Introduction and Summary

In cities around the world, people suffer from unnecessary asthma, cancer and other health ailments that are linked with the pollution that comes from the world's growing vehicle population. Cleaning up the world's fuel supplies is a critical step towards reversing this situation -- not only do contaminants like lead in gasoline and sulfur in diesel fuel lead to air pollution that impairs health, but they are barriers to catalytic converters, particulate " traps" and other emission control technologies that can remove most of the pollution that comes from today's vehicles.

In 1994, NRDC began a campaign -- in cooperation with concerned governments, the World Bank and other international agencies, and citizen groups -- to clean up the world's fuel supply by eliminating lead from the world's gasoline. The harmful effects of lead on human health have been long recognized -- lead poisoning can result in mental retardation, impaired growth and, at high doses, even death. Plus, lead renders catalytic converters -- the leading emission control system to reduce smog-forming and other pollutants from cars -- ineffective. So, to truly reduce the health impacts from gasoline-fueled cars, lead had to go. In just the last six years, more than 50 nations have taken action to eliminate or reduce significantly the use of lead in gasoline. Today, over 85 percent of the world's gasoline is lead-free.

Eliminating sulfur from diesel fuel is the other half of the battle to clean up the world's fuel supply. Diesel fuel is used in most of the world's trucks and buses, and in an increasing number of cars. In fact, the number of diesel cars is expected to double in the next twenty years. This will have serious health impacts unless steps are taken to clean up diesel fuel and the vehicles that use it, because the emissions from diesel vehicles have been linked with a wide range of health impacts that include increased asthma, lung disease, heart disease, cancer and even premature death -- plus environmental impacts like smog, acid rain and nutrient pollution in waterways, as well as crop and forest damage. Like lead, the sulfur in diesel fuel has direct health impacts, because of its role in the formation in sulfate-based particulate matter. Moreover, the sulfur in diesel fuel renders diesel catalysts ineffective and also harms particulate traps and other filtering systems that can remove at least 90 percent or more of diesel's particulate matter emissions.

Last year, the United States and the European Union each took major steps to remove sulfur from diesel fuel and dramatically reduce emissions from diesel-fueled trucks, buses and cars -- thereby leading the way to a cleaner, more sustainable transportation future. Japan is in the process of taking similar steps. Now, it is time for the rest of the world to follow this path.

NRDC's Dump Dirty Diesels Campaign has led the effort to clean up America's diesel vehicles, and we are now expanding this effort to the international diesel market. Our goal is simple and straightforward: we call on the world's governments, when they meet at the World Summit on Sustainable Development in Johannesburg this summer, to commit to near-zero levels of sulfur in diesel fuel by the end of the decade. As sulfur is removed from diesel fuel supplies, transit fleets, truck operators and diesel car owners will be able to use advanced emission controls to reduce diesel emissions by more than 90 percent -- providing great public health benefits in cities around the world.

We are eager to work in partnership with national governments, international institutions, local and regional governments, non-governmental organizations, and industry to develop specific plans to eliminate diesel sulfur -- and to reduce diesel emissions dramatically -- in cities and nations around the world.

Diesel engines (technically, compression-ignition engines that burn diesel fuel) emit huge quantities of fine particulate matter, nitrogen oxides and dozens of toxic chemicals that harm human health and the environment.

In more than 30 epidemiological and other health studies from around the world, particulate matter (PM) from diesel engines has been linked with a wide range of health impacts, including increased asthma attacks and emergencies, cancer, ¹ endocrine disruption, ² numerous cardiopulmonary ailments, and premature death. ³ Virtually all diesel PM is less than one micron in diameter, which means that it is small enough to evade our respiratory defense mechanisms and lodge in the deepest recesses of our lungs.

Diesel engines emit much more PM than gasoline engines -- in midtown Manhattan, diesel engines emit more than half of the PM inhaled by New York pedestrians, even though gasoline vehicles outnumber diesel vehicles by ten-to-one in New York State. ⁴ In Japan, diesel fuel powers roughly one out of every six vehicles, but these diesel vehicles emit nearly 100 percent of vehicle-related PM emissions. ⁵

Nitrogen oxides (NOx) contribute to ground-level ozone formation, acid deposition, nutrient pollution of waterways, crop damage and secondary (i.e., atmospheric) formation of particulate matter. Just as with PM, diesel vehicles emit disproportionately high levels of NOx, compared to gasoline vehicles. Using the same example as above, Japanese diesel vehicles emit 75 percent of vehicle-related NOx emissions. ⁶ In the United States, diesel vehicles are responsible for 34.5 percent of all NOx emissions nationwide, despite fueling approximately 12 percent of all vehicle miles traveled. ⁷

Moreover, diesel exhaust typically contains more than 40 different chemical compounds (either in gaseous form or attached to the particles) that cause cancer, reproductive harm or other toxic impacts. Because of these toxic chemicals, diesel exhaust has been found to be either a likely, known or other form of carcinogen by the World Health Organization's International Agency for Research on Cancer, the U.S. Environmental Protection Agency (EPA), the U.S. National Toxicology Program, the U.S. National Institute for Occupational Safety and Health, Germany's environmental protection agency and the California Air Resources Board (CARB), as well as other leading public health agencies around the world. CARB estimates that 71 percent of the airborne cancer risk in Southern California is due to the 2 percent of vehicles that are diesel-fueled. ⁸

The health benefits of reducing diesel sulfur levels are significant. When it finalized its groundbreaking diesel sulfur and emissions rule last year (discussed below), the U.S. EPA estimated that implementing the new rule will eliminate 8,300 premature deaths annually, as well as 5,500 cases of chronic bronchitis and 17,600 cases of acute bronchitis in children. Moreover, the U.S. EPA estimates that this step will help avoid more than 360,000 asthma attacks and 386,000 cases of respiratory symptoms in asthmatic children every year, plus a savings of more than 1.5 million lost workdays each year. ⁹

Around the world, cities and nations are realizing that the historic trade-off between the public's health and diesel's efficiency is no longer warranted -- or defensible. New fuels and technologies are attracting urban bus fleets to alternative fuels (e.g., natural gas, LPG) and advanced technologies (e.g., hybrid-electrics and battery-electrics) that virtually eliminate diesel's toxic particles and sharply reduce its contribution to chronic urban smog and soot problems.

Moreover, diesel technologies are being developed now that will reduce diesel pollution from new diesel engines by more than 90 percent, compared to the engines that they replace. These technologies include filters that can trap diesel soot (known as " PM traps" ), and catalysts and adsorbers that can neutralize and eliminate most of the NOx emissions from today's diesel engines. Perhaps most noteworthy, these PM traps and some NOx controls can be added to diesel vehicles that are already on the road, thereby opening the door to retrofit programs that can mitigate the impacts of some of the world's dirtiest vehicles.

The growing use of diesel fuel in cars around the world makes these developments especially critical and timely. Global sales of diesel cars are expected to double by 2020, as truck operators and car owners increasingly take advantage of diesel's better fuel efficiency. ¹⁰ As the chart below indicates, diesel cars now comprise roughly one-third of all new car sales in the European Union (EU) -- and more than half of new car sales in Spain, Belgium and Austria. ¹¹ Unfortunately, diesel cars are allowed to emit three times as much NOx as gasoline cars in Europe, due to weaker emission standards for diesel cars there. ¹² While diesel cars are a tiny portion of the American car market, several car makers are aggressively seeking to sell diesel cars here, including Ford, General Motors and Volkswagen. Given increasing health concerns about diesel emissions around the world, it will be imperative for these vehicles to meet the most stringent emission standards wherever they are driven -- with no special treatment for diesels.

As noted above, the barrier to cleaner diesels is sulfur -- specifically, the sulfur content of the fuel being burned in the engine. None of these new technologies can work properly if there is sulfur in the fuel -- and in some cases, sulfur in the fuel will render the equipment (and even the vehicle) inoperable. By reducing sulfur to near-zero levels, engine companies can provide an engine that will be more than 90 percent cleaner, providing immense health benefits wherever the engines operate.

As the chart below indicates, the United States, the European Union (and several of its member states) and Japan are leading the way to lower global sulfur levels in diesel fuel.

In January 2001, the U.S. EPA finalized its plan to reduce sulfur levels in America's highway diesel fuel by 97 percent, starting in mid-2006 (from today's 500 ppm level to 15 ppm). Reducing sulfur levels to 15 ppm will enable the use of filtering technologies to reduce particulate soot by 90 percent and the use of advanced catalytic and other technologies to reduce smog-forming nitrogen oxides (NOx) by 95 percent, beginning with the 2007 model year. These emission levels have now been codified by the U.S. ¹³

When fully implemented, achieving these emission levels will yield the most significant emissions reductions in the U.S. since the elimination of lead from American gasoline. Achieving these emission levels will be environmentally equivalent to removing 13 million (i.e., 90 percent) of today's trucks from American roads.

In December 2001, the European Environmental Council announced an agreement to cap sulfur levels at 10 ppm in every EU state by 2009 (from today's 350 ppm level, with an interim level of 50 ppm starting in 2005). ¹⁴ While EU NOx emission standards for 2008 are considerably less stringent than the upcoming American standards (in fact, the average European diesel car will emit nearly eight times as much NOx as the average American car at that time, regardless of its fuel), the EU PM emission standards are comparable to the American standard. Both of the EU emission standards will require near-zero levels of sulfur in diesel fuel. ¹⁵

The EU action comes after a number of cities and EU member states took unilateral steps to cut sulfur levels and reduce diesel emissions. These steps included, in some cases, innovative tax policies to shift their diesel fuel markets to lower-sulfur compositions.

Sweden provides the best example of using tax policy to shift sulfur levels without government regulation or mandates that require a specific sulfur level. In the 1990s, Sweden effectively lowered its national diesel sulfur level to 10 ppm by creating a three-tiered fuel tax system based on sulfur levels. Its " Class 1" diesel was intended to be used in urban areas only, but its lower tax rate attracted truck operators throughout the nation. In response, the nation's entire retail and wholesale diesel fueling infrastructure shifted to Class 1 diesel. ¹⁶ Germany, the United Kingdom, Belgium, the Netherlands, Luxembourg, Finland and Denmark each have used tax policies to lower sulfur levels -- creating market demand for lower-sulfur fuel and, in some cases, directing funds to offset refiners' incremental costs. In so doing, each of these nations have effectively reduced their sulfur levels at 50 ppm already, in advance of the lower EU levels.

So far, Japan is the only Asian nation that has committed to low-sulfur diesel fuels. By 2003, sulfur levels in Japanese diesel fuel will be reduced from 500 ppm to 50 ppm. Further, there have been reports that the Japanese government has reached an agreement with the oil industry to provide diesel fuel with no more than 10 ppm sulfur as early by 2008. ¹⁷

Unfortunately, as the chart below indicates, many nations continue to use diesel fuel that has extremely high levels of sulfur. In most of Asia, sulfur levels are an order of magnitude higher than in the U.S. and the EU. In China, sulfur levels often exceed 5,000 ppm and are rising, due to increasing imports of Mideast oil that has a higher sulfur content than China's domestic petroleum supply. In India, despite a Supreme Court decision ordering Delhi to replace old diesel buses with newer, soot-free natural gas buses, the typical truck burns a diesel fuel with a sulfur level of 2,500 ppm. Smaller Asian nations are doing no better: South Korea caps its sulfur at 2,000 ppm, and Thailand caps it at 5,000 ppm. In South America, sulfur levels are largely uncontrolled. As a result, they exceed 2,500 ppm in many nations and reach 10,000 ppm in Brazil. There has been no effort to reduce sulfur levels in Africa, and there is little information about sulfur levels there. ¹⁸

Around the globe, a number of large cities are acting independently to clean up some of their dirtiest local bus and other fleets. These fleets can provide significant local air quality benefits by reducing their sulfur levels and installing PM and NOx emission controls on new and existing diesel vehicles (of course, in many cases, fleets are going even further than cleaning up their diesels -- and are switching their fleets from diesel to alternative fuels like natural gas or LPG, or by introducing advanced technologies like hybrid-electric or battery-electric vehicles). Because these fleets are often government-controlled or government-financed, public funds are often available to ensure the success of these programs. Moreover, these fleets are often centrally-fueled and maintained, easing the burdens of implementation. Further, these local fleets can provide a platform for national progress, and for the development of local businesses to service the programs.

Thus, New York City's largest transit fleet capped its diesel fuel sulfur at 30 ppm in 2000 and moved to install PM traps in all of its more than 3,000 diesel buses and purchase more than 1,000 natural gas and hybrid-electric buses ¹⁹ -- and thereby demonstrated the technical feasibility of cleaning up the nation's largest transit bus fleet. This became an important piece of the technical and political foundation that supported EPA's national 15 ppm proposal one year later. Similarly, Sweden's Class 1 diesel fuel -- and 50 ppm programs for buses in London, Copenhagen and elsewhere -- helped make the case for the EU's steps to reduce sulfur in diesel fuel throughout Europe. Perhaps Hong Kong, which has provided preferential tax treatment to create a market for 50 ppm sulfur fuel, can be a model that will be used elsewhere in Asia.

Given the huge health benefits of reducing sulfur levels in diesel fuel, the implementation costs are quite reasonable. These costs include the expense of upgrading and modernizing refineries, modifying petroleum distribution systems, and installing and maintaining emission control systems. Refinery costs will vary due to differing refining and processing technologies, differences among the types of crude oil used, labor costs and other local factors.

It is logical to assume that oil companies and others in the fuel supply chain will pass the cost of the transition to low-sulfur diesel fuel to their consumers. However, according to the U.S. EPA, the average consumer cost of reducing sulfur levels to 15 ppm in the United States will be no more than five cents ($0.05) per gallon. ²⁰ Indeed, shortly after the U.S. EPA announced its sulfur plan, BP announced that it would begin selling low-sulfur diesel fuel in the western U.S. at a comparable incremental cost. ²¹

Observers of the EU action have made similar estimates. In a study for the EU, EUROPIA/CONCAWE (the European auto makers' industry association) found that the incremental costs of reducing Europe's diesel fuel supply from its current 350 ppm level to 10 ppm would add 13 cents to the cost of a gallon of diesel fuel. Ford estimated the cost at 9 cents per gallon. In Germany, where tax policies have already dropped sulfur levels to below 50 ppm, the government estimates that the incremental cost to achieve a 10 ppm system would range from 4 to 6 cents per gallon. ²²

Of course, in order to maximize the environmental benefits of lower sulfur levels, vehicles will have to be equipped with particulate traps or filters, NOx catalysts or adsorbers, or other comparable emission control equipment. EPA's estimates that this equipment will add $2,000 - 3,200 in the short run, but only $1,000-1,600 per vehicle over the long run. ²³ Given that heavy-duty diesel trucks cost more than $200,000 and heavy-duty transit buses can cost more than $300,000, the long-term incremental cost of a truck or bus equipped with PM and NOx controls that meet the U.S. EPA's 2007 PM and NOx standards should be less than one percent of the vehicle's initial purchase cost -- a reasonable expense for the huge environmental benefit.

Using low-sulfur diesel offers economic benefits beyond the obvious public health and environmental improvements. Low-sulfur diesel should reduce maintenance costs over the life of the vehicle, because it reduces engine corrosion and makes engine lubricating oil less prone to acidification -- leading to longer maintenance intervals and lower maintenance costs. The U.S. EPA estimates that this will save as much as $610 over the life of a heavy truck or urban bus. ²⁴

Of course, the principal benefits to cleaning up diesel vehicles are the improvements to human health and the environment. Some of those benefits are summarized in the " health rationale" section above. While it is difficult -- and some say impossible -- to place a monetary value on health and environmental benefits, EPA has estimated the monetary benefits of its 2007 diesel sulfur and emissions rule. In summarizing the complex costs and benefits of its upcoming rule, the U.S. EPA estimated that the annual monetized net benefits would be $66.2 billion, due to the thousands of avoided hospital admissions, asthma emergencies, lost work days, chronic pulmonary ailments, other health impacts, reduced agricultural crop and commercial forest damage (due to reduced NOx emissions), and other factors. ²⁵

A global campaign to remove sulfur from diesel fuel is the perfect complement to the global campaign to remove lead from gasoline. To successfully eliminate sulfur from the world's diesel fuel supplies, there are several steps that should be taken.

At the national level, NRDC's Dump Dirty Diesels Campaign urges national governments, at the 2002 World Summit on Sustainable Development in Johannesburg, to commit themselves to a joint goal of reducing sulfur in diesel fuel to near-zero levels by the end of the decade -- as a necessary predicate to adding advanced PM and NOx emission controls to diesel vehicles around the world. Further, NRDC urges national governments to initiate their own regulatory and/or tax measures to achieve lower sulfur levels in their diesel fuel supplies, as the U.S., many European countries and Japan have done.

At the municipal and regional level, NRDC urges governments in polluted mega-cities to begin the process of cleaning their diesel vehicles by cutting the sulfur levels in their own fuel supplies to provide immediate health benefits, by requiring diesel fleet operators to install advanced PM and NOx emission controls on their existing vehicles, and by including them in all new vehicles (as is happening already in New York, London, and elsewhere). Further, where the local environmental conditions and the operating characteristics of the fleet support a shift from diesels to a cleaner, non-diesel fuel like natural gas or an advanced technology like a hybrid-electric or battery-electric system, NRDC strongly encourages fleets to do so.

International agencies like the World Bank can play a pivotal role in the success of these programs. They can provide financial and technical assistance for nations, can develop specific phase-out plans and demonstration projects, and can assist in ensuring that the technology and investment that will be required is available, especially in developing countries.

Removing sulfur from the world's diesel fuel supplies would be an historic environmental victory -- and would complement perfectly the ongoing campaign to eliminate lead from the world's gasoline supply. With cleaner diesel fuel, every diesel truck, bus and car would be significantly cleaner -- and this would translate directly into longer, healthier lives for hundreds of millions of people around the world, who currently hold their breath when a diesel vehicle drives by.

Notes

1. Among the public health authorities that have found a link between diesel particulate exhaust and cancer are the World Health Organization's International Agency for Research on Cancer, the U.S. Environmental Protection Agency, the German EPA, the California Air Resources Board and others.

2. Endocrine/Estrogen Letter, June 2, 2000, p. 6. Researchers at the Science University of Tokyo found testicular abnormalities in male mice that inhaled diesel exhaust.

3. NRDC, Exhausted by Diesel, Third edition, May 1999, pp. 5, 8.

4. New York State Department of Environmental Conservation, NY State Implementation Plan for Inhalable Particulate (PM10), September 1995, p. 11.

5. Michael P. Walsh, " Current and Future Technology for Controlling Diesel Exhaust," Delhi, India, November 2000. NRDC is grateful to Michael P. Walsh, an independent consultant and expert on motor vehicle pollution and energy issues, for his technical assistance in the preparation of this paper.

6. Id.

7. U.S. Department of Energy, Transportation Data Energy Book, Vol. 20, pp. 4-6, 7-1 and 8-1.

8. South Coast Air Quality Management District, see <http://www.aqmd.gov/matesiidf/matestoc.htm>.

9. 66 Federal Register 5002 et seq. (January 18, 2002) (hereafter, the " EPA Diesel Rule" ).

10. Compression-ignition engines are more efficient in converting their fuel to mechanical energy, compared to spark-ignition engines. Plus, diesel fuel contains more energy per unit volume than gasoline. Taken together, diesel-fueled compression-ignition engines can use at least 30 percent less fuel, compared with comparable gasoline-fueled spark-ignition engines. However, due to differences in the energy intensity of their respective production, refining and distribution systems, life-cycle greenhouse gas savings are considerably less. Plus, consumer cost differences vary widely, due to different gasoline and diesel fuel prices.

11. Data provided by Michael P. Walsh, February 2002.

12. Europe continues to use different NOx standards for different fuels, thereby allowing diesel cars to emit considerably more pollution than comparable gasoline models. The US abandoned this approach in its Tier 2 program and adopted a fuel-neutral approach to emission standards. Moreover, the upcoming Euro 4 NOx standard for diesel cars (0.24 grams/kilometer) is nearly eight times as high as EPA's upcoming Tier 2 average NOx level (EPA's 0.05 grams/mile, which converts to 0.031grams/kilometer). Different emission test protocols and criteria will alter this difference somewhat.

13. EPA Diesel Rule at 5005-5006. Sulfur levels in American highway diesel fuel will be reduced to a cap of 15 ppm by mid-2006. Starting in 2007, American heavy-duty vehicles (i.e., trucks and buses) will have to meet a NOx emission standard of 0.2 grams/brake-horsepower-hour (g/bhp-hr) and a PM standard of 0.01 g/bhp-hr.

14. See <http://www.dieselnet.com/news/0112ec.html>.

15. Starting in 2008, EU diesel vehicles will have to meet a NOx emission standard of 1.5 g/bhp-hr. and a PM emission standard of 0.015 g/bhp-hr.

16. Class 1 diesel is taxed at 83 percent of Class 3. See European Commission Directorate General XXI, Vehicle Taxation in the European Union 1997, September 1997, p. 15.

17. " Recent Developments in Japan, Car Lines, December 2001, p. 44.

18. Telephone communication with Michael P. Walsh, January 2002.

19. New York City provides an excellent example of how local authorities can take steps to dramatically reduce their diesel emissions. In 2000, the Metropolitan Transportation Authority (MTA) embarked on a fleetwide program to reduce its bus emissions, which was developed jointly by the MTA, New York's Department of Environmental Conservation and NRDC. The MTA's " Clean-Fuel Bus" program consists of (1) buying more than 1000 compressed natural gas (CNG) and hybrid-electric buses to replace aging diesel buses; (2) using low-sulfur diesel and PM traps in all future diesel bus purchases (while the MTA committed to purchasing only CNG and hybrid-electric buses for its standard, 40-foot transit buses, it continues to buy diesel buses for its non-standard sized buses); and (3) using low-sulfur diesel and retrofitting more than 3,000 existing buses with PM traps by the end of 2003.

20. EPA Diesel Rule at 5093.

21. BP Amoco, press release, June 15, 2000.

22. Marsh, George, Hill, Nikolas and Sully, Jessica (November 2000). " Consultation on the need to reduce the sulfur content of Petrol and Diesel Fuels below 50 ppm: A Policy Makers Summary. Currency and volume conversions by Bryanna Millis, NRDC Program Associate.

23. EPA Diesel Rule at 5089-91.

24. EPA Diesel Rule at 5099.

25. EPA Diesel Rule at 5101-5108.