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Analysis

Market Segments that Can Most Benefit From ULSD

Mon, 09/01/2014 - 14:15

“Cummins has always tried to be on top of technology related to emissions, and to exceed the emissions regulation requirements in each of the countries we work in,” explains Pedro Zermeño, ABO Components BU Leader & Marketing FBU Mexico & Central America of Cummins. In the US, for example, it was ahead of the game, since Cummins engines that complied with the EPA’s 2010 regulations were ready for the market by 2009. 18 years ago, Cummins was able to develop after- treatment systems which are now still part of the emission controls rolled out in 2013. Zermeño says that considering

Mexico is nine years behind the most advanced emission regulations in the US and Europe, Cummins is seeking to help bridge that gap with its technology. Hope has been kindled with certain regulations in the oil and gas industry as these should change the availability of needed technology. “The government is saying Ultra-Low Sulfur Diesel (ULSD) will be available in 2017, which will allow us to introduce products that have lower emissions,” Zermeño explains. “In the US, heavy-duty vehicles face the strictest regulations. This makes sense, given the type of equipment that circulates in cities.” In this sector, Cummins has a good participation on the engine side where it has a solid market share. “For mid-range trucks, we have about 34% of market share and 28% in buses,” he adds. Hence, the company aims to push the envelope for such vehicles. Mexico City is notorious for its pollution issues but, according to Zermeño, it will try to emulate what California has done in terms of emission regulations for older vehicles. “California set a deadline for fleet owners to have at least 60% of their fleets kitted out with emission control systems,” he adds, “In Mexico City, old engines are still working and although there are no set regulations, the government is working to reduce emissions from fleets. Suppliers like Cummins are now cooperating with the government on this, and although the cost might be high, the benefits are countless.”

The lack of availability of ULSD in Mexico to date has led to inventive alternatives for reducing emissions. “Natural gas engines have become a viable option, and Cummins implemented a project with a fleet of 50 natural gas buses in Guadalajara, and 20 more in Mexico City. Natural gas engines result in a 40% fuel cost reduction, which is bound to provide a good incentive for their increased use,” says Zermeño. The company is also working on projects that will seek to power units with energy created from the methane gas obtained from trash. “We have double cycle products in diesel, natural and methane gas,” he adds. But while these alternatives hold potential, Cummins has set its sights on the future availability of ULSD and the fount of technology and components it will bring to Mexico in the years ahead.