The precious metal’s future remains in the hands of consumers.
JOHANNESBURG – The Obama administration’s move to decrease smog pollution in the United States (US) by tightening federal ozone standards is unlikely to have a material impact on the platinum market.
Citing “extensive scientific evidence” on the effects of ground-level ozone pollution or smog on public health and welfare, the country’s Environmental Protection Agency (EPA) has reduced the amount of ground-level ozone to 70 parts per billion (ppb) from the 75ppb limit set by the Bush administration in 2008.
Under the new rules, the EPA will give states until 2017 to collate air quality data and devise plans to meet the limits by 2025. However, some areas, depending on the severity of their smog pollution, will have until 2037 to meet the standards.
In anticipation of tighter ozone regulations, the non-profit International Precious Metals Institute (IPMI) ran a public policy advertisement in a Washington newspaper, stating “precious metals help turn dangerous ozone into harmless oxygen” and “platinum group metals provide the critical spark that makes catalytic converters work to reduce smog and harmful emissions.”
This, in part, sparked some discussion as to whether tighter regulations would prove a boon for platinum demand given the metals widespread use in catalytic converters which effectively renders diesel motor vehicles more environmentally friendly.
As Johannesburg-based independent analyst Ian Cruickshanks noted, “the biggest demand for platinum has come from countries with the strictest environmental regulations”. But US consumers’ relative failure to adopt more fuel efficient diesel vehicles – diesel vehicles form about 3% of the total US car market compared to almost 50% of the European car market – means that in spite of the EPA regulations, US platinum demand is still highly dependent on consumer attitudes.
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