/ 1 August 2009

Waiting for the smog to clear

Unless you’ve had your head under a Kalahari molehill for the past decade you should be aware of the “inconvenient truth” about the world’s dependence on non-renewable fossil fuels.

Next year South Africans will be introduced to our own version of “green tax”. Although this may seem to be another issue for petrol heads to feel guilty about, and to raise manufacturers’ temperatures, depending on how efficient their vehicles are, carbon dioxide (CO2) emissions will have a direct impact on your wallet. It’s worth considering how CO2 labelling works, whether these are reflective of a vehicle’s true “green” credentials and whether South Africa is staring down the barrel of a fuel crisis.

Since July 2008 the Department of Minerals and Energy’s energy-efficiency accord has stipulated that new vehicles’ CO2 emissions have to be displayed at point of sale.

Measuring emissions
The g/km emissions figure is derived from the exact process all new vehicles undergo when they are tested for average fuel consumption. Stuart Rayner, chairperson of the National Association of Automobile Manufacturers of South Africa’s (Naamsa’s) committee on fuels and emissions, said: “The fuel economy measurements are made with the vehicle mounted on a rolling road dynamo-meter in a chamber under controlled atmospheric conditions.

The fuel economy is measured as the vehicle is driven through a standard cycle of set accelerations and stops. This ‘combined cycle’ consists of an ‘urban cycle’ of 7km with vehicle stops, idling and starts reaching a maximum speed of 50kph and an ‘extra urban cycle’ of 4km in which a speed of 120kph is briefly reached. CO2 emissions are recorded over the ‘combined cycle’.” This procedure is conducted independently by Naamsa.

Those hardly sound like challenging circumstances under which a vehicle needs to perform and they go a long way to explaining the optimistic economy figures manufacturers have been known to advertise. But it is worth considering that the testing procedure was not meant to be true to life.

“The intention of the figures is to provide a standardised test that all vehicles must undergo to allow comparison between vehicles. Fuel economy and emissions vary enormously depending on many factors,” Rayner said.

  • How you drive
  • The most notable of those factors is quite simply how you drive. The faster you go, the more fuel you use, the more CO2 you put into the atmosphere. Companies that measure “carbon footprints” in the corporate sector say a more accurate indicator of how much CO2 a vehicle emits can be calculated by multiplying litres of fuel burned by 2.39kg for petrol and 2.63kg for diesel vehicles.

    This means an average-sized 50-litre fuel tank contributes 115kg of CO2 for petrol and 131kg for diesel vehicles into the atmosphere. This all depends on your driving style. Is it fair then to tax a consumer based on a CO2 label when — as with average fuel consumption figures — they have little in common with what occurs in the real world?

  • Fuel quality
  • Another notable factor in CO2 emissions is the quality of the fuel powering your vehicle. Sulphur exists naturally in all crude oil and any sulphur not removed during the refining process runs the risk of contaminating fuel, which leads to subsequent damage to your engine and the environment.

    The sulphur found in diesel contributes significantly more to fine particulate emissions, through the formation of sulphates both in the exhaust stream and later in the atmosphere.

    Hence the advanced particulate filters found on new diesel models these days and the dilemma of their ability to function on higher grade 50ppm (parts per million of sulphur) or the more readily available 500ppm diesel fuel in South Africa.

    It’s a dilemma that makes South Africa’s fuel look all the more archaic when you consider that Europe is set to introduce mandatory 10ppm to 15ppm diesel fuel in September under the Euro5 compliance.

    If you’re a diesel-vehicle owner, or have your eye on a latest generation high-tech diesel vehicle, don’t expect a quick fix.

    Speaking at the South African National Energy Association Action for Energy conference recently, Dr Benny Mokaba, chief director of the Sasol South Africa energy cluster, said that it would cost fuel refiners R40-billion to upgrade to Euro4 fuel compliance by 2014. It’s a long way to go when you consider that Europe introduced Euro4 fuel compliance in 2005 and plans to be at Euro6 by 2014.

    National interests
    Mokaba said although cleaner fuel would ensure the continued sustainability of South Africa’s fuel industry, new energy policies shouldn’t be implemented only because it is fashionable. A push to cleaner fuel conflicted with national interests and could lead Sasol to import as much as eight billion litres of liquid fuel by 2014, he said.

    This gloomy outlook seems at odds with last year’s estimate that Sasol banked profits as high as R100-million a day. In a record year that resulted in an operating profit increase of 32%, or R34-billion.

    There is endless scope to debate whether local refiners are simply reluctant to move to Euro4 compliance because they want to safeguard their bottom line. But the reality is that it puts vehicle manufacturers and new car buyers into a more complex corner with 2010 “green tax” just around the corner.

    Anton Moldan, environmental adviser to the South African Petroleum Industry Association (Sapia), said: “While the perception is that oil companies have been dragging their feet over clean fuels, Sapia has been meeting them twice a week since the beginning of the year to set up a long-term road map to cleaner fuels.

    “Clean fuels cannot be realised with just a simple flick of a switch. Regulatory certainty is needed before committing huge investment. And it’s difficult to justify wholesale changes at a stage that would service only 10% to 11% of the vehicles in South Africa’s car park,” Moldan said.

    The reality of South Africa’s long- term road map to cleaner fuels is that manufacturers, refiners and consumers appear locked in a turgid three- way stalemate, with refiners unable to commit to cleaner fuels until consumers show more of an interest in low-emissions vehicles and manufacturers unable to commit to these until refiners guarantee a steady stream of cleaner fuels. Despite this, Moldan said the goal of improved air quality should be remembered.

    Motor industry reaction to green tax
    Stuart Rayner, chairperson of Naamsa’s fuels and emissions committee: “Lack of low-sulphur fuels has the effect of denying many manufacturers the opportunity to introduce the latest generation of low CO2 emission vehicles.

    “Many already face the prospect of having to drop certain vehicle models or continue with older engine technology as a result of a lack of low-sulphur fuels — often at a cost premium. Naamsa has been pressing government for some years with little success to move to cleaner fuels, specifically to allow the introduction of new- technology vehicles.

    “Treasury has proposed to incentivise low-sulphur fuels but has not acted. Experience overseas indicates that a small cross-subsidy in favour of the low-sulphur fuel can drive up availability within months as opposed to the five years we are currently looking at.”

    Guy Kilfoil, general manager, group communications and public affairs, BMW South Africa: “It’s important to recognise that the proposed emissions tax will not incentivise the consumer to buy ‘greener’ cars. The duty is according to value-based (ad valorem) and linked to the price of the vehicle — you pay more for the same gram of carbon emission on a BMW 730d than you do on a BMW 330d. This is an unreasonable disparity, especially when the emissions values for the two cars are identical.

    “We firmly believe that any tax measure to curb CO2 emissions should be implemented on all cars and be linked to annual licence fees, as they are in Europe.

    “Government needs to start an open discussion with all stakeholders to accelerate the fuel-reform process and certainly before the implementation of the proposed ‘green’ tax as it stands.”

    Reandren Thulkanam, product manager, Mercedes-Benz cars division, Mercedes-Benz South Africa: “We have always supported environmental awareness and have invested time and money into making more efficient vehicles available.

    “But we think that certain fundamental factors need to be confirmed and finalised before we [South Africa] implement these taxes; things such as the availability of better quality fuel throughout the country. We need to ensure that there is infrastructure available and set up first; that high-quality diesel and petrol are available at all filling stations in the country; and that the consumer is aware of these taxes and what they mean.”

    Jaco van Loggerenberg, spokesperson for Hyundai Automotive South Africa: “Although we believe that taxing emissions is a step in the right direction, it might still be a bit too soon. The government is still undecided about the future Euro specification that will be required. This has a major impact on manufacturers in costs and vehicles in stock.

    “The ideal time for implementation would be 2012 because this will leave enough time for manufacturers to sell stock that does not comply with present standards.

    “The taxes should be implemented on a sliding scale, allowing time for manufacturers to comply with requirements. There is also the major problem in the number of old vehicles on South African roads.

    “The scrapping allowance implemented in Europe recently has gone a long way to alleviate the problem of old and unsafe vehicles, allowing those customers who would not have been able to otherwise to upgrade to new vehicles.”