Russian manufacturers cannot ignore fuel efficiency standards

10 july 2018 | Rossiyskaya Gazeta

The falling global oil prices, the persisting consumer preference for large cars and the Trump factor may slow down the improvement in the fuel efficiency of motor vehicles around the world and impact the reduction in fuel consumption in transport, writes the Rossiyskaya Gazeta, citing a new bulletin from the Analytical Center.

Irina Pominova
Irina Pominova
Department for Fuel and Energy Sector

The International Energy Agency estimates that the introduction of fuel efficiency standards and caps on greenhouse gas emissions for cars in different countries since 2015 has already resulted in the saving of some 2.7 million barrels of oil per day. The current projections put the potential reduction in demand for oil stemming from improved fuel efficiency at 14-18 million barrels a day by 2040, or about 10% of the total demand.

"The relaxing of the US fuel efficiency standards is playing into the hands of the automotive lobby in the EU, giving them an additional argument against stricter standards in Europe," Irina Pominova, Deputy Head of the Department for Fuel and Energy Sector of the Analytical Center, explained to a Rossiyskaya Gazeta correspondent. Stricter requirements mean higher costs. Nevertheless, Brussels may choose to impose stricter requirements as they see them as a leader in the efforts to curb climate change and also as a way to promote clean transport research and development, she believes.

When speaking about efficiency standards, experts usually mean the Global Fuel Economy Initiative (GFEI), which calls for the fuel efficiency of new cars around the world to grow by 50% on the 2005 level by 2030. The goal is to stabilize greenhouse gas emissions while allowing the number of cars on the roads to increase at the current rate. So much attention is being paid to transport exhaust fumes because transport consumes about 40% of the oil produced globally.

Russia does not have any standards for fuel efficiency or the level of greenhouse gas emissions for transport. The International Energy Agency estimated that in 2005 the fuel efficiency of Russian cars was 8.3 liters per 100 km while in 2008 it was 8.1 liters per 100 km, however, these figures are hardly up to date now. The share of cars whose environmental class is less than Euro 4 in Russia is about 60% while Russia is now imposing stricter requirements on both imported and domestically manufactured cars, with the Euro 5 standard being used as the benchmark. "There are additional incentives: Russia has a recycling program and the changes in traffic regulations introduced in 2017 included restrictions on vehicles with low environmental classes," Ms Pominova noted.

Russia is a key supplier of diesel fuel to the EU, so Russian producers must take into account the standards that exist in foreign markets as well, the expert believes. "In theory the changes in the EU policy regarding emissions may indirectly impact the Russian market as well, because oil refineries that focus on diesel exports are going to modernize their production lines as the EU introduces new requirements if they want to hold on to their market share in the European market," she concluded.

Source: The Rossiyskaya Gazeta

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