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India might become the first country to completely skip one stage of emission standards and move directly from the fourth to the sixth stage (Bharat IV to Bharat VI) as it hurries to address the menace of vehicular pollution. Differences among the stakeholders, however, are complicating this move.
India based its emission programme on the European, or Euro, norms. It started taking steps to check vehicular pollution around the time the economy was being liberalised. For petrol vehicles, the first stage of emission norms came into force in 1991 and for diesel vehicles, in 1992. In 1995, the government introduced unleaded petrol and made it mandatory for catalytic converters to be fitted in petrol cars sold in the four metros. By 2000, passenger and commercial vehicles had adopted Bharat Stage I, or BS I, norms. Currently, BS IV-compliant fuel is sold in 50 cities (the rest of India follow BS III norms). This (BS IV) will be extended to the rest of the country by April 1, 2017. The oil industry invested Rs 35,000 crore to upgrade the refineries to produce BS III and IV fuel.
So what have we gained? The move from BS III to IV is supposed to have brought down the particulate matter from cars to half (0.0250 gram/kilometre) and to one-fifth in commercial vehicles (0.02 gram/km). But the air quality, especially in the capital, has deteriorated. Even though BS IV standard is implemented in several cities, a large number of older vehicles remain compliant with a lower norm. Moreover, older vehicles from other cities continue to move through cities that follow BS IV norms.
The oil industry, it is learnt, is in favour of skipping the BS V norms. It wants BS VI to be introduced by 2020 instead of 2024. The fuel specifications to meet BS V and BS VI standards are the same, says an IndianOil official.
Friedrich Boecking, regional president (diesel systems) at Bosch India, reiterates that but for minor variations, BS V and VI fuel specifications are almost the same (sulphur content in both is 10 ppm). This means that the oil industry can smoothly transit from IV to either V or VI. But the automobile industry, which has all along been preparing for the advent of BS V, will face challenges. Boecking says that according to industry estimates, around Rs 50,000 crore will have to be invested to upgrade the four-wheeler engines from BS IV to BS V.
"Skipping the BS V emission norm could lead to major safety compromises in vehicles," says Vikram S Kirloskar, president of The Society of Indian Automobile Manufacturers , or SIAM, and vice-chairman of Toyota Kirloskar Motor. "While BS V and BS VI fuels are basically the same, the vehicular technologies are vastly different and have to be sequentially developed, tested and validated with each stage taking about four years. That is also the reason why other countries first implemented Euro V and moved to Euro VI only after the stabilisation of Euro V, even though the fuel was available," he said in a recent statement.
Boecking says in Europe a stepwise approach was followed to implement the Euro norms and sufficient lead time (4-5 years) was provided to vehicle and engine manufacturers as well as fuel system technology providers before shifting to the next stage of emission norms. The European Union implemented Euro VI norms in 2014.
Safety risk
The SIAM president argues that moving from BS III to BS V itself improves particulate matter emission by up to 90 per cent. The switch to BS VI only offers an incremental 0-10 per cent advantage, which, according to him, is not worth the safety risk involved in skipping the BS V stage.
The automobile industry is also worried that making a vehicle compliant to BS V or BS VI norms will significantly add to the costs, especially for diesel vehicles, and thus impact sales. The sale of diesel vehicles has already come under pressure owing to the narrowing gap between petrol and diesel prices, leading to low capacity utilisation of the capital-intensive diesel engine manufacturing facilities set up in recent years.
R C Bhargava, chairman of Maruti Suzuki, the country's biggest car maker, says Euro V changes are minimal in petrol cars, but in diesel vehicles manufacturers need to put particulate filter. This would increase the cost of a diesel car by Rs 22,000 to Rs 25,000 and of a petrol car by Rs 5,000. Moving to BS VI would imply a further cost escalation of about Rs 70,000 for diesel cars and Rs 10,000 for petrol and CNG cars. These costs will naturally be passed on to the customer.
BS norms are not the only factor that will make cars costlier in the coming years. The government has recently made it compulsory for new models to meet the minimum frontal and side crash test as well as pedestrian protection test from October 2017. Existing models have a grace period of one year to meet the side crash test norms and two years to clear the frontal crash test. These norms will require manufacturers to install airbags and the anti-lock brake system in all vehicles. This too will escalate the cost by about Rs 30,000 per car and significantly impact the price of entry-level cars.
Given that the automobile industry is struggling to grow in the backdrop of high interest rates, rising fuel cost and overall economic environment, such price escalations could compound the challenges for the sector.
