Automotive Fuel Markets in Eastern/Central Europe & Former Soviet Union (FSU) Presented by Tammy W. Klein, Director, Americas and Global Environmental Policy International Fuel Quality Center Hart Downstream Energy Services email:tklein@chemweek.com
Presentation Overview Regional Overview FSU Crude Capacity Fuel (gasoline, jet, distillate) Production Fuel Consumption What s Driving Automotive Fuel Specifications? European Enlargement & Fuel Quality European Gasoline & Diesel Specifications Lead Phase Out Progress Conclusions Appendix: Sulfur Specifications
Eastern/Central Europe & FSU Region Central Region: Poland, Czech Republic, Slovakia, Hungary Baltic Region: Lithuania, Latvia, Estonia Adriatic Region: Slovenia, Croatia, Yugoslavia (Serbia), Bosnia, FYR Macedonia, Albania Southeast Region: Romania, Bulgaria, Turkey, Cyprus Former Soviet Union: Russia, Ukraine, Belarus, Moldavia, Azerbaijan, Georgia, Armenia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan
Eastern/Central Europe & FSU Crude Capacity World Crude Refining Capacity 2% 1% 10% 17% Western Europe Eastern Europe North America Asia 14% Latin America 31% Africa Australia 25%
Fuel Production in Eastern/Central Europe BPD 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 Gasoline Jet Fuel Distillate Poland Czech Rep. Slovakia Hungary Lithuania Latvia Estonia Slovenia Croatia Yugoslavia Bosnia FYR Macedonia Albania Romania Bulgaria Turkey Cyprus Source: EIA, 2000 data Distillate includes on-road diesel and fuel oil
Fuel Production in Former Soviet Union BPD 1,000,000 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 Gasoline Jet Distillate 0 Russia Ukraine Belarus Moldavia Azerbaijan Georgia Armenia Kazakhstan Kyrgyzstan Turkmenistan Tajikistan Uzbekistan Source: EIA, 2000 data Distillate includes on-road diesel and fuel oil
Fuel Consumption in Eastern/Central Europe 100% 90% 80% 70% 60% 50% 40% Distillate Jet Gasoline 30% 20% 10% 0% Poland Czech Rep. Slovakia Hungary Lithuania Latvia Estonia Slovenia Croatia Yugoslavia Bosnia Macedonia Albania Romania Bulgaria Turkey Cyprus Source: EIA, 2000 data Distillate includes on-road diesel and fuel oil
Fuel Consumption in Former Soviet Union 100% 80% 60% 40% Distillate Jet Gasoline 20% 0% Russia Ukraine Belarus Moldavia Azerbaijan Georgia Armenia Kazakhstan Kyrgyzstan Turkmenistan Tajikistan Uzbekistan Source: EIA, 2000 data Distillate includes on-road diesel and fuel oil
What s Driving Automotive Fuel Specifications? Public Policy Environment Global Country Regional Local Fuel specifications Lead Sulfur Benzene Aromatics Distillation Octane/Cetane Additives Oxygenates Engine technologies China Middle East Direct Injection Hybrids Fuel cells India Refining Industry & technology USA South Africa Economy Australia Alternative fuels Bio-fuels LPG CNG Gas to Liquid H2 Argentina Brazil
European Enlargement & Fuel Quality Latvia - CEN 1993 (CEN 1999 by 1/1/04) Lithuania - CEN 1993 (CEN 1999 by 1/1/03) Estonia - CEN 1993 (CEN 1999 by 1/1/04) Bulgaria - CEN 1993, CEN 1999 Romania CEN 1993, CEN 1999 Malta Dir. 98/70 Transition period Turkey CEN 1993 (CEN 1999 by 1/1/05) 1996 Euro 2 2000 Euro 3 2003 2005 Euro 4 2008 10 ppm Slovenia - Dir.98/70 2000 Slovakia - Dir.98/70 2000 Czech Rep - Dir. 98/70 2000 Hungary - Dir. 98/70 2000 Poland Dir. 98/70 (1/1/03) Cyprus Dir. 98/70 (1/1/03?) Source: IFQC s A Summary of Worldwide Automotive Fuels Specifications, January 2002
European Gasoline & Diesel Specifications Gasoline EN 228: 1993 Euro II Dir 98/70 2000 EN 228: 1999 Euro III Dir. 98/70 2005 Euro IV Dir. 98/70 2009 (EP/Council) Aromatics, vol%, max - 42 35 (Review) * Olefins, vol%, max - 18 18 (Review) * Benzene, vol%, max 5.0 1.0 1.0 (Review) * Oxygen, wt%, max - 2.7 2.7 (Review) * Sulfur, ppm, max 500 150 50(10) 10 RVP, kpa 35-100 60.0 /70.0 60.0/70.0 (Review) * Lead, g/l max 0.013 None None none EN 590: 1993 Diesel (*) Dir 98/70 2000 EN 590: 1999 Dir. 98/70 2005 Dir. 98/70 2009* (EP/Council) Poly Aromatics, vol%, max N/A 11.0 11.0 (Review) * Sulfur, ppm, max 2,000 350 50/10 10 Cetane number, min 49 51 51 (Review) * Density @ 15 o C, kg/m 3 820-860 845 845 (Review) * Distillation, T95 o C, max 370 360 360 (Review) * * Review clause: By end 2005 the European Commission will carry out a review of the parameters and alternative fuels and see if new specifications are necessary, the outcome of the various commitments with the auto-manufacturers to reduce fuel consumption and CO2 emissions of new passenger cars, the effect of metallic additives on new pollution abatement technologies. The Review will also confirm the diesel 10ppm introduction end date e.g. 2009 and will align the non-road diesel fuel quality with the on-road diesel fuel quality.
Eastern/Central European & FSU Fuel Specs Country following spec EN 228:1993 for gasoline and EN590:1993 for diesel Country following spec EN 228:1999 for gasoline and EN 590:1999 for diesel Country following Former Soviet Union specifications Little to no data ESTONIA LATVIA RUSSIA LITHUANIA BELARUS POLAND UKRAINE CZECH REP. SLOVAKIA MOLDAVIA HUNGARY SLOVENIA ROMANIA BOSNIA CROATIA BULGARIA YUGOSLAVIA ALBANIA MACEDONIA TURKEY CYPRUS Other FSU Countries GEORGIA ARMENIA AZERBAIJAN KAZAKHSTAN KYRGYZSTAN TADJIKISTAN TUKMENISTAN UZBEKISTAN
Eastern/Central European & FSU Lead Phase-Out ESTONIA LATVIA RUSSIA LITHUANIA BELARUS POLAND UKRAINE CZECH REP. SLOVAKIA MOLDAVIA HUNGARY SLOVENIA ROMANIA BOSNIA CROATIA BULGARIA YUGOSLAVIA ALBANIA MACEDONIA TURKEY Other FSU Countries GEORGIA ARMENIA AZERBAIJAN KAZAKHSTAN KYRGYZSTAN TADJIKISTAN TUKMENISTAN UZBEKISTAN Country still using leaded gasoline CYPRUS Country that completed lead phase out
Lead Phase-Out Overview Regional Framework: UN/ECE Pan-European Lead Phase-Out Strategy, adopted June 1998 promotes: Phase out of leaded petrol/gasoline, By 1 January 2005 leaded petrol should no longer be marketed in European Countries, Aim to have unleaded petrol market share of at least 80% by 1 January 2002 at the latest, Limit for the lead content of 0.15 g/l max by January 2000 at the latest, Lead content of unleaded petrol shall not exceed 0.013 g/l. EU Framework: Directive 98/70/EC calls for lead ban. Accession country implementation mandatory. No derogation requests currently on the table.
Lead Phase-Out Overview Regional Framework: UN/ECE Pan-European Lead Phase-Out Strategy and EU Accession Impact: 8 Eastern/Central European countries no longer using lead. First wave accession countries have completed lead phaseout. Cyprus and Poland lead phase out planned for 2003. Currently, no leaded fuels marketed in Poland. Second wave and third wave accession countries lead phase out projected between 2003-2005. Turkey ready for a ban in 2005 in its bid for EU membership. Russia no longer produces leaded gasoline. Georgia lead phase out in place.
Conclusions Positive Factors: East and Central European Accession Countries moving towards implementation of Directive 98/70/EC Fuel Quality Specifications and CEN Standards by 2003-2005 Tourism from West Europe pushes sulfur reduction in region including FSU to meet automotive technology demands Negative Factors: Russia and FSU countries implementation of better fuel quality slow and in piecemeal fashion starting with lead ban. Low sulfur availability only planned in tourism corridors. Russian high sulfur crude supplied to much of region Actual fuel quality evaluation lacking in entire region Monitoring and enforcement lacking in entire region
International Fuel Quality Center For more information please contact: Sandrine Dixson-Decleve, Director, Europe & Africa, sdixson@chemweek.com Vlad Curelea, Manager, Refining, Research & Development, vcurelea@chemweek.com
Central/Eastern Europe & FSU Gasoline Sulfur Specs Region Country Sulfur level ppm Unleaded Leaded North Central Poland 500 / 150 - Czech Rep. 150 - Slovakia 150 - Hungary 150 / 50 - Baltic Lithuania 500 - Latvia 500 - Estonia 500 -
Central/Eastern Europe & FSU Gasoline Sulfur Levels Region Country Sulfur level ppm Unleaded Leaded Slovenia 150 - Adriatic Croatia 1,000 1,000 Yugoslavia 150 1,000 Bosnia 150 1,000 Macedonia No data No data Albania No data No data Southeast Romania 150 1,500 Bulgaria 500 / 150 No data Turkey 500 1,000 Cyprus 500 1,000
Central/Eastern Europe & FSU Gasoline Sulfur Specs Region Country Sulfur level, ppm Unleaded Leaded Russia 500 1,000 Ukraine 500 1,000 FSU Belarus 500 1,000 Moldavia 500 1,000 Azerbaijan 1,000 1,000 Georgia 1,000 1,000 Armenia 1,000 1,000 Kazakhstan 1,000 1,000 Kyrgyzstan 1,000 1,000 Turkmenistan 1,000 1,000 Tajikistan 1,000 1,000 Uzbekistan 1,000 1,000
Central/Eastern Europe & FSU Diesel Sulfur & Cetane Specs Region Country Cetane Sulfur, ppm North Central Poland 49 / 50 / 51 2,000 / 350 / 50 Czech Rep. 48 / 51 350 Slovakia 51 350 Hungary 51 350 Baltic Lithuania 51 500 Latvia 51 500 Estonia 47 / 49 500 Slovenia 51 350 Adriatic Croatia 51 350 Yugoslavia 45 5,000 Bosnia 51 350 Macedonia No data No data Albania No data No data
Central/Eastern Europe & FSU Diesel Sulfur & Cetane Specs Region Country Cetane Sulfur ppm Southeast Romania 49 / 51 2,000 / 500 / 350 Bulgaria 51 500 Turkey 51 7,000 Cyprus 49 10,000 Russia 45 / 49 / 51 5,000 / 2,000 / 1,000 / 500 / 350 Ukraine 45 / 49 / 53 2,000 / 1,000 / 500 / 350 FSU Belarus 45 / 49 / 53 2,000 / 1,000 / 500 / 350 Moldavia 45 5,000 / 2,000 / 500 Azerbaijan 45 5,000 / 2,000 Georgia 45 5,000 / 2,000 Armenia 45 5,000 / 2,000 Kazakhstan 45 5,000 / 2,000 Kyrgyzstan 45 5,000 / 2,000 Turkmenistan 45 5,000 / 2,000 Tajikistan 45 5,000 / 2,000 Uzbekistan 45 5,000 / 2,000