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Fuel Quality & Emissions

The Australian automotive industry is committed to making a robust contribution to national efforts to reduce the impact of climate change and improve air quality.

Clearly zero-emission vehicles - including battery electric vehicles and hydrogen fuel cell vehicles - will increasingly populate our roads as they are developed by international parent companies. But, without Government market intervention on a scale seen in other countries, it will be the mid-late 2020s before sales of these sorts of vehicles will rise beyond the current level of less than 2.0 per-cent of the national total.

So, while the Federal Chamber of Automotive Industries (FCAI) supports the introduction of a C02 standard relevant to the Australian market and the introduction of ‘Euro 6’ exhaust emission standards, in the meantime, the poor quality of fuel sold at Australian service stations will continue to be the number one issue influencing outcomes across the board in this space.

Indeed ‘Euro 6’ has several stages and is dependent on petrol meeting European standard EN228 and diesel meeting EN590. New compact cars already heading to market will simply not meet the initial stage until we’re filling their tanks with European standard fuel – in fact, the Toyota Corolla Hybrid and Mazda 3 2.0-litre petrol now sold in Australia have de-tuned engines to operate with our fuel standards.

Put bluntly, an investment of $1 billion into the four Australian refineries is required to develop world-standard fuel (95 RON, 10 parts-per-million Sulphur and 35 per-cent aromatics for petrol). 

Until this is achieved, Australian new car buyers – many currently welded to historic 91 RON fuel - will not be able to purchase vehicles with the latest engine and exhaust technology. In essence, engines in new cars sold in Australia will be those powering similar vehicles sold in 3rd world countries with similar fuel standards and, due to the declining numbers of cars produced for these markets, engines will increasingly become more expensive.

Why? Because global automotive companies are now focusing on the development of engine/exhaust technologies applicable to large markets (India and China) and advanced markets (Europe, USA and North Asia)…markets with fuel standards much higher than Australia.

Given total Australian new car sales each year are less than 2.0 per-cent of the global total, it would be economically impossible for any brand to develop engines specifically for our market and fuel.

The FCAI contends the $1 billion expenditure for Australian refineries is a small investment – indeed automotive companies regularly spend this much on the R&D of a new model.

In conjunction with the AAA and AIP, the FCAI has developed a roadmap addressing vehicle emissions which includes:

  • Australian fuel quality standards
  • Introduction of ‘Euro 6’ pollutant (particulate matter) emissions standards; and
  • The introduction of a realistic, achievable and market-relevant C02 emissions standard.

Why ‘realistic’, ‘achievable’ and ‘market relevant’? Because to do otherwise would remove the choice desired by Australian new car buyers, 43 per-cent of whom now prefer SUVs and LCVs (light commercial vehicles such as utes). The FCAI advocates two separate C02 targets by 2030 – one for passenger cars and one for SUVs and LCVs – and, moving forward, separate targets for different vehicle categories (just as they do in Europe and North America).

That roadmap takes into account the local petroleum refining industry’s timeline for achieving the required standards - 10 PPM of Sulphur in particular - by 2027 and allows seamless integration into new model cycles of international vehicle manufacturers.

Defining the agreed timeline will be significant as new model development in the automotive industry is considerable and typically takes a minimum of four years. The FCAI/AAA/AIP proposal suggests an interim step towards achievement of European fuel standards which harmonizes Sulphur and aromatics figures, but, as a stop-gap, maintains 91 RON (95 RON in Europe). 

The good news is that while these new engines come on-stream, Australia’s carpark of existing vehicles will also contribute to better air quality, simply by switching to the new fuels.