Navistar, rivals win delay of tougher emissions standards in Colombia

Posted on Dec 21 2013 - 2:24am by Editor

Trucks without pollutant filters to be sold in South American country until 2015

When Colombia tried narrowing the gap between its emissions standards and those of the United States and Europe, U.S. manufacturers pushed back.

CT ct-biz-1220-navistar-loss004.JPGIn September, the manufacturers won a reprieve. They’ll be allowed to sell trucks without pollutant filters in Colombia until January 2015.

“The Colombian government is on the (industry) side, and it’s allowing the import of technologies that are considered obsolete in the country where they were created,” said Eduardo Behrentz, dean of the School of Engineering at Universidad de los Andes in Colombia.

American manufacturers, including Lisle-based Navistar International Corp., had argued that Colombia was moving too fast in trying to upgrade its 2008 emissions standards, which are similar to those adopted in the U.S. in 1998, and that its diesel fuel isn’t clean enough for more modern engines.

Trucks sold in the U.S. can comply with more stringent regulations, the manufactures said, because the diesel fuel sold here has very low amounts of sulfur. Colombia lowered the amount of sulfur in its diesel fuel by more than 95 percent this year. Though not as clean as the diesel sold in the U.S., Colombia’s cleaner fuel led it to demand cleaner operating engines.

That’s important for a country that continues to battle with air quality. In 2009, more than 5,000 premature deaths were attributed to urban air pollution, according to a World Bank report.

“If you measure average particulate matter concentrations, the levels in (some) Colombian cities are nearly twice the levels found in Los Angeles, Madrid and Rome, and more than twice the levels in New York and Paris,” said Renan Poveda, a senior environmental specialist in the World Bank’s environment and sustainable development department.

Universities, nongovernmental organizations and environmental groups have lobbied for about a decade to improve Colombia’s fuel quality and pushed for new emissions standards, Behrentz said.

In 2005, a Bogota councilman draped hundreds of white sheets around the city so people could see how pollution changed their color in only a few days.

“The sheets were completely black,” said David Luna, the councilman who later became a congressman and pushed for a law to improve country’s fuel quality. “I invited the media to a press conference and the issue became more important. People finally understood that air pollution kills children.”

Behrentz helped write the 2008 law that, among other things, lowered the amount of sulfur in diesel from 1,200 parts per million in Bogota and 4,500 parts per million in the rest of the country to 50 parts per million nationwide. To get there, Colombia invested more than $1 billion modernizing a refinery. That change prompted a conversation about stringent emissions standards that would work with the new fuel.

A resolution was drafted, requiring companies to comply by 2013 with standards similar to those Europe adopted in 2005. U.S. manufacturing companies pushed back against the draft resolution, and it was never formally adopted. In September, Colombia’s ministry of the environment passed a resolution requiring companies to comply with the stringent standards by 2015.

Thomas Wallner, a mechanical engineer with Argonne National Laboratory near Lemont, said the Colombian approach is similar to that of other developing countries.

Wallner said the more technologically advanced an engine or a vehicle is, the more expensive it becomes, and local markets in emerging countries often can’t support the price increases.

“That’s why we typically see an introduction of new engine technologies starting in the U.S., Asia and Europe, and they slowly penetrate into some of the Third World countries,” Wallner said.

Navistar, which sold more than 6,000 trucks in Colombia in fiscal 2012, said part of the problem was that the South American country wanted manufacturers to implement regulations within six months. By comparison, when the Environmental Protection Agency implements new rules, it gives manufacturers a year to three years to do so, said Steve Schrier, a Navistar spokesman.

“Most countries that want to implement emission changes allow the manufacturer ample time to make the necessary engineering requirements to do so,” Schrier said.

For example, Schrier said the EPA gave manufacturers a decade to meet emissions standards that took effect in 2010. Navistar spent more than $700 million on engine technology that failed to meet those standards. It is now on a turnaround plan to return to profitability next year. The plan includes outfitting some of its trucks and buses with engines from a competitor, closing plants and laying off workers.

On Friday, Navistar reported a fourth-quarter net loss of $154 million, or $1.91 per share, compared with a loss of $2.77 billion, or $40.13 per share, a year earlier. Revenue fell 13.5 percent to $2.75 billion.

Manufactures also argued that Colombia was playing favorites with European manufacturers.

Source: Chicago Tribune