18 August 2003
The Engine Manufacturers Association (EMA) released the results of a recent study evaluating the economic viability of using urea-based selective catalytic reduction (SCR) to meet 2007/2010 heavy-duty vehicle NOx reduction requirements. The study, completed by TIAX (formerly Arthur D. Little), was commissioned by EMA and the National Renewable Energy Laboratory (NREL). The TIAX report concludes that it is feasible to provide urea to a large fraction of the trucking industry in a cost-competitive manner.
The cost of urea depends on several factors, including the market penetration of SCR technologies. In completing the study, TIAX examined potential market structures, created cost models, completed a critical path analysis, and examined several business cases. Two implementation scenarios were considered, with SCR introduction starting in 2007 and 2010. Urea distribution pathways that were analyzed included (1) solid urea blended and dispensed at truck stops dealing with large urea throughputs, (2) aqueous urea blended at a central distribution facility and trucked in tanker-loads to truck stops, and (3) aqueous urea blended at a central distribution facility and distributed in small quantities (300 gallons to 55 gallons).
In the report’s conclusions, TIAX emphasized the conditions necessary to develop a viable nationwide urea distribution system. These include: greater than 50% market penetration of SCR technologies, a concerted effort on the part of fleets to work together with diesel fuel and urea suppliers and retailers to develop the infrastructure, and a clear and early signal from engine and vehicle manufacturers that they intend to provide SCR-equipped vehicles.
Two sets of urea prices are likely to emerge, concludes the study:
- Low-price urea would be available in the high urea consumption sector. The urea prices would be comparable to prices of diesel fuel. This high consumption sector would cover 65% to 97% of total urea consumption.
- Higher price urea would be offered in the low urea consumption sector. These prices were estimated to be 2.4 to 3.7 $/gallon (32.5% solution). This sector would supply only about 3% of on-road urea.
Average cost of retail SCR-urea would drop over time as urea consumption increases. However, if only some engine manufacturers adopt SCR, the average cost of retail SCR-urea would be higher due to lower urea throughput at stations.
The sensitivity of urea pricing to the retail volumes was already shown in an earlier study by TIAX, prepared for NREL (NREL/SR-540-32689, July 2002). In that study, the urea distribution cost—representing the highest cost component—ranged from $0.70 to $35 per gallon of 32.5% SCR-urea solution. The lower figure assumed high throughput truck stops, while the upper part represented light-duty, low urea throughput retail outlets.
Urea consumption rates vary depending on the required NOx reduction. In several urea-SCR studies, consumption rates of urea solution on the order of 3% relative to the diesel fuel consumption were reported.
The average capital expenditure for the urea infrastructure has been estimated by TIAX to range from $25,000 to $200,000 per station depending on the designed throughput for the dispensing facility.
Timely implementation of urea infrastructure for the 2007-2010 timeframe would require that immediate action is taken on the following issues:
- Establish on-road SCR-urea specification and/or standard
- Issue a combined strong signal by all key engine and truck manufacturers on the impending sale of SCR-equipped engines
- Issue signals by to all downstream stakeholders of impending need for an on-road SCR-urea infrastructure
The US EPA has been speaking in favor of NOx adsorbers—and against urea-SCR—as the NOx reduction strategy for compliance with the 2007/2010 emission standards. However, the SCR technology is much more mature than NOx adsorbers, which are still far away from becoming a commercially viable technology option for heavy-duty diesel engines. One of the SCR technology issues raised by the EPA has been the feasibility of establishing an economically viable urea infrastructure prior to 2007. Based on the TIAX report, the EMA emphasized that urea-SCR presents a potentially successful technology solution which is economically viable and should not be dismissed on grounds of its perceived impediments.