SGS INSPIRE Newsletter March 2024

At the end of January, SGS INSPIRE launched the of its Energy Talks podcast on ‘E-fuels, all hype or fuel of the future?’ featuring Ralf Diemer, Managing Director of the E-fuel Alliance, a cross-sectoral coalition created in 2020 to promote the industrialized production of e-fuels on a global scale.

Ralf Diemer outlined the benefits of using e-fuels for reaching the European Union (EU) decarbonization goals, the significance of investments and incentives in the Union market for this particular type of fuel, as well as a debate that is unfolding in the EU on which sectors should be using e-fuels and which sectors should be fully electrified.

In March, SGS INSPIRE published three reports on Sustainable Aviation Fuels (SAF) covering North America, Asia Pacific, and Europe.

In the , the SAF industry is witnessing rapid transformation, marked by frequent announcements concerning offtake agreements, progress in production facilities’ construction, and increasing SAF consumption. The recent enactment of the Inflation Reduction Act has emerged as a significant catalyst for SAF development in the U.S., thanks to the introduction of the SAF Blenders Tax Credit (BTC) and the Producer Tax Credit (PTC). The U.S. is poised to assume a crucial role in the global SAF market. Even though SAF production and offtake agreements are on the rise in Europe, its consumption remains low in . Other aspects of the SAF market in Europe such as SAF production pathways, planned production capacities and feedstocks are also analyzed in the report. In , SAF development is primarily driven by airlines' initiatives to reduce carbon emissions. Nevertheless, countries, including China, Japan, India, Indonesia, Singapore, and the United Arab Emirates, announced their volumetric target and timeline. The report analyzes operational and planned production capacities and feedstock of SAF in the region.

On 27 & 28 March, our experts presented these three reports during a public webinar. They discussed how recent government and political initiatives have influenced SAF production and adoption in the respective regions: the European Union's Refuel Aviation mandate, the US government's potential shift to the GREET model and significant developments in the Asia Pacific region such as the introduction of SAF mandates in many countries, including Indonesia, India, Japan and Singapore.

In January, SGS INSPIRE published a compiling regulatory limits and the average actual content of ethanol detected in gasoline samples.

In February, SGS INSPIRE published a and the average actual content of biodiesel we detected in diesel samples.

Global map on on-road vehicle exhaust emissions regulations

SGS INSPIRE continued to provide a comprehensive overview of fuel standards all over the world with published since the beginning of the year, including those from Uganda, Brazil, Thailand, South Korea, Kenya, Suriname and Egypt.

The Global Database of Fuel specifications provides the most actual data per territory and country, with globally standardized specification units and fuel properties and SGS is constantly improving its database to make it more accessible, robust and up to date. Recently, SGS INSPIRE merged ethanol blend grades into gasoline grades, and biodiesel blend grades into diesel fuel types in all the database screens, optimizing the current classification.

Most directives and regulations included in EU’s came into force in October 2023. The remaining legislation such as the Energy Taxation Directive and the proposal for a non-binding 2040 emission reduction target, should be finalized before the European elections in June 2024.

On January 18, 2024, the Council and the European Parliament reached a provisional agreement on CO2 emission standards for , introducing a new carbon-neutral fuel paragraph. The agreement was due to the request by a group of EU member states led by Germany to allow renewable fuels.

The provisional agreement on standards on vehicle exhaust emissions and battery durability has been reached, too. The regulation covers passenger cars, vans, and HDVs, buses and trucks in one single legal act for the first time in the EU. The provisional agreements now need to be endorsed and formally adopted by both institutions. On March 13, 2024, the European Parliament approved the Euro 7 exhaust emissions standards, aimed at reducing emissions from passenger cars, vans, buses, trucks and trailers.

On February 6, 2024, the European Commission published its communication and impact assessment on a , aiming for a 90% net reduction in greenhouse gas (GHG) emissions by 2040, compared to the 1990 baseline. The communication is a non-binding and non-legislative document. A formal legislative proposal for a 2040 target is expected during the next European Commission mandate, starting on November 1, 2024. The EC has also published a detailed impact assessment on possible pathways to reach climate neutrality by 2050 to inform potential future legislation.

The EC has launched the Union Database for Biofuels , a mandatory registration system for biofuels in the EU that will contribute to mitigating fraudulent cases, ensuring traceability of the fuels and their sustainability standards. As of January 15, 2024, all renewable and recycled carbon fuel operators can register online in the UDB. The EC has made registration available to provide a smooth start for the UDB, which must be set up and in full operation by November 21, 2024. Since imported certified biomethanes are not allowed to be registered in the UDB, over 45 organizations including Eurogas have called for immediate measures from the EC in that regard.

From January 1, 2024, will gradually introduce E10 gasoline, containing up to 10% ethanol, at fuel stations. E10 will be available in RON 95 as the primary conventional grade, while E5 will be available in RON 98 for vehicle protection. Vehicles made after January 1, 2010, are compatible with E10, and the Ministry of Climate and Environment offers an online system to check compatibility.

In March, SGS INSPIRE published updates for a summarizing development in the renewable targets for 2024, as well as the updates in the production capacities of advanced biofuels announced by Total Energies. RON 95 E10 gasoline grade (conventional gasoline containing up to 10% v/v of ethanol) reached 58.3% of the gasoline market share.

In an overview of diesel market in we reported about the upgraded regulatory base for diesel fuel quality in the country, as 10 mg/kg sulfur limit for diesel purposed for use in off-road machinery was approved.

In 2024 continues to stimulate electromobility in 2024 by zeroing customs duties on electric vehicles while reducing it three times for hybrid cars.

SGS INSPIRE published report on vehicles in with information on the vehicle emissions standards, updated fiscal policies, the current situation in vehicle markets/fleets, and a projection for further development.

On February 12, 2024, Uzbekistan's President announced that state-owned oil and gas company Uzbekneftegaz has to deliver 680,000 tonnes of diesel fuel to farmers at prices reduced by 15% to .

Overview of bio-based gasoline report France

Overview of gasoline report in Germany

Overview of gasoline quality in Serbia

Overview of gasoline quality in Western Balkans

Overview of diesel fuel quality in Western Balkans

Overview of vehicles in Western Balkans

Overview of diesel fuel quality in Azerbaijan

After a 50-day comment period, the White House received the .

The U.S. Department of Agriculture (USDA) recently awarded USD 19 million under the Higher Blend Infrastructure Incentive Program (HBIIP) to in 22 states.

in Georgia, the world's first of its kind. The establishment of this plant comes at a particularly opportune time, as the U.S. government is currently evaluating which emissions assessment model to adopt for granting SAF subsidies under the Inflation Reduction Act (IRA).

In recent years, the U.S. has seen a noticeable decline in the production capacity of. This downturn is largely due to competitive pressures from renewable diesel, with by an annual average of 5% and demand decreasing by 3.2% annually over the past five years. On the other hand, has experienced a significant surge, with its production capacity increasing by an average of 96% annually over the past two years. Moreover, consumption of renewable diesel in the U.S. has seen an impressive average annual growth rate of 28% over the last decade, with California emerging as the , accounting for approximately 99% of the total consumption in the country.

New Jersey Senate introduced a bill at the end of January to establish a in the state. If signed into law, the bill would establish the first clean fuel standard on the East Coast, joining similar programs in California, Oregon, and Washington.

U.S. refiner Phillips 66 announced its plan to cease crude oil processing at its refinery in Rodeo, California, and begin producing renewable diesel (RD) by the end of Q1 2024. This move mirrors a broader trend driven by government incentives and .

As of January 2024, , a fuel blend containing 15% v/v ethanol. With this development, E15 sales are now permitted in all U.S. states except California. Moreover and after several months of delay, the U.S. EPA approved a request from eight Midwestern states to allow gasoline in their jurisdictions, starting in 2025. The rule is set to take effect in April 2025 and will apply to Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin.

The U.S. federal government is considering easing the proposed by the EPA in 2023. Recent considerations by the administration suggest giving car manufacturers more time and moving away from the initial requirement for a rapid acceleration of EV (Electric Vehicle) sales in the coming years.

At the beginning of March, New Mexico became the fourth U.S. state to adopt a standard aimed at reducing the carbon intensity of transportation fuels, joining California, Oregon, and Washington. The Environmental Improvement Board is set to establish specific rules for implementing the clean transportation fuel standard program by July 1, 2026. Hawaii, Illinois, Massachusetts, Michigan, Minnesota, New Jersey, and New York are among the states considering the adoption of a clean transportation fuel standard.

Overview of diesel quality in U.S.

Overview of biobased gasoline in U.S.

Overview of gasoline quality in U.S.

Paraguay's fuel and have grown gradually in recent years. In addition, E85 flex-fuel consumption has decreased while consumption of E100 has increased. Domestic production of fuel ethanol is to stay stable from 2024 to 2025, and demand will increase in 2025 compared to 2024.

Ecuador approved a law that set a new target for battery electric vehicles or zero-emission vehicles in public and commercial transportation . In addition, the law includes tax and tariff benefits for battery electric vehicles.

Chile's Ministry of Energy published in February 2024, a resolution that implies a reduction in the income tax for buyers of and an exemption from the annual tax for circulation permits. In addition, Chile's Ministry of Energy is developing the Green Hydrogen Action Plan 2023-2030.

Colombia's consumption of oxygenated , and diesel demand grew in 2023, compared to 2022. Total demand for liquid fuels could moderately grow from 2024 to 2033, considering the expectation of recovering economic growth and greater penetration of low and zero-emission technologies.

Peru's Ministry of Energy and Mines published in February 2024, a decree modifying the deadlines for using and trading liquid fuels with. In this sense, the decree also extends the deadline for compliance with Euro 6/VI exhaust emissions limits standards for motor vehicles.

Overview of vehicles in Mexico

Overview of gasoline quality in Chile

Overview of diesel quality in Chile

Overview of gasoline quality in Ecuador

Overview of biobased gasoline in Ecuador

Overview of diesel quality in Ecuador

Overview of gasoline quality in Uruguay

Overview of diesel quality in Uruguay

Overview of gasoline quality in Paraguay

In January 2024, the Civil Aviation Administration of China (CAAC) granted the This represents a groundbreaking milestone as the first time a private refinery has received official airworthiness approval, allowing commercial use.

The Korean government has implemented a . However, vehicles of the same model running on environmentally friendly fuels are permitted. Moreover, the Korean government granted into low-carbon-eco-friendly fuel without requiring prior government approval.

A Japanese oil refinery announced its decision to by the end of the month of January 2024. Certain Japanese refineries have scaled back their production capacity, primarily because of competition from low-carbon energy sources and the challenges posed by an aging and shrinking population.

The Thai government with a maximum sulfur limit of 10 mg/kg. This represents a one-year delay from the original schedule. Additionally, in January 2024, the government introduced the . Under this initiative, the government reduced subsidies for electric vehicle (EV) purchases and lowered taxes imposed on electric vehicles.

In February 2024, Indonesia’s state-owned electricity company started operating the in Jakarta.

The Australian government concluded the public comment period on the country's . The government is currently undergoing a review process.

The Singapore government unveiled the country's , which is set to commence in 2026.

Overview of vehicles in Thailand

Overview of diesel in New Zealand

Overview of gasoline in New Zealand

Overview of diesel in Singapore

Overview of bio-based diesel in the Philippines

Overview of bio-based gasoline in the Philippines

Overview of bio-based gasoline in Viet Nam

On January 14, 2024, the in Nigeria started production of diesel and aviation fuel after delays. The production capacity at the new refinery is the highest in the African continent and the refined products is expected to satisfy local demand with the excess to be exported to other countries in Africa and Europe.

In South Africa, Anglo American Platinum, BMW Group South Africa and Sasol South Africa Limited partnered to test ) on roads. Renewable green hydrogen will be supplied by Sasol. This project supports the national government’s Green Hydrogen Commercialization Strategy and will drive uptake of both renewable hydrogen and critical raw materials which the country has in abundance.

Overview of gasoline quality in Egypt

Overview of diesel quality in Algeria

Overview of gasoline quality in Algeria

Overview of diesel quality in Kenya

Overview of gasoline quality in Kenya