National standards for fuel quality
1 January 2002 was a milestone for Australian motorists and the petrochemical industry with the advent of the first national fuel quality standards for petrol and diesel. A significant aspect of the standards is that they prohibit the supply of leaded petrol and reduce the level of sulfur in diesel fuel.
The new standards are prescribed in the Fuel Standard (Petrol) Determination 2001, and the Fuel Standard (Automotive Diesel) Determination 2001, which have been made under the Fuel Quality Standards Act 2000 (the Act). The Act is also implemented through the Fuel Quality Standards Regulations 2001. This legislation provides the framework for the harmonisation of Australian fuel quality standards with international standards. It regulates any substance that is sold or represented as a fuel for which a fuel standard is made.
The Act, through the petrol and diesel determinations, prohibits the supply of petrol and diesel fuel that does not meet the national standards. The Act also makes it an offence to alter fuel to take it outside the specifications of a standard in specified circumstances.
- A fuel that does not meet the petrol or diesel standards may be supplied for use in motor vehicles in accordance with an approval granted under the Act. Approvals can be granted by the Minister for the Environment and Heritage. An approval can vary a fuel standard that has been made under the Act, but only with respect to specified supplies of fuel and for a specified time.
- It is not an offence to supply non-compliant fuel if the supplier believes, on reasonable grounds, that the fuel will be further processed for the purpose of bringing it into compliance with the standard or an approval.
- The supply of non-compliant fuel may be permitted under a direction or order made under an emergency law.
The petrol and diesel standards are an essential step in implementing the Commonwealth Government's commitment to facilitate the adoption of better, cleaner emission control technology, the more effective operation of engines, and to reduce pollution and vehicle emissions.
Over the next 10 years, the standards are expected to have a major impact on the amount of noxious pollutants emitted by vehicles, including benzene, oxides of nitrogen, hydrocarbons, and particles. The cleaner air will be good for our health, for local and global environments, and for reducing the economic and social costs of illnesses linked to vehicle pollution. More recently, standards for LPG and Biodiesel have been made.
Monitoring and compliance
The Commonwealth legislation has various offence provisions, including, in relation to:
- the supply of fuel that does not comply with a standard made, or approval issued, under the Act;
- alteration of fuel that is the subject of a fuel standard; and
- the supply or importation of a fuel additive that is entered in the Register of Prohibited Fuel Additives.
Penalties under the Act can be substantial. Corporations face a maximum penalty of $275,000 (for altering or supplying fuel that does not comply with a fuel standard). The importation or supply of a fuel additive that is entered in the Register of Prohibited Fuel Additives established under the Act carries a maximum penalty of $137,500 for a corporation.
The department has developed a monitoring, compliance and enforcement program for the implementation of the new fuel standards. The overall budget for implementing the Act exceeds $8 million for the four years from 1 July 2001. A team of Commonwealth inspectors in all states and territories conduct sampling along the fuel supply chain. Samples are then tested at an independent, NATA (National Association of Testing Authorities) accredited laboratory for compliance with the standards. While the initial approach to the sampling program was mainly random and based on market share statistics, a more strategic approach is now being developed which incorporates industry notification and reporting, and mechanisms for consumer and/or agency information-sharing.
Industry notification and reporting
Under the Act, fuel suppliers (from importers and producers, through to distributors and service station outlets) must provide documents relating to the fuel being supplied. At each stage, before supply to the consumer, these documents must include a statement about whether or not the fuel complies with the relevant fuel quality standard, and if not, how and why the standard has not been complied with. Other information about the supplier, the product and the delivery docket number must also be provided. Vehicle operators have to provide additional information in accordance with the regulations. This largely involves industry self-regulation. However, industry's documentation, and related production and distribution processes, are likely to be investigated if non-compliant fuel is detected through the sampling program undertaken by the department. Failure to provide accurate information about compliance with national fuel quality standards and other prescribed matters is an offence attracting significant penalties under the Act.
From 2003, fuel producers and importers are also required to report annually to the department, about the fuel they produced and supplied in the previous year. Some of this information will be included in the department's annual report, which will be tabled in Federal Parliament. For example, information about the total amount of fuel produced and/or imported and supplied in Australia, by grade, and periodic averages of the content of the fuel when tested against the fuel quality specifications, will be provided to the department for analysis. This data will contribute to a better understanding of fuel quality and consumption, and vehicle fleet emission rates, in Australia. Again, failure to provide accurate information is an offence.
Sampling and inspectors' powers
The sampling program commenced in April 2002. Samples are taken by Commonwealth inspectors from refineries, bulk storage terminals, and service stations. Strategic partnerships have been developed with State Fair Trading Agencies and the Australian Taxation Office for officers from these agencies, who are appointed as inspectors under the Act, to conduct sampling as directed by the department.
The Act sets out inspectors' obligations when exercising their powers under the Act. For example, inspectors can only enter premises with the consent of the occupier or their representative, unless the inspector holds a monitoring or offence-related warrant issued under the Act. The offence-related powers authorise Commonwealth inspectors, either with consent or under a warrant, to:
- conduct a search;
- inspect, examine, take measurements of, conduct tests on, or take samples of any fuel (or fuel additives);
- take photographs / video recordings;
- inspect and take copies of any book, record or documentation;
- take onto premises and use equipment or materials;
- secure evidential items or material until a warrant is obtained to seize it;
- operate equipment for specified purposes; and
- remove documents and disks, or transfer information onto a disk (or other storage device).
The third facet of the monitoring, compliance and enforcement program for fuel quality standards will involve information-sharing arrangements. Motoring clubs, consumer affairs, fair trading, and environment protection agencies in each state and territory, are regular recipients of consumer complaints regarding fuel quality. Special arrangements have been established with these bodies to encourage information-sharing. Information received from these sources contribute to the effectiveness of the department's response strategy where non-compliance with the Act is apparent.
Future fuel quality standards and approved variations
The fuel quality standards legislation also sets out the process that the Minister for the Environment and Heritage must follow when fuel quality standards for other fuels are made. This process involves consultation with the Fuel Standards Consultative Committee which has been established under the Act. The Committee comprises federal, state and territory government representatives, and representatives of industry and consumer organisations.
Fuel quality standards may be varied by an approval granted by the Minister under the Act, but only for specified, limited periods. Applicants who unsuccessfully seek an approval have a right to appeal to the Administrative Appeals Tribunal.
The expected outcomes of the new fuel quality legislation will be the supply of regulated fuel to consumers, a reduction in noxious vehicle emissions, and the availability of the fuel required by vehicles fitted with advanced emissions control technologies.
The Commonwealth's new fuel quality standards legislation, and further information, can be accessed via the Fuel Quality Standards Act 2000 page. Enquiries may also be directed to the department's Community Information Unit, phone: 1800 803 772.
The information contained in this article is of a general nature only and should be read in conjunction with the Fuel Quality Standards Act 2000, the Fuel Quality Standards Regulations 2001, the Fuel Standard (Petrol) Determination 2001 and the Fuel Standard (Diesel) Determination 2001. Fuel suppliers may wish to seek legal advice about their obligations under this legislation.