BBM 505

TOPIC: COST IMPACT OF EURO STANDARDS ON AUTOMOBILE

INDUSTRIES.

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SUBMITTED BY:
AAYUSH VERMA

BBM (HONS.)

087501
AUTOMOBILE
AN INTRODUCTION

An automobile, motor car or car is a wheeled motor vehicle used for transporting passengers, which also
carries its own engine or motor. Most definitions of the term specify that automobiles are designed to run
primarily on roads, to have seating for one to eight people, to typically have four wheels, and to be
constructed principally for the transport of people rather than goods. However, the term automobile is far
from precise, because there are many types of vehicles that do similar tasks.

There are approximately 600 million passenger cars worldwide (roughly one car per eleven people). Around
the world, there were about 806 million cars and light trucks on the road in 2007. They burn over 1 billion m³
(260 billion US gallons) of petrol/gasoline and diesel fuel yearly. The numbers are increasing rapidly, especially
in China and India.

FUEL TECHNOLOGIES:
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A radio taxi in New Delhi. A court order requires all commercial vehicles including trucks, buses and taxis in
India to run on Compressed Natural Gas
Older automobiles were generally powered by a steam engine, which was fed by burning gasoline. Most
automobiles in use today however are propelled by an internal combustion engine, fueled by deflagrating
gasoline (also known as petrol) or diesel. Both fuels are known to cause air pollution and are also blamed for
contributing to climate change and global warming. Increasing costs of oil-based fuels, tightening
environmental laws and restrictions on greenhouse gas emissions are propelling work on alternative power
systems for automobiles. Efforts to improve or replace existing technologies include the development of
hybrid vehicles, electric and hydrogen vehicles that do not release pollution into the air.

COSTS AND BENEFITS:

The costs of automobile usage, which may include the cost of: acquiring the vehicle, repairs, maintenance,
fuel, depreciation, injury, driving time, parking fees, tire replacement, taxes, and insurance, are weighed
against the cost of the alternatives, and the value of the benefits – perceived and real – of vehicle usage. The
benefits may include on-demand transportation, mobility, independence and convenience.

EFFECTS OF THE AUTOMOBILE ON SOCIETIES:

Similarly the costs to society of encompassing automobile use, which may include those of: maintaining roads,
land use, pollution, public health, health care, and of disposing of the vehicle at the end of its life, can be
balanced against the value of the benefits to society that automobile use generates. The societal benefits may
include: economy benefits, such as job and wealth creation, of automobile production and maintenance,
transportation provision, society wellbeing derived from leisure and travel opportunities, and revenue
generation from the tax opportunities. The ability for humans to move flexibly from place to place has far
reaching implications for the nature of societies.

ENVIRONMENTAL IMPACT:

Transportation is a major contributor to air pollution in most industrialized nations. According to the American
Surface Transportation Policy Project nearly half of all Americans are breathing unhealthy air. Their study
showed air quality in dozens of metropolitan areas has worsened over the last decade. In the United States
the average passenger car emits 11,450 lbs (5 tonnes) of carbon dioxide, along with smaller amounts of
carbon monoxide, hydrocarbons, and nitrogen.[28]

Animals and plants are often negatively impacted by automobiles via habitat destruction and pollution. Over
the lifetime of the average automobile the "loss of habitat potential" may be over 50,000 square meters
(538,195 square feet) based on Primary production correlations.[29]
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Fuel taxes may act as an incentive for the production of more efficient, hence less polluting, car designs (e.g.
hybrid vehicles) and the development of alternative fuels. High fuel taxes may provide a strong incentive for
consumers to purchase lighter, smaller, more fuel-efficient cars, or to not drive. On average, today's
automobiles are about 75 percent recyclable, and using recycled steel helps reduce energy use and pollution.
In the United States Congress, federally mandated fuel efficiency standards have been debated regularly,
passenger car standards have not risen above the 27.5 miles per US gallon (8.55 L/100 km; 33.0 mpg) standard
set in 1985. Light truck standards have changed more frequently, and were set at 22.2 miles per US gallon
(10.6 L/100 km; 26.7 mpg) in 2007. Alternative fuel vehicles are another option that is less polluting than
conventional petroleum powered vehicles.
INRODUCTION: (EURO STD.)
European emission standards define the acceptable limits for exhaust emissions of new vehicles sold in EU
member states. The emission standards are defined in a series of European Union directives staging the
progressive introduction of increasingly stringent standards.

Currently, emissions of Nitrogen oxides (NOx), Total hydrocarbon (THC), Non-methane hydrocarbons (NMHC),
Carbon monoxide (CO) and particulate matter (PM) are NOT regulated for most vehicle types, including cars,
lorries, trains, tractors and similar machinery, barges, but excluding seagoing ships and airplanes. For each
vehicle type, different standards apply. Compliance is determined by running the engine at a standardized test
cycle. Non-compliant vehicles cannot be sold in the EU, but new standards do not apply to vehicles already on
the roads. No use of specific technologies is mandated to meet the standards, though available technology is
considered when setting the standards. New models introduced must meet current or planned standards, but
minor lifecycle model revisions may continue to be offered with pre-compliant engines.

CO2 EMISSION:

Within the European Union, road transport is responsible for about 20% of all CO2 emissions, with passenger
cars contributing about 12%.

The target fixed at Kyoto Protocol was an 8% reduction of emissions in all sectors of the economy compared to
1990 levels by 2008-2012.

Relative CO2 emissions from transport have risen rapidly in recent years, from 21% of the total in 1990 to 28%
in 2004, but currently there are no standards for limits on CO2 emissions from vehicles.

EU transport emissions of CO2 currently account for about 3.5% of total global CO2 emissions.

In late 2005, the European Parliament passed a resolution in support for mandatory CO 2 emission standards to
replace current voluntary commitments by the auto manufacturers and labeling.

In late 2006, in response to a new report, by the European Federation for Transport and Environment
documenting lack of progress on the voluntary targets, the European Commission announced that it was
working on a proposal for legally binding limit CO 2 emissions from cars. According to the mentioned European
Federation for Transport and Environment study, Fiat is the best performer in Europe.
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TOXIC EMISSION: STAGES AND LEGAL FRAMEWORK:

The stages are typically referred to as Euro 1, Euro 2, Euro 3, Euro 4 and Euro 5 for Light Duty Vehicle
standards. The corresponding series of standards for Heavy Duty Vehicles use Roman, rather than Indian
numerals (Euro I, Euro II, etc.)
 o Euro 1 (1993):
o For passenger cars.
o Also for passenger cars and light trucks.

o Euro 2 (1996)
o For passenger cars.
o For motorcycle.

o Euro 3 (2000)
o For any vehicle.
o For motorcycle.

o Euro 4 (2005)
o For any vehicle.

o Euro 5 (2008/9) and Euro 6 (2014) for light passenger and commercial vehicles.

In the area of fuels, the 2001 Biofuels Directive requires that 5.75% of all transport fossil fuels (petrol and
diesel) should be replaced by biofuels by 31 December 2010, with an intermediate target of 2% by the end of
2005. However, In a vote in Strasbourg, the European parliament’s environment committee supported a plan
to curb the EU target for renewable sources in transport to 4% by 2015. They also said that a thorough review
would be required in 2015 before the EU could progress to an 8-10% mark by 2020.
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EMISSION STANDARDS FOR PASSENGER CARS:

Exhaust gases are far less toxic than they were years ago.

Emission standards for passenger cars and light commercial vehicles are summarised in the following tables.
Since the Euro 2 stage, EU regulations introduce different emission limits for diesel and gasoline vehicles.
Diesels have more stringent CO standards but are allowed higher NO x emissions. Gasoline-powered vehicles
are exempted from particulate matter (PM) standards through to the Euro 4 stage, but vehicles with direct
injection engines will be subject to a limit of 0.005 g/km for Euro 5 and Euro 6. A particulate number standard
(P) or (PN) is part of Euro 5 and 6, but is not final. The standard is to be defined as soon as possible and at the
latest upon entry into force of Euro 6.

ENHANCED ENVIRONMENTALLY FRIENDLY VEHICLE:

Enhanced environmentally friendly vehicle or EEV is a term used in the European emission standards for the
definition of a "clean vehicle". The standard lies between the levels of Euro V and Euro VI.
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CYCLE BEATING:
For the emission standards to deliver real emission reductions it is crucial to use a test cycle that reflects real-
world driving style. It was discovered that engine manufacturers would engage in what was called 'cycle
beating' to optimize emission performance to the test cycle, while emissions from typical driving conditions
would be much higher than expected, undermining the standards and public health. In one particular instance,
research from two German technology institutes found that for diesel cars no 'real' NO x reductions have been
achieved after 13 years of stricter standards.

EUROPEAN INDUSTRY PROGRESS IN REDUCING EMISSIONS:

 The most advanced trucks now emit 86% less NOx and 95% less particulate matter than those from the early
1990s.
 Over the past 10 years, truck exhaust emissions have reduced by 35% despite an increase in ’work done’
(tonnekm) by 30%.
 It takes 100 cars produced today to emit as many polluting elements as 1 car made in the 1970s.
 Particulate matter filters can reduce particulate emissions from diesel vehicles by 99%.

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EMISSION STANDARDS:
Cars and commercial vehicles sold in Europe are subject to strict limits on the mass of air pollutants produced
from the tailpipe. Called Euro standards, these were introduced in 1991 with Euro 0 for passenger cars and in
1992 with Euro I for commercial vehicles.

Innovation has helped meet progressively tighter targets as the rules have developed. Technologies like
variable valve timing, direct fuel injection and improved engine management systems have all played a role.

So too have exhaust after-treatment systems. New diesel cars are now fitted with particulate traps to meet
tough new Euro 5 standards, while many of the latest commercial vehicles use Selective Catalytic Reduction
(SCR) in combination with a urea-based additive (one trademark is ‘AdBlue’) to help reduce NOx emissions.

Industry will continue to innovate and has actively participated in discussions over the latest Euro 5 and Euro 6
rules for cars and the Euro V and VI rules for commercial vehicles.

However, industry remains concerned that the Commission did not carry out proper impact assessments on
the costs for industry to meet these new targets – and the price rises that new technologies would impose on
vehicle buyers.

EMISSIONS AND HIGH COSTS:

Auto makers believe that a lack of a robust impact assessment has led to a significant under-estimation in the
costs of meeting the Euro 6 targets.

Diesel car prices, for example, are forecast to rise. In 2005, the Commission’s Clean Air for Europe (CAFE)
Programme suggested a €202 increase. However, an independent panel, set up by the Commission, later
forecast that the cost could be more than four times higher at €900. The Commission’s figure was also based
on the assumption of a fall in precious metal prices, which has already been seen to be incorrect.

The effect of a significant price increase could damage the market for fuel-efficient diesel cars and vans,
particularly during the economic downturn. This could have the perverse effect of an increase in CO2
emissions from cars and hurt the competitiveness of European manufacturers, who are technology leaders
when it comes to diesel engines.

Issues like market distortion and the counter effect on European CO2 emission targets demonstrate why a
thorough and transparent impact assessment, based on realistic cost assumptions, must form the basis for any
technology-led targets for vehicle manufacturers.
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INTRODUCTION: (BHARAT STD.)

Bharat Stage emissions standards are emissions standards instituted by the Government of the Republic of
India (Bharat) that regulate the output of air pollutants (such as nitrogen oxides (NOx), carbon monoxide (CO),
hydrocarbons (HC), particulate matter (PM), soot, and, where applicable, sulfur oxides (SOx)) by internal
combustion engine powered equipment, including motor vehicles, or other air polluting facilities or
equipment. In many cases they are similar to European emissions standards.

MOTOR VEHICLES

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Comparison between European, US, and Bharat Stage (Indian) emission standards for
gasoline passenger cars.
Comparison between European, US, and Bharat Stage (Indian) emission standards for diesel
passenger cars. The sizes of the green circles represent the limits for particulate matter.
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BACKGROUND:
The first Indian emission regulations were idle emission limits which became effective in 1989. These idle
emission regulations were soon replaced by mass emission limits for both petrol (1991) and diesel (1992)
vehicles, which were gradually tightened during the 1990s. Since the year 2000, India started adopting
European emission and fuel regulations for four-wheeled light-duty and for heavy-dc. Indian own emission
regulations still apply to two- and three-wheeled vehicles.

Current requirement is that all transport vehicles carry a fitness certificate that is renewed each year after the
first two years of new vehicle registration.

On October 6, 2003, the National Auto Fuel Policy has been announced, which envisages a phased program for
introducing Euro 2 - 4 emission and fuel regulations by 2010. The implementation schedule of EU emission
standards in India is summarized in Table 1.

Table 1: Indian Emission Standards (4-Wheel Vehicles)

Standard Reference Date Region

India 2000 Euro 1 2000 Nationwide

2001 NCR*, Mumbai, Kolkata, Chennai

Bharat Stage II Euro 2 2003.04 NCR*, 12 Cities†

2005.04 Nationwide

2005.04 NCR*, 12 Cities†

Bharat Stage III Euro 3
2010.04 Nationwide

Bharat Stage IV Euro 4 2010.04 NCR*, 12 Cities†

* National Capital Region (Delhi)

† Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Ahmedabad, Pune, Surat, Kanpur, Lucknow, Sholapur, and
Agra
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The standards apply to all new 4-wheel vehicles sold and registered in the respective regions. In addition, the
National Auto Fuel Policy introduces certain emission requirements for interstate buses with routes originating
or terminating in Delhi or the other 10 cities.

For 2-and 3-wheelers, Bharat Stage II (Euro 2) will be applicable from April 1, 2005 and Stage III (Euro 3)
standards would come in force from April 1, 2010.
CO2 EMISSION:

India’s auto sector accounts for about 18 per cent of the total CO 2 emissions in the country. Relative CO2
emissions from transport have risen rapidly in recent years, but like the EU, currently there are no standards
for CO2 emission limits for pollution from vehicles.

AGRICULTURAL TRACTORS:

Emission standards for diesel agricultural tractors are summarized in Table 2.

Table 2: Indian Emission Standards (4-Wheel Vehicles)

Standard Reference Date Region

India 2000 Euro 1 2000 Nationwide

2001 NCR*, Mumbai, Kolkata, Chennai

Bharat Stage II Euro 2 2003.04 NCR*, 11 Cities†

2005.04 Nationwide

2005.04 NCR*, 11 Cities†

Bharat Stage III Euro 3
2010.04 Nationwide

Bharat Stage IV Euro 4 2010.04 NCR*, 11 Cities†

* National Capital Region (Delhi)

† Mumbai, Kolkata, Chennai, Bangalore, Hyderabad, Secunderabad, Ahmedabad, Pune, Surat, Kanpur and Agra

FUELS:
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Fuel Quality plays a very important role in meeting the stringent emission regulation.
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The fuel specifications of Gasoline and Diesel have been aligned with the Corresponding European Fuel
Specifications for meeting the Euro II, Euro III and Euro IV emission norms.

The use of alternative fuels has been promoted in India both for energy security and emission reduction Delhi
and Mumbai have more than 100,000 commercial vehicles running on CNG fuel. Delhi has the largest number
of CNG commercial vehicles running anywhere in the World. India is planning to introduce Biodiesel, Ethanol
Gasoline blends in a phased manner and has drawn up a road map for the same. The Indian auto Industry is
working with the authorities to facilitate for introduction of the alternative fuels. India has also setup a task
force for preparing the Hydrogen road map. The use of LPG has also been introduced as an auto fuel and the
oil industry has drawn up plans for setting up of Auto LPG dispensing station in major cities.

CRITICISM:
INEFFECTIVENESS OF PRESENT POLLUTION CONTROL SYSTEM:

Presently, all vehicles need to undergo a periodic emission check (3 months/ 6 months) at PUC Centre’s at Fuel
Stations and Private Garages which are authorized to check the vehicles. In addition, transport vehicles need
to undergo an annual fitness check carried out by RTOs for emissions, safety and roadworthiness.

The objective of reducing pollution not achieved to a large extent by the present system. Some reasons for
this are: – Independent centre’s do not follow rigorous procedures due to inadequate training – Equipment
not subjected to periodic calibration by independent authority – Lack of professionalism has led to malpractice
– Tracking system of vehicles failing to meet norms non-existent

COMPARISON BETWEEN BHARAT STAGE AND EURO NORMS:

The Bharat Stage norms have been styled to suit specific needs and demands of Indian conditions. The
differences lie essentially in environmental and geographical needs, even though the emission standards are
exactly the same.

For instance, Euro-III is tested at sub-zero temperatures in European countries. In India, where the average
annual temperature ranges between 24 and 28 degree Celsius, the test is done away with.

Another major distinction is in the maximum speed at which the vehicle is tested. A speed of 90 km/h is
stipulated for BS-III, whereas it is 120 km/h for Euro-III, keeping emission limits the same in both cases.

In addition to limits, test procedure has certain finer points too. For instance, the mass emission test
measurements done in g/km on a chassis dynamometer requires a loading of 100 kg weight in addition to
unloaded car weight in Europe. In India, BS-III norms require an extra loading of 150 kg weight to achieve the
desired inertia weight mainly due to road conditions here.

NON-EXISTENCE OF CO2 LIMITS:

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Various groups and agencies have criticized the government and urged the government of India to draft
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mandatory fuel efficiency standards for cars in the country, or at least to make the CO 2 emissions labeling
mandatory on all new cars in the country. The auto companies should inform the customers about a vehicle’s
emissions.

LAG BEHIND EURO STANDARDS:

There has been criticism of the fact that the Indian norms lag the Euro norms. At present, this lag is around 5
years. Also, there was suggestion from some bodies to implement Euro IV norms after Euro II norms, skipping
the Euro III norms totally. This is because the Euro III norms are only a small improvement over Euro II,
whereas Euro IV norms mark a big leap over Euro II.

The justification cited for this lag is that enforcing tight norms too soon would drive up automobile prices,
thereby stifling growth of the automotive industry in the country.

CYCLE BEATING:

For the emission standards to deliver real emission reductions it is crucial that the test cycles under which the
emissions have to comply as much as possible reflect normal driving situations. It was discovered that engine
manufacturers would engage in what was called 'cycle beating' to optimize emission performance to the test
cycle, while emissions from typical driving conditions would be much higher than expected, undermining the
standards and public health. In one particular instance, research from two German technology institutes found
that for diesel cars no 'real' NOx reductions have been achieved after 13 years of stricter standards.

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CASE:
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AS PER THE ECONOMIC TIMES,

NEW DELHI: Petrol and diesel have become costlier by up to 50 paise a litre in the country, barring 13 cities,
after India switched over to cleaner Euro-III fuel on September 22, eight days ahead of the schedule.

The transition to a higher grade fuel will also mark the end of the road for Euro-II compliant automobiles in the
country from October 1, leading to a 2-5% increase in the prices of certain brands of vehicles.
“There has been city-specific increase in fuel prices, maximum up to 30 paise a litre for Euro-III diesel and 50
paise for Euro-III petrol to recover capital cost,” said a director of government-run fuel retailer Hindustan
Petroleum Corp (HPCL).

The increase in price will not impact consumers in 13 major cities where Euro-IV fuel is sold from April 1, he
said, requesting anonymity. These cities are Mumbai, National Capital Region of Delhi, Agra, Kanpur, Lucknow,
Chennai, Kolkata, Ahmedabad, Bangalore, Surat, Pune, Solapur and Hyderabad.

Public sector retailers Hindustan Petroleum, Bharat Petroleum and Indian Oil together spent Rs 32,000 crore
in upgrading their refineries to produce better quality fuel. Higher grade fuel will reduce emission of sulphur
and benzene substantially, key air pollutants from fossil fuels.

The government had planned to roll out Euro-III fuel all over the country on October 1, but extended the
deadline by six months for some regions to allow automobile manufacturers clear their inventories of Euro-II
vehicles.

While most of the automobile companies have already raised vehicle prices to recover additional cost in
manufacturing Euro-III and IV vehicles, some are planning to raise prices next month. October, the country’s
festive month, is considered auspicious for vehicle purchase by Indians. Tata Motors plans to hike prices of all
its vehicles from October 1 as it migrates to meet the new emission norms.

“While prices for BS-IV (or Euro-IV) products have already been increased, the BS-III (or Euro-III) products are
likely to see a hike of 2-5%,” Ravi Pisharody, president of commercial vehicle business at Tata Motors, had said
earlier. Bharat Stage (BS) is Indian version of emission standards comparable with the European standard
known as Euro.

Mahindra & Mahindra has already raised prices of its passenger as well as commercial vehicles between Rs
3,000 and Rs 8,000 effective October 1.

“We have been holding back this raise for a while, but now it has become imperative to raise prices as the
prices of raw materials have been on the rise. In addition, the new Bharat Stage-III (or Euro-III) emission norms
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have also resulted in this price hike,” Mahindra & Mahindra chief executive-automotive division Rajesh
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Jejurikar said.
REFERENCES
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1. www.scribd.com
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2. www.managementparadise.com
3. www.docstoc.com
4. www.wikipedia.com
5. www.google.com