New fuel standards that will enable diesel engines to meet dramatically lower emission levels were passed on July 24 by the California Air Resources Board (ARB). The rule will require a more than 95 percent reduction in the amount of sulfur in diesel fuel. “Less sulfur will of itself mean less pollution, but even more important the new fuel will allow advanced technology emission control devices to be installed on diesel engines that will bring dramatic pollution reductions,” said ARB Chairman Dr. Alan Lloyd. The new sulfur standard will be phased in starting in mid-2006. It aligns California diesel fuel sulfur standards with federal diesel sulfur standards, which require a sulfur limit of 15 parts-per-million (PPM) starting in 2006. California’s rule will apply to fuel sold for both on-road and off-road vehicles, while the federal standards will apply to diesel fuel for on-road vehicles only. Reducing diesel fuel sulfur content from the current statewide average of 140 PPM to less than 15 PPM (refiners usually make the fuel with somewhat less sulfur than the standard) will reduce sulfur oxide emissions 6.4 tons-per-day (TPD) and particulate matter (PM) emissions by about four percent or .6 TPD. In addition, the lower sulfur content can help reduce PM by allowing installation of PM pollution control devices on existing diesel engines and by enabling the use of advanced technology to cut pollution from the next generation of diesel engines. High sulfur levels blunt the effectiveness of these devices, California continues to maintain the existing specification to limit aromatic hydrocarbons of California diesel fuel. These requirements have been in place since 1993 and continue to reduce California NOx emissions by 110 tons per day. ARB staff estimates that the new rules will add approximately one cent to three cents to the cost of producing a gallon of diesel fuel in California. Since a similar requirement is being instituted nationwide, the Board’s action is not expected to cause an increase in the cost of diesel in California relative to other states. The national rules are expected to add four to five cents to a gallon of diesel fuel. California's costs are lower because several of the state's refineries already have much of the equipment needed to meet the new standards.

Originally posted on Fleet Financials