KARACHI: Assemblers are capable of producing Euro III and IV compliant diesel engines for heavy vehicles, but they cannot switch to this latest technology because the specific fuel is not available in Pakistan.

Manufacturers including Hino, Nissan, Isuzu, Mitsubishi, Daewoo offer advanced categories of engines, however in Pakistan they are forced to produce Euro I type engine, an obsolete technology.

Some assemblers have launched Euro II engine compliant vehicle that are fuel efficient and environment friendly. While the customers have to pay more for advanced technology, however the unavailability of advanced fuel makes it a futile exercise.

A Japanese heavy vehicle assembler said that in India, Euro III engine heavy vehicles and Euro IV vehicles are running. The issue is a technical barrier in promotion of trade with India in heavy vehicle segment, he said.

Since Japanese assemblers have major share in this segment in Pakistan, they are disturbed over the dichotomy as it puts reputation of their brands at stake, he said.

Euro II emission standard was scheduled to be implemented on commercial vehicles (diesel engines) from July 1, 2012.

However, due to non availability of required grade of diesel and inspection/testing facilities, the Sindh High Court awarded a stay order.

The industry official said that many meetings were held on the subject in the last few years at different ministries to finalise execution plan but failed.

An informed source told Dawn that the deadline given to oil refineries regarding the de-sulphurisation of diesel has already expired. Even the revised deadline will expire shortly but no action was taken for the implementation, he added.

To set up a required facility, oil refineries need huge investment that they are hesitant to make.

According to experts, an investment of about $130 million to $200 million is required for diesel de-sulphurisation plants.

The refiners argue that the volume and price of diesel in the country do not justify the investment on superior quality products.

Sources said that Pakistani refineries collected over Rs150 billion from the consumers in the last several years under deemed duty. The amount was supposed to be used for upgrading plants to produce Euro II compliant fuel but with the exception of Pak Arab Refinery Limited (Parco), refineries failed to do so.

Experts said refineries are now demanding permission to charge more in order to collect $2.4bn from consumers to upgrade plants to produce Euro II compliant diesel and seek to extend the deadline to 2016.

As refineries had already been allowed time (under a Feb 26, 2013 decision of the ECC) up to June 2014, last year new cutoff date submitted to ECC for consideration was December 31, 2015. Still there is no clear road map to ensure availability of Euro II diesel.

Director Marketing and Sales Afzal Motors/Daewoo Pak Motors, Muhammad Tahir Javed told Dawn that the USA, Canada and Europe have moved to Euro V plus whereas Asian nations like Japan and Korea have surpassed Euro IV.

Almost all the countries in the South Asian region have already implemented Euro III Emission Regulations in light and heavy commercial vehicles and moving to Euro IV next year.

He said Pakistan is among few nations with practically no policy for emission in commercial vehicles equipped with diesel engines resulting in high fuel cost and more pollution.

The primary reasons for stagnant commercial vehicle industry in absence of any policy like “homologation” that define the present and future regulation covering all dimension of environment like, pollution, noise, light and many other.

“In year or two, there will seldom be any Euro I engine available in the world even most of the manufacturers have already announced to seize the production of Euro II by end 2015,” he said.

Despite number of timelines set by various governments hardly any refinery has commenced the production of Euro II compliant diesel fuel.

Due to the global restriction most of the commercial vehicles in Pakistan are gradually moving toward Euro II.

“The performance of Euro II diesel engines diminishes by 10-15 per cent by using Euro I diesel, resulting not only in increased operating cost but declined engine life as well,” he said.

He claimed Japanese, Korean and Chinese truck and bus manufacturers are producing Euro I vehicles only for Pakistan. The volume of Euro I engines is much less than Euro II engines produced that result in higher cost of Euro I.

Another industry official said availability of fuel, testing facilities and Euro II compliant products are need of the time. As per Euro II standard, the amount of sulphur must not exceed from 0.05pc, but in Pakistan the amount of sulphur in diesel ranges between 1.00 to 1.5pc which leads to cancer and asthma among people. Cancer patients in Pakistan are about four million whereas over two million are asthma patients.

He said Euro II compliant diesel would enhance the air quality.

He called for setting up inspection and testing facilities for the vehicles against the standards to ensure that the vehicles match the requirements set by the regulatory body or bodies in terms of emission, safety and road worthiness. With the availability of such facilities only tested products are entitled for registration.

Published in Dawn, June 11th, 2014