Dud fuel could undermine Euro 6, says FCAI

AUSTRALIA’S low-quality petrol could scupper benefits from mandatory Euro 6 vehicle emissions standards to be introduced 2018, thus wasting $495 million a year paid by consumers for new emissions technologies, according to the Federal Chamber of Automotive Industries (FCAI).

The peak auto industry body says that improving fuel quality will not only get the best out of Euro 6-compliant vehicles but also make a major contribution to car manufacturers’ efforts to cut carbon-dioxide emissions by allowing more efficient engines to be offered in Australia.

The FCAI is fighting the battle for higher-quality, low-sulphur petrol on multiple fronts. These include a submission to a federal government-appointed Independent Review of the Fuel Quality Standards Act and also in proposed consultations directly with the environment department over Australia’s proposed greenhouse gas emissions reduction targets announced this week.

FCAI chief executive Tony Weber said his organisation welcomed the government’s greenhouse gas targets, saying the industry’s continued commitment to improve the technology and environmental outcomes for new motor vehicles would achieve some continued reductions.

But he urged the government to do more to help the industry’s efforts.

“To make further reductions from private road transport, it is important the government considers a range of policy matters, including fuel quality, infrastructure and incentives for the take up of low-emissions vehicles, and driver behaviour,” he said.

Mr Weber said the FCAI’s submission to the Fuel Quality Standards Act Review explained how motor vehicles were designed and developed to meet emissions standards with an expectation of fuel quality in a particular market.

“In Australia, transport fuels are of lower standard than other major markets, especially the EU, Japan and the US,” he said.

“This restricts the introduction of some engine variants and inhibits the performance of the latest generation of engines.

“Lifting the fuel quality in Australia could see further reductions in CO2 emissions.”

The FCAI’s fuel standards submission says sub-standard fuels could also undermine efforts to reap the full benefit from mandatory Euro 6 emission standards that come into force from 2018.

The submission says a Euro 6-compliant petrol – 95 RON with a limit of 10 parts per million of sulphur – was required if the new standards were to be effective.

The FCAI estimates it will cost between $300 and $800 a vehicle to elevate motor vehicles from the current Euro 5 standard to Euro 6, for a total cost of about $495 million a year to Australian consumers.

“Without Euro 6-compliant fuel available in the market, the government’s expected environment and health benefit for this additional cost will not be delivered,” the submissions.

The current fuel quality standards specify two levels – unleaded petrol at 91 RON and 150ppm maximum sulphur content, and premium unleaded at 95 RON and 50ppm sulphur.

Says the FCAI submission: “If Australia does not align to higher world fuel quality standards, Australia will be at risk that future vehicle models will shift Australia's vehicle fleet towards lower grade offerings.

“This potentially degrades Australia's progress towards more technologically advanced and efficient vehicles.”

The submission says the lack of appropriate fuel not only restricts the introduction of some engines to Australia but also inhibits the performance of others.

“Poor fuel quality can lead to increased operating and maintenance costs for consumers,” the report says.

“For example, poor fuel can lead to increased fuel consumption from the engine needing to run rich more often to increase the exhaust gas temperature to de-sulphurise the catalyst.

“More frequent de-sulphurisation cycles will also reduce the service life of the catalyst leading to the need for more frequent replacement.”

The environment minister Greg Hunt has appointed consultant Marsden Jacob to do the review, in conjunction with Pacific Environment/Toxicos.

The final report is due in the minister’s hands by November, enabling legislative changes by the end of the financial year.

Separately, the FCAI says it will take up the federal government promise to consult with industry on greenhouse gas targets, although no timetable has been set for those discussions.