China is drawing up a plan to replace 1 million heavy-duty diesel trucks – 20% of the total – with ones powered by cleaner fuel, Reuters reported, citing one anonymous industry source familiar with the matter, in a way to ramp up efforts to tack air pollution.
The transport and environment ministries are considering using more trucks fueled by a higher grade of diesel that align with the National V Emission Standard – based on the European Five Emission Standard, with a PM limit of 4.5mg/km, and more electric or gas trucks as an alternative, the source noted.
The policy would come into effect in 2020 and would be implemented in the smoggiest northern regions of the country, Reuters said, but adding it was not clear when the two ministries would make their final decision.
The Ministry of Transport said in July it planned to cut 1 million these trucks in northern China. Currently, about 6 million heavy duty trucks are expected driving on roads across the country.
The MOT confirmed the two ministries are drafting a plan. The push is the latest by the government to improve air quality, curb exhaust emissions from road vehicles and boost railroad use. The vast majority of the 47.2 billion tonnes of freight transported across China last year was by highway.
But if it pulled so many diesel trucks off the road en masse, it would remove as much as 20 million tonnes of annual demand, according to Reuters' calculations based on trucks that use 20 litres of diesel per 100 miles. That's 11% of China's annual diesel output.
If adopted, it could slow China's outright crude oil demand growth, which has been a key global price driver and revenue safeguard for the petroleum industry.
It would also have a major impact on oil refiners across Asia, including China's state-owned majors Sinopec and CNPC. Refiners geared toward lower diesel grades will out as the world's biggest diesel consumer moves toward cleaner fuel.
(Writing by Alex Guo Editing by Harry Huo)
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