The Department of Environment and Natural Resources (DENR) is thumbing down the appeal of automakers to defer compliance with the environment-friendly Euro 4 fuel standards for new vehicles by two years, stressing that the cleaner-emission regulations have been delayed for far too long.
The director of the Environmental Management Bureau (EMB), Environment Undersecretary Jonas R. Leones, appears to be standing firm on the DENR’s ruling to implement Euro 4 compliance for all new vehicles to be used or introduced in the Philippines starting January 1, 2016.
Another aspect of the implementation of Euro 4 standards pertaining to the quality of fuel is slated to take effect in the country a month from now. It mandates the use of a cleaner-fuel standard that allows a maximum sulfur content of 50 parts per million (ppm). The prevailing Euro 2 used by vehicles in the country today has a cap of 500 ppm.
This was announced through a Department Administrative Order (DAO 2015-04) released in late March, which details the type of vehicles that need to comply with Euro 4 standards and the corresponding emission limits.
The DAO contained a provision stating that all new vehicles to be used or introduced in the country must comply with the standards by January 2016, which means vehicle engines must already be Euro 4-compliant. This immediately elicited backlash from automakers.
“Campi [Chamber of Automotive Manufacturers in the Philippines Inc.] wrote a letter to the DENR to clarify the DAO. They replied that by January 2016, new vehicles should comply with Euro 4. They mentioned that the new vehicles cover even current models,” Mitsubishi Motors Philippines Corp. (MMPC) Vice President for Marketing Froilan Dytianquin said in a text message to the BusinessMirror.
“This will be a problem for all brands since we are not ready to introduce Euro 4 for these vehicles, since it will take time to develop Euro 4-compliant engine. That is the underlying reason for the two years required for transition to Euro 4 for current models,” the MMPC executive added.
Automakers are asking the DENR to keep its pledge of giving a two-year grace period from the January 1, 2016, deadline to allow them to make adjustments on model offerings and deplete the current inventory of models.
Leones reasoned, however, that the previous agreement was made during a predecessor’s time, and that circumstances have changed so car manufacturers may have to bite the bullet.
“Our point is that most of the countries surrounding the Philippines are already using Euro 4. Why is it in the Philippines it is still Euro 2? It’s high time that the country switches to Euro 4. Our compliance should have started in 2005. Sacrifices need to be made because we need to protect the environment. Manila has the worst air quality and 80 percent of the air pollution is from vehicle emissions,” Leones said in a phone interview.
Leones also clarified that the July 1, 2015, deadline is for compliance to fuel distribution of petrol companies, not on automakers.
“July 2015 pertains to loading of the Euro 4 fuel. Car companies can still import Euro 2, but by January 2016, all vehicles coming in should already be compliant in terms of engine and fuel,” Leones clarified. The EMB director also clarified that there will be no “retroactive application,” meaning the need to have Euro 4-compliant engines will only apply to new vehicles to be sold and imported starting January 2016.
Leones said the enforcement of the standards on vehicles by January 2016 is meant to maximize the matching of the fuel standards with the vehicle engine. Leones said that, while the granting of the two-year grace period is ultimately the decision of Environment Secretary Ramon J.P. Paje, his endorsement of the request will play a role in the decision-making.
Environment vs economy
Highlighted as a modern case of environmental protection butting heads with economic development, the carmakers’ dilemma should be defended exhaustively, the EMB director said.
“I’m not saying that it’s impossible for the request [the grace period] to be granted but, right now, there has to be a very strong justification on their [the car companies] part. It should have a heavier impact than the issue of public health and general welfare,” Leones said.
The DENR undersecretary said should there be any justification, it should be on the economic impact on the public if they disallow the two-year grace period.
The automotive industry has been touted as the backbone of the country’s manufacturing industry, with the work force numbering to 500,000, according to Campi.
The industry also contributes to the national budget in terms of annual payment of duties and taxes of over P30 billion and recorded total exports of about $3.4 billion in 2013.
Campi will con-tinue its appeal for a grace period, Dytianquin said.