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Michael D. Jackson Scott Fable Shyam Venkatesh TIAX, LLC 1601 S. De Anza Blvd, Suite 100 Cupertino, California 95014-536

VIABILITY OF UREA INFRASTRUCTURE FOR SCR SYSTEMS U.S. Environmental Protection Agency Clean Diesel Engine Implementation Workshop CHICAGO, ILLINOIS August 6-7, 2003. Michael D. Jackson Scott Fable Shyam Venkatesh TIAX, LLC 1601 S. De Anza Blvd, Suite 100 Cupertino, California 95014-5363

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Michael D. Jackson Scott Fable Shyam Venkatesh TIAX, LLC 1601 S. De Anza Blvd, Suite 100 Cupertino, California 95014-536

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  1. VIABILITY OF UREA INFRASTRUCTURE FOR SCR SYSTEMS U.S. Environmental Protection AgencyClean Diesel Engine Implementation WorkshopCHICAGO, ILLINOISAugust 6-7, 2003 Michael D. Jackson Scott Fable Shyam Venkatesh TIAX, LLC 1601 S. De Anza Blvd, Suite 100 Cupertino, California 95014-5363 408.517.1550

  2. SCR Urea ImplementationSummary • Urea can be distributed at prices comparable to the price of diesel • Focus urea distribution to the large public and private diesel retailers serving the Class 7 & 8 trucks sector and consuming nearly 97 percent of the diesel • The current world and domestic production capacity of urea is sufficient to cover the increased demand from mobile SCR urea • Cost to retail urea is reasonable for the largest retailers and is less than the price of diesel • There is a small segment in terms of diesel consumption (3%) that will see urea at prices around $3/gallon • SCR urea is very competitive with NOx adsorber in the early years (2007) and markedly cheaper in later years (2015) • For SCR urea to be implemented successfully, all stakeholders must work in a concerted manner D5197 7642

  3. L - Local; < 200 miles MR - Medium Range; 200 - 500 miles LR - Long Range; > 500 miles CF - Central company-owned fueling station; Fleet Stations SC - Single contract fueling facility located off site; Cardlocks P - Public fueling station; Truck stops and conventional retail stations O - Other fueling habit SCR Urea ImplementationDiesel Consumption 2002 On-Road Diesel Consumption: 35 billion gal 85 % of all diesel consumed Medium Class 3-5 10,001 - 19,500 lb Light Class 1-2 < 10,000 lb Light-Heavy Class 6 19,501 - 26,000 lb Heavy Class 7&8 > 26,001 lb L 50% LR 19.7% LR LR LR MR 14.9% L 6.9% MR L 3.7% MR L 2.9% MR CF 5.6% CF 3.7% CF 14.3% CF CF CF CF CF CF CF CF CF S = 23.6% SC 1.3% SC 1.1% SC 4.5% SC SC SC SC SC SC SC SC SC S = 6.9% P 31.2% P 8.1% P 14.9% P P P P P P P P P S = 54.2% O O O O O O O O 1.1% O O O O D5197 7642

  4. SCR Urea ImplementationFueling Station Profiles Profiles of Fueling Stations Serving the Class 7 & 8 Truck Market Station Size (Monthly Diesel Consumption) # of Public & Private Stations Diesel Consumption Large (2,000,000 — 1,000,000 gal/month) 2,200 77% Medium (200,000 – 80,000 gal/month) 3,500 20% Small (<80,000 gal/month) >25,000 3% D5197 7642

  5. 1,200 High NOx engine out 1,000 800 Urea Consumption (million gallons of urea 32.5%wt solution) 600 Low NOx engine out 400 Urea consumption if SCR- Urea consumption if SCR- urea implemented 200 urea implemented starting with MY2010 starting with MY2007 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 Calendar Year SCR Urea ImplementationProjected Annual Urea Consumption Projected Annual Urea Consumption 2007 Total Diesel Consumption ~43 Billion Gal 2015 Total Diesel Consumption ~57 Billion Gal D5197 7642

  6. SCR Urea ImplementationUrea Supply vs. Demand World & Domestic Urea Supply vs. Demand MM Tons/Yr * -- Corresponds to 250 - 1,100 MMgal of 32.2% Aqueous urea Domestic demand includes stationary side SCR usage D5197 7642

  7. SCR Urea ImplementationRetail Urea Cost Retail Urea Cost by Diesel Station Throughput 4.00 3.50 3.00 2.50 Cost, $/gal 2.00 1.50 1.00 0.50 0.00 0 10000 20000 30000 40000 50000 Urea Throughput, gal/month D5197 7642

  8. SCR Urea ImplementationRetail Urea Cost Retail Urea Cost by Diesel Station Throughput D5197 7642

  9. SCR Urea ImplementationRetail Urea Price Range of Urea Prices for Various Scenarios D5197 7642

  10. Cost Comparison Parameters for Line-haul Application 2007 2010 2015 SCR-Urea Implementation StrategiesSCR Urea-NOx Adsorber Break-Even Analysis Assumptions: • $1.55/gal diesel • 1 million miles over vehicle life • High EGR used on alternative systems for MY2007-09 and on all vehicles for MY2010+ • Maintenance costs same for all systems D5197 7642

  11. Breakeven Urea Price $4.91-$6.89 Breakeven Urea Price $2.51 SCR Urea ImplementationPrice of Urea Compared to Competing NOx Technologies Breakeven Urea Prices for Various Scenarios D5197 7642

  12. SCR Urea ImplementationStakeholders All stakeholders must move in a concerted manner • Truck Operators - key stakeholders since aggregate fueling habits almost evenly distributed between public fueling facilities and private central fueling facilities. Will require installing a urea dispensing facility in their central fleet refueling facilities and need to leverage infrastructure at public facilities. Will require assurance from truck and engine manufacturers on the availability of urea and SCR systems before investing in vehicles or infrastructure. • Urea Retailers - primary retailers of diesel to the Class 7 & 8 truck market. The large truck stops and central fleet fueling facilities are best early adopters. Will require strong signals from customer (truck operators) to carry infrastructure. • Urea Distributors - these are likely to be existing diesel distributors, ag urea distributors and new entrants. Are key to coordinating supply and demand and will require early strong signals from upstream and downstream members in the value chain to make investments. • Systems Providers - vendors of urea distribution, storage, and dispensing equipment. Existing players servicing the petroleum industry are well situated to handle urea. Some niche urea systems developers already exist in Europe. • Engine & Truck Manufacturers - providers of SCR technology. Must initiate strong signals to all downstream members in the value chain on impending this emerging technology. D5197 7642

  13. SCR Urea Implementation Thank you for you attention Acknowledgements TIAX would like to acknowledge the Engine Manufacturers Association and the National Renewable Energy Labs for making this study possible • Further Published References: • “Development of a Urea Infrastructure to Support MY2007+ Heavy-duty Emission Requirements,” TIAX report to NREL, Contract # ADZ-3-33020-01, May 2003 • “Selective Catalytic Reduction Urea Infrastructure Study,” Arthur D. Little report to NREL, Contract No. DE-AC36-99-GO10337 Contact Michael D. Jackson - jackson.michael@tiax.biz D5197 7642

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