Upgrade of Agricultural Machinery Emission Standards Forces Green Transformation of the Industry
The emission standard for agricultural diesel engines has been upgraded from “China II” to “China III”, accelerating the pace of green transformation in agricultural machinery. In the long run, it is more conducive to promoting the transition of domestically produced agricultural machinery toward the high-end segment. However, during the transition period for switching to the “China III” standard, enterprises face tight timelines and heavy tasks, and are under great pressure to clear “China II” agricultural machinery inventory. In the future, on the one hand, enterprises need to overcome difficulties and actively transform; on the other hand, relevant departments need to formulate more effective supporting subsidy measures.
The China Agricultural Machinery Industry Association recently announced that starting from October 1, the emission standard for agricultural diesel engines will be upgraded from “China II” to “China III”. From April 1, 2016, agricultural machinery host manufacturers can no longer produce or sell complete machines equipped with “China II” engines. Experts believe that the upgrade of agricultural machinery emission standards will force the agricultural machinery industry to gradually shift toward green transformation.
Transformation Is Imminent
Chen Zhi, President of the China Agricultural Machinery Industry Association, said that agricultural machinery enterprises are currently actively taking measures to respond to the upgrading and transformation of agricultural machinery emission standards. The “China III” diesel engine technology reserve is sufficient, production capacity continues to improve, and supply should not be a problem. However, after-sales service reserves are insufficient, and training of service technicians needs to be strengthened.
It is understood that a number of domestic diesel engine manufacturing enterprises have already obtained qualification review approval from environmental protection authorities.
The upgrade of agricultural machinery emission standards from “China II” to “China III” represents a systematic upgrade of agricultural machinery R&D technology. Chen Zhi told the Economic Daily reporter that compared with “China II” diesel engines, “China III” diesel engines significantly reduce nitrogen oxides, hydrocarbons and other polluting gaseous substances and particulate matter, which has a positive impact on improving atmospheric environmental pollution.
As a major agricultural machinery manufacturing country, China's agricultural machinery industry faces an awkward situation: low technical level of agricultural machinery products, weak independent innovation capability and lack of core technologies, resulting in a shortage of high-end products and an oversupply of low-end products. Now, with increased state support for “agriculture, rural areas and farmers”, rising farmers' income levels and the rise of new types of agricultural business entities, farmers' demand for diverse, intelligent, efficient, environmentally friendly and energy-saving high-end agricultural machinery products has risen significantly. Under the forcing mechanism of the market, the transformation and upgrading of the agricultural machinery industry is imminent.
Actively Responding to Challenges
The upgrade of emission standards brings obvious practical pressure on agricultural machinery manufacturers.
One of the main difficulties facing agricultural machinery enterprises is the tight timeline. There are only six short months from when certification bodies accept applications to completing the switch, which puts great pressure on diesel engine enterprises in terms of technology R&D, inventory management and application testing. Due to the uncertainty of results, upstream and downstream enterprises have experienced a brief sense of “tension”.
Pan Gangqiang, Section Chief of the Marketing Department at YTO (Luoyang) Diesel Engine Co., Ltd., told reporters that the company's R&D work on “China III” has lasted 10 years, and it has mastered multiple “China III” fuel technology routes including high-pressure common rail, electronically controlled unit pump, electronically controlled rotor pump and mechanical pump. At present, the biggest challenge of the “China III” switch comes from the market adaptability and reliability of the engines. Due to the tight schedule, after “China III” diesel engines are matched with host enterprises, there is no time for field operation tests, and the safety and reliability of the products cannot be verified.
For agricultural machinery host enterprises, the “China III” switch involves “China II” stocking, inventory control, “China III” technology route selection and other work. If any one link is not well controlled, it will bring huge losses from unsold inventory or the serious consequence of losing market share. China YTO produces 100,000 large, medium and small wheeled tractors and crawler tractors annually, and currently has nearly 30,000 host machines equipped with “China II” diesel engines in inventory. Kou Haifeng, Director of the Market Department at YTO, said that there are some difficulties in matching with “China III” diesel engines. For example, tractors using electronically controlled diesel engines have not yet been fully verified in field use, and their reliability and adaptability still need further verification, which brings many uncertainties to “China III” diesel engine matching.
At present, “China II” agricultural machinery inventory is large, and how to clear this inventory is another major problem facing agricultural machinery enterprises. When environmental protection authorities formulated the policy, they gave agricultural machinery enterprises a six-month “clearing period” from October 1, 2015 to April 1, 2016. Agricultural machinery sales have obvious seasonality, and this period happens to be the off-season for the agricultural machinery industry, making it difficult for agricultural machinery enterprises to sell all factory and social inventory.
Policies Need to Be Clearer
As a mandatory measure, the upgrade of agricultural machinery emission standards, while being vigorously promoted by the government, should also be accompanied by comprehensive supporting policies to create a favorable policy environment for the transformation and upgrading of the agricultural machinery industry.
Agricultural machinery subsidy policies play an important guiding role in the transformation and upgrading of agricultural machinery. It is understood that in the first half of this year, farmers' demand for purchasing machinery was strong, and there was a relatively large gap in agricultural machinery subsidies in some areas. At present, agricultural machinery dealers are worried about not being able to obtain agricultural machinery subsidies, and their enthusiasm for selling “China II” agricultural machinery inventory is not high. Some agricultural machinery enterprises actively guide and encourage agricultural machinery enterprises to clear “China II” inventory and sell “China III” agricultural machinery. At the same time, they require dealers across the country to do their best to properly resolve the connection between “China II” product sales and agricultural machinery purchase subsidies during the transition period of the “China III” engine switch. Some enterprise leaders hope that next year's agricultural machinery subsidy policy can fully consider the practical difficulties facing enterprises.
Currently, competition in the domestic agricultural machinery market is fierce. Some industry insiders worry that while agricultural machinery enterprises with good brand influence actively transform and upgrade, some small enterprises will continue to use “China II” engines and engage in vicious competition with low-cost advantages, dealing a blow to agricultural machinery enterprises using “China III” engines. Therefore, it is hoped that relevant state departments will introduce supporting measures, vigorously rectify the agricultural machinery market, create a fair competitive environment, and put the agricultural machinery industry on a virtuous development path of transformation and upgrading.
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Non-road mobile machinery emission standards move toward “China III”
Non-road mobile machinery refers to various mobile mechanical equipment powered by internal combustion engines, such as construction machinery, agricultural machinery and generator sets, which belong to the same category of mobile pollution sources as road vehicles.
For many years, environmental protection authorities have been committed to raising emission standards for non-road mobile machinery. In May 2014, the Ministry of Environmental Protection issued the “Limits and Measurement Methods for Exhaust Pollutants from Diesel Engines of Non-road Mobile Machinery (China Phase III and IV)” (GB20891—2014), which clearly provided a timetable: starting from October 1, 2015, manufacturing and sales of Phase II diesel engines for non-road mobile machinery shall cease, and all manufactured and sold diesel engines for non-road mobile machinery must have exhaust pollutant emissions complying with the Phase III requirements of this standard.
On August 10, 2015, the Agricultural Machinery Testing and Identification Station of the Ministry of Agriculture issued the “Notice on Information Changes for Ministerial-Level Promotion Identification Involving the Upgrade of Agricultural Diesel Engine Emission Standards”, which clearly stated that starting from October 1, 2015, applications for ministerial-level promotion identification of agricultural tractors equipped with China Phase II emission diesel engines would no longer be accepted. Starting from April 1, 2016, applications for ministerial-level promotion identification of other agricultural machinery equipped with China Phase II emission diesel engines would no longer be accepted.