Better fuel already on the way, opinions vary over ability of engines to meet Euro 6

EUROPEAN vehicle importers including Volkswagen are calling on the Australian federal government to bring forward more stringent Euro 6 emissions regulations to ensure local motorists are afforded the latest, most efficient new cars available.

But fuel retailers and the Australian Institute of Petroleum say the standard of liquid fuels sold in Australia are already a step ahead of government regulations, with two of Australia’s major refineries saying they are expediting the proposed move to Euro 6 standards by a full three years.

Volkswagen Australia – and others – dispute the claims, however, saying Australia’s outdated fuel standards must be brought into line with other OECD nations.

Meanwhile, the Australian branches of Peugeot-Citroen, BMW, and Mercedes-Benz told GoAuto the cars they sell in Australia are already Euro 6-compliant across the board and the reality of the situation is not nearly as bleak as is often believed as current fuel quality is not a limiting factor for their engines.

A recent article published by the ABC said “Australia is becoming a dumping ground for more dangerous and polluting cars”, adding that the federal government’s delay in mandating the adoption of Euro 6 emission standards for the sale of light vehicles to 2027 had made it difficult for manufacturers to offer cleaner, more efficient models to Australian consumers.

Australia will officially adopt Euro 6 European emissions standards a full two years after the European Commission introduces even more stringent Euro 7 standards, leaving the local market in a perpetual game of catch-up with tightening regulations and more advanced vehicle offerings, the ABC suggests.

The ABC article added that Australia already lags 80 per cent of the world’s automotive markets – including China, Europe, India, Japan, Korea, Mexico, and the United States – in adopting standards that reduce tailpipe CO2 emissions and particulate matter from passenger vehicles, citing Australia’s petrol and diesel quality as “the worst among OECD nations”.

According to the article, Australian petrol can have up to 15 times as much sulphur as the maximum regulated amount in other developed nations and contains sizable quantities of aromatics, including benzene.

While Australian diesel moved to ultra-low sulphur content standards in 2009, under which the fuel must contain no more than 10 parts per million (ppm) of sulphur, petrol quality is yet to be regulated to the same degree and contains up to 150ppm of sulphur for 91RON regular unleaded and up to 50ppm for 95 and 98RON premium unleaded.

The current European standard (EN228) stipulates 95 and 98RON petrol must contain no more than 10ppm of sulphur and 35ppm aromatics with 1ppm of benzene.

Australian passenger vehicle emissions regulations are currently based on Euro 5 standards (known as ADR 79/04 locally) and were adopted in 2013. Europe introduced Euro 6 regulations in 2013 and mandated compliance for mass-produced passenger cars in 2015 in an effort to reduce tailpipe pollutants including carbon dioxide, carbon monoxide, hydrocarbons, nitrogen oxide and particulate matter.

Under European regulations, average CO2 tailpipe emissions need to be under 130g/km across a manufacturer’s entire vehicle portfolio. This average will fall to 95g/km under Euro 7 regulations – which were proposed following the ‘dieselgate’ scandal of 2015 – though exemptions are in place for some manufacturers.

Australia’s Federal Chamber of Automotive Industries (FCAI) weighed in on the matter recently, saying that without the level of government intervention seen in other markets, poor quality fuel would continue to influence outcomes for Australian consumers and the environment.

The FCAI added that the relatively small size of the Australian new car market – less than two per cent of the global total – and estimated $1 billion investment required to updated Australia’s remaining refineries meant there was little chance that manufacturers would continue to find it viable to offer detuned cars in local showrooms.

Popular small cars including the Mazda 3 and Toyota Corolla Hybrid are already detuned to operate with Australian fuel standards, the FCAI says.

Volkswagen says it is also restricted to offering its latest Golf small car with engine technology from the previous generation model in a bid to guarantee its high-tech newer engines would not fall foul of issues including clogged petrol particulate filters and catalytic converters, damaged exhaust gas oxygen sensors, and destructive preignition.

Volkswagen Group Australia managing director Michael Bartsch told GoAuto that the majority of European-sourced vehicles required low-sulphur, high-octane petrol to operate reliably and that Australian consumers could soon face diminished options when it comes to buying a new car.

“VGA maintains that for some mass market brands, Australia has long been a dumping ground. Australia lags more than a decade behind global best practice, including New Zealand, in terms of CO2 and sulphur emissions,” Mr Bartsch said.

“While all but one Volkswagen vehicle conforms to Euro 6 standards, the outgoing Amarok ute, a number of VW’s top 10 selling rivals continue to import to Australia Euro 5 compliant engines that cannot be sold in Europe, where instead they sell many of the same models with Euro 6 engines.

“Euro 5 development costs have long since been amortised, yet frequently these vehicles are priced in proximity to Volkswagens and Skodas,” he stressed.

Mr Bartsch said that although the Australian government was slowly taking steps towards improving fuel quality for Australian motorists and vehicle importers, the topic of vehicle emissions remained largely ignored.

“Long overdue action is being undertaken on petrol quality, but unless a hard and fast CO2 reduction target is set, manufacturers will continue to prioritise markets both for zero emission vehicles and the most efficient conventional engines,” he noted.

“Australia has had a limit of 10ppm of sulphur in diesel since 2009, the previous limit being 50ppm. Until at least 2024, however, 50ppm will remain the ‘best’ sulphur level that can be guaranteed in petrol – and that is only costly premium unleaded. Most petrol sold in Australia is rated 150ppm of sulphur.

“Australians are being forced to pay almost $2 per litre for so-called ‘premium’ petrol; 25 cents per litre over highly sulphurous 91RON. European-sourced vehicles cannot reliably run on the latter, so effectively owners of the most efficient conventional vehicles on sale in this country are penalised for emitting less.”

On top of premiums placed on fuel and less-efficient vehicles, Mr Bartsch said Australian motorists were doubly worse off when considering lower-emission plug-in hybrid and zero-emission electric vehicles with tax and road-user charges unfairly targeting adopters of cleaner, modern vehicles.

“This is on top of the outdated five per cent tariff to which European cars are subject – and that is compounded by the Victorian government’s decision to ensure contemporary PHEVs are effectively double taxed under the road user charge and fuel excise, while antiquated 1990s ‘self-charging’ hybrids that run on 150ppm petrol are exempted from the former,” he said.

“While Australia is yet to settle on an official adoption date for Euro 6, which commenced in Europe in 2013 and prevails in developed markets, there is a very real danger that our country will continue to languish in Euro 5 at mid-decade.

“By that time, Euro 7 will have been introduced. This would only result in a drastic diminishment in customer choice, a situation that could conceivably serve some brands,” he concluded.

The federal government has stated previously that the 2027 deadline would provide sufficient time for Australia’s four remaining refineries – BP, Caltex Australia (now Ampol Australia), ExxonMobil, and Viva – to prepare for the change while also striking the right balance with respect to public health.

The Australian Institute of Petroleum (AIP) emphasised that its member companies are continually investing in adapting fuel standards to harmonise with more stringent requirements, often ahead of the regulated timeframe, but said other factors must be considered before moving to align Australian standards wholly with those outlined by the European Commission.

AIP CEO Paul Barrett told GoAuto that while adopting the standards set internationally might seem a logical step to improving the quality of fuel sold in Australia, the demands of the local market are such that uniform parameters for cleaner fuels are difficult to implement, and not always beneficial to consumers – or the environment.

“Australian fuel standards are set for Australian conditions taking account of climate, environment, and market conditions. Fuel standards across the world vary for the same reasons – Europe, Japan, and the United States all have different standards – (for example) Australia does not use the oxygenate MTBE as it poses an excessive risk of water contamination, especially groundwater for drinking purposes,” Mr Barrett said.

“Fuels supplied to the Australian market are far better than the regulated standards. For example, the regulated standard for premium unleaded petrol is 50ppm of sulphur and in 2020 the average level of sulphur was 21ppm. The major environmental benefits of improved fuel quality are realised with the reduction in sulphur levels in petrol and Australia will introduce global best practice standards by 2024.”

Mr Barrett said that claims that Australia’s fuel standards lag OECD best practice are incorrect but says AIP member companies were always prepared to further fuel standards provided they were based on sound scientific evidence, suitable for the Australian market, and demonstrate a net benefit to the community – which includes “no major negative impacts on industry, motorists, or the environment”.

Fuel suppliers have joined Mr Barrett in labelling the ABC’s claims as “spurious”.

Speaking to GoAuto this week, a spokesperson for Ampol Australia said its fuels are already refined to exceed the standards outlined above and that it is committed to ensuring all its petroleum products meet Euro 7 guidelines by 2024 – a full three years ahead of the proposed government mandate.

“On average, sulphur levels in Ampol fuels are well below the standards currently in place. We support further improvements to fuel standards, where they are suitable for Australia and demonstrate a net benefit to the community, including industries operating in Australia,” the Ampol Australia spokesperson said.

“We have already committed to achieving 10ppm maximum limits for sulphur in petrol in Australia by 2024 and are undertaking refinery upgrades to meet those levels. This will bring Australia into line with most developed countries on sulphur and is three years ahead of the 2027 timeline announced by the government in 2019.”

Ampol Australia’s spokesperson said that while Australian fuel standards have often followed those set by the European Commission, there was a need to recognise that the Australian market has unique requirements that dictate certain variations to the composition of petrol sold locally, and that companies including Ampol Australia were generally supportive of the Australian government’s timeline for review of future standards.

“While we recognise (that) Australian fuel standards have often followed European precedence, they have done so recognising that our conditions are different from those experienced in Europe, including the fact that some additives allowed in Europe, such as MTBE, are not allowed to be used in Australian fuel,” Ampol Australia’s spokesperson explained.

“This is important when looking at making changes to Australian fuel standards and we support the government in their review of alternative pathways to deliver restrictions on aromatics in low sulphur fuel from 2024.

“We also acknowledge fuel standards aren’t the only answer to improving environmental outcomes from the transport sector and have already made significant progress developing new energy solutions across areas such as electricity and hydrogen.”

BP Australia echoed the sentiment of Ampol Australia, telling GoAuto that it not only supports the transition toward new fuel standards but is well ahead of the 2027 target proposed by the Australian government.

“BP supports the transition to new fuel standards. This includes the standard to reduce the maximum allowable levels of sulphur in all grades of petrol to 10ppm by the end of 2024 or sooner,” a BP spokesperson said.

“The Australian Institute of Petroleum (AIP) and its member companies, including BP, is working with Government to implement 10ppm sulphur petrol across all grades by the end of 2024. The timeline was developed in order to provide the industry with the time to plan for the most cost-effective solutions and to minimise market and consumer impacts.”

BP has converted its Kwinana refinery in Western Australia to an import terminal with fuel refined offshore for local consumption. It says sulphur and aromatic levels in petrol sold in Australia is already substantially below regulatory limits, the investment in its offshore refineries guaranteeing not only ‘cleaner’ petrol but also a reliable and secure local supply.

“This government decision, in particular the timeframe provided, acknowledges the very significant investment that would need to be made by the Australian refining industry whilst meeting the challenges of continuing strong competitive pressures from larger refineries in the Asia Pacific region,” BP said in a recent article published in the AIP’s publication, Downstream Petroleum.

“It highlights the importance the government places on the economic contribution of domestic refineries, particularly in their local communities, and in supporting supply reliability and security to the local market.”

Viva Energy, suppliers of Shell Fuels in Australia, joined Ampol Australia and BP in suggesting moves towards cleaner fuels are already underway. A Viva Energy spokesperson told GoAuto there is no such thing as an international standard for fuel, but that it fully supports the improvements in Australia’s fuel quality standards.

“Viva Energy has invested heavily to (ensure it) meets tighter standards, particularly over the last few decades. Each country has different fuel quality standards which have been established to suit their particular market circumstances and environment – there is no such thing as an International Standard for fuels,” the spokesperson said.

“Australia has some of the most tightly regulated fuels anywhere in the world, which are regulated at a national level through the Fuel Quality Standards Act (FQSA), but also at a state level for some specifications such as RVP (Reid Vapour Pressure).

“Ten parts per million sulphur in petrol and diesel is becoming increasingly common as a standard around the world because this specification represents the majority of environmental benefits from tighter fuel quality,” the spokesperson added.

Like others, Viva Energy said it is committed to reducing the quantity of sulphur and aromatics in its petroleum products well ahead of the government’s proposed timeline, adding that, contrary to popular belief, most fuels sold in Australia are already well below the regulated standards.

“As part of the government’s Fuel Security Package, Viva Energy has recently committed to reducing the sulphur limit in petrol to 10ppm in Australia by the end of 2024 and are planning for refinery upgrades to meet those levels. Diesel fuel supplied to the Australian market is already regulated, refined, and sold at 10ppm.

“Interestingly, and on average, sulphur levels in petrol in the Australia market right now are well below the regulated standards and have been for some time. The average sulphur level in ULP is 53ppm against the standard of 150ppm. For PULP (premium unleaded petrol) the average is 21ppm against a standard of 50. For those reasons, the latest vehicles – including Euro 6 compliant passenger vehicles – can operate successfully on Australian fuel,” the spokesperson for Viva Energy added.

The claims from fuel providers interviewed by GoAuto contrast those of other media outlets, the FCAI, and selected importers who denounce the quality of Australian fuel as “substandard”.

However, the Viva Energy spokesperson added that sulphur is only one part of the focus required when understanding the composition and regulation of petroleum fuels, and that methyl tertiary-butyl ether (MTBE) and similar aromatic components (used to raise the octane rating of petrol) must be considered as regulations tighten.

“Other parameters, such as aromatics, are challenging in the Australian context. In Europe, aromatic levels are achieved through (the) blending of MTBE into their gasoline pool. This is effectively banned in Australia due to the potential impacts this could have on our groundwater,” the spokesperson explained.

“In America, ethanol blending is widely used, and while we do blend and market some ethanol blended fuels in Australia, these continue to be unpopular with many customers, and we lack sufficient volumes of locally produced ethanol to blend (it) into the entire gasoline pool.

“There are other parameters for diesel fuels that aren’t relevant to the Australian market, such as cetane, which improves the cold start properties of fuel for European and American markets where very low winter temperatures are common.

“The vast majority of diesel sold in Australia goes to commercial customers, including those in mining, agricultural, and heavy transport sectors. These specifications are also not relevant for these applications.”

It seems not all European passenger vehicle importers are hampered by the quality of fuel currently sold in the Australian market as they are already offering Euro 6 emissions compliant vehicles to Australian customers.

Among others, the Australian ranges of Peugeot-Citroen, BMW and Mercedes-Benz are already Euro 6-compliant across  the board, their importers telling GoAuto that although any improvement to the environmental performance of fuels sold in Australia is welcomed, the reality of the situation is not nearly as bleak as is often believed.

Peugeot-Citroen (now part of the Stellantis Group) produces the PureTech family of three-cylinder petrol engines – which are also found under the bonnet of some BMW and Mini models – that cut fuel consumption and CO2 emissions by up to 18 per cent over previous four-cylinder PSA engines and have a reliable track record in the Australian market despite the complex technology utilised – and the consumption of ‘sub-standard’ Australian premium unleaded.

At the time of its launch, PSA had invested €893 million ($A1.4 billion) in the development of its award-winning PureTech engine family, and filed over 210 international patents, the units incorporating high-yield turbocharging, low-friction and offset piston technology, high-pressure direct fuel injection and variable intake and exhaust timing among its complex mechanicals.

The company says it also managed a 75 per cent reduction in particulate emissions via the use of a petrol particulate filter (PPF), one of the same features Volkswagen says cannot be successfully implemented in its range until fuel quality drastically improves.

“Stellantis continues to develop advanced propulsion systems, including Euro 6 compliant vehicles, as part of our ongoing commitment to safeguard the environment,” an Australian spokesperson for the company told GoAuto.

“All 14 brands in the Stellantis portfolio have a roadmap to reducing our environmental footprint and are committed to offering best-in-class fully electrified solutions.

“At EV Day 2021, Stellantis revealed plans to invest more than €30 billion ($A46.5 billion) in electrification and software through 2025, and we maintain our efforts to be the frontrunner in automotive efficiency.”

The sentiment was echoed by BMW Group Australia, which sells a range of BMW and Mini models that are likewise compliant with Euro 6 emissions standards.

Speaking to GoAuto this week, BMW Group Australia general manager of corporate communications Leanne Blanckenberg said that while the company welcomes any opportunity to improve the quality of fuel offered to Australian motorists, the company’s current range was “using Australian fuel without issue”.

“The majority of the BMW Group Australia fleet, including our range of new models, has been certified to run on Euro 6 fuel standards for some time now. Locally delivered engines in BMW and Mini models achieve the required power, efficiency, and emissions figures when using Australian fuel without any issues,” Ms Blanckenberg said.

“While we would certainly welcome a lift in fuel standards and quality in the future, we are able to provide our customers with vehicles that perform to an optimal level with the current (fuel) offering.”

BMW said recently that although it was prepared to offer electrified vehicles across its range as soon as was required, it was in no hurry to abandon development of its combustion engines and was confident customer demand will continue into the future.

But for Mercedes-Benz, impending Euro 7 emission standards were already sounding the death knell for many of the combustion engines offered in its range.

Mercedes-Benz chief operating office Markus Schafe recently told British publication Autocar that the brand “will reduce the number of engine variants, going through Euro7, by about 50 per cent”, but said it would only completely cease development and production of the combustion engine “where market conditions allow”, and possibly by as soon as the end of the decade.

The German manufacturer has already announced plans to end production of its V8 and V12 engines, switching to high-output and electric-assisted four-cylinder units across much of its future range – including the next generation AMG C63 sports sedan, a crowd favourite in the Australian market.

Despite the gloomy news, Australian consumers can rest easy in the knowledge that the current crop of Mercedes-Benz passenger vehicles already provide the best environmental performance possible, with Mercedes-Benz Cars Australia media relations and product communications manager Ryan Lewis telling GoAuto that the quality of Australian fuel was not a limiting factor in meeting the latest Euro 6 emissions equivalent.

“Currently, every Mercedes-Benz passenger vehicle sold in Australia is fitted with a Euro 6 compliant engine, and all are suitable for use with today’s Australian fuels,” Mr Lewis said.

The Grattan Institute suggests capping vehicle emissions could be another strategy that would set Australia on the road to net-zero emissions but states that better quality fuel is required to help achieve that target.

Suggesting passenger vehicles are responsible for 11 per cent of Australia’s carbon dioxide emissions – with the average new vehicle emitting 180 grams of carbon dioxide per kilometre driven – the Institute says emissions ceilings do not necessarily limit the sale of large or higher-emitting vehicles to those who need them.

“The ceiling should come into force no later than 2024 at 143 grams of carbon per kilometre (g/km). It would tighten to 100g/km by 2027 and 25g/km by 2030. Carbon emissions from new vehicles under the ceiling would fall to zero by 2035,” the Grattan Institute report said.

“The change could save almost 500 million tonnes of carbon dioxide by 2060 … and would leave drivers better off financially.

“It wouldn’t mean the end of the weekend. But it would change the balance of options available. There would be more low-emissions and zero-emissions vehicles, and a smaller offering of higher-emitting vehicles.

“In the lead up to 2035, as more people switched to electric vehicles, there would be space under the ceiling for manufacturers to sell higher-emitting varieties to those who need or prefer them,” the report added.

The Grattan Institute says steps towards such a program cannot be taken before the quality of fuel used in the existing 20.1 million vehicles on Australia’s roads – and the many more unregistered vehicles used across agricultural and mining sectors – is improved.

Fortunately, it seems that process is already well underway.

Extracted in full from: Conflicting claims about Australian fuel quality | GoAuto