The Ministry of Industry and Information Technology (MIIT) announced on April 23 that State-III emissions standards-compliant vehicles would be banned for sale starting from January 1, 2015. Three weeks later on May 12, a China Central Television (CCTV) program exposed the industry practice of selling fake State-IV trucks that only meet State-III or even State-II emissions standards, naming heavy-duty truck makers such as JAC and Dongfeng Commercial Vehicle as culprits. The show created a stir in the industry and forced JAC to issue a statement saying that it is only the practice of dealers, not the OEMs.
“We sell State-III-compliant vehicles with State-IV certificates, which have advantages in both costs and standards, at the consent of truck OEMs,” a truck dealer in Shanghai was quoted as saying by National Business Daily. “We would also communicate with relevant officials in advance for a green light in annual vehicle inspection and exhaust testing,” added the dealer.
Why is the practice rampant in the industry and whose fault really is it?
Fraud means and damages
After obtaining State-IV certificates, a number of dealers would use them on State-III or even State-II-compliant vehicles. Some may even alter engine nameplates for registration.
Since this kind of fake State-IV vehicles have no exhaust processing system, these vehicles are not able to pass exhaust testing though with State-IV labels, which damage the interest of consumers fundamentally.
The SCR after treatment system widely applied in State-IV emissions standards models requires the usage of AdBlue. The engine will give an alarm or even be limited in power when it runs out of AdBlue. Thus, Adblue has added usage and maintenance costs to truck owners. To satisfy these owners, some manufacturers deceive the vehicle OBD system monitor in using technical methods to prevent the alarm and enable the vehicles to keep on running without AdBlue. The NOx emissions therefore increases in this instance and lead to heavier air pollution.
Some consumers also use water instead of AdBlue to fool the engine alarm, which make the State-IV emissions standards a dead letter.
Incomplete supporting facilities
“Incomplete supporting facilities have reduced the effects of emissions reduction,” said Yang Zaishun, vice secretary-general of China Passenger Car Association (CPCA) and a heavy-duty truck industry expert. “State-IV products can be mass applied only if the supply of qualified fuel and AdBlue are sufficient,” said Yang.
“Unqualified State-IV emissions standards-compliant diesel has hindered the popularity of State-IV-compliant vehicles,” said Yao Jie, vice secretary-general of China Association of Automobile Manufacturers (CAAM) to AASTOCKS.com. “China’s two oil tycoons, PetroChina and Sinopec, will provide qualified State-IV diesel by the end of 2014 and the new standards can be carried on smoothly then.”
The emissions standards upgrading of China mainly depend on the SCR technology. However, since AdBlue, the principal component of the technology is in insufficient supply, the upgrading has been hindered as well.
According to a CAAM study in April, none of the 672 diesel stations in 18 provinces and 2 cities are equipped with professional AdBlue filling facility. Only 2 percent of the stations provide small packages or buckets of AdBlue, and only 58 percent of the 145 auto service stations or auto parts marts in these regions provide buckets of AdBlue.
Inadequate supervision and low fraud cost
Fake State-IV vehicles cost ¥10,000 ($1,605) less than genuine State-IV vehicles per unit on average, and consumers seem to benefit more from using fake State-IV vehicles. At the same time, very few usage of fake State-IV vehicles are caught and even those that do get caught are hit with minimal penalties, making fake State-IV vehicles a common phenomenon.
Almost all truck manufacturers are now capable of producing genuine State-IV vehicles. However, when State-III vehicles can be sold as State-IV vehicles without punishment or little punishment, these manufacturers choose to take risks. Some of them have no intention to make fake vehicles, but connive with dealers in selling fake State-IV vehicles.
Increasing the risk of fraud can efficiently reduce fraud. The reduction of fraud profit also leads to a cleaner market environment. For example, the State-III vehicles of Dayun Automobile Manufacturing Co., Ltd. and C&C Trucks cost the same as State-IV trucks, thus, dealers have no motive to make a fraud.
Increase the supply of State-IV diesel, reduce fuel supply of State-III and below, popularize the supply of AdBlue, and provide financial subsidies and incentives to upgrade will also promote real implementation of the new standards.
Fake State-IV vehicles may be rampant and lead to further environmental pollution if government departments fail to increase penalties or provide law-abiding enterprise incentives.
It is unfair to shift the blame to manufacturers, dealers, or consumers for fake State-IV vehicles. The government should provide more support to the construction of infrastructural supporting facilities, and establish sufficient AdBlue filling facilities. Relevant supervision departments should also make up technological loopholes. For example, it is improper for some departments to judge the vehicles merely based on the installation of AdBlue buckets but not on real testing data. All parties concerned should contribute to a smooth implementation of the State-IV emissions standards.