted the lubricity specification defined in ASTM D975 for all diesel fuels, effective January 1, The D975 specification is based on the High Frequency Reciprocating Rig (HFRR) test (D 6079) and requires a wear scar no larger than 520 microns. As necessary, additives are added to ULSD prior to its retail sale to increase lubricity and to inhibit corrosion. With these additives, ULSD fuel is expected to perform as well as Low Sulfur Diesel fuel. Energy Density or Content: Energy density is a fuel's relative measure of energy (or heat) generated by burning a given amount of fuel. The processing required to reduce sulfur to 15-ppm reduces the aromatics content and the density of diesel fuel, resulting in a reduction in energy content (BTU/gal) of about one (1) percent and may affect fuel mileage. Cetane Number: The processing required to reduce sulfur to 15-ppm also reduces the aromatics content resulting in an increase to the cetane number. Lubrication: A new oil formulation, CJ-4 is required for all 2007 engines. CJ-4 will be "backward compatible" (may be used) with older generation engines. Cold Climates: Only Ultra Low Sulfur kerosene (No. 1 diesel with no more than 15-ppm sulfur) may be blended with ULSD fuel to improve cold weather performance. Cost: The EPA estimates that when fully implemented the sulfur reduction requirement will increase the cost of producing and distributing diesel fuel by about five cents per gallon due to additional refining costs to remove the sulfur from the fuel. Other sources indicate this cost per gallon will be higher. Source: National Association of Fleet Administrators, Aug

3 How will ULSD affect my fuel system seals? Engine and vehicle manufacturers expect ULSD fuel to be fully compatible with the existing fleet, including 2006 and earlier model year vehicles. In some instances, the introduction of ULSD fuel to older vehicles may affect fuel system components or loosen deposits in fuel tanks. As part of a good maintenance program, owners and operators of existing cars, trucks, buses and equipment are encouraged to monitor their diesel-powered vehicles closely for potential fuel system leaks or premature fuel filter plugging during the changeover to ULSD fuel. The transition to ULSD in 2006 may affect fuel system elastomers (e.g., o-rings). Any change will depend on the elastomer material and age, as well as the change in seal swell characteristics of the particular fuel being used, relative to the fuel the vehicle has been using. Experience in transitioning to Low Sulfur Diesel (500-ppm) in 1993, suggests that end-users should be proactive. Specifically, maintenance records should be reviewed to ensure that fuel system elastomer seals have been changed out at recommended intervals with recommended materials. (See Chevron's technical bulletin Fuel Links from Seals of Vehicles using Ultra Low Sulfur Diesel 2 for additional information.) 2 Source: National Association of Fleet Administrators, Aug

4 The Biodiesel Alternative to ULSD (15-ppm) Biodiesel is an alternative to Ultra-Low Sulfur Diesel (ULSD). Biodiesel includes B100 and biodiesel blends of B20 (20% Biodiesel) or B5 (5% Biodiesel). B20 should be blended with ULSD (15-ppm) to insure maximum emission reduction benefits and to protect after treatment devices on 2007 and newer emission compliant engines. Below is a description of these Biodiesel fuels, their costs, and benefits to fleet operators. What is Biodiesel? Biodiesel (B5, B20, B100) is a clean-burning fuel containing no sulfur or aromatic compounds. It is currently produced from a number of renewable sources including soybean oil, rapeseed oil, animal fats, and recycled cooking oil. These sources can be obtained from agricultural feedstocks, or recycled cooking oil or grease. The most common form of biodiesel is derived from virgin soybean oil. Biodiesel can be used in its pure form, B100 or "neat biodiesel," or blended with diesel. The most common blend is B20, which contains 20 percent biodiesel blended with 80 percent diesel. A major advantage of B20 is that it can be used in any diesel engine with little or no modification to the engine or refueling infrastructure. But because of biodiesel s cleaning properties, initially dispensers and vehicles fuel filters will probably require more frequent replacement. To ensure proper quality, only use biodiesel-ulsd fuel blends that are properly mixed by a qualified blender. Users should not create their own biodiesel blends by adding biodiesel to ULSD fuel in a vehicle s fuel tank. The nation s largest biodiesel user, the Department of Defense, does not permit truck manifolded blending or splash tank blending. The typical acceptable method is partially filling the tanker truck s compartments at the terminal with ULSD diesel fuel and then adding warm or hot B100 biodiesel. Blending occurs during transportation. Most engine manufacturers currently allow biodiesel blends in concentrations up to five (5) percent provided those blends meet accepted (ASTM) fuel quality standards. In June 2006, the Engine Manufacturers Association (EMA) announced that they were developing Test Specifications for B20 to help reduce the nation s demand for imported oil. 3 Because biodiesel can solidify during cold weather, Cloud Point (CFPP) becomes a critical part of the ASTM s D975 specification for diesel. Like ULSD, Biodiesel may impact certain elastomers and natural rubber compounds in the fuel systems. When using biodiesel fuels, the condition of seals, hoses, gaskets, and wire coatings should be monitored. According to the National Biodiesel Board s experience, there is no impact on these components when using B20 and lower. 3 Source: National Association of Fleet Administrators, Aug

5 Currently, OEMs are switching to components more suitable for use with Ultra Low- Sulfur Diesel blended with biodiesel. Alternative Fuel: In 1998, Biodiesel was added to the EPAct's list of alternative fuels. Fleets subject to EPAct 1992 may use B20 or B100 as a compliance strategy to achieve their EPAct alternative fuel use requirements and to reduce the nation's energy dependence on imported oil. Lubricity: Other benefits of B20 are include enhanced lubricity, fuel system cleaning properties, and, when used with older Federal Low Sulfur Diesel, some environmental benefits. The use of biodiesel, even in amounts less than B20, increases the lubricity of both Low Sulfur Diesel (500-ppm) and ULSD. The increased lubricity can increase the life of heavy-duty engines and their components. But the enhanced lubricity of biodiesel can also act as a solvent and clean engine and/or fuel systems. This can lead to clogged fuel dispenser filters and engine fuel filters when biodiesel is first used. Dispenser and engine fuel filters should be monitored. Environmental Benefit: B20 has an environmental benefit when blended with Federal Low Sulfur Diesel (500-ppm). The blended fuel s sulfur content is reduced by 20%. The EPA s draft report, A Comprehensive Analysis of Biodiesel Impacts on Exhaust Emissions, 4 October 2002, comparing soybean-based B20 to Federal Low Sulfur Diesel (500- ppm), found that B20 reduced particulate matter by 10 percent, hydrocarbons by 21 percent, and carbon monoxide by 11 percent. However, Nitrogen Oxide emissions increased by 2 percent. When B20 is blended with ULSD, B20 s environmental benefit is negligible. NOx emissions from B20 blended with ULSD actually increase 1 to 6 percent, depending upon the source of the B20. Additives are being developed to reduce Biodiesel s NOx emissions so that they are equal to those of ULSD. Potential drawbacks with the use of biodiesel may include engine warranty considerations, increased cost, cold flow properties, fuel economy, shelf life, and in the near term, increased Nitrous Oxide emissions. Engine Warranty: Many engine manufacturers permit up the use of up to a 5 percent biodiesel blend (B5). Some manufacturers state that the use of larger percentages of biodiesel may impact the engine s warranty. Check with the engine manufacturer. Cost: Before the United States Federal tax credit was enacted as part of EPAct 2005, the cost of B20 was about 20% higher than Low Sulfur Diesel (500-ppm). With the current Federal tax credit that expires in 2009, there should be little or no difference 4 Source: National Association of Fleet Administrators, Aug

6 in cost between B20 and ULSD. As more biodiesel becomes available, prices are expected to be competitive with ULSD. Cold Climates: When both biodiesel and conventional diesel fuels are used in very cold temperatures, biodiesel s cold flow properties may become an issue. According to the United States Department of Agriculture, the cold filter plugging point of B20 is approximately 7 degrees warmer than with conventional diesel. The increase in the temperature at which B20 begins to freeze compared to conventional diesel may not present problems for many users. To improve cold weather performance, Biodiesel should be blended at the same rate with ULSD No. 1 diesel (no more than 15-ppm sulfur) and have an anti-gelling additive. Shelf life: Currently, the industry recommends that biodiesel be used within six months. As with other fuels stored for an extended period, fleet operators should test the fuel prior to use. Fuel economy: Fuel economy may be a minor drawback. Conventional diesel contains more energy content, and therefore provides higher fuel economy. ULSD has about 1.0 percent less energy content that Federal Low Sulfur Diesel. A fuel s energy content has a direct relation on fuel economy with plant-based biodiesel providing better fuel economy than animal-based biodiesel. The EPA estimates that the fuel economy penalty for B20 is between 1.6 percent (plant-based biodiesel) percent (animalbased biodiesel). Users of B20 should anticipate a loss of fuel economy of 1.1 percent to 1.25 percent when it is blended with ULSD. However, B20 has a higher cetane number than conventional diesel, which increases the engine s performance to balance some of the energy loss. Emissions: While biodiesel provides emissions benefits similar to ULSD, Nitrous Oxide (NOx) emissions may increase from 1 to 6 percent depending upon the source of the biodiesel (plant verses animal renderings) and a given engine s duty cycle. Additives are being developed, both in the U.S. and Europe, to reduce the NOx emissions from biodiesel. If you have any questions about the use of biodiesel fuel in a specific engine, contact your OEM and/or the National Biodiesel Board at (800) References: and Chevron's Fuel Links from Seals of Vehicles using Ultra Low Sulfur Diesel Source: National Association of Fleet Administrators, Aug

7 2007 Emission Standards for Heavy-Duty Engines and Diesel Regulation Regulatory Background In December 2001 the 2007 Heavy Duty Highway Final Rule pertaining to model year 2007 diesel engines and ultra low sulfur fuel was adopted by the U.S. Environmental Protection Agency (EPA). The 2007 diesel engines will reduce nitrogen oxide emissions by 95% and particulate matter emissions by 80%. To facilitate these reductions in the 2007 engines, sulfur in diesel fuel must be reduced by 97% from the current level of 500 PPM to 15 PPM. Under the original EPA rule, refiners and importers must produce highway diesel fuel meeting no more than 15 PPM of sulfur by June 1, 2006 with availability required at terminals by July 15, 2006 and finally retail and wholesale availability by September 1, However, the regulation provides a temporary compliance option permitting up to 20% of the highway diesel produced to meet the current 500 PPM sulfur limit through May 2010 provided the remaining 80% meets the 15 PPM standard. To facilitate the transition to the ultra-low sulfur diesel (ULSD) fuel, EPA announced (5/27/2005) plans to issue a rule later this year that will modify the deadlines. EPA will shift the retail compliance date from September 1 to October 15, 2006, to allow more time for terminals and retail outlets to comply with the 15 ppm ULSD standard. During this extended transition period, diesel fuel meeting a 22 ppm level can be marketed as ULSD downstream in order to speed the transition. Requirements In order to meet 2007 emissions standards engine manufacturers will rely primarily on engines using particulate traps to reduce particulate matter and exhaust after treatment catalyst technology to control nitrogen oxide emissions. These devices in conjunction with exhaust gas recirculation will permit engine manufacturers to comply with the more stringent 2007 emission standards. Engine manufacturers warn that use of current diesel fuel in 2007 engines may damage the particulate trap and catalyst technology. Engines manufactured before 2007 without emission reduction equipment can be retrofitted with these devices resulting in a 90% particulate matter reduction and hydrocarbon levels reduced to nearly undetectable levels when used in combination with ultra low sulfur fuel. Older engines without these devices will reduce emissions by approximately 10% when utilizing ultra low sulfur diesel fuel. Impact The EPA estimates 2.6 million tons of nitrogen oxide and 110,000 tons of particulate matter will be reduced when the program is fully implemented resulting in the prevention of 8300 premature deaths, 5500 cases of chronic bronchitis, and 17,600 cases of acute bronchitis in children. Cost ULSD has less energy content than conventional diesel fuel. Engine manufacturers feel the next generation of engines will not experience a significant difference in fuel economy. However fleets with older vehicles may experience a fuel economy penalty of 1% to 2% when ULSD is utilized in this equipment. ULSD fuel will cost more than conventional high way diesel fuel. Predicting the cost impact is uncertain. Estimates range from 5 to 7 cents per gallon up to 13 cents per gallon over current price. It is uncertain if oil change intervals will be impacted by the additional emission devices. Particulate traps will require routine maintenance potentially adding to maintenance costs. At this time engine manufacturers will not provide estimated incremental costs for 2007 emission compliant engines. Industry observers estimate that 2007emissions compliant engines could add $5000 to $7000 to the cost of an engine. Source: National Association of Fleet Administrators, July 2005

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