Fuel Standard (Petrol) Determination 2001 and the Fuel Standard (Automotive Diesel) Determination 2001

Regulation Impact Statement
Environment Australia, 2001

8. Conclusion and Recommended Option

The selection of the most appropriate option for national fuel quality standards, was based on three principal selection criteria: The suite of standards recommended would need to, as far as possible:

  • provide harmonisation with international standards ie 'Euro' standards;
  • satisfy the objectives of the seven guiding principles to ensure that any fuel standards selected were appropriate for the Australian context; and
  • provide a balance between environmental objectives and the capacity of the refining industry to supply cleaner fuels.

In light of consultation with stakeholders, Option 2 is recommended as providing the most appropriate suite of standards to satisfy the objectives of setting national fuel quality standards for Australia. In summary, the revised proposal provides greater flexibility for the refining industry to meet the standards in the transitionary period leading up to 2005 when full harmonisation with Euro 3 will be required. Flexibility has been provided for refiners with the use of pool averaging for some parameters and the relaxation of some Euro 3 standards eg aromatics in light of the limits being placed on the use of MTBE as an octane enhancer in petrol and diesel density and distillation levels which have been adjusted in light of Australian specific considerations (ie refinery capacity and different market demands).

The preferred Option also provides an appropriate balance between the levels required for those fuel parameters which affect emissions and what can actually be achieved by the domestic refining industry. The proposals for olefins and MTBE in petrol will impact significantly on importers, however, it is considered that the higher cost for importers to source fuel to meet the standards is balanced by the substantial investment required by domestic refiners to produce the cleaner fuels.