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Poor Ultra-Low Sulfur Availability A Risk for The Sector: AMDA

By Alejandro Enríquez | Tue, 06/15/2021 - 10:25

The availability of ultra-low sulfur diesel in Mexico is declining, indicates a recent AMDA study, putting at risk the heavy vehicle market that is expected to sell and produce only EPA 10 / EURO VI technologies in the country by January 2022.

Ultra-low-sulfur diesel, which contains a maximum of 15mg/kg (15ppm) of sulfur, is on the radar of several industry associations. “Starting in 2016, AMDA has tracked the availability of ultra-low sulfur diesel in Mexico given that the Mexican NOM-044-SEMARNAT establishes that starting 2022, only heavy vehicles with EPA 10 or EURO VI technologies can be sold and manufactured in the country. These technologies require ultra-low sulfur diesel, otherwise, considerable damages to the vehicles are to be expected,” said Guillermo Rosales, Director General of AMDA.

The study shows that in 2016 the country was only at 68 percent of SEMARNAT’s target for full ultra-low sulfur diesel availability. NOM-016-SEMARNAT states that ultra-low-sulfur diesel should have been available to 100 percent of the country by 2019. Availability increased to 81 percent in 2018 but coverage declined the following year to 75.2 percent and then again to 72.6 percent in 2021. "Data obtained in 2019 and 2021 shows a clear setback as availability of ultra-low sulfur diesel in the country has diminished," said Rosales.

The study was conducted between February and May 2021, in more than 380 service stations nationwide. In the study participated AMDA, AMIA, AMTM, ANPACT, ANTP, CANACAR, CANACINTRA, CANAPAT, CANATRAM, CONCAMIN, COPARMEX and INA.        

"There are voices within the federal government that have declared that 100 percent availability is not needed to make the changes on vehicle technologies that the NOM-044 establishes. However, the experience of users, transportation companies, operators and investors says that without 100 percent coverage, changing to EURO VI / EPA 10 technologies becomes a risk." AMDA’s study shows that the pacific region shows little availability of ultra-low sulfur diesel and there are also blind spots in the territory that make the transition “not-viable.” Moreover, only 10 percent of the stations have clear signs that indicate ultra-low sulfur availability.

From the study, AMDA concluded that availability is more related to fuel infrastructure than to the needs of transportation companies. CRE also granted an extension to PEMEX, giving it until January 2025 to reach nationwide coverage of ultra-low-sulfur diesel. "PEMEX's extensions set the stage for SEMARNAT to extend NOM-044 so EURO V/EPA 07 technologies coexist with EURO VI/EPA10 technologies until full coverage is reached," said Rosales.

“Should the ultra-low sulfur diesel supply dates change, NOM-044 will have to be adjusted accordingly. The current scenario dictates that regular diesel will be supplied until 2024. ANPACT expects NOM-044 to be discussed in 2021 when the sector will know when ultra-low-sulfur diesel will be truly mandatory. We insist that both Euro V / EPA 07 and Euro VI / EPA 10 technologies need to coexist given the country’s energy reality,” said Miguel Elizalde, President of ANPACT, to MBN.

Recently the Elizalde highlighted the heavy vehicle sector’s commitment towards sustainability. "As a part of the heavy vehicle sector, we can contribute to improve the environment in Mexico. To reduce emissions you need cleaner, newer and more efficient vehicles and there is where our sectors invest heavily to develop new technologies," said Miguel Elizalde.

Photo by:   Zetong Li
Alejandro Enríquez Alejandro Enríquez Journalist and Industry Analyst