fabricio cardoso - firt firt outlook - the market... · the market outlook for diesel exhaust fluid...
TRANSCRIPT
Fabricio CardosoLead Analyst, EmissionsInteger Research, Ltd.
The Market Outlook forDiesel Exhaust Fluid
The market outlook for Diesel Exhaust FluidFabricio Cardoso Lead Analyst, Emissions Control
Savannah, Nov 18 - 20, 20142014 Fertilizer Outlook & Technology Conference
Source:
FROM AIR QUALITY STANDARDS TO DEF
The relationship between air quality, emission standards and DEF
Health Environment
PM HC CO NOx
Air Quality Standards
Emission Standards CO2
Climate Change
Greenhouse gas/Fuel Economy
Standards
Source: IntegerPM – particulate matter, HC – hydrocarbons, CO – carbon monoxide, NOx – nitrogen oxide, CO2 – carbon dioxide
NOx and PM levels have been dramatically reduced since the first standards
Source: Integer, EPA, NHTSA
Demand driver: why ammonia/urea?
The combustion
trade-offInjection timing, Exhaust Gas Recirculation
NOx
High temperatures
SCR & alternativesAmmonia or urea reductant
Particulates / soot
Incomplete combustion
Filters
Expensive maintenance
Several aftertreatment technologies are available to reduce NOx levels
Aftertreatment technologies to reduce NOx levels
Ceramic catalyst
(Vanadium, Iron, Copper)
NO, NO2(NOX) from combustion
AUS 32 (urea solution, 32.5 wt%)DEF
N2, H2O
Selective Catalytic Reduction (SCR)
Exhaust Gas Recirculation
EGRLean NOx Trap
LNT
Selective Catalytic Reduction
SCR
The EPA has regulated heavy-duty diesel engine emissions since its inception in 1970, but GHG and fuel economy requirements have just been introduced
Source: Integer, EPA, NHTSA
1998 2002 2007 2010 2013 2014 2017 2020 2021 2025
Mandatory
Fleet-wide CO2 compliance
Voluntary
Phase 1 Phase 2EPA ‘98 EPA ‘04 EPA ’07 EPA ‘10
OEMs circumvent emission standards, EPA introduces strict test procedures and Not-To-Exceed limits
Truck-makers use EGR technology, fuel efficiency drops
Navistar adopts SCR, last OEM to do so.
SCR used by all but one truck OEM. Navistar uses high-flow EGR and credits.
Fleet-wide fuel economy legislation
NOx limit (g/bhp-hr)4.0 2.0 1.2 0.2
If SCR requires ammonia, why urea?
• Ammonia is technically more suitable for use in every application
• However: storing, transporting, dispensing and using ammonia has challenges due to its pungent smell and safety‐related issues
• Urea is therefore used as an ammonia carrier. It must first be converted back to ammonia before it can be used to destroy NOx
• Other options were considered, including aqueous ammonia and ammonium formate and more recently solidly methods for storing ammonia. None have yet reached commercial acceptance.– Absorbed on a salt matrix: Amminex– As ammonium bicarbonte: Tenneco
Urea fluid standardised globally
• 32.5% urea solution – allows freezing of vehicle tank• Names: AdBlue / Diesel Exhaust Fluid (DEF) / ARLA‐32
• ISO 22241 standard defines the quality requirements– biuret and formaldehyde limits mean that fertilizer urea cannot be used– water must be de‐ionised
• This standard was originally defined by truck industry in discussion with catalyst suppliers and urea producers, then adopted by non‐road equipment and car manufacturers.
• 40% urea solution for marine applications because tank freezing is not an issue
VEHICLE, SCR AND DEF FORECAST
While the majority of commercial vehicles in North America are equipped with a diesel engine, the share of diesel passenger cars and light-duty vehicles is still small compared to other regions
98.6%
95.7%
93.0% 7.0%
8.31.4%
8.94.3%
0.4 million vehiclesMDV/HDV
LDV
PC
diesel non-diesel
Source: Integer, WardsAuto, ACT
Million vehicles
The commercial vehicle SCR fleet is expected to be six times bigger in 2025 compared to 2013
Source: Integer
7 50
30
0
40
0
2
1
320
6
5
4
10
20252020
6.1
2024202320222021
3.8
201920182017201620152014
1.4
2013
1.0
Class 4-7 fleetClass 8 fleet
Million vehicles %
More than 11 million passenger cars and light-duty vehicles are forecast to be on the road in North America by 2025
Source: Integer
million vehicles
6.0
7.5
0.0
3.0
1.5
12.0
4.5
10.5
9.0
20212019
6.6
2023 20242017 20252018 202220202013
11.9
2014
1.4
2016
2.0
2015
SCR-equipped passenger carsSCR-equipped light-duty vehicles
Our base-case scenario shows DEF consumption is expected to reach 1 billion gallons in North America by 2019
billion gallons of DEF
Source: Integer Research
3.0
1.5
0.5
1.0
0.5
2.0
0.00.0
2.5
1.5
1.0
2.0
2014
0.36
2013
0.23
2025
1.86
20242023202220212020
1.22
20192018201720162015
HDOff-highway
MDUREAPC
LD
Million tons of urea
DEF MARKET, CURRENT AND OUTLOOK
DEF logistics: It’s all about the water
• 67.5% of AdBlue/DEF is water• Supply chain options account for transport optimisation:
• End-user prices reflect supply chain requirements
About 65% of total DEF consumption in 2013 originated from domestic urea production
Solutionizing & dilution plants13%
DEF imports
23%
64% Domestic urea production
DEF production from urea plants in North America totalled 147 million gallons in 2013
Truck fleets
Truck stops
OEM dealers
Gas stations
Retailers
Domestic urea
production
Urea imports
Solutionizing& dilution
DEF import terminals
DEF distributors
DEF Concentrated urea solution Prilled urea AUS50
Key:
26 million gallons7 ktons
147 million gallons
29 million gallons
13 ktons
54 million gallons
230 million gallons
Midwest, Gulf Coast and Canada have the highest shares of DEF coming from domestic urea plants
21%
58%
87%
69%59%
35%
74%64%
46%
45%
19%
13%
22% 41%
38%
17%
23%54%
34%23%
10%
27%
9% 13%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
North America
Canada
PADD 5 (West Coast)
PADD 4 (Rocky
Mountains)
PADD 3 (Guld Coast)
PADD 2 (Midwest
)
PADD 1C
(Lower Atlantic)
PADD 1B
(Central Atlantic)
PADD 1A (New
England)
DEF Imports Domestic urea productionSolutionizing & dilution plants
What to expect for 2020?
• Urea plants coming online – domestic DEF production will remain strong
• More efficient logistics – urea plants producing more concentrate solution and distributing to solutionizing & dilution plants across the country and closer to the main consumption markets
• Prilled urea imports – likely to maintain an important growth, specially in California, where the gap between supply and demand will increase
Thank [email protected]
www.integer-research.com
Our nitrogen publications