Stricter Fuel Standards Set to Bring Cleaner Cars to Aussie Roads

Over the last couple of decades, governments around the world have been implementing various policies to control harmful gas emissions and air pollution from vehicles. When it comes to contributing to climate change, they are indeed major contributors and this is why making them fuel efficient and putting into place stricter standards has always been a priority.

In 2000, the Fuel Quality Standards Act 2000 was the first significant legislative framework to set national fuel standards for Australia. It prohibited the supply and use of leaded petrol and lowered the level of sulphur allowed in diesel, making it a criminal offence to alter fuel to specifications outside of those standards. It also paved the way for the harmonisation of Australian fuel standards with international ones. 

In the decade that followed, the Government reaffirmed its commitment to cleaner energies by putting into place similar standards for other fuels including autogas, biodiesel and ethanol, and to make it clear that it meant business, the act came with significant penalties if violated. Companies not complying with fuel standards could face a penalty of $275,000 for altering or supplying non-compliant fuel or $137,500 for importing or supplying a prohibited fuel additive.

To enforce these standards, the department appointed inspectors with extensive powers to monitor and penalise companies as needed. They can, for example, take samples and have them tested by an independent lab, NATA (National Association of Testing Authorities), to check compliance. They can also confiscate documents and equipment or conduct searches.

Despite these measures, Australia has been singled out as seriously lagging behind compared to developed nations when it comes to emissions standards, all the more so that the country is also unable to benefit from high-tech foreign vehicles which would further reduce toxic gas emissions, because the quality of fuel available in Australia wouldn’t suit them. Although new cars have to meet Euro 6 emission standards by July 2018, there has been no such deadline for trucks and heavy vehicles.

The impact of a new study

Recently, a report from the Ministerial Forum on Vehicle Emissions suggested the adoption of stricter fuel standards, including on sulphur levels, to make it easier for foreign car manufacturers to sell their production in Australia. European vehicles, in particular, are more fuel efficient than their Aussie counterparts, but they use higher-quality fuels hence the necessity to match international fuel standards.

The report is researching the viability of three measures:

- The adoption of Euro 6 emission standards

- The revision of fuel economy rules

- Bringing the country’s fuel quality into line with international standards from Europe.

Car manufacturers have agreed that, under current Australian fuel standards, European cars with Euro 6 engines would not perform well if imported and would probably cause higher levels of gas emissions as well as be unreliable. Indeed, where Australia allows 50 parts-per-million (ppm) of sulphur in premium unleaded fuel and 150ppm in regular unleaded fuel, European standards allow only a maximum of 10ppm of sulphur for both.

Faced with finding a solution to close this huge gap, the Forum is now focusing on three possible courses of action to phase out unwanted fuels:

1) 91RON fuel would be gradually removed from sale with 95RON fuel - which contains only 10ppm sulphur - becoming the standard option. ‘Aromatics’, additives used in gasolineto raise the octane rating which are now criticised as being as harmful as lead, would be capped to 35%.

2) Standards for fuels would be revised and only low-octane ones would be retained.

3) All standards would be revised so that all fuels would match the European standard of 10ppm sulphur limit by 2027.

According to independent reports, these solutions could deliver up to $614 million in ‘positive net value’. The use of higher-quality fuels would bring health benefits too and cleaner air could reduce the health bill by $371 million in the short term and $418 million in the long term.

Although these changes would cause a slight increase in fuel prices at an estimated 2p per litre, it is widely agreed that it is acceptable compared to the benefits they would bring about.

The first option above, seen as the most ‘aggressive’, is that favoured by the car industry as it will change the game swiftly whereas the other two are deemed not sufficient to make a real difference.

What next?

It is expected that the Ministerial Forum on Vehicle Emissions will make formal recommendations in the second half of 2018, which would then be brought forward to Parliament for debate and approval.

At this point, it looks like adopting Euro 6 standards for light and heavy vehicles (along with 10ppm sulphur petrol) is the most likely outcome, with Australian regulators suggesting that full Euro 6 compliance start in 2019 to 2020 at the earliest, with newly approved vehicles subject to the standard from 2019 and new heavy vehicles from 2020.

Real-world emission testing is also a distinct possibility as part of the new rules, as are changes to government fleet purchasing policies. Public servants are currently encouraged to purchase locally-built cars, but that could change next year when there is no Australian automotive manufacturing industry to protect.

The Department of Infrastructure, Regional Development and Cities has also flagged potential changes to the luxury car tax, including a shift to promote high-efficiency petrol models over diesel vehicles currently favoured by the scheme. Such a move would likely be welcomed by the car industry, which is united in its opposition to the luxury car tax.

If you are coming to Australia for a holiday or are relocating, you may be considering importing your own car rather than renting or buying one. Contact McCullough to find out more about the process. It may sound complicated but we have been shipping vehicles internationally for over two decades and we will be delighted to help you and make the experience a stress-free one for you.