With a total of 24 planned oil refineries, Asia-Pacific is expected to contribute 40% of global capacity additions over the next five years, according to the latest report from energy experts GlobalData.

The firm's latest report, "Planned Oil Refineries - Global Market Analysis, Competitive Landscape and Capacity Forecasts to 2017," expects China alone to install nine new refineries by the end of 2017, with 2,211 thousand barrels per day (mbd) in total Crude Distillation Unit (CDU) capacity additions during the 2012-2017 period – the most of any country in the world and almost double that of the second greatest contributor, Saudi Arabia, with a total of 1,201 mbd in additions during the same period.

Chinese National Oil Companies (NOCs) PetroChina and Sinopec will be responsible for most of the country's additions in the near future. Sinopec plans to build two new refineries in China, one in the coastal city of Lianyungang with an initial capacity target of 240 mbd, and the other in Zhanjiang, with expected crude processing capacity of 300 mbd.

PetroChina aims to install five new-build refineries between 2012 and 2017 across locations such as Sichuan and Yunnan.

India is predicted to place a relatively distant second in the region's CDU capacity additions, with 803 mbd over the next five years, while Indonesia is forecast third with a total of 319 mbd.

By region, GlobalData's report predicts the Middle East and Africa to follow Asia-Pacific closely with 37% of the global additions for 2012-2017, leaving Europe and the America's combined total at just 23%.

Motorists are steering away from high-octane fuels, according to data from Singapore's Department of Statistics, which show that the sale of 92-octane and 95-octane petrol has continued to grow in popularity over the premium 98 grade.

In the first half of the year, the market share of "non-premium" grades (92-octane and 95-octane) stood at 65.5%, compared to 56.6 % in 2007, 43.4% in 2005 and 20% before 2000.

This trend has developed, market watchers say, as a result of rising pump prices, as well as a growing awareness that most cars are built to run on a variety of petrol grades, including 92-octane. Cost could be a strong factor for the shift, since lower-octane fuels are cheaper than the premium grades by as much as 19% in Singapore.

Based on the average annual mileage of about 20,000 kilometers (12,427 miles), and a fuel economy of 10 km a liter (23.5 mpg), vehicle owners can save around US$300 a year if they switch from 98-octane to 92-octane.

Industry experts say that only certain types of vehicles require high-octane fuels. Greg Engeler, Chevron's regional manager of product engineering, said: "Often, older, worn or heavily carbonized engines will need higher octane... Turbocharged engines also tend to require higher octanes. The higher a fuel's octane number, the better it is able to prevent knocking--the pre-ignition of fuel in the engine--which leads to lower efficiency. In any case, cars are unlikely to knock in the course of normal city driving."

He added that it is best to refer to a car's manual to determine which grade of fuel to use.

Major Japanese oil companies are reducing their refining capacities due to a drop in domestic demand. The government has urged the reduction, as it fears that cutthroat competition could lead to a collapse of the entire industry. Cosmo Oil Co. President, Keizo Morikawa announced at a press conference in late August that the company plans to shut down its Sakaide refinery in Kagawa Prefecture in July 2013. The closure will result in a reduction of the company's refining capacity by 20% or 140,000 barrels per day (bpd). Cosmo will integrate its refining operations in three locations to achieve increased efficiency.

Other companies in the industry are also rushing to reduce their refining capacities. The JX Group downsized by shutting down six of its processing plants as early as October 2010, reducing its refining capacity by 400,000 bpd. In September 2011, Showa Shell Sekiyu cut back its refinery capacity by 120,000 bpd at its Ogimachi plant in Kawasaki, Kanagawa Prefecture. Idemitsu Kosan Co. is set to shut down its 120,000 bpd Tokuyama refinery in Yamaguchi Prefecture in March 2014.

The cutbacks are unavoidable because of falling demand, due partly to the growing shift from oil to natural gas use and the increased efficiency of cars. According to the Petroleum Association of Japan, the 1999 domestic peak demand for petroleum of 245.97 million liters is expected to be approximately half of that at 134 million liters by fiscal year 2020.

The 2009 Law Concerning Sophisticated Methods of Energy Supply Structures has encouraged further reduction in refining capacity. It calls on companies to increase the ratio of crude distillation units to their total processing capacity. The goal is to bring the industry's 10-year achievement of about a 10% crude distillation ratio to 13% by the end of fiscal 2013.

Spokesperson Tao Detian announced that China's Ministry of Environmental Protection (MEP) has completed the examination of total pollution reduction of all provinces, autonomous regions, municipalities and 8 state-owned enterprises in 2011. The results indicate that discharges of chemical oxygen demand (COD), ammonia (NH3) and sulphur dioxides (SO2) nationwide have dropped compared to 2010, while the discharge of nitrogen oxides (NOx) has increased.

In 2011, national discharges of COD totaled 24.999 million tons, down 2.04% against that of 2010, discharges of NH3 and SO2 reached 2.604 million tons and 22.179 million tons, declining by 1.52% and 2.21% respectively. Meanwhile, the total discharge of NOx grew to 24.043 million tons, up by 5.74%.

Tao said that the 12th Five-Year Program for National Economic and Social Development has identified measures to control these four major pollutants. The year 2011 is the first year of the 12th phase.

Among all the provinces and cities, Beijing, Shanghai, Zhejiang and Henan Province head the list in terms of average reduction of the four pollutants. Specifically, Beijing reduced discharges of COD, NH3, SO2 and NOx by 3.53%, 2.98%, 6.22% and 4.75% respectively compared with that of the previous year. Shanghai also achieved emissions reduction of all the above pollutants by 6.26%, 3.40%, 5.90% and 1.66%, respectively.

Problem areas included Xinjiang and Heilongjiang Province, where all four major pollutants have increased since 2010.

India's biggest crude oil refining and marketing company, Indian Oil Corp. (IOC), announced that it is planning to set up a new refinery in the west coast of India.

"We are planning to come up with a new refinery in the western part of India by 2020. But as of now the plan is on the drawing board stage," said R. S. Butola, chairman and managing director of IOC.

Butola said the company is planning to build a refinery near the coast so that it can import crude at a lower cost, as well as service the western Indian market. IOC's nine refineries and another one it owns through a subsidiary, have a total refining capacity of 65 million tons per annum (MTPA), the highest crude processing capacity, or crude throughput, achieved by any company in India. Reliance Industries comes in second, with a capacity of 62 MTPA.

A new refinery would cement IOC's number one position in the country's refining sector. It would also help meet the gap between its current output and sales, but analysts doubt if the company would be able to fulfill what they consider a grandiose plan, since one of IOC's most ambitious projects, the 15 MTPA Paradip refinery at Orissa, has yet to roll out its first batch of output. But Butola explained that "almost 87% of the work in the refinery is complete and we plan to commence it by the later part of next year."

India's decision to increase diesel fuel prices has been met with swift and intense backlash from various sectors. The 14% price increase on diesel fuel, which went into effect in early September, is the first of several increases scheduled within the next 15 months. Diesel fuel is heavily subsidized in India, and economists say that if the government decides to reverse the price increase partially by shaving off one rupee from the Rs5 per liter (US$0.09) increase, it would still be sufficient as a necessary first step in the government's efforts to narrow a large budget deficit of 5.8% of gross domestic product (GDP).

Economists agree that slowly increasing the price of diesel fuel could send a positive signal to international investors and rating agencies. It would also help buoy the sagging rupee, which would in turn help stabilize the economy. "It's quite a bold step," said Siddhartha Sanyal, chief India economist for Barclays. "It's important to note the government is prioritizing fiscal consolidation."

However, if the government under Prime Minister Manmohan Singh gives in to the public outcry and reverse the price increase entirely, analysts believe that it would mean that the toughest overhauls on the government's agenda, such as allowing investment from international supermarkets including Wal-Mart Stores Inc., will most likely get bogged down as well.

Starting October, Beijing will release new measurements of hazardous airborne pollutants known as PM 2.5, from eight newly established and 27 upgraded monitoring stations scattered around the city, the Beijing Municipal Environmental Monitoring Center said on its official Sina Weibo.

Particles less than 2.5 micrometers in diameter (PM2.5) are referred to as "fine" particles and are believed to pose the greatest health risks. Because of their small size (approximately 1/30th the average width of a human hair), fine particles can lodge deeply into the lungs. Sources of fine particles include all types of combustion activities (motor vehicles, power plants, wood burning, etc.) and certain industrial processes.

The eight new stations, of which five will be set along the second, third and fourth ring roads, and other major traffic arteries, will detect the emissions with a diameter of 2.5 micrometers, which can adversely affect human health, said the center.

"The stations at major traffic areas aim to reflect the pollution situation along the arteries and will narrow the gap between how the residents feel and the actual air quality condition and will offer help in determining air pollution policymaking," said Zhang Dawei, director of the municipal center.

According to the Xinhua News Agency, research by environmental officials shows that more than 22% of the PM 2.5 in downtown is caused by vehicle exhaust.

The 27 existing detection stations across the city have been or will be upgraded with equipment capable of detecting PM 2.5.

Three other new stations, used to study the pollutant's migration in the region, will be positioned in the suburban areas, pushing the total number of such stations to six.

The center said the air quality in Beijing is directly affected by pollution in neighboring cities, especially during severely polluted days when the larger region can be covered by a shroud of pollutants. This makes it critical for the capital to coordinate with other regional cities in tackling air pollution.

A new edition of the air quality index (AQI) will be put into use from the beginning of next year, allowing residents to track the data released by all 35 stations in the city on the municipal center's website.

Environment officials will convert the measurement of PM 2.5 into the AQI, aiming to facilitate the resident's reference of the air quality.

Bharat Petroleum Corporation Ltd. (BPCL) has signed a memorandum of understanding (MoU) with the state of Kerala, India, in what is considered one of the most ambitious projects in the state. When fully operational, the Rs20,000 crore (US$3.7 billion) project would provide direct employment to 10,000 people and indirect employment to almost 25,000.

Oommen Chandy, chief minister for the state, signed the MoU for the Integrated Refinery Expansion Project (IREP), while BPCL Chairman R. K. Singh signed for the refiner; although BPCL requested tax waivers from the state, the state government agreed instead to provide the company loans at a nominal interest. According to Chandy, the state also agreed to extend incentives such as deferment of KGST/VAT and CST, as well as exemption of works contract tax.

The MoU provides for the integrated expansion of the Kochi refinery with an investment of Rs14,000 crore (US$2.6 billion). The project would raise the refinery's capacity from 9.5 metric tons per annum (MTA) to 15.5 MTA, which would make it the largest public sector refinery in the country, as well as modernize the refinery to produce Euro 4- and Euro 5-compliant automotive fuels.

BPCL also plans to build a massive petrochemical complex, which will involve an investment of Rs5,000-6,000 crore (US$926.4 million-1.1 billion), by using byproducts from the expanded refinery. This unit will be established as a joint venture between the BPCL and petrochemical major LG Chem of South Korea.

The expansion project is to be commissioned by 2015-16.

India's Petroleum and Natural Gas Ministry is seeking to set up an inter-ministerial committee (IMC) with representatives from the Ministry of Road Transport and Highways, the Ministry of Heavy Industries, Urban Development and Public Enterprises and the Ministry of Environment and Forests to draw up a roadmap to reduce pollution.

The Ministry has stated that with a time lag in implementation of sound vehicle inspection and maintenance, vehicle retrofit and retirement, garage certification and traffic management, mere improvement of fuel quality was not enough to achieve the desired results.

"It is time to evolve an appropriate roadmap and supervise implementation of measures to reduce the pollution levels," it has stated in a note circulated among various stakeholders.

The note pointed out that as per the source apportionment studies conducted by the Central Pollution Control Board (CPCB) in six cities, vehicular emission is not the only major contributor to overall pollution as road side dust, construction activities, domestic combustion, use of diesel generator sets and biomass burning also contribute significantly to pollution levels going up.

The Petroleum Ministry said while the oil industry has kept its commitment of supplying BS-IV quality auto fuels to reap the full benefits of the upgraded fuel quality, a more important and immediate need was to ensure improvement in vehicle engine technology to reduce emission levels and deliver higher fuel efficiency.

"Measures like retro-fitment of pollution control devices in old vehicles, phasing out of old vehicles, mandatory periodical inspections and maintenance requirements are also requirement to be taken up simultaneously," it has stated.

It further pointed out that a decision had been taken to progressively expand coverage of BS-IV fuels in at least 50 cities by 2015. Inclusion of all state capitals and cities with population of more than one million and non-attainment cities will be emphasized, while selecting additional cities for implementation of BS-IV auto fuels.

The European Union will impose a limit on the use of crop-based biofuels over fears they are less climate-friendly than initially thought and compete with food production, Reuters reported.

The draft EU legislation, which will need the approval of EU governments and lawmakers, represents a major shift in Europe's biofuel policy.

The plan also includes a promise to end all public subsidies for crop-based biofuels after the current legislation expires in 2020.

"The (European) Commission is of the view that in the period after 2020, biofuels should only be subsidised if they lead to substantial greenhouse gas savings... and are not produced from crops used for food and feed," the draft said.

The policy reversal comes after EU scientific studies cast doubt on the emissions savings from crop-based fuels, and following a poor harvest in key grain-growing regions that pushed up prices and revived fears of food shortages.

Under the draft proposal, the use of biofuels made from crops such as rapeseed and wheat would be limited to 5% of total energy consumption in the EU transport sector in 2020.

Crop-based fuel consumption currently accounts for about 4.5% of total EU transport fuel demand. Thus, if the legislation is passed, there will be little room to increase current production volumes.

Such a limit will throw into doubt the EU's binding target to source 10% of road transport fuels from renewable sources by the end of the decade, the vast majority of which was expected to come from crop-based biofuels.

In an attempt to make up the shortfall, the European Commission wants to increase the share of advanced non-land using biofuels made from household waste and algae in the EU's 10% target.

"It is appropriate to encourage greater production of such advanced biofuels as these are currently not commercially available in large quantities, in part due to competition for public subsidies with now established food crop based biofuels," the draft legislation said.

The Commission has proposed that the use of such advanced fuels should be quadruple-counted within the EU's 10% target, in an attempt to at least meet it on paper.

Hong Kong has suffered the most from ship emissions in the Pearl River Delta, with locals accounting for 75% of deaths related to sulphur dioxide (SO2) released from vessels, the South China Morning Post reported.

Air quality at Kwai Chung and Tsim Sha Tsui could be the worst hit by ship pollutants, researchers behind a five-year study by Civic Exchange suggest. The think tank, founded by Christine Loh Kung-wai, now environment undersecretary, urged the city's administration to be more proactive in tightening restrictions and to seek support from its mainland counterparts.

The city's popular ship routes were partly to blame, because some vessels passed through Hong Kong waters on the way to twin ports in Shenzhen, the group said in its report.

"With so many ships berthing at the terminal in Kwai Chung, it's like a small power plant," said Simon Ng Ka-wing, Civic Exchange's head of transport and sustainability research.

According to the Civic Exchange report, jointly issued with the University of Science and Technology and the University of Hong Kong, the city saw 385 of the 519 deaths directly related to SO2 from ship emissions in the region. The number of deaths in the inner Pearl River Delta region was 93, while that in the outer region was 42.

The think tank suggested the government seek support from the central government and apply to the International Maritime Organization (IMO) to set up an emission control area, which would require ships to switch to 0.1% sulphur fuel when they are within 100 nautical miles of Hong Kong. It said such a move could reduce deaths related to SO2 by 91%.

It also suggested that the government make it compulsory for ships to switch their fuel to 0.5% sulphur at berth.

Long among the most-polluted cities in the world, Jakarta had in recent years shown some signs of improvement. But recent government data point to a sharp increase in the level of airborne pollutants in the past year-and-a-half, as economic growth has surged, the Wall Street Journal reported.

Specifically, levels of particulate matter known as PM10, or large-particle dust, carbon monoxide and nitrogen dioxide—which already far exceeded limits set by the World Health Organization (WHO)—rose by between 40% and 85% in 2011. The increase was the greatest one-year movement in the Jakarta government's records, dated 2005-2011.

New data show the higher levels have been sustained in the first half of 2012. Other studies, meanwhile, show that more than 50% of Jakartans have experienced illnesses related to air pollution.

The results are disappointing given that the government body that tracks the data—the Jakarta Environmental Management Agency, or BPLHD—reported a decline in the same pollutants from 2005 to 2010. Levels of all three pollutants, which are among the five that must be monitored under Indonesian law, dropped 29% to 58% over the period.

One other pollutant, sulfur dioxide (SO2), saw a significant decline in 2011 as power plants, the biggest contributor to airborne sulfur, began using less-polluting compressed natural gas, (CNG).

The BPLHD doesn't publish trend data for ozone, the fifth pollutant, as it only began monitoring it several years ago. But separate data from Indonesia's Environmental Ministry show ozone has been steadily climbing since 2001.

Part of the challenge for policy makers is that the data aren't as complete as many experts would like. For Jakarta to fully gauge its air quality, activists and the BPLHD say the city needs as many 30 automatic monitoring stations, and perhaps more than that to specifically monitor roadside air; it currently has four.

The agency also doesn't publicly measure PM2.5, the tiny dust particles that are considered more dangerous to human health than PM10.

The BPLHD says it is working to increase Jakarta's green space and is building up its network of automatic pollutant testing stations, with a fifth station coming online later this year.

Indonesia's Environmental Ministry, which spurred a 1999 law that lays out many of the nation's air-quality regulations, says it is also doing what it can. Ade Palguna, the assistant deputy minister for air pollution, says the ministry is pushing initiatives to improve the quality of diesel fuel and other fuels, and to promote the use of natural gas for public transportation.

In its latest medium-term outlook, the International Energy Agency (IEA), a Paris-based global energy watchdog, said China could become a petroleum-product exporting powerhouse given current expansion plans.

The IEA recently predicted that global oil demand would rise to 95.7 million barrels a day by 2017, but the refining-sector expansion plans will likely take global refining capacity to 100.5 million barrels daily.

China will account for more than 40% of global refining capacity growth in the next five years, it said. However, the viability of the country's refining sector is under question because of recently sluggish demand and a weaker economic growth outlook, which has prompted some state-run oil firms to scale back expansion plans, the IEA said.

Analysts say that while Beijing can slow the pace of expansion by its state-owned oil companies, a surge in capacity addition by private refiners could undermine its balancing act.

Nearly half of the some 155 independent refineries spread across China have yet to be even legally identified by Beijing, according to a new study published by Argus Media.

Teapot refineries, which already make up more than a quarter of China's total refining capacity, may expand by 37% to 5.23 million barrels a day by 2015, according to the Argus study.

If so, together, the teapots will rival the entire oil refining capacity of big energy-consuming nations like India and Japan.