The Indian governments decision to pull forward the application of stricter emissions standards to meet global norms has sent the automobile and lubricant industry into a spin and means investments of billions of dollars over the next few years, costs that will be inevitably passed on to vehicle buyers.

India, a country of 170 million vehicles, lags the Wests auto emissions standards. Based on European regulations, the country first adopted its own set of norms, known as Bharat Stage (BS), in April 2000. It has been implementing them in phases to reduce chronic air pollution. According to a report by environmental protection group Greenpeace, 1.2 million Indians died of air pollution related diseases in 2016 at a cost of 3 percent of GDP. While combustion engine emissions are not the whole cause, they are a contributor.

The current BS-IV norm, which is roughly equivalent to Europes Euro IV standard, was introduced in 2010 and implemented across India from April this year. It bans the sale of all vehicles that do not comply.

Advanced Action

Original equipment manufacturers (OEMs) and lubricant suppliers, however, were surprised when Transport Minister Nitin Gadkari last year announced that India would jump from BS-IV to BS-VI grade fuels from April 1, 2020, skipping the BS-V phase altogether.

The government originally planned to implement BS-VI for all vehicles from April 2024 but later decided to pull forward the roll out to April 2021. The leapfrogging has left us with no time to really do systematic development, and thats a challenge. And add to that you have [to meet] fuel economy norms as well, said Mathew Abraham, senior general manager at automobile major Mahindra & Mahindra Ltd., at the Asia, Middle East and Africa Base Oil, Lubricant and Wax Conference in July.

India, the worlds third-largest carbon emitter after China and the United States, implemented the countrys first passenger vehicle fuel-efficiency standards in April 2017 and the norms will become stringent from April 2022 onwards. Its not that we dont have solutions, but we need time to develop all those solutions, Abraham said. Tapan Sahoo, senior vice president of research and development at Maruti Suzuki India Ltd., the countrys largest car maker, agreed. Engine development takes place almost two and half years before a model is designed. All of a sudden, the notification came that we are leapfrogging from BS-IV to BS-VI because the requirement from the fuel side was very close in terms of BS-V and BS-VI. From the OEMs side, it is a very challenging task, he said.

The governments urgency to implement tighter emissions norms is understandable as India is a signatory to the Paris Agreement on Climate Change. As part of the agreement, the country has to reduce the emissions intensity of its economy by 33 to 35 percent by 2030 from 2005 levels of roughly 1.07 metric tons per capita.

BS Benefits

The current BS-IV norms in India, one of the largest automobile markets in the world, allow diesel cars to emit three times more nitrogen oxide (NOx) than gasoline cars, but emissions benefits from BS-VI will be significant as this difference will be reduced to 1.3 times, according to the New Delhi-based think-tank Centre for Science and Environment (CSE). This is a game-changer decision and will help India leapfrog to much cleaner emissions, CSE Executive Director Anumita Roychowdhury said in a statement. This will reduce the time lag with Europe to six years in 2020 and lower the pollution impacts of the new vehicle fleet considerably.

The Indian automotive industry, which includes two, three and four wheelers, is likely to grow to between U.S. $252 billion and $295 billion by 2026 from approximately $73 billion in 2015, according to industry body Society of Indian Automobile Manufacturers. The CSE said the shift to BS-VI standards will reduce particulate matter (PM), which affects air quality and human health, by 82 percent and NOx emissions by 68 percent in cars. In two-wheelers, PM would reduce by 89 percent and NOx emissions by 76 percent. Similarly, in heavy-duty vehicles such as trucks and buses, PM and NOx emissions will drop by 50 percent and 89 percent, respectively.

The opportunity to reduce emissions, however, is not without its share of obstacles given the operating conditions in India, said S.K. Raghuram, country director at Infineum India Additives Pvt. Ltd. BS-VI represents a very serious challenge, mostly because the Indian situation is very complex. The conditions are not as conducive as one would see in Europe or other parts of the world. Traffic is a big problem here, he added.

Technological Requirements

Transition to BS-VI with fuel economy regulations will require automakers to make major improvements to engine and vehicle technology to curb pollutants emitted by vehicles, Mahindra & Mahindras Abraham said. As a result, the new era would see several firsts for the industry.

For the first time, real-world emissions testing with portable monitoring equipment will be implemented along with in-service regulations to prevent emissions cheating. Also, for the first time, India will enforce PM emissions standards and onboard diagnostic systems for two- and three-wheelers, according to the CSE.

The new requirement has been introduced with the limitation of the PM number, Raghuram said. OEMs have also been given the responsibility of maintaining the aftertreatment devices (ATDs) for [the life of the vehicle], he added. Raghuram said that it is likely automakers will need to have different systems such as diesel oxidation catalysts, diesel particulate filters, exhaust gas recirculation and selective catalytic reduction to reduce pollutants.

Abraham said that simply bringing the technology from outside and implementing in India wont work because one needs to consider factors such as traffic and and the state of the roads, and fuel adulteration that impact technical capability. You have lots and lots to do to adapt to these conditions, he said.

The task is going to be large for automakers, whose products span various portfolios and several categories. They will have to allocate more resources and time to developing the engine and validating emission ratings, said N.C. Sekharan, vice president of direct sales at Raj Petro Specialities Pvt. Ltd. He added that OEMs are working on the prototypes and some of the engines are available for testing, while some are still being developed. It is quite challenging as time is running out to conduct sufficient studies of engine lubricants.

For OEMs, it represents too short a period of time to really ramp up, validate and test everything before 2020, Raghuram said. Marutis Sahoo said the early availability of fuel is extremely important to carry out the required development before the new norms become effective in 2020. Ideally, the BS-VI fuel should be available in 2018, Marutis Sahoo said at the ICIS Indian Base Oils & Lubricants Conference in April. Its going to be extremely difficult to work on this unless theres collaboration between all [stakeholders].

Gulf Oil Internationals Chief Technology Officer Y.P. Rao echoed the sentiment. The industry needs to support OEMs as the window available for the validation of products is just two years and that is a major challenge, he said. There are lots of other parameters coming in and we will be working very closely with our OEMs, said Ravi Chawla, managing director of Gulf Oil Lubricants India Ltd.

Indias Petroleum Minister Dharmendra Pradhan has assured the supply of BS-VI fuel across the country by April 2020. Oil marketing companies are hopeful of starting fuel sales before the government deadline, but the task seems daunting for lube suppliers in Indias 2.4 million metric ton (2.64 million ton) finished lubricants market.

Lubricant Challenges

To develop optimized lubricants that meet the performance challenges and customer expectations of the BS-VI era, suppliers will have to consider factors such as retaining drain intervals, fuel economy and ATD protection, Mahindra & Mahindras Abraham said. We are reaching a level of uncertainty and how to tackle those [issues] is going to be the biggest challenge, he said. Abraham also stated the dedicated lubricants will be needed as per the technology used, while gas engines and hybrid engines would require special lubricant for better efficiency.

Raghurarn said that reduced SAPS (sulfated ash, phosphorus and sulfur) lubricants will be the main reference oils in the BS-VI era, and a search for fuel economy will push the industry toward thinner grades. Its even more critical in India because we are a tropical country, so temperatures are very high, and durability is going to be a serious threat for all the OEMs, he said.

Raghuram added that significant fuel economy benefit can be seen by reducing an oils viscosity grade from SAE 15W-40 to SAE 15W-330 and SAE 5W-30. In the coming years, you will find that the use of high-quality base stocks is going to play a very strong role within the industry, he said.

Minaketan Panda, senior manager for technical services at Hindustan Petroleum Corp. Ltd., said Group II and Group III base stocks are likely to play a big role in the future in India, the worlds third-largest lubricant market. Group IV are definitely going to be there but the cost will be a critical factor in determining their usage, he added.

If you look at the thermal and oxidation stability of these base oils, you will see that Group III and Group IV or Group IV and Group V are going to be the order of the day in Euro VI, Panda said. In diesel engine oil, API CK-4 and API FA-4 will be the specifications in 2020, he added.

With BS-VI implementation, India will certainly achieve its aim of meeting global emissions standards, but the technology upgrade would push vehicle costs higher, which could pose a challenge for automobile companies going forward. Unless you are able to make a system very affordable, they [Indian customers] dont buy it, said Marutis Sahoo. Therefore, it is imperative that manufacturers work with all the suppliers and the ecosystem to develop affordable solutions for the customers, he said.