Transition to Bharat Stage-V norms will require Rs 80,000 crore investments by OMCs

NEW DELHI: India’s automobile industry has seven years to upgrade to the Bharat Stage-V emission norms, but it can meet the deadline only if oil marketing companies manage to line up fresh investments of at least Rs 80,000 crore over the next few years to supply the requisite fuel.

An expert committee, tasked by the petroleum ministry to suggest standards and timelines for switching to higher quality fuel and emission norms in the country, has recommended upgrade to the intermediate BS-IV+ norms across India by April 1, 2017 followed by introduction of BS-V fuel on April 1, 2021 if fresh investments are made.

The emission standards are instituted by the government to regulate the output of air pollutants from internal combustion engine equipment including motor vehicles. Oil marketing companies (OMCs) had invested Rs30,000 crore for moving from BS-III to BS-IV emission norms in 2010. It is estimated that fresh investments of at least Rs80,000 crore will be needed over the next few years for OMCs to set up new facilities capable of producing the BS-V fuel.


“Enabling investments of this magnitude will require an appropriate pricing policy in the country. In the absence of investment of this magnitude, the transition could take another four years,” Saumitra Chaudhuri, Planning Commission member and head of the committee, told ET.

Laying the roadmap for a transition from BS-IV to BS-V fuel, the Chaudhuri-led committee has proposed phased rollout of intermediate fuel from April next year.

The committee, which is likely to submit its report by the end of this month, has suggested introduction of BS-IV+ fuel in northern parts of the country from the next fiscal followed by western and some southern states in April 2016 and coverage of the entire country by April 1, 2017.

The BS-IV+ fuel will have sulphur content at 40ppm compared with 50ppm under BS-IV norms. The bar will be raised to 10ppm under BS-V. India has been following European emission norms, albeit with a time lag as this allows use of readily available technology and does not require much investment in research. The decision to upgrade to better quality fuel rests entirely on the oil marketing companies and will not require much technological change at the end of vehicle manufacturers, said Vishnu Mathur of the Society of Indian Automobile Manufacturers.

“However, if there is a corresponding change in emission norms, the automobile manufacturers will have to make necessary changes to adapt to intermediate emission norms,” he added. The existing fuel quality and emission standards were laid out in the National Auto Fuel policy of 2003. This, in turn, was based on the recommendations of the Mashelkar committee report of 2002 which had laid down the road map for implementation of the Bharat Stage norms till 2010.

In the absence of a road map for emission norms beyond 2010, the government had set up a 13-member committee under Chaudhuri to chart a road map for fuel quality and vehicle emission standards. Bharat stage emission standards and their timelines are set by the Central Pollution Control Board under the ministry of environment and forests.