Low sulphur fuel benefits: Vehicle fuel economy and emissions

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1 Low sulphur fuel benefits: Vehicle fuel economy and emissions Stuart Rayner: National Association of Automobile Manufacturers of South Africa/Ford Motor Company: July 2015

2 Presentation sections Fuel economy measurement and European CO2 emission reductions and plans Vehicle Technology trends South Africa Example: Vehicle emission and fuel standards: Actual and legislated. SA Department of Energy fuel economy labeling SA National Treasury CO2 vehicle taxation Potential improvements to new vehicle fuel economy and CO2 emissions Summary

3 Science Stabilizing Atmospheric CO 2 Levels 3

4 European new passenger car fleet CO2 legislation 130 gr/km average by 2015 progressive intro from gr/km average by 2020 subject to 2013 review. Waver for sub 10,000 units pa and special arrangements for sub 300,000 units manufacturers. Not initially applied to light commercial vehicles. Results in an effective 19% decrease in C02 emissions for all vehicles compared to current fleet. Implications for African markets?

5 Emission/CO2 Testing Facilities Slide: Ford Motor Company

6 Typical Light Duty Vehicle Test Facility speed vs. time Power Absorption Unit Dilution Air Inertia Wheels Measurements in g/km, mg/km or #/km Regulations ECE-83 or 715/2007/EC Constant Volume Sampling (CVS) System Bag Samples to emissions analyzers

7 Emissions Test Cell Small vehicles only ( Fully Laden < 3.5 t). Multi million dollar investments On-going calibration / correlation / maintenance requirements to maintain accuracy, precision and reliability Highly skilled operators required Ford Motor Company

8 speed (kph) New European Driving cycle (NEDC) New European Emissions / CO2 Cycle applied from year Excellent for repeatability and assessment against legislative standards New European Driving Cycle (NEDC) Speed / time trace 120 kph Recognised by both Industry and Legislators for some time as not representative of real driving Start of measurement Single Urban Drive Cycle 195 seconds Extre Urban Drive Cycle 400 seconds NEDC not only used in Europe but Mauritius / India / China / Russia / S Africa and many parts of South America time (s) 10 July 2015 Slide:Ford Motor Company

9 Fuel Consumption (FC) Calculation and relationship to CO2 Relevant MEASUREMENTS taken test during rolling road emission test. 1) Carbon monoxide - CO 2) Hydrocarbons HC 3) Carbon Dioxide CO2 The fuel consumption (FC), expressed in litres per 100 km (in the case of petrol, LPG, ethanol (E85) and diesel) is calculated by means of the following formulae: FC = (0.118/D) [(0.848 HC) + (0.429 CO) + (0.273 CO2)] Where D is the fuel density. However quantities of CO and HC emissions are comparatively very small in modern vehicles. Hence for a given fuel type and density, FC is effectively directly proportional to CO2

10 Vehicle technology trends : Petrol Introduction of EcoBoost Technology Engines Gasoline Direct Injection Turbocharging Downsizing & Boosting Source: Ford Motor Company 10

11 New Vehicle Technology Migration Recent/Near Term Begin migration to advanced technology Mid Term Full implementation of known technology Long Term Volume roll-out of hybrid electric technologies and alternative energy sources Near Term Mid Term Long Term Significant number of vehicles with Stratified Injection technology Dual clutch and 6-speed transmissions replace 4- and 5-speeds Increased hybrid applications Increased unibody applications Introduction of smaller cars and CUVs Electric power steering Battery management systems Aero improvement Weight reduction Engine displacement reduction aligned with weight save Stratified injection engines available in nearly all vehicles Increased use of hybrids as a percentage of gas engines Diesel use as market demands up to 10% Additional Aero improvements EPAS approaching 100% on light-duty vehicles Introduction of plug-in hybrids Percentage of internal combustion dependant on renewable fuels Volume introduction of hybrids and plug-in hybrids Introduction of BEV and fuel cell vehicles Clean electric / hydrogen fuels 11 Source: Ford Motor Company

12 Advanced Gas technologies and stringent emissions levels will reduce the Diesel vs. Gas fuel economy and CO 2 gaps. Fuel Economy Better CO2 Better Diesel Gasoline Emissions Control impact ~10-15% fuel economy difference VCT DI (homogen) Boosting & Downsizing Adv. Combustion (Lean) Today Future 12 Source : Ford Motor Company

13 South Africa Market Fuel economy/co2 developing market example Significant producer of new vehicles : BMW, Ford, GM, Mercedes Benz, Nissan and Toyota all have assembly plants supporting local and export markets. EU Trade agreements. Used vehicle imports prohibited : As opposed to the situation in most Sub Saharan countries. Legislated new vehicle requirements and homologation system. As opposed to just a Road Traffic Act aimed at operational issues as is the case in most developing countries. SA follows Europe in terms of vehicle design. SA participates in WP 29 and adopts ECE vehicle regulations albeit at lower stingency.

14 SA Government initiatives(1) Department of Energy Energy Efficiency strategy Energy Efficiency accord

15 Department of Energy: Energy Efficiency Strategy 2009: Objectives Targets to be met by 2015 Industry and Mining 15% final energy demand reduction Power Generation 15% reduction in parasitic electrical usage Commercial and Public Sector Buildings 15% final energy demand reduction Residential sector 10% final energy demand reduction Transport sector 9% final energy demand reduction

16 Legislated labeling requirements New passenger cars Vehicle Fuel Economy and Carbon Dioxide Emission Labelling Every petrol and diesel powered vehicle shall have applied to the inside of its windscreen a fuel consumption label. The label shall be self adhesive and removable and of a type suitable for application to the windscreen. The Label shall be placed in the bottom corner of the windscreen. The fuel consumption label shall contain the following statements and information. The words "FUEL CONSUMPTION" or "FUEL ECONOMY" as a heading The vehicle make, model or description. The fuel consumption and carbon dioxide emissions values as determined by SANS ECE R101 XXX recorded in litres per 100km and grams per km respectively Where a common label is utilised covering different engine, body styles or transmissions the fuel consumption and carbon dioxide figures quoted shall be those as applicable to the worst case combination. As an alternative to sections 1.1, 1.2 and 1.3above, an internally mounted label visible through the windscreen of the vehicle and suitable for removal and inclusion in the owner's manual may be displayed.

17 South Africa: New passenger car Fuel Economy/CO2 label

18 NAAMSA FUEL ECONOMY/CO2 DATA BASE

19 SA Government initiatives (2) National Treasury Environmental based taxation proposals: April 2006 CO2 taxation: New passenger cars and D/Cab LCV s.

20 National Treasury Environmental Fiscal Reform Draft : April 2006 OPTIONS FOR REFORMING EXISTING TAX

21 The Press comments..

22 Final CO2 Taxation: September 2010/March 2011 implementation The rate of emissions tax on passenger vehicles is R75 per gram CO2 emissions in excess of 120 g/km based on test reports. The rate of emissions tax on double cabs is R100 per gram CO2 emissions in excess of 175 g/km based on test reports. If no test report is available the CO2 emissions will be calculated according to the following formula: Passenger vehicles < 3000 cm³: (0.05 x cm³) = g/km CO2 Passenger vehicles > 3000 cm³: (0.05 x cm³) = g/km CO2 Double-cabs: (0.07 x cm³) = g/km CO2 Note: Tax rates increased in 2013 Budget by 20%

23 South Africa: Passenger car CO2 emission data and trend Data source: Lightstone/NAAMSA

24 Fuels and Vehicle are a System Multiple studies over the past three decades directly link fuel quality to emissions Air quality is not improved solely on restricting emissions standards fuel quality plays a key role in air quality improvements Reductions in NOx, HC, CO, CO2, etc. are achieved through a harmonious relationship between vehicle technologies and fuel quality. Vehicle emission equipment without the appropriate fuel quality can increase emissions. Fuel Quality Vehicle Technology Improvements in Fuel Economy and Emissions 24

25 SA vehicle fuel economy improvement potential NAAMSA inputs to National Treasury 2010

26 BMW European Market South African Market Make Model Engine CO2 Model Engine CO2 BMW 523i N53B30U i N52B25O2 187 BMW 528i N53B30O i N52B30O2 187 BMW 320i N43B20O i N46B20O2 189 BMW 325i N53B30U i N52B25O1 191 CHEVROLET European Market South Africa Market Make Model Engine CO2 Model Engine CO2 Chevrolet Aveo 1.4L* 140 Aveo 1.6L 173 Chevrolet Cruze 1.6L # 159 Cruze 1.6L 185 * 1.4L not available for SA, Euro 2 model does not exist. # European model (Euro 5) not available to SA.

27 MAZDA Other Market (Europe) South Africa Market Make Model CO2 Model CO2 Mazda Mazda dr TS Air con 125 Mazda2 1.3 Active 5-dr 129 Mazda dr Sport 135 Mazda2 1.5 Dynamic 5-dr 140 Mazda dr TS2 Diesel 107 Not approved for SA Mazda dr Sport Diesel 112 Not approved for SA Mazda dr TS 149 Mazda3 1.6 Dynamic 164 Mazda dr Sport 159 Mazda3 2.0 Individual 187 Mazda dr TS Diesel 117 Not approved for SA Mazda dr Sport (150ps) Diesel 144 Not approved for SA Mazda dr Sport (185ps) Diesel 149 Not approved for SA Mazda dr MPS 224 Mazda3 Sport 2.3 MPS 5-dr 235 Mazda5 2.0 Diesel 159 Not approved for SA Mazda dr TS 159 Mazda6 2.0 Original 187 Mazda dr Sport 186 Mazda6 2.5 Individual 203 Mazda dr S Diesel (129ps) 138 Not approved for SA Mazda dr TS Diesel (163ps) 142 Not approved for SA Mazda dr Sport Diesel (180ps) 142 Not approved for SA

28 MERCEDES BENZ Other Market (Western Europe) South Africa Market Make Model Engine CO 2 * Model Engine CO 2 Mercedes-Benz Vito/Viano Crewbus 2.2CDI 198 (Euro 5) Vito/Viano Crewbus 2.2CDI 225 (Euro 3) Mercedes-Benz Vito/Viano Crewbus 3.0CDI 225 (Euro 5) Vito/Viano Crewbus 3.0CDI 244 (Euro 4) Mercedes-Benz Sprinter Panel Van 2.2CDI 208 (Euro 5) Sprinter Panel van 2.2CDI 250 (Euro 3) Mercedes-Benz Sprinter Panel Van 3.0CDI 242 (Euro 5) Sprinter Panel van 3.0CDI 276 (Euro 4) * Euro 5 engines require 10 ppm ULS diesel Western Europe is currently at Euro 5 and is preparing to upgrade to Euro 6 by This will limit availability of lower EU spec engines for South Africa. Current SA spec is Euro 2. SA fuel spec levels (ie. 500ppm and limited-availability 50ppm ULS Diesel) poses a major risk to vehicle powertrain performance and DPF components. This risk is not sustainable in the long term.

29 OPEL European Market South Africa Market Make Model Engine CO2 Model Engine CO2 Opel Corsa * 1.3 CDTi 99 Corsa 1.3 CDTi 127 Opel Astra # 1.3 CDTi 109 Not approved for SA Opel Astra # 1.7 CDTi 119 Not approved for SA Opel Astra # 2.0 CDTi 126 Not approved for SA * European model (with DPF) not permitted in SA due to SA fuel quality. FORD # Euro 5 model (with DPF) not permitted in SA due to SA fuel quality Other Market (Europe) South Africa Market Make Model CO2 Model CO2 Ford Fiesta 1.4-litre TDCi diesel non DPF 110 Fiesta 1.6 DV6 Diesel non DPF 110 Ford Fiesta 1.6-litre TDCi diesel DPF 107 Not approved for SA Ford Fiesta 1.6-litre TDCi diesel DPF ECOnetic 98 Not approved for SA

30 TOYOTA Other Market (UK) South Africa Market Make Model Engine CO2 Model Engine CO2 TOYOTA Auris 1.4D 1.4D 128 Auris X (1.3 petrol) 1NR-FE 140 TOYOTA Yaris 1.4D-4D 1.4D 110 Yaris T3+ 2NZ-FE 141 The following models cannot be introduced into SA due to fuel sulphur requirements (indicated). Verso 2.2 D-CAT Auris 2.2 D-CAT Auris 1.4 D Rav4 2.2 D-CAT Landcruiser D V8 195kW Landcruiser Prado 1KD Lexus IS D-CAT Yaris 1.4 Diesel 50ppm 350ppm

31 World-Wide Fuel Charter First established in 1998 to promote greater understanding of fuel quality needs of motor vehicle technologies and to harmonize fuel quality worldwide in accordance with vehicle needs This is the go-to document for fuel quality information. Covers both gasoline and diesel, with four levels of each for fuel quality based on emission requirements Biofuels covered by separate document Access from AutoAlliance.org 31

32 Summary Globally all developed markets are moving rapidly to new higher fuel economy, low CO2 vehicle technology utilising progressively reduced sulphur level fuels. In the case of S Africa the benefits of fuel economy labelling and recent CO2 taxation are showing an approximate 1% pa CO2 improvement for passenger cars. Further progress towards more fuel efficient technology, is subject to fuels of appropriate quality becoming available. Comparison of typical developing market spec vehicles with that of the EU indicates significant improvements in CO2/fuel economy are possible given the appropriate fuel quality.

33 End Stuart Rayner National Association of Automobile Manufacturers of South Africa.

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