Department of the Environment and Heritage annual report 2004-05
Volume two
Department of the Environment and Heritage, 2005
ISSN 1441 9335
Legislation annual reports 2004-05 (continued)
In this section
- Amendments to determinations
- Regulation of fuel quality
- Future fuel standards - research and consultation
- Statutory review of the Fuel Quality Standards Act 2000
- Fuel Standards Consultative Committee
- Monitoring and compliance activities
- Administrative Appeals Tribunal
- Communication with stakeholders
Operation of the Fuel Quality Standards Act 2000
This annual report is prepared in accordance with section 71 of the Fuel Quality Standards Act 2000. It covers the operation of the Act from 1 July 2004 to 30 June 2005. The Act was amended in March 2004 to enable labelling of fuel in the public interest, and the objects of the Act are now to:
- regulate the quality of fuel supplied in Australia in order to:
-
- reduce the level of pollutants and emissions arising from the use of fuel that may cause environmental and health problems
- facilitate the adoption of better engine technology and emission control technology
- allow the more effective operation of engines
- ensure that, where appropriate, information about fuel is provided when the fuel is supplied.
The Fuel Quality Standards Regulations 2001 cover the regulation of fuel and fuel additives; the operations of the Fuel Standards Consultative Committee; the publication of notices relating to entries in the Register of Prohibited Fuel Additives; enforcement; and record keeping and reporting obligations.
Amendments to determinations
The Fuel Quality (Petrol) Amendment Determination 2005 and the Fuel Quality (Automotive Diesel) Amendment Determination 2005 were signed by the minister on 13 May 2005 and registered on the Federal Register of Legislative Instruments on 15 June 2005. The amendments relate mainly to test methods used to determine compliance with the petrol and automotive diesel fuel quality standards. They also correct an error in the fuel standard specified for diesel where the decision taken by government when the standards were first introduced was not correctly represented in the final determination setting the standard.
Regulation of fuel quality
Petrol and diesel - environmental standards
Specific fuel quality standards have been set as Fuel Standard Determinations for diesel and petrol. These determinations were implemented on 1 January 2002, and include environmental and engine operability based standards for a range of parameters. The limits for a number of key parameters were either introduced or tightened from 1 January 2005 including:
- sulfur levels in all grades of petrol limited to 150 milligrams per kilogram
- distillation in all grades of petrol to have a maximum final boiling point of 210o Celsius
- olefin content of petrol to be limited to a flat maximum of 18 per cent in all grades
- aromatics content in all grades of petrol to be reduced to 42 per cent pool average with a cap of 45 per cent.
Biodiesel
Limits for a number of parameters under the biodiesel standard came into force on 18 September 2004 including:
- free glycerol limited to a maximum of 0.020 per cent mass
- total glycerol limited to a maximum of 0.250 per cent mass
- metals - Group 1 (Na, K) limited to a maximum of five milligrams per kilogram
- metals - Group II (Ca, Mg) limited to a maximum of five milligrams per kilogram
- alcohol content limited to a maximum of 0.20 per cent (mass by mass)
- total contamination limited to a maximum of 24 milligrams per kilogram
- cetane number must be no less than 51.0
- oxidation stability must be a minimum of six hours at 110oCelsius.
Future fuel standards - research and consultation
- Petrol and diesel
- Diesohol
- Ethanol
- Compressed natural gas
- Methylcyclopentadienyl manganese tricarbonyl (MMT)
Petrol and diesel
Operability standards
Operability standards are standards linked to the more effective operation of engines. The Department of Industry, Tourism and Resources continued consultation with stakeholders on finalising outstanding operability standards for petrol and diesel namely:
- Petrol: colour, appearance, driveability index and flexible volatility index
- Diesel: appearance, acidity, cloud point and cold filter plugging point.
The consultations culminated in a joint industry and government workshop held in Canberra in November 2004 where industry consensus was reached on the way forward. It was agreed that these parameters should be managed through industry guidelines and not through regulation under the Act. The guidelines are being developed by the Australian Institute of Petroleum in consultation with the Federal Chamber of Automotive Industries.
Future sulfur limits
The department was an active participant in a review by the Land Transport Environment Committee into fuel quality and motor vehicle emissions standards to take effect after 2006. The review considered further lowering maximum limits of sulfur in petrol and diesel. As a result new fuel standards announced in July 2004 will see sulfur in premium unleaded petrol reduced from the current level of 150 milligrams per kilogram to 50 milligrams per kilogram from 1 January 2008, and sulfur in diesel reduced from 500 milligrams per kilogram to 50 milligrams per kilogram on 1 January 2006 and capped at 10 milligrams per kilogram from 1 January 2009. A complete set of fuel standards is on the department’s web site.
Olefin content of petrol
A discussion paper relating to the future management of olefins in petrol was released for public comment in June 2005. The paper was prepared in response to a request by the Australian Institute of Petroleum for a degree of flexibility in setting olefins specifications. The paper examined the current management trends for olefins and considered options for future management. The Australian Institute of Petroleum submitted that the flat limit of 18 per cent for all grades, which came into effect on 1 January 2005, would put pressure on refineries in meeting the standard.
Diesohol
On 27 May 2004 the Department of the Environment and Heritage released a discussion paper for public comment on setting a fuel quality standard for diesohol. Diesohol is defined in the Fuel Quality Standards Regulations 2001 as a ‘blend primarily comprising diesel and an alcohol’. Also known as E-diesel, M-diesel and Oxy-diesel, the fuel is used in compression ignition engines as an alternative to diesel fuel. The focus in Australia has been on hydrous ethanol blends formulated using an emulsifier developed by Apace Research. An alternative technology used anhydrous ethanol and an additive. Diesohol is not subject to any formal or accepted industry quality standards, either in Australia or internationally.
Ethanol
The department commissioned the International Fuel Quality Centre to prepare a paper on issues surrounding setting a fuel quality standard for ethanol. The paper, which was released in November 2004, addressed ethanol standards setting in an international context along with discussion regarding various parameters regulated abroad. While the ethanol content of petrol blends has been capped at 10 per cent, with the requirement that blended petrol be labelled at the point of sale, there is no national fuel quality standard for fuel grade ethanol. Setting a standard will help to ensure that the environmental and vehicle operability objectives of the Act are met, and assist in building confidence in the fuel by ensuring a high quality is available. On 22 September 2005 the government announced additional measures to increase the uptake of ethanol blended fuels.
Compressed natural gas
In June 2005 the department announced that the existing Australian Standard AS 4564:2003 specification for general purpose natural gas is sufficient for the quality control of compressed natural gas vehicle fuel. The Fuel Standards Consultative Committee and the Australian Government agreed that the quality of compressed natural gas is already well controlled by an Australian Standard and by industry agreements, and concluded that there was little benefit to justify developing a fuel quality standard under the Act or amending the Australian Standard.
Methylcyclopentadienyl manganese tricarbonyl (MMT)
The use of MMT as a petrol additive was considered by the Fuel Standards Consultative Committee during the year. Consultations are continuing on the environmental and engine operability implications of the additive to assess whether there is a need for managing its use in petrol supplied in Australia.
Statutory review of the Fuel Quality Standards Act 2000
Section 72 of the Act provides for a review of the operation of the Act to be undertaken as soon as possible after the second anniversary of the commencement of Part 2 of the Act, which commenced on 1 January 2002.
This review was completed in April 2005 and provided an early opportunity to evaluate the operation of the Act and to propose corrective actions if necessary. The review considered the effectiveness and efficiency of sections of the legislation in achieving the function for which they were drafted, in the light of experience with administering the Act.
The review concluded that the overall policy objectives of the Act are being met and should not be altered, but that the following issues should be addressed:
- Nationally consistent fuel standards and their application to unincorporated suppliers have not been achieved in all respects; there is thus a need for complementary state and territory legislation.
- In order to reinforce the monitoring and enforcement function of the Act, consideration should be given to an ongoing review of resources provided for fuel sampling and testing, coupled with cost-effective approaches such as the inclusion of penalty notices.
- In order to ensure fuel supply in an emergency, a procedure and an emergency provision for non-compliant fuel should be developed.
- To ensure that the administrative effort required is in keeping with the objects of the Act, the approvals system needs to be streamlined; and procedures such as the delegation of duties to departmental officers, notification obligations for regulated persons, and the provision of geographical and seasonal variation to standards need to be refined.
- In order to address stakeholder concerns and ensure continued compliance, industry and community communication and education need to be improved.
Fuel Standards Consultative Committee
Section 25 of the Act establishes a Fuel Standards Consultative Committee as a formal consultation mechanism. The committee is required to include one representative of each state and territory, and the Australian Government. It must also include at least one person representing fuel producers, a non-government body with an interest in the protection of the environment and a person representing the interests of consumers. The minister may also appoint other members to the committee, which to date has included representatives from the motor vehicle manufacturing industry, independent fuel importers and suppliers, the alternative and renewable fuels industry, and the trucking industry.
Table 1 lists members of the committee during 2004-05.
| Member | Representing | Term (a) |
|---|---|---|
| Mr Peter Burnett, Chair | Department of the Environment and Heritage | |
| Mr Bruce Dawson | Victorian Environment Protection Authority | until 13 October 2004 |
| Mr John Bortolussi | Truck manufacturing industry | |
| Dr David Bowman | Environmental non-government body | |
| Mr Phil Cross | Northern Territory Department of Infrastructure, Planning and Environment | from 13 April 2004 |
| Mr James Hurnall | Consumers | |
| Mr Mike McCullagh | Independent fuel producers and importers | |
| Mr Scott McDowall | Queensland Environmental Protection Agency | until 7 March 2005 |
| Mr John Woodland | Queensland Environmental Protection Agency | 7 March - 29 July 2005 |
| Mr Ewen Macpherson | Australian Institute of Petroleum | until 24 June 2005 |
| Mr Steven Payne | Department of Industry, Tourism and Resources | |
| Mr David Quinlan |
Australian Capital Territory Department of Urban Services | |
| Mr Nigel Routh | New South Wales Department of Environment and Conservation | |
| Dr Stephen Schuck | Alternative and renewable fuels industry | |
| Mr Keith Seyer | Vehicle manufacturing industry | |
| Mr Kelvyn Steer | Tasmanian Department of Primary Industries, Water and Environment | |
| Mr Fred Tromp | Western Australian Department of Environment | |
| Mr Tom Whitworth | South Australian Environment Protection Authority | |
| Mr Geoff Latimer | Environment Protection Authority Victoria | from 13 October 2004 |
| Mr Steve Sanderson | Northern Territory Department of Infrastructure, Planning and Environment | from 20 April 2005 |
| (a) Unless otherwise stated, members served on the committee for the whole of 2004–05. | ||
Under section 24A the minister must consult the committee before:
- granting an approval
- making a fuel quality standard
- making a fuel quality information standard
- deciding whether to enter in or remove a fuel additive from the Register of Prohibited Fuel Additives
- preparing guidelines for more stringent fuel standards.
The committee provides written recommendations to the minister on the above matters. In relation to granting approvals under section 13 (that allows for specific variations to the fuel standards for specified periods), the committee made recommendations for 15 new approvals (see Table 2), and three amendments to existing approvals (see Table 3)
| Name of approval holder | Period of operation | Variation approved |
|---|---|---|
| Just Fuel Petroleum Service Pty Ltd | 17 June 2005 – 31 December 2006 |
Variation of the Fuel Standard (Petrol) Determination 2001 to permit the supply of 10 specialist racing fuels. Variation of the Aromatics, Oxygen, DIPE (a), MTBE (b) and Olefins parameters. |
| VPW Australia Pty Ltd | 17 June 2005 – 31 December 2006 |
Variation of the Fuel Standard (Petrol) Determination 2001 to permit the supply of 10 specialist racing fuels. Variation of the Aromatics, Oxygen, DIPE, MTBE and Olefins parameters. |
| VP Racing Fuels Pty Ltd |
17 June 2005 – |
Variation of the Fuel Standard (Petrol) Determination 2001 to permit the supply of 10 specialist racing fuels. Variation of the Aromatics, Oxygen, DIPE, MTBE and Olefins parameters. |
| Elf Competition Fuel and Lubricants Australia Pty Ltd |
17 June 2005 – |
Variation of the Fuel Standard (Petrol) Determination 2001 to permit the supply of 10 specialist racing fuels. Variation of the Aromatics, Oxygen, DIPE, MTBE and Olefins parameters. |
|
17 June 2005 – 31 December 2006 |
Variation of the Fuel Standard (Petrol) Determination 2001 to permit the supply of petrol with a lead content of greater than 0.005g/L. Conditions attached. |
|
17 June 2005 – |
Variation of the Fuel Standard (Petrol) Determination 2001 to permit the supply of petrol with a lead content of greater than 0.005g/L. Conditions attached. |
| BP Australia Bulwer Island | 17 June 2005 – 31 December 2006 |
Variation of the Fuel Standard (Automotive Diesel) Determination 2001 to permit the supply of diesel with a minimum density of 810 kg/m3. |
| BP Australia Pty Ltd |
10 February 2005 – |
Variation of the Fuel Standard (Automotive Diesel) Determination 2001 to permit the supply of (wintermix) diesel with the following parameters:
Conditions attached. |
| The Shell Company of Australia |
10 February 2005 – |
Variation of the Fuel Standard (Automotive Diesel) Determination 2001 to permit the supply of (wintermix) diesel with the following parameters:
|
| Caltex Australia Petroleum Pty Ltd |
10 February 2005 – |
Variation of the Fuel Standard (Automotive Diesel) Determination 2001 to permit the supply of (wintermix) diesel with the following parameters:
|
| Mobil Oil Australia Pty Ltd | 10 February 2005 – 31 December 2005 |
Variation of the Fuel Standard (Automotive Diesel) Determination 2001 to permit the supply of (wintermix) diesel with the following parameters:
|
| BP Australia Bulwer Island |
8 December 2004 – |
Variation of the Fuel Standard (Automotive Diesel) Determination 2001 to permit the supply of diesel with a minimum density of 810 kg/m_. |
| The Shell Company of Australia |
30 September 2004 |
Variation of the Fuel Standard (Petrol) Determination to permit supply of unleaded petrol with an olefin content of up to 25%. |
| The Shell Company of Australia | 30 August 2004 – 30 December 2005 |
Variation of the Fuel Standard (Diesel) Determination 2001 to permit the supply of Shell Aquadiesel. Variations to the viscosity, density, and water and sediment parameters. |
| Caltex Refineries (Qld) Ltd |
13 July 2004 – |
Variation of the Fuel Standard (Diesel) Determination 2001 to permit the supply of fuel certified by a minimum cetane number of 46 instead of a minimum cetane index of 46. |
| (a) DIPE = di-isopropropyl ether (b) MTBE = methyl tertiary-butyl ether |
||
| Name of approval holder | Period of operation | Variation approval | Amendment(s) made (a) |
|---|---|---|---|
| Caltex Australia Petroleum Pty Ltd | 21 March 2003 – 31 December 2004 |
Variation of the Fuel Standard (Automotive Diesel) Determination 2001 to permit the supply of (wintermix) diesel with the following parameters:
|
List of regulated persons extended on 8 August 2004 (GN34, 25 August 2004) |
|
6 December 2002 – 30 June 2005 |
Variation of the Fuel Standard (Petrol) Determination 2001 to permit the supply of petrol with a lead content of greater than 0.005g/L. Conditions attached. |
List of regulated persons extended on 29 September 2004 |
|
6 December 2002 – 30 June 2005 |
Variation of the Fuel Standard (Petrol) Determination 2001 to permit the supply of petrol with a lead content of greater than 0.005g/L. Conditions attached. |
List of regulated persons extended on 29 September 2004 |
| (a) A notice under section 17A concerning a decision to grant or amend an approval is published in the Commonwealth Government Notices (GN) Gazette. A list of the approvals granted and amended is on the department’s web site at www.deh.gov.au/atmosphere/cleaner-fuels/variations/index.html. (b) The viscosity, density, lubricity and sulfur parameters have been varied to allow the supply of ‘wintermix diesel’ to certain parts of Australia. ‘Wintermix diesel’ is a fuel that is fit for use in cold regions of Australia, which ensures that diesel engines and machinery will operate without the fuel being prone to ‘waxing’. |
|||
Monitoring and compliance activities
A monitoring programme continued during 2004–05 to test fuel industry compliance with the fuel quality standards. Fuel samples were taken in all states and territories of all grades of fuel covered by standards. The continuing monitoring programme aims to take representative samples in each of the fuel markets around Australia in addition to responding to fuel complaints made by consumers.
Fuel sampling is undertaken at distribution terminals, depots, service stations and other outlets. Samples are tested at a laboratory accredited by the National Association of Testing Authorities, Australia for compliance with the standards. Testing methods are accredited to international standards.
A new standard for biodiesel and changes to the chemical signature of diesel fuels meant that new cetane testing technology was needed in Australia. The department worked with the laboratory to purchase an ignition quality tester and install it in Melbourne. With the commissioning of this machine, the department can properly test for cetane levels in diesel and biodiesel fuels.
During 2004–05, 132 compliance incident reports were received and addressed. Inspectors took 869 petrol and diesel samples from approximately 420 sites nationwide. In comparison, during 2003–04 there were 822 samples from 400 sites, and 120 compliance incident reports.
Test results indicate a high level of compliance with the fuel standards. Where non-compliance with a standard is detected, further investigation is undertaken with a view to prosecution where an offence can reasonably be proven. Discussions commenced during the year with the Director of Public Prosecutions on four cases that were referred for potential prosecution action.
Administrative Appeals Tribunal
The Administrative Appeals Tribunal received one application under section 70 of the Act for the review of a decision.
ET Racing Fuels Pty Ltd filed with the Administrative Appeals Tribunal on 5 August 2004, with the case dismissed on 1 September 2004 on the grounds that the tribunal did not have jurisdiction to consider the application for review.
Communication with stakeholders
The department continued to work closely with industry and other stakeholders. The department produced two issues of the Clean Fuels Bulletin, an electronically distributed newsletter, and presented papers at four domestic and three international meetings.
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