The World Bank

Removal of Lead from Gasoline

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Courtesy of Courtesy of The World Bank

On 12th March 1997, the European Commission adopted a proposal from the Environment Commissioner Ritt Bjerregaard on a European Union strategy to combat acidification. The strategy will, by 2010, reduce significantly the extent of the areas in the European Union where the tolerance of sensitive ecosystems to acidity is exceeded.
Main elements of the strategy include establishment of national emission ceilings for each acid rain pollutant; ratification of the UN protocol on further reductions of sulphur emissions; proposal for a directive limiting the sulphur content of heavy fuel oils; review of the large combustion plant directive (Dir. 88/609/EEC); designation of the Baltic Sea and the North sea as so called sulphur dioxide control areas; promotion of cost-effective measures to reduce emissions in Central and Eastern European countries.

Current predictions indicate that the extHuman exposure to lead is a major environmental health hazard, a large part of which is attributed to the use of lead in gasoline. Experience has shown that significant reduction in present and future human exposures to lead can be achieved cost-effectively by the removal of lead from gasoline. This note provides guidance on approaches to implementing programs to phasing out lead from gasoline.

Impacts and Sources of Exposure to Lead

Lead is a highly toxic heavy metal that adversely affects the nervous, blood-forming, cardiovascular, and reproductive systems and the kidneys. Of most concern are its effect on the nervous system of young children, causing reduced intelligence, attention deficit, and behavioral abnormalities; and its contribution to cardiovascular diseases in adults. Such impacts occur even at low levels of exposure without a known lower threshold.

Human exposure to lead can be attributed to four types of sources: (i) traffic due to the use of lead gasoline additives; (ii) industrial emissions largely from the mining, smelting and processing of lead and lead-containing metal ores; (iii) lead-containing waste disposal and processing such as incineration; and (iv) the use of lead-containing products such as water pipes and solder, food can solder, ceramic glazes, paint pigment and batteries. Many of the uses of lead (for example, lead-based paint) have been banned by most countries. As a result, vehicular traffic is often the largest source of human exposure, accounting for as much as 90 percent of all atmospheric lead emissions in many urban areas. A close connection has been discovered between the use of lead in gasoline and human health impacts (EPA, 1985). In addition to the immediate health exposures through inhalation, lead also accumulates in the soil causing long-term exposure.

Rationale of Removing Lead from Gasoline

Alkyl-lead compounds have been widely used to improve auto engine performance by increasing the resistance of the internal combustion engine to early ignition (measured by the octane rating of gasoline) since the 1930s. The use of lead additives allowed car manufacturers to produce larger and more powerful engines, which resulted in a rapid growth in the use and emission of lead from vehicular sources. However, there have been two major factors that resulted in a decline in the use of lead in gasoline, since the 1970s:

The introduction of catalytic converters, aimed to reduce the tailpipe emissions of various pollutants, required the introduction of unleaded gasoline to protect the converters; and
The recognition that health impacts occurred even at low exposure levels, which induced measures to reduce the lead content of gasoline to minimize health impacts.
Due to the social benefits that largely outweigh the costs of phasing out lead from gasoline, policies should facilitate the reduction of lead from gasoline in addition and beyond the demands of changing car technology.

World-Wide Experience with Phasing-Out Lead From Gasoline

Countries are at various stages of phasing out lead from gasoline. A total phase-out has been completed by many countries including Austria, Bermuda, Brazil, Canada, Colombia, Costa Rica, Denmark, El Salvador, Finland, Guatemala, Honduras, Japan, Nicaragua, Salvador, Slovakia, Sweden, Thailand and the U.S. In some countries (for example, the U.S.), the phase-out was initially driven by the intention to protect catalytic converters. In others (for example, the European Union), the regulation of lead levels in gasoline preceded the widespread use of catalytic converters. Some countries (for example, Brazil and Colombia) have introduced alternative fuels (alcohol). Many developing countries, however, still use alarmingly high concentrations of lead in gasoline, and have not introduced unleaded gasoline yet.

Technical Issues

Refinery capacity to produce unleaded gasoline. Gasoline importing countries have greater flexibility in phasing-out the use of lead in gasoline. In most countries, however, domestic oil refining capacity determines the options and cost of adjustment. Experience shows that modifications required in refinery processes to reduce lead may be quite modest, depending on such factors as refinery complexity (more complex refineries adjust easier); spare octane capacity; and the octane requirement of the car fleet. The additional cost of producing unleaded gasoline rarely exceeds US$0.01-0.02 per liter of gasoline. The potential adverse environmental impacts of certain refinery process should restrict the choice of technologies to replace lead. Specifically, the increase of the aromatic (benzene) content of gasoline should be avoided by relying on isomerization, alkylation, and the use of oxygenates such as methyl-tertiary butyl ether (MTBE) to replace the octane enhancing capacity of lead.

The impact of unleaded gasoline on cars designed to use leaded gasoline. Besides enhancing engine performance, lead also functions as lubricant of the exhaust valves. This function allowed car manufacturers in the past to use soft, low grade metals on the engine valves. The lubricating function of lead has become unnecessary in the new generation of cars, as most car manufacturers started to apply hard metals on the valves during the last decades. However, a significant share of the car fleets in many developing and transition economies may still consist of old cars with soft valves. The recession of these soft valves (especially the valve seats) caused by unleaded gasoline has been seen as an obstacle to the rapid phase-out of lead from gasoline in many countries. However, tests and experience shows that (i) this problem is not as serious as it is believed; (ii) much lower lead concentrations than contained in most leaded gasolines still provide adequate protection to sensitive engines; (iii) significant maintenance savings are associated with the switch for leaded to unleaded gasoline; and (iv) valve seat recession can be solved by adding lubricants to unleaded gasoline.

Policy Issues

Since the social benefits of removing lead from gasoline are large, and technical obstacles are relatively easy to deal with, the key to successful lead phase-out programs is the introduction of proper government policies. The recognition of the lead problem and political commitment to tackle it play a decisive role in initiating the phase-out process. The main areas Government policies should focus on are:

Public awareness building and education. Public awareness of the rationale of phasing out lead from gasoline plays a key role in changing consumer habits and demand. Public education should provide information on:

The health impacts of lead;
The feasibility of using unleaded gasoline in the various types of cars;
Recommended fueling practices; and
Recommended maintenance requirements.
Consensus building. A lead phase-out program requires the participation of various stakeholders. Their consensus in the support and implementation of the program is essential. National programs, therefore, should be designed with the participation of the main stakeholders including:

Ministry of Energy;
Ministry of Industry;
Ministry of Transport;
Ministry of Environment;
Ministry of Health;
Ministry of Finance;
Interest groups such as associations of car manufacturers and oil refineries;
Consumer groups such as auto-clubs; and
Fuel specification. Fuel specifications should provide clear requirements for the schedule of the reduction and ultimate elimination of lead use from gasoline. In order to avoid potential negative health impacts of certain refinery processes, fuel specifications should also limit the aromatics and benzene content of gasoline.

Regulations of Implementation. Government regulations should facilitate the cost-effective adjustment of gasoline supply to changing demand and requirements. In countries where a large number of refineries exist, the optimal timing and speed of adjustment at each refinery is likely to vary. Incentive regulations, such as lead trading among refineries (implemented, for example, in the U.S.) introduce flexibility in the timing of compliance with changing fuel specifications.

Price policies. Gasoline prices should enable domestic refineries to adjust. Liberalized price and market policies allow refineries to generate sufficient resources and return to finance such adjustment. Controlled gasoline prices, however, can only facilitate such adjustment if prices are set at least at the level of prevailing international market prices. Gasoline price subsidies should be eliminated to encourage rapid supply-side adjustment.

Tax policies. A tax rate which is higher on leaded than unleaded gasoline is justified to reflect the social costs of negative health impacts caused by lead. Experience has shown that differentiated taxation that results in a 5-10 percent difference in favor of unleaded gasoline prices facilitates the rapid adjustment of consumer habits and demand. If revenue neutrality is an objective, the difference in tax rates will need to be adjusted over time as the market share of unleaded gasoline increases in the phase-out period.

Environmental policies. Air pollution causes serious health damage, especially in densely populated urban areas. Traffic is generally a large and growing contributor to these pollution problems and, in many cases, the requirement to install catalytic converters is justified to reduce such damages. Such regulations facilitate the shift in gasoline demand towards unleaded gasoline brands.

Import policies. Import regulations and customs levied on imported cars depending on their age and environmental performance affect gasoline demand. Import policies should reflect the social cost of pollution generated by imported cars using such proxies as:

Existence of emission control device;
Typical emission factors of the car model; and
Age of the vehicle.
Promotion and training. Governments can accelerate the adjustment of markets to the wider use of unleaded gasoline by encouraging their promotion and supporting the training of technicians and car mechanics in the proper maintenance and adjustment of the various types of vehicles to use unleaded gasoline.

Bank Experience

Policies. Bank studies have pointed out the danger of lead exposure in several countries and regions including Thailand, Indonesia, Mexico, the Middle East, and Central and Eastern Europe. Evidence of the adverse health impacts of lead has resulted in Government action to address the problem and, with the assistance of the Bank, design and implement lead phase-out programs and supporting policies in a number of countries including Thailand, the Philippines, Mexico, and Bulgaria. The experience in Thailand has shown that a rapid lead phase-out is possible if the Government sets clear deadlines, gasoline prices are liberalized, and refineries respond to market changes and regulations. However, the lead phase-out program became severely hampered in Mexico, where price policies and market liberalization efforts didn't support the adjustment of refineries on the one hand, and consumer behavior, on the other.

Implementation. The Bank has provided financial support to the restructuring of the Bangchak refinery in Thailand in order to enable the refinery to produce unleaded gasoline. The Bank's financing role has been largely catalytic to attract the participation of commercial sources. As a result of government policies and rapid refinery adjustment, lead was phased-out completely from gasoline by the end of 1995 in Thailand. A similar project is under preparation for Bulgaria to assist the country's main refinery to improve its technical capacity to increase the production of unleaded gasoline.

ent of affected areas in 2010 would, in the absence of the strategy, be 8.7 million hectares. With the strategy this figure will be reduced to 4.5 million hectares

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