Over the past 10 years, construction machinery manufacturers and heavy vehicle builders have been engaged in a huge programme to build cleaner burning engines – a development that has largely bypassed the Middle East, since the cleaner engines can’t be used here because of the poor fuel quality. Nevertheless, there has been some impact, including on the importation of second-hand machines, and separately, some manufacturers may not offer some variants as new models are built with the new engines.
Diesel fuel in most markets in the Middle East is considered dirty, becase it contains high amounts of sulphur. Additional contaminants can be present if it isn’t handled properly – such as water or dirt – as is the case in any market. When legislation was introduced in Europe and elsewhere requiring lower engine emissions, new fuel with far lower levels of sulphur was also introduced. This reduced the amount of sulphur dioxide (SO2) emitted, caused by the presence of sulphur in the fuel, and over time it allowed the manufacturers to develop highly efficient and sensitive catalysts to be used in the exhaust aftertreatment, reducing the emission of carcinogenic gases. In the most recent generation of engines, the cost of the material in the catalyst alone can be several thousand dollars.
Kevan Browne, a spokesman for Cummins Engines, says running one of these cleaner engines on diesel fuel with higher than 15 parts per million (ppm) sulphur would quickly damage the aftertreatment catalyst, which would then need replacing. “This could happen even after using just several tanks of fuel with high sulphur levels by the equipment or vehicle. The aftertreatment failure could result in subsequent serious damage to the engine,” Browne told CMME.
This is why some second-hand equipment can’t be imported from an HRC market to the Middle East without modifying the engine. Engines and aftertreatment for vehicles were first introduced in the 2006/7 timeframe, and for off-highway equipment from 2011 onwards, notes Browne.
“OEMs and engine manufacturers have taken significant efforts to avoid these vehicles and machines being exported to markets such as Africa and the Middle East where the sulphur issue could occur. In fact, there have been only a very few instances where this happened and engines were damaged – but of course, this cannot be avoided 100%. For operators and dealers in these areas, the message is: do not import very low emissions vehicles or machines from North America or the EU with aftertreatment unless you have access to ULSD. There are areas where the availability of ULSD makes importation possible, such as Singapore, Australia and major cities in China.”
Nevertheless, engine manufacturers have busied themselves finding a technical solution to what is, after all, a technical problem. For engine manufacturers who supply to many OEMs – such as Cummins, Caterpillar, Perkins, Volvo and MTU – the pressure came from machinery builders to enable the engines to be exported to LRC markets, important for their residual values and therefore for product purchasing cycles.
In November last year, Caterpillar announced that, following extensive field tests, its Tier 4 Interim engines from 156 kW to 895 kW (7 to 32 litres) would not require any modification for what it calls “equipment migration” to take place. For engines smaller than 156 kW, the manufacturer announced that it would offer authorised modification processes removing aftertreatment from machine and commercial engines to allow them to operate in LRCs.
And it was also announced that a solution for the Tier 4 Final engines (the latest, and potentially ‘final’ emission phase) is not far off.
Other manufacturers, such as JCB and Volvo, have also announced that their engines are able to be modified for export to high sulphur regions. Cummins has a high sulphur tolerance kit. One thing for buyers to keep in mind is that the engine modification may have to be carried out by their local dealer, since the modification includes a decertification process and may not be able to be legally carried out prior to export.
As Browne notes, the kit is applied by a Cummins dealer or distributor in the receiving country, as the US Environmental Protection Agency (EPA) does not allow the modification to be undertaken in the US prior to shipment. Nevertheless, with all the major brands well supported in the Middle East, potential buyers should feel comfortable buying newer machines at auction in the HRCs.
Buying second-hand is one thing, but what about buying new? With the announcement that the UAE is phasing in diesel fuel to at least a Euro 5 standard (10 parts per million sulphur), and with a timeline for adoption of ULSD in the other GCC markets (see sidebox), it’s worth questioning whether we will see the new engines being sold once ULSD is adopted across the GCC.
In the HRC markets, there was no voluntary introduction of the cleaner engines – all the emission standards were legislated for. It’s possible we’ll see similar moves in the GCC, once all the states have unified their fuel standards. However, in the current phase, with only the UAE operating on USLD, it’s unlikely to be economically feasible for importers to bring in the new engined machines for what is a relatively small market.
With the newest engines in Europe and the US, there was a significant jump in cost for buyers, on the order of several thousands of dollars. This caused buyups of machines and trucks in the months leading up to the new standard. However, fleet owners and rental companies have also found that manufacturer claims about better fuel economy are not puffery – the engines are using considerably less fuel, and willpay for themselves in markets where fuel is a major cost. Yet performing similar calculations in the GCC markets – especially Saudi Arabia – won’t yield the same result, due to a lower price of diesel here.
Looking to the benefits of ULSD in the region, it may be possible that manufacturers will start introducing more efficient engines, with the latest high pressure turbo injection systems, but leave off the additional expensive exhaust treatment systems required in Europe for Euro 6, effectively building to a Euro 4 or 5 standard. With many machines and vehicles built to order, it wouldn’t be a hard task.
And in the passenger vehicle markets it’s likely that importers will relish the chance to bring in the highperforming diesel engines that have been developed for passenger markets, but which can’t be run on high sulphur fuel.
Manufacturers would see improved return on investment (ROI) for their research costs into new engines and aftertreatment tech if they could sell greater volumes globally, but if they did voluntary introduction here they’d risk pricing themselves out of the markets, assuming other manufacturers continued selling machines with the older and cheaper engines. The GCC is one of the most competitive markets in the world, with machinery available from a wide range of countries.
And sticking an extra few thousand dollars on a machine’s cost isn’t going to be doing your salesmen any favours, especially in the compact equipment segments. In a segment where the total price is higher – think of an all-terrain crane – buyers may swallow an extra cost to get the machine they want; but in segments where the competition is greater – such as backhoe loaders or skid steers – any extra cost would influence a purchasing decision.
With these considerations in mind, it’s fair to assume that unless the hand of the industry is forced by legislation, we won’t see a consistent outcome, and that individual brands will decide which engines to import based on their own interests, including machine performance. This means that some aspects of the new engine tech will certainly make its way here.
Here at CMME we’re interested primarily in machine performance, and how it can boost a company’s profitability; policy makers may take a different view. The recent moves by the UAE federal government to clean up diesel fuel suggests that improving air quality is certainly a focus. But, the timeline prediction for adoption of ULSD suggests that it will take some time before it is ubiquitous in the GCC, a precondition for importing the cleaner burning engines.