China's Sinopec cuts sulphur in diesel to clear urban skies

BEIJING, June 18 Tue Jun 18, 2013 6:13am EDT

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BEIJING, June 18 (Reuters) - Sinopec Corp, Asia's largest refiner, has from the end of May cut the sulphur content of diesel for agricultural, industrial and shipping use as part of a national effort to help clear the smoggy skies of Chinese cities.

The refiner cut the sulphur content of its "ordinary" diesel to a maximum 350 parts per million (ppm), bringing it into line with the minimum standard for diesel produced for autos and trucks, it said in a release late on Monday.

The new standard also means a quality change in Sinopec's diesel exports, although the refiner is not expected to export any of the fuel in June for the second month in a row. Sinopec is the country's dominate diesel exporter.

The fuel upgrade means all diesel produced by Sinopec will be of quality similar to Euro III standards or higher.

China's so-called ordinary diesel is widely used in rural, industrial and shipping sectors and makes up close to half of diesel consumption in China, the world's second-largest oil consumer. Over the past decade or so, the fuel grade has carried a sulphur content of as high as 2,000 ppm.

Automotive diesel, burned by trucks and buses, makes up the remainder of China's use of the fuel. China made 350 ppm sulphur automotive diesel a national mandate from June 2011.

Emissions from low quality diesel are among the main culprits for urban air pollution.

All of Sinopec's refineries completed by the end of May the upgrade to the new standards, the company said. The shift is estimated to cut emissions of sulphur dioxide by a minimum 60,000 tonnes annually, it said.

Beijing has set deadlines of end-2014 for the whole country to move to 50-ppm sulphur automotive diesel, a quality similar to Euro IV, and by end-2017 to 10-ppm sulphur, or Euro V diesel.

Sinopec has invested more than 200 billion yuan ($32.6 billion) in its refining business over the past decade, with spending to reach 33.8 billion yuan this year versus 32.1 billion yuan in 2012, the company said.

($=6.1335 yuan) (Reporting by Chen Aizhu and Judy Hua; Editing by Tom Hogue)

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