Oil majors need to invest Rs 15k cr to shift to BS-IV

Oil majors have to invest around Rs 15,000 crore to comply with Bharat Stage (BS)-IV fuel norms at their refineries, which would help the automobile industry address emission concerns.

According to a senior industry representative, by 2015, around 50 cities would come under the BS-IV norms. However, the adoption of the new norms by the existing fleets would be a challenge.

Speaking on the sidelines of the Asia Pacific Automotive Conference, organised by SAEINDIA, R K Malhotra, director (research and development), Indian Oil Corporation, said oil companies had invested nearly Rs 30,000 crore in the last few years at their refineries to manufacture fuel that complied with BS-IV norms, instead of BS-III. An additional investment of Rs 10,000-15,000 crore was needed to achieve the government's directive of covering 50 cities by 2015. Currently, 16 major cities have been brought under the latest emission norms.

Moving to BS-IV alone would not reduce pollution. The complete benefits of BS IV emission norms would be realised only if old vehicles are phased out, Malhotra said. “Only a small part of total particulate emission (sulphur) would come down. The major impact on old vehicles can be felt only if they have retrofit engines and after-treatment devices,” he said.

Pawan Goenka, chairman (steering committee, APAC), and president (automotive & farm equipment sectors), Mahindra and Mahindra, added, “Retrofits are not always possible, as they involve significant recalibration, and the costs are not insignificant.” The challenge is phasing out older vehicles, which requires huge government support, since it involves the costs of disposing vehicles, said Goenka.

In several countries, vehicle owners are being given incentives to replace old vehicles. “Several governments have written a significant cheque towards this,” added R Seshsayee, executive vice-chairman, Ashok Leyland.

He added apart from BS IV, the government should accelerate the adoption of compressed natural gas by building the required pipeline infrastructure across the country. Currently, Delhi, Mumbai and Surat have embraced this alternative fuel. The industry is keenly awaiting the Krishna-Godavari discovery, so that Hyderabad and its surrounding areas, including Tamil Nadu can benefit from this.