New fuel standards contributing to better air quality

The Australian Institute of Petroleum (AIP) said today that new quality standards for petrol and diesel, announced by the Minister for the Environment and Heritage, Senator the Hon Ian Campbell, will improve urban air quality.

AIP Executive Director, Dr John Tilley said, "AIP members support the goal of improved urban air quality through appropriate fuel quality changes and the introduction of new, cleaner and more efficient vehicle engine technologies."

"AIP members acknowledge the consultative approach taken by the Australian Government on this initiative, involving a coordinated approach across the motor vehicle and fuels industries."

The new standards will reduce the allowable levels of sulfur in premium unleaded petrol (PULP) and diesel. The standards build on the Government's decision in 1999 to introduce and progressively tighten mandatory fuel quality standards from 2002 under Measures for a Better Environment. This will keep Australia on track with comparable moves in Europe, North America and Asia to improve air quality.

From 1 January 2008, the maximum level of sulfur in PULP will be 50 parts per million (ppm), compared with 150 ppm today. The maximum level of sulfur in diesel will be reduced to 10 ppm from 1 January 2009, compared with 500 ppm today and 50 ppm from 2006.

AIP member companies expect to invest up to $2 billion in refinery upgrades to progressively meet the petrol and diesel standards legislated for this decade, including currently mandated standards and the standards just announced.

"This is a very significant commitment by the Australian refining industry given the continuing strong competitive pressures from larger, highly efficient refineries in the Asia Pacific region, and the sub-standard average profits of the Australian industry over the past five years," said Dr Tilley.

"Incentives already announced by the Government will help offset the costs to refiners of responding to the Government's cleaner fuels program and will encourage suppliers to deliver fuel of this quality to consumers well before the dates required."