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Post-Conference Report - Integer Research

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Associação Brasileira<br />

de Engenharia Automotiva<br />

Associação Brasileira<br />

de Engenharia Automotiva<br />

Associação Brasileira<br />

de Engenharia Automotiva<br />

Associação Brasileira<br />

de Engenharia Automotiva<br />

beyond<br />

numbers<br />

- USA<br />

insight<br />

beyond<br />

numbers<br />

Diesel Emissions<br />

<strong>Conference</strong> Series<br />

Asia | Brazil | Europe | India | Russia | USA<br />

Diesel Emissions <strong>Conference</strong> Series<br />

Asia | Brazil | Europe | India | Russia | USA<br />

<strong>Post</strong>-<strong>Conference</strong> <strong>Report</strong><br />

PLATINUM SPONSORS<br />

ENVIRONMENTAL SPONSOR<br />

SILVER SPONSORS<br />

DELEGATE<br />

BAG SPONSOR<br />

LUNCH SPONSORS<br />

EXHIBITORS<br />

INDUSTRY PARTNERS<br />

GLOBAL MEDIA PARTNERS<br />

Associação Brasileira<br />

de Engenharia Automotiva


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Contents<br />

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<strong>Conference</strong> analysis ..............................................................................................3 - 11<br />

Attendee demographics ............................................................................................12<br />

Testimonials ..............................................................................................................13<br />

Closing remarks .........................................................................................................14<br />

<strong>Integer</strong> & <strong>Conference</strong>s<br />

<strong>Integer</strong> <strong>Research</strong> is a provider of key business information, market forecasts and commercial strategy<br />

consulting. We are not a ‘conference company.’ <strong>Conference</strong>s are simply an extension of our core<br />

business. It is the reputation of <strong>Integer</strong>, our market knowledge, and our contacts that enable us to<br />

produce the industry’s leading Diesel Emissions <strong>Conference</strong> series. This places <strong>Integer</strong> in a unique and<br />

privileged market position and allows us to provide the industry with a comprehensive forum to meet,<br />

discuss and debate on the latest industry issues.<br />

In 2012, the Diesel Emissions <strong>Conference</strong> Series will cover Russia & CIS, Asia, South America, Europe,<br />

India and North America.<br />

<strong>Post</strong>-<strong>Conference</strong> Analysis: Diesel Emissions <strong>Conference</strong> & ARLA 32 Forum Brazil 2012<br />

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Day 1<br />

The conference began with an introduction from<br />

<strong>Integer</strong>’s Director of Emissions, Tim Cheyne, who<br />

highlighted the challenges that the Brazilian<br />

market has experienced through the first half of<br />

2012. There is no option to further delay emissions<br />

regulations and so the industry must find ways<br />

of helping customers face the challenges after 6<br />

months of PROCONVE P7. Discussions looking<br />

ahead to PROCONVE P8 and light duty sectors<br />

were also highly anticipated.<br />

Keynote Session 1: The transition<br />

between PROCONVE P5 and PROCONVE<br />

P7 in Brazil<br />

Lucio Flavio Bicalho, Director of Customer<br />

Satisfaction and Quality, Iveco Latin America<br />

Ltda., started proceedings with a presentation<br />

introducing Iveco’s new generation of ECOLINE<br />

engines designed to meet P7. More than 200<br />

vehicles were durability tested across 5 million<br />

kilometres of road in Brazil. Emphasis was placed<br />

on the need to acknowledge that experiences in<br />

Europe and North America are not always directly<br />

applicable elsewhere, and that a fundamental<br />

challenge in meeting P7 is going to be utilising the<br />

experience in other regions like Brazil, where the<br />

landscape presents a completely different situation<br />

than other markets. While the use of ARLA 32 is<br />

required for engines with SCR-equipped vehicles,<br />

Iveco decided to use both SCR and EGR in its latest<br />

engine range, and defends both technologies.<br />

Domingos Carapinha, Chief Engineer, MWM<br />

International Indústria Automotiva da<br />

América do Sul continued by sharing how MWM<br />

approached implementation of PROCONVE P7 in<br />

its MaxxForce heavy duty engine range, as well<br />

as the potential synergies in off-road platforms.<br />

The presentation focussed on the efficient use of<br />

development time through the use of geometric<br />

optimisation and development of vehicle<br />

performance simulation. In MWM’s current Euro V<br />

engine line, new components were added to the<br />

five core areas of the engine structure, combustion<br />

system, air management system, after-treatment<br />

and electronics (including OBD), resulting in an<br />

estimated 6-7% cost increase. Carapinha cited<br />

complications associated with fuel injection, due to<br />

space issues around the radiator, as the reason for<br />

switching from standalone EGR in North America<br />

to SCR technology in Brazil.<br />

<strong>Post</strong>-<strong>Conference</strong> Analysis: Diesel Emissions <strong>Conference</strong> & ARLA 32 Forum Brazil 2012<br />

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To end the first session of the day, Nilton<br />

Monteiro, Executive Director of AEA (Brazilian<br />

Automotive Engineering Association),<br />

moderated a discussion on the development<br />

of emissions legislation in Brazil so far, and<br />

the challenges likely to be faced in the future.<br />

The two keynote speakers were joined on the<br />

panel by Alexandre Parker, Governmental &<br />

Institutional Affairs at Volvo do Brasil Veiculos<br />

Ltda., Rodrigo Chaves, Senior Manager at<br />

MAN Latin America and Marcel Luiz do Prado,<br />

Product Portfolio Manager at Scania Latin<br />

America Ltda. Monteiro opened by focussing<br />

on the 5-10% average cost increase that<br />

manufacturers saw as a result of engine technology<br />

development for PROCONVE P7, and the need to<br />

absorb these costs in the market. The notion that<br />

the complexity of SCR technology and the prospect<br />

of ARLA 32 dissuaded customers from purchasing<br />

P7 trucks was raised, and all panellists agreed<br />

that, going forward, a priority must be placed on<br />

educating customers of the operational advantages<br />

in buying P7 trucks. The panel concluded with a<br />

call for the OEMs to discuss and take a proposal to<br />

the Brazilian government on how to better cope<br />

with the next stages of legislation.<br />

Session 2: Future plans for commercial<br />

vehicle emissions reduction<br />

Marcio Schettino, Technical Assistant to the<br />

Secretary of Transportation, São Paulo City<br />

Government provided a comprehensive update<br />

on the emissions reduction initiatives in São Paulo<br />

City targeted at abating the city’s often severe<br />

NOx levels. The city boasts a range of emission<br />

reduction technologies, including biodiesel,<br />

ethanol, hybrid diesel electric, fuel cell buses and<br />

battery electric vehicles. São Paulo’s municipal<br />

vehicle fleet has 15,063 buses, with an annual<br />

diesel consumption of 390 million litres and by<br />

2018, the city’s fleet must be completely run on<br />

renewable fuels.<br />

Laerte Graner, Product Development Chemical<br />

Analyst at Volkswagen do Brasil continued<br />

the session with an overview of Volkswagen’s<br />

approach to PROCONVE P7 legislation for lightduty<br />

commercial vehicles. Brazil’s emissions<br />

legislation pertaining to light vehicles is set to<br />

limit NOx emissions to 0.08 g/km from 2013, and<br />

this considerable reduction in emissions is set to<br />

challenge light-duty engine manufacturers going<br />

forward given the size of the market.<br />

Manfred Schuckert, Senior Manager (S/RC), at<br />

Daimler AG gave an insight into the development<br />

of the Brazilian industry beyond PROCONVE<br />

P7, drawing on experience in other regions,<br />

notably Europe but also in the US and Japan. Dr.<br />

Schuckert outlined the need for a reliable ARLA 32<br />

infrastructure, and commented that committing<br />

to SCR is more likely to prove successful with<br />

consumers if manufacturers do not U-turn over<br />

their choice of engine technology. The need to<br />

reduce vehicle lifetime was also presented, as well<br />

as the implications of new OBD requirements.<br />

To discuss the themes of the session further,<br />

Elcio Farah, Executive Director, AFEEVAS (The<br />

Association of Equipment Manufacturers for<br />

Vehicle Emissions Control in South America)<br />

led a panel made up of Nilton Monteiro,<br />

Executive Director, AEA, Breno Kamei,<br />

Business Development Manager, IVECO Latin<br />

America Ltda., Luis Chain Faraj, Marketing<br />

and Sales Director, Cummins Brasil Ltda.,<br />

Gustavo Teixeira, Diesel Product Engineering,<br />

FPT Industrial, and Carlos Vinicius Massa,<br />

Head of Fuel and Lubricant Technological<br />

Project, Petrobras, where the question of how<br />

quickly Brazil can prepare for PROCONVE P8<br />

was addressed. The panel agreed that energy<br />

efficiency must be tackled, and a key discussion<br />

point emerged surrounding fleet renewal and the<br />

possibility for retrofitting options to be included in<br />

future legislation. Engine manufacturers must test<br />

the implications of sulphur content in fuel, and<br />

with this, the quality of fuel in bordering countries<br />

must also be considered at this stage of transition<br />

in the market. It became clear that fleet owners<br />

will need to consider this issue before assigning<br />

<strong>Post</strong>-<strong>Conference</strong> Analysis: Diesel Emissions <strong>Conference</strong> & ARLA 32 Forum Brazil 2012<br />

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routes if they have P7 trucks.<br />

Session 3: Global experience of meeting<br />

stringent diesel emissions legislation<br />

Tim Johnson, Director, Emerging Regulations<br />

& Technologies, Corning gave a technical paper<br />

on the range of new engine technologies and the<br />

advances that have been made in order to reduce<br />

emissions. The resulting effect on a wide range of<br />

emissions was analysed, considering in detail SCR<br />

catalyst placement, DPF substrate properties, and<br />

Diesel Oxidation Catalysts.<br />

Gabriel Branco, Director and Co-founder,<br />

Environmentality moderated Tim Johnson,<br />

Director, Emerging Regulations &<br />

Technologies, Corning, Christian Wahnfried,<br />

Fuels, Emissions & Validation, Bosch Brasil,<br />

Manfred Schuckert, Senior Manager (S/RC),<br />

Daimler AG, and Qingyuan Song, Director,<br />

Advanced <strong>Research</strong> & Technology, Foton<br />

Motor Group in a panel discussion looking at the<br />

global lessons applied to the Brazilian experience<br />

of meeting emissions regulations. Concerns over<br />

the timing of PROCONVE P8 and the readiness of<br />

the industry were discussed. The panel raised the<br />

need to strive for world harmonisation in emissions<br />

legislation, a theme which continued into the<br />

dialogue on Day 2. The importance of OBD as a<br />

tool to operate trucks properly was stressed, and<br />

it was agreed that while engine inspections are<br />

timely and expensive, they are worthwhile.<br />

Ben Patel, Vice President, Emission Control,<br />

Global <strong>Research</strong> & Development, Systems<br />

Integration, Tenneco Automotive took the<br />

opportunity to update the delegates on the<br />

progress of Tenneco’s Hydrocarbon lean NOx<br />

catalyst technology which offers an alternative to<br />

liquid urea SCR. Hydrocarbon LNC technology uses<br />

ethanol instead of urea solution – a timely and<br />

attractive prospect given the availability of ethanol<br />

in Brazil. While the technology requires further<br />

development before its unveiling, the existing<br />

infrastructure in Brazil led Patel to claim that<br />

“ethanol is Brazil’s Diesel Exhaust Fluid”.<br />

Session 4: Emissions control technology<br />

options used to meet PROCONVE P7<br />

and future emissions regulations<br />

Kurt Krier, Global Vice President, Exhaust<br />

Emissions, Dow Automotive presented on the<br />

future of diesel system architectures for use in<br />

PROCONVE P7 and future legislations in Dow’s<br />

AERIFY particulate filter range. The AERIFY<br />

substrate technology has been offered to OEMs<br />

in prototype format, and is expected to be fully<br />

developed by 2014.<br />

Enric Senar - Serra, Product Manager,<br />

Automotive Catalysts, Haldor Topsoe A/S<br />

followed with an overview of the lessons that<br />

have been learned in the last 10 years in Euro<br />

V applications. As a key issue in Brazil, sulphur<br />

tolerance was discussed and it was reported that<br />

at low temperatures, s1200 fuel affects NOx<br />

conversion. The implications of phosphorous and<br />

urea deposits was also highlighted.<br />

Mohamed Gouda, Product Manager, AVL<br />

demonstrated AVL’s engine development process<br />

in using virtual design verification for diesel<br />

powertrain systems. Changing design parameters<br />

in order to simulate diesel engine conditions is an<br />

increasingly popular method in engine technology<br />

design.<br />

Marcio Auada, Product Engineering and VPI<br />

Manager, Cummins do Brasil ended the day with<br />

a roundup of engine development in Brazil since<br />

PROCONVE P7 was introduced, and the advances<br />

in performance in the latest engine range. The P7<br />

engine range was heavily tested over 6.5 million<br />

km, both under environmental conditions, and<br />

with fuels range from s10 to s1500. Cummins<br />

has been working with ARLA 32 distribution<br />

networks to explain the new technology to dealers<br />

and customers, however the expected sales of P7<br />

engines in the first five months of 2012 was far<br />

lower than expected, and has led to production<br />

capacity reduction.<br />

<strong>Post</strong>-<strong>Conference</strong> Analysis: Diesel Emissions <strong>Conference</strong> & ARLA 32 Forum Brazil 2012<br />

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Day 2<br />

Session 5: Issues surrounding diesel fuel<br />

quality standards in Brazil<br />

Crystiane Maria Pereira de Souza, Sales and<br />

Supply Analyst, Petrobras evaluated the initial<br />

achievements and challenges in creating an<br />

adequate s50 distribution network at Petrobras<br />

since January 2012. Low sulphur diesel has been<br />

required since 2009, and from 2014 s1800<br />

diesel will be completely replaced with s500<br />

diesel. Petrobras is producing s50 diesel at seven<br />

refineries, with combined capacity able to serve<br />

60-65% of national demand, and is increasing<br />

capacity to be able to serve domestic demand<br />

wholly starting November 2014. Petrobras expects<br />

an increase in s50 sales in the second half of the<br />

year as more P7 trucks enter the market, and<br />

expected sales of s50 diesel in 2012 is 5.5 million<br />

cubic metres.<br />

Rubens Cerqueira Freitas, Supply Deputy<br />

Superintendent, ANP (National Agency of<br />

Petroleum, Natural Gas and Biofuels) gave a<br />

paper on the issues surrounding the use of s10<br />

diesel fuel from the ANP’s perspective. L6 and<br />

P7 vehicles are required to use s10 diesel from<br />

January 2013. Freitas discussed the criteria for<br />

compulsory vs. voluntary stocking of low sulphur<br />

diesel, highlighting cases when there are more<br />

diesel pump channels than gasoline or ethanol,<br />

where the forecourt must offer low sulphur diesel.<br />

While the ANP has no control over pricing of<br />

s50 diesel, questions following the presentation<br />

were almost exclusively regarding pricing, with an<br />

emphasis placed on how the industry can expect<br />

P7 truck owners to pay a premium of around 12<br />

cents per litre for s50 diesel. It was also asked<br />

why older trucks are not encouraged to use better<br />

quality diesel, as current pricing acts as a major<br />

disincentive.<br />

The next panel was moderated by Maëlle Soares<br />

Pinto, Director Global Biofuels Center, Hart<br />

Energy Consulting. Viewpoints were given from<br />

Rubens Cerqueira Freitas, Supply Deputy<br />

Superintendent, ANP (National Agency<br />

of Petroleum, Natural Gas and Biofuels),<br />

Luís Fernando Sabino, Fuels Technology<br />

Manager, Raízen, Ricardo Hashimoto,<br />

Director, Fecombustíveis (National Federation<br />

of the Commerce of Fuels and Lubricants),<br />

Silvia Guimarães, Commercial Manager,<br />

Equipamentos Londrina Ltda., Sergio Luiz<br />

Viscardi, Technical Manager - Fuels and<br />

<strong>Post</strong>-<strong>Conference</strong> Analysis: Diesel Emissions <strong>Conference</strong> & ARLA 32 Forum Brazil 2012<br />

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Lubricants, Ipiranga on the production and<br />

distribution of s1800, s500 and s50 diesel in Brazil.<br />

The sentiment from the service station chains and<br />

equipment provider representatives on the panel<br />

was that limited advance notice was given prior to<br />

the introduction of s50 diesel which meant that<br />

the upgrading of gas stations mandatorily required<br />

to stock s50 diesel was rushed and could have<br />

been much better managed. Market driven pricing<br />

was somewhat criticised, and comments from the<br />

floor questioned the government regulation of<br />

locations stocking s50 diesel when prices are not<br />

subject to the same level of intervention.<br />

Richard Petti, Chief Operating Officer, Wema<br />

System AS gave an overview of how Wema has<br />

approached the adoption of emissions legislation<br />

around the world. Wema has developed extensive<br />

experience through their work with ARLA sensor<br />

technology. Petti also stressed that the legislation<br />

in Brazil and around the world is too complex to<br />

copy technology systems from existing markets e.g.<br />

Europe or North America, and that a great deal of<br />

customisation is required at the regional level.<br />

Session 6: Further plans to introduce<br />

alternative fuel throughout Brazil<br />

Ricardo Gomide, Deputy Director of<br />

Renewable Fuels Department, Ministry of<br />

Mines & Energy kicked-off the session on<br />

alternative fuels with a presentation on the<br />

Brazilian biodiesel market since the introduction of<br />

B5 in 2010. One of the Ministry’s goals for energy<br />

policy is to increase biodiesel consumption, and this<br />

has been reflected in Brazil’s rise to prominence as<br />

the third largest biodiesel consumer globally over<br />

the last 5 years. The government’s energy plan<br />

forecasts biodiesel demand to rise by 50% to 3.8<br />

thousand cubic metres per year by 2020.<br />

Julio Minelli, Executive Director, APROBIO<br />

(Brazilian Biodiesel Producers’ Association)<br />

presented the campaign of the biodiesel industry<br />

to achieve a mandatory 20% biodiesel blend in<br />

regular diesel. There are now 37 plants that have<br />

been licensed as viable raw materials for biodiesel<br />

production and the paper was very timely given the<br />

announcement last week that Vale is investing in<br />

a palm oil-extraction plant in the Amazon to make<br />

B20 diesel. Minelli stated that the biodiesel chain<br />

is ready for the next steps in securing a supply of<br />

alternative fuel in Brazil, the land and raw materials<br />

are available but development of new oil seeds<br />

is required urgently given the typical 5-7 years<br />

required for new crops to mature.<br />

Minelli then moderated the next panel on the<br />

potential of biodiesel and alternative fuel for<br />

emissions reduction in Brazil, with Alfred Szwarc,<br />

Director, ADS Tecnologia e Desenvolvimento<br />

sustentável, Breno Kamei, Business<br />

Development Manager, IVECO Latin America<br />

Ltda., Eduardo Pinto, Head of Urban Buses<br />

Chassis Sales, Scania Brasil providing comment.<br />

70% of Brazil’s fuels are renewable and so it was<br />

important to discuss what the challenges and<br />

bottlenecks will be moving forward. All panellists<br />

mentioned the involvement of the government<br />

in setting legislation and the need for better<br />

defined policies that foster and value renewables.<br />

The technical complexity of biodiesels will be a<br />

challenge moving forward and the development<br />

should be aligned with other benchmarks being set<br />

such as CO2 savings.<br />

Session 7: Emissions reduction for<br />

non-road vehicles – plans to meet<br />

PROCONVE-MAR 1 requirements by<br />

2015<br />

Luis Chain Faraj, Marketing and Sales Director,<br />

Cummins Brasil Ltda. introduced the first nonroad<br />

session of the conference with a regulatory<br />

overview of emissions reduction for the sector<br />

ahead of MAR-1 implementation in 2015, and<br />

drew noteworthy correlations between the<br />

performance of the Brazilian economy and the<br />

production of agricultural machinery. Challenges<br />

exist in the use of SCR in off-road applications<br />

where space is at a premium and the discussion of<br />

<strong>Post</strong>-<strong>Conference</strong> Analysis: Diesel Emissions <strong>Conference</strong> & ARLA 32 Forum Brazil 2012<br />

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these was highly anticipated.<br />

Ricardo Huhtala, Director, AGCO SISU POWER<br />

South America and Jak Torretta, Products<br />

Director, AGCO South America gave a joint<br />

presentation, considering the technology choices<br />

and market issues that will affect compliance<br />

with emissions legislations in the non-road sector.<br />

They brought up a key issue that emerged on<br />

Day 2, that you cannot simply “copy and paste”<br />

technology, and that specific adaptations need to<br />

be applied to the injection system. Huhtala and<br />

Torretta also mentioned the lack of subsidies made<br />

available to the Brazilian agriculture industry, unlike<br />

in Europe and the US.<br />

Enrique Guzman, Integration Manager, FPT<br />

Powertrain Brazil provided insight into FPT<br />

Powertrain’s strategy to achieve reduced diesel<br />

emissions in non-road vehicles. Productivity was a<br />

key area for FPT in meeting MAR-1 legislation, but<br />

importance was also placed on cost of ownership<br />

and ease of operation. Guzman addressed<br />

the trade-off between EGR and SCR engine<br />

technology, and moved on to the specifics of the<br />

operating cost reduction and net savings associated<br />

with the new engines.<br />

A panel moderated by Tim Cheyne, Director -<br />

Emissions, <strong>Integer</strong> <strong>Research</strong> followed, with the<br />

following panellists: Ricardo Huhtala, Director,<br />

AGCO SISU POWER South America, Luis<br />

Chain Faraj, Marketing and Sales Director,<br />

Cummins Brasil Ltda., Daniel Zacher, Manager,<br />

Regulatory Affairs South America, John<br />

Deere Brasil Ltda., Rey Agama, Global Engine<br />

Emissions Regulations Manager, Caterpillar<br />

Inc., Alessandro da Silva, Product Safety and<br />

Homologation Specialist, CNH Latin America.<br />

The distinguished panel discussed the solutions for<br />

meeting non-road legislation in Brazil, and straight<br />

away agreed that electronic integration is the<br />

future for meeting non-road legislation through<br />

engine technology, as it allows greater monitoring<br />

of maintenance and operation. While some<br />

markets such as China have been able to adhere<br />

to legislation using mechanical engine technology,<br />

in order to really get the best customer value,<br />

electronic will be the choice. Fuel quality is also set<br />

to be an obstacle that will need consideration as<br />

the legislation implementation date approaches.<br />

Session 8: Global experience of meeting<br />

non-road emissions legislation and<br />

lessons for Brazil<br />

Tim Cheyne, Director – Emissions, <strong>Integer</strong><br />

<strong>Research</strong> gave a global overview of the non-road<br />

mobile machinery market, the harmonisation<br />

of emissions limits, and engine manufacturers’<br />

commitment to SCR technology. Focus was then<br />

turned to the main markets included in <strong>Integer</strong>’s<br />

NRMM (non-road mobile machinery) market study<br />

and finally a detailed look at the Brazilian market.<br />

Weight class split was analysed as well as forecasts<br />

of production and sales up to 2020.<br />

Richard Bishop, Environmental Compliance,<br />

John Deere Power Systems outlined the key<br />

elements of harmonisation in the non-road<br />

legislation schedule. Bishop stressed that while<br />

some aspects are well aligned by certification,<br />

the approval process requires development. This<br />

detailed look at global certification practices<br />

prompted the following panel discussion with<br />

Tim Cheyne, Director – Emissions, <strong>Integer</strong><br />

<strong>Research</strong> moderating Jaime Enrique Sauerteig,<br />

Director, Compliance & Certification, DEUTZ<br />

Corp., Jak Torretta, Products Director, AGCO<br />

South America, Richard Bishop, Environmental<br />

Compliance, John Deere Power Systems to call<br />

for a harmonisation process for the certification<br />

of engines. It was suggested that Brazil could<br />

potentially save a step of legislation progress<br />

and go straight Tier 4 Final equivalents, however<br />

the real discussion centred around the desire for<br />

engine homologation globally and the potential<br />

for an aligned system at least in South America, if<br />

not globally. Some panellists urged the industry to<br />

allow for transferrable limits and legislative unity<br />

across borders in the hope that this would ease the<br />

burden on engine manufacturers.<br />

<strong>Post</strong>-<strong>Conference</strong> Analysis: Diesel Emissions <strong>Conference</strong> & ARLA 32 Forum Brazil 2012<br />

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Day 3<br />

Laura Cross, Analyst, <strong>Integer</strong> <strong>Research</strong> began<br />

the proceedings for the ARLA 32 Forum by giving<br />

a case study of Diesel Exhaust Fluid (ARLA 32)<br />

in the North American market, and assessed key<br />

market indicators in the development of the ARLA<br />

32 supply chain in Brazil since January 2012.<br />

Session 1: The current status of<br />

the ARLA 32 market in Brazil and<br />

development throughout South<br />

America<br />

Achille Liambos, Director Air1, ARLA 32<br />

Division, Yara Latin America presented results<br />

on ARLA 32 production and sales in the first half<br />

of 2012 compared with the initial projections. The<br />

market conditions have been substantially different<br />

to what was expected and Yara’s initial downside<br />

estimation that the market for ARLA 32 would<br />

be 40 million litres in 2012 is not expected to be<br />

upheld this year. Liambos added that the size of<br />

the market had been closer to 7.7 million litres in<br />

the first five months of the year, and also said that<br />

when supply is closely located, the price of ARLA<br />

32 is expected to be around 90% of diesel prices.<br />

Laura Cross, Analyst, <strong>Integer</strong> <strong>Research</strong> led<br />

a panel consisting of Daniel Hubner, Business<br />

Manager Air1 Brazil, Yara Latin America,<br />

Sergio Luiz Viscardi, Technical Manager<br />

- Fuels and Lubricants, Ipiranga Bruno<br />

Azevedo, Director and General Manager, Peak<br />

Automotiva Ltda., Luiz Claudio Mandarino<br />

Freire, Lubricants Consumers Marketing<br />

Manager, BR Petrobras, during which the<br />

initial achievements of the ARLA 32 market were<br />

discussed. Service station chain representatives<br />

from Petrobras and Ipiranga demonstrated their<br />

distribution plans, and while the prospect of<br />

combined diesel-ARLA 32 pumps was mentioned,<br />

it was clear that this level of investment is<br />

still a long way off given the current market<br />

development. The panel also discussed the<br />

potential opportunities for the expansion of the<br />

ARLA 32 market across South America, to which<br />

the main challenge is likely to be fuel quality, more<br />

specifically, sulphur content.<br />

<strong>Post</strong>-<strong>Conference</strong> Analysis: Diesel Emissions <strong>Conference</strong> & ARLA 32 Forum Brazil 2012<br />

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Analysis (cont.)<br />

in<br />

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n<br />

Session 2: Practical application of ARLA<br />

32 in Brazil<br />

Christiano Garrido, Chief Engineer, Iveco Latin<br />

America Ltda put forward Iveco’s involvement and<br />

practical application of ARLA 32 since PROCONVE<br />

P7 came into force. This included a roundup of<br />

system installation, OBD strategy, and ARLA 32<br />

consumption, reported to be mostly between 4<br />

and 5%. Garrido explained misuse testing that has<br />

been performed on the engine range to assess the<br />

implications of adding diesel or ARLA 32 into the<br />

wrong tank. If this occurs, the OBD applies a derating<br />

to the engine.<br />

Luiz Claudio Mandarino Freire, Lubricants<br />

Consumers Marketing Manager, BR Petrobras<br />

continued the proceedings with a comprehensive<br />

look at Petrobras’ strategy for ARLA 32, and<br />

the progress made so far in 2012. Luiz showed<br />

the issues that are likely to arise in terms of<br />

accessibility, especially in remote regions, and<br />

outside of the main cities in Brazil, and also<br />

highlighted that, while in other regions rail<br />

road transport has been utilised, there is not an<br />

adequate industrial rail network in Brazil.<br />

Prompted by requests at other <strong>Integer</strong> conferences<br />

for some insight into the underlying urea market,<br />

Tim Cheyne, Director - Emissions, <strong>Integer</strong><br />

<strong>Research</strong> gave a paper on the global fertilizer<br />

and industrial urea markets. Tim outlined the key<br />

drivers in the urea market, and the onset effect this<br />

has on the ARLA 32 market.<br />

Session 3: Ensuring the quality control<br />

of the ARLA 32 brand<br />

Victor Simão, Technology <strong>Research</strong>er, INMETRO<br />

(National Institute of Metrology, Quality &<br />

Technology) provided an in-depth breakdown<br />

of the INMETRO certification process of ARLA 32.<br />

INMETRO has two stages of ensuring regulatory<br />

control – inspection and compliance. Inspection<br />

of collected samples is designed to test if the<br />

legal requirements are being met, and whether<br />

an INMETRO seal has been issued. If ARLA 32 is<br />

sold without the INMETRO seal, the point of sale<br />

will receive a fine. This makes the quality control<br />

of ARLA 32 in Brazil the most stringent in the<br />

world. The second measure is compliance which<br />

is a more complex process of lab testing to verify<br />

technical requirements of the ARLA 32. Over<br />

10 days of testing recently, INMETRO found no<br />

non-compliance products – all had the INMETRO<br />

seal and necessary information. The next stage<br />

is to begin lab testing however INMETRO has<br />

encountered a problem as no third-party labs<br />

are currently equipped to perform the tests.<br />

Producers are currently using their own labs to gain<br />

certification.<br />

Jeffrey Harmening, Audit Program<br />

Coordinator, API (American Petroleum<br />

Institute) then brought perspectives from the<br />

North American DEF certification programme. The<br />

experience in North America in terms of testing<br />

and compliance was explained, and sampling<br />

demographics and test results were also presented.<br />

Tim Cheyne, Director - Emissions, <strong>Integer</strong><br />

<strong>Research</strong> moderated a panel that included Jeffrey<br />

Harmening, Audit Program Coordinator,<br />

API (American Petroleum Institute), Victor<br />

Simão, Technology <strong>Research</strong>er, INMETRO<br />

(National Institute of Metrology, Quality &<br />

Technology), and Fernando Junior, Quality<br />

Manager, Cummins Filtration South America,<br />

with the aim of discussing the global experience of<br />

ensuring quality control of AdBlue and DEF, and<br />

the implications of this in Brazil. It was concluded<br />

that the challenge will not be ensuring the quality<br />

of sealed product, but of bulk supply methods. The<br />

possibility of using chemical tracing indicators was<br />

mooted. The notion of “black sheep” suppliers in<br />

the industry making sub-optimal quality ARLA 32<br />

and undercutting market prices is a serious issue<br />

in Europe, however INMETRO reiterated that the<br />

regulation will be enforced stringently, with fines<br />

and intervention from authorities if suppliers are<br />

found not to comply.<br />

<strong>Post</strong>-<strong>Conference</strong> Analysis: Diesel Emissions <strong>Conference</strong> & ARLA 32 Forum Brazil 2012<br />

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Analysis (cont.)<br />

in<br />

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Session 4: Developments in the ARLA 32<br />

supply and distribution infrastructure<br />

Fernando Voltolini, Product Marketing Fuels,<br />

Raízen and also a representative of Sindicom<br />

(National Union of Fuel and Lubricant<br />

Distributors) began his presentation on optimum<br />

storage and distribution methods of ARLA 32 by<br />

reiterating the importance of fuel quality, before<br />

moving onto the logistical issues for ARLA 32.<br />

The synergies with lubricant distribution were<br />

highlighted, and it was explained that this is the<br />

reason why packaged product is likely to be so<br />

heavily depended on in the near future. Questions<br />

from the floor prompted Voltolini to estimate that<br />

it would be two years before investment in pumps<br />

was seen at the service station forecourt. Sindicom<br />

believes that by that time there will be enough<br />

volume to justify bulk product.<br />

The final panel of the day addressed the<br />

question of optimum supply modes of ARLA 32<br />

to the Brazilian market. Moderated by Ricardo<br />

Hashimoto, Director, Fecombustíveis (National<br />

Federation of the Commerce of Fuels and<br />

Lubricants), the panel consisted of Achille<br />

Liambos, Director Air1, ARLA 32 Division,<br />

Yara Latin America, Sergio Luiz Viscardi,<br />

Technical Manager - Fuels and Lubricants,<br />

Ipiranga ,Ltda., Luiz Claudio Mandarino Freire,<br />

Lubricants Consumers Marketing Manager,<br />

BR Petrobras and Charles Culverhouse, DEF<br />

Equipment Business Manager, Old World<br />

Industries. The issue of product that has passed<br />

it expiry date was discussed, with field examples<br />

in North America shown as cases where overdue<br />

product has been quality tested and remained<br />

within ISO 22241 specifications. There is an<br />

expectation that P7 truck sales will improve going<br />

in to the second half of the year, and the long<br />

term storing of product should not be a problem,<br />

however the next few months will be crucial. It<br />

was acknowledged that it will most likely be up to<br />

suppliers to kick start the provision of equipment<br />

solutions for ARLA 32, and that this will come at<br />

the point when the market dictates.<br />

<strong>Post</strong>-<strong>Conference</strong> Analysis: Diesel Emissions <strong>Conference</strong> & ARLA 32 Forum Brazil 2012<br />

11


in<br />

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Attendee Demographics<br />

in<br />

b<br />

n<br />

E<br />

Company Type<br />

D<br />

C<br />

B<br />

A<br />

The <strong>Conference</strong> attracted an excellent mix of stakeholders from<br />

across the diesel emissions supply chain, including leading OEMs<br />

from Brazil and beyond.<br />

A Aftertreatment systems/ Auto. Parts/ Testing/ Raw 37%<br />

Materials<br />

B Vehicle and/or Engine Manufacturer 23%<br />

C Government/ Legislator/ Association/ <strong>Research</strong> Institute 14%<br />

D Oil, Fuels, Chemicals and Lubricants Producer/ Supplier/ 13%<br />

Distributor<br />

E AdBlue Manufacturer/ Urea Producer/ Equipment<br />

Supplier/ Distributor<br />

13%<br />

Job Segment<br />

The <strong>Conference</strong> attracted stakeholders of a high<br />

level of seniority, across a variety of specialisms.<br />

A Owner/ President/ VP/ Partner/ C-suite/ Director 30%<br />

B Senior Engineer/ Engineer/ Design/ Product Manager 28%<br />

C Business Development/ Marketing/ Sales 21%<br />

D<br />

E<br />

F<br />

G<br />

A<br />

D Member of Government/ Legislator/ Member of 10%<br />

Association<br />

E Senior Manager/ Country Manager/ Program Manager/ 6%<br />

Supply Chain Manager<br />

F Regulation Analyst/ Regulation Specialist/ <strong>Research</strong>er 3%<br />

G Professor/ Scientist 1%<br />

C<br />

B<br />

D<br />

B<br />

C<br />

Region<br />

Bringing together a global audience who shared their own<br />

domestic experiences in meeting diesel emissions legislation.<br />

A<br />

A South America 77%<br />

B North America 12%<br />

C Europe 10%<br />

D Asia 1%<br />

<strong>Post</strong>-<strong>Conference</strong> Analysis: Diesel Emissions <strong>Conference</strong> & ARLA 32 Forum Brazil 2012<br />

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Testimonials<br />

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“Mandatory for all who work in the<br />

diesel emissions industry”<br />

Renato Sousa, Supervisor, Ford Motor<br />

Company<br />

“Good picture of what is happening<br />

in South America”<br />

Carlo Coco, Senior Applications Engineer<br />

Europe and South America, Stanadyne<br />

“Very good, extremely useful for<br />

industry information”<br />

Eduardo Bernardo, Product Development<br />

Engineer Manager, CNH Latin America<br />

“A valuable educational and<br />

networking experience”<br />

Enrique Guzman, Senior Integration Manager,<br />

FPT Industrial<br />

“Local conference with global input<br />

– bringing valuable information to<br />

the Region”<br />

Stephan H. Blumrich, Vice President & General<br />

Manager, Umicore Brasil Ltda.<br />

“Would definitely recommend”<br />

Axel Peter Roosen-Runge, Sales Manager AST,<br />

AVL<br />

“Excellent level, very interesting and<br />

relevant issues.”<br />

Victor Gomes Simão, Technology <strong>Research</strong>er,<br />

INMETRO<br />

“Excellent for understanding the<br />

situation in Brazil”<br />

Tim Johnson, Director, Emerging Regulations &<br />

Technologies, Corning<br />

“Very valuable, especially for<br />

networking”<br />

W Doelling, Manager Business Development,<br />

Alantum<br />

“Excellent opportunity to meet with<br />

senior people from the industry”<br />

Bruno Marques, Sales Manager - South<br />

America, Corning<br />

“Very interesting conference,<br />

building strategies for the market”<br />

Vanderluz Paulino de Souza, NGK<br />

“Important conference for bringing<br />

together Brazil’s leading automotive<br />

industry representatives”<br />

Tadeu C Corderro de Melo, Petrobras<br />

“A conference where you find<br />

the key players and relevant<br />

information”<br />

Fabio Pires, Director Brazil, Tracerco<br />

<strong>Post</strong>-<strong>Conference</strong> Analysis: Diesel Emissions <strong>Conference</strong> & ARLA 32 Forum Brazil 2012<br />

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in<br />

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Closing Remarks<br />

in<br />

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Thank you for supporting this year’s conference. We hope that you found the event, and<br />

this document, useful for yourself and for your organisation. Please do not hesitate to<br />

contact me if you have any further questions.<br />

Best wishes for the future,<br />

Rebecca Shellim<br />

<strong>Conference</strong> Manager<br />

Tel:+44 20 7503 1265 Mobile: +44 7977 568 492<br />

www.integer-research.com/conferences<br />

<strong>Post</strong>-<strong>Conference</strong> Analysis: Diesel Emissions <strong>Conference</strong> & ARLA 32 Forum Brazil 2012<br />

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