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Consumers to get cleaner petrol and diesel

15 May, 2002

New Zealanders will have access to higher quality petrol and diesel that is cleaner and more environmentally friendly as a result of changes agreed by the government, Associate Minister of Energy Paul Swain announced today.

“Cleaner fuel will help the environment in two ways. It will limit the amount of polluting vehicle emissions, and it will enable New Zealanders to use the newer, cleaner vehicles that are available overseas.

“The changes will ensure that the fuel we use suits our vehicle fleet and climate conditions, as well as providing health benefits.”

The decision to amend the fuel quality regulations, called the Petroleum Products Specifications Regulations, follows a comprehensive review that began early last year. The Ministry of Economic Development led the review, with the assistance of the Ministry of Consumer Affairs, Ministry for the Environment, Ministry of Health, and Ministry of Transport. The process involved wide consultation with stakeholders and other interested parties.

“In making its decisions, the government balanced a range of considerations, including consumer, industry, health, safety, environmental, and quality issues,” said Mr Swain.

Timing

The changes will be phased in over the next three and a half years.

“While it would be ideal to implement all the improvements at once, the timetable we have chosen is the most realistic,” said Mr Swain.

“Our fuel comes from two major sources, the Marsden Point Oil Refinery and from overseas. The changes we have agreed to, allow sufficient lead time for the Marsden Point Oil Refinery to build the plant required to meet the new specifications. They also take into account the availability of fuel from other refineries in the Asia-Pacific region.

“It is essential to the security of our supply of petrol and diesel that we are able to import fuel that meets our standards. Accordingly, in many cases the timing of our specification changes is similar to that of Australia, which is a major regional influence on fuel quality.”

The practice of phasing in fuel regulations to provide refineries with sufficient lead times to update plant and processes was common around the world, said Mr Swain.

Major Changes to Diesel

“For diesel, a major change to the quality standards is to reduce allowable sulphur levels progressively,” said Mr Swain. “Last year, because of the traffic congestion problems in Auckland, the oil companies agreed that they would provide Auckland and Northland with diesel containing an average sulphur level of 1,000 parts per million (ppm). The oil companies have been doing this on a voluntary basis since January, as well as providing the rest of the country with lower than regulated diesel sulphur levels. These lower sulphur levels will now become part of the regulations with immediate effect.

“From 2004, maximum sulphur levels will be lowered for all New Zealand to 500 ppm average and from 2006 to 50 ppm. By mid-2005, the government will review the diesel sulphur levels, with a view to implementing a 10 to 15 ppm as soon as possible after 2006 but no later than 2009/10.

“Lower sulphur levels will reduce the amount of air pollution from vehicle exhausts, which will have a positive impact on people’s health and the environment. It will also allow New Zealanders to use the newer, cleaner vehicles that are available overseas,” he said.

It is possible that lowering diesel sulphur levels below 500 ppm in 2004 will bring forward maintenance requirements in some vehicles, especially older, Japanese-imported light-duty vehicles. The government will coordinate a public information campaign at that time to help make consumers aware of any maintenance requirements they might need to take, said Mr Swain.

Another major change to the diesel standards is the introduction of a filterability standard, to help avoid the engine filter-blocking problems experienced last winter.

Major Changes to Petrol

Major changes to the petrol standards include:

- Reducing petrol benzene levels from 4.2% to 3% by 2004 and to 1% by 2006. This change will limit emissions of benzene, a known carcinogen.

- Lowering petrol aromatics limits from a maximum of 48% to an average of 42% immediately for regular grade and in 2006 for premium grade petrol. This change will reduce harmful emissions.

- Allowing up to 10% ethanol blended into petrol. Ethanol, a renewable energy source, is used internationally as a blending agent for petrol.

- Disallowing the use of the additive MTBE from March 2003. MTBE can be used to boost petrol octane, but if petrol containing MTBE is spilled or leaks, it can taint the smell and taste of groundwater.

- Restricting the addition of manganese to petrol as a precautionary measure until research on its health effects is completed. The government will review available research on the addition of manganese to petrol by 2006.

“The Petroleum Products Specifications Regulations were first established in 1988 and reflected the nature of New Zealand’s motor fleet and the technologies of the day,” said Mr Swain. “Individual amendments since that time have removed lead from petrol and limited the aromatics content.

“The changes announced today represent the first comprehensive revision of the regulations since they were instituted and bring them up to date with widely accepted international standards. The improved petrol and diesel quality that results from these changes will benefit all New Zealanders through a cleaner, healthier environment,” said Mr Swain.

Ends

Information Sheet on Petrol and Diesel Quality

1. Why do we want the proposed changes?

For consumer, health, and environmental reasons.

Consumer reasons:

- To improve the operation and performance of existing and new vehicles

- To ensure our petrol and diesel is suitable for use in newer-technology vehicles, which produce fewer exhaust emissions and require fuel produced to stringent specifications

Health and environmental reasons:

- Air quality: Fuel quality has an effect on air quality, which can adversely affect human health. The changes to the regulations will reduce the amount of pollutants such as particulates (small, airborne particles) and benzene that are emitted from vehicle exhausts. The changes, through the reduction of aromatics and the lowering of vapour pressure, will also limit the amount of petrol that evaporates into the air during refuelling and from hot vehicle engines.

- Water quality: Changes to the regulations will better protect water quality. Reducing vehicle emissions will lower the amount of polluting material that goes into waterways, which occurs when particulates are washed by rainfall into streams and rivers. The amended regulations will also limit the effects of accidental fuel spills by restricting substances that can easily contaminate water systems.

2. How will the new regulations compare with international standards?

By 2006, when all the changes are fully phased in, the regulations will align to a large extent with those of Australia and Europe. Most of the exceptions relate to petrol and diesel properties that are climate-specific, such as vapour pressure in petrol and cold weather properties in diesel, and which need to be adjusted for New Zealand’s conditions.

3. What is the timing of the changes?

The changes will take effect in three stages:

- 1 August 2002 (after new regulations are drafted and approved)

- 1 January 2004 (1 August 2004 for diesel sulphur and density),

- 1 January 2006 for Stage 2.

This timetable will allow current voluntary good practice to be incorporated into the regulations immediately, while allowing the necessary lead time for specifications that require investment at the Marsden Point Oil Refinery. The timetable also reflects the fact that New Zealand is dependent on imports for about one-third of our petrol and one-tenth of our diesel. We need to know that competitively priced fuel that meets our specifications is available from Australia and Asia. The timing of the changes to the regulations is consistent with the time when overseas refineries will be upgraded to supply higher quality fuel.

4. Why can’t the changes be done faster?

The proposed timing of changes takes into account the time that the refinery will need to build additional capacity. It also takes into account when other refineries in the Asia-Pacific region will have upgraded to meet the more stringent specifications that are being implemented in the region.

5. What will be the impact of the changes on vehicles?

The changes will enable the use of new and emerging vehicle technologies from Europe and other countries. They will also ensure the continued good operation of existing vehicles in the New Zealand fleet. Some adjustments may be necessary for older petrol vehicles that use ethanol-blended petrol and older diesel vehicles when sulphur is reduced to 500 parts per million. Information will be available to advise consumers who may be affected by these changes about what precautionary maintenance they should take.

6. Why is it important to reduce sulphur in diesel?

Sulphur is present to a greater or lesser extent in all crude oils. When crude oil is distilled into petrol and diesel fuel blending components, some sulphur finds its way into those components. The amount of sulphur allowed in petrol and diesel is limited because of the undesirable effects it causes during combustion, such as its odour, its corrosiveness, and its tendency to produce acidic by-products. Sulphur in diesel tends to produce emissions in the form of particulates, which are very small airborne particles, some of which are small enough to enter the lungs. Exposure to particulates can aggravate respiratory and cardiovascular diseases and can increase mortality.

The proposal to limit sulphur in diesel to 500 parts per million average in 2004 will improve air quality by directly reducing particulate emissions. Limiting sulphur in diesel to 50 parts per million by 2006 will enable New Zealanders to use the newer, cleaner vehicles that are available overseas.

It is possible that lowering sulphur levels to 500 parts per million will bring forward the need for maintenance on engine seals, particularly in older, Japanese-imported light-duty vehicles. The government will coordinate a public information campaign in advance of the introduction of 500 ppm sulphur diesel to inform consumers about this possibility and any precautionary maintenance they should take.

7. Can we lower diesel sulphur levels earlier?

The government intends to lower diesel sulphur levels in line with international best practice. Many countries are implementing a maximum specification of 50 ppm sulphur. The Marsden Point Oil Refinery, which produces about 90% of New Zealand’s diesel, needs to make a major investment of millions of dollars in new plant to produce diesel with sulphur levels down to this level. This plant will be operational in about three years, so New Zealand will be able to obtain diesel with 50 ppm maximum sulphur content from 2006. Australia, which is also implementing a 50 ppm standard in 2006, gave Australian refineries a much longer lead time to lower the diesel sulphur levels.

In the interim, there are some adjustments that NZRC can make to its refinery processes to produce diesel with 500 ppm average sulphur content, but these adjustments are difficult to achieve with the current plant. The government is asking the refinery to take these steps from August 2004, recognising that to request such action earlier could threaten the long term viability of the refinery and New Zealand’s access to diesel supplies.

In the longer term, New Zealand plans to implement a “zero sulphur” diesel specification of 10 to 15 ppm, in line with international trends. The government will review the diesel sulphur issue by mid-2005, with the intent of setting a timetable for the “zero sulphur” specification of no later than 2009/10.

8. What steps are being taken to prevent the recurrence of the diesel filter blocking problem?

Filterability is a measure of how well fuel flows through an engine filter. The amended regulations will include a performance-based standard of filterability that states that diesel must be of acceptable filterability so that it is fit for common purpose. This type of standard is common in consumer protection legislation. A laboratory test will be used for monitoring purposes. The oil supply companies are researching other test methods, and the issue will be reviewed by 2006.

9. Why is the use of ethanol being allowed?

Ethanol is a renewable fuel that is used as a means of extending petrol as well as increasing petrol octane. The new regulations will allow blending of up to 10% ethanol in petrol, in line with international practice. Older cars may need mechanical adjustment to operate optimally on ethanol blends. To ensure consumers are aware about petrol containing ethanol, under the changed regulations, dispensers for ethanol-blended petrol will have to be clearly labelled as containing ethanol and the sale of ethanol-blended petrol will have to be accompanied by consumer information regarding its use in older vehicles.

Glossary of terms:

Aromatics Aromatics are petrol components with a molecular structure based on carbon rings and include benzene, toluene, and xylene. They occur naturally in crude oil and are produced as part of the refining process. Controlling the level of aromatics directly limits evaporative losses and exhaust emissions of these compounds, thereby reducing human exposure to them.

Benzene Benzene is the simplest aromatic compound and is a known carcinogen. Many countries are setting lower limits on benzene in petrol in response to health and air quality concerns. The 1% maximum by volume specification is in force in Europe and will be in place in Australia in 2006.

Manganese Manganese is a component of the octane-improving petrol additive MMT. The human health effects of exposure to manganese from MMT use are under investigation overseas. As a precautionary approach, the government has decided to restrict the addition of manganese to petrol, and thus the use of MMT, until this evaluation is completed. The government will review available research by 2006.

MTBE MTBE is an octane-increasing petrol additive that is soluble in water. The government has decided not to allow the use of MTBE, as it can taint the smell and taste of groundwater even at very low concentrations. Its use is being phased out in Australia and parts of the US.

Octane number Octane number measures whether a petrol is likely to cause knock in an engine. Knocking or pinking is caused by self-ignition in the engine's cylinders, which happens when the petrol/air vapour mixture in the cylinder ignites before the spark plug sparks. This premature ignition pushes against the crankshaft instead of with it, producing a knocking or pinging sound. Knocking causes the engine to overheat and lose power, and it can damage the engine in the long run.

The way to avoid knocking is to use petrol with a sufficiently high octane number. The higher the octane number, the more resistant the petrol is to the self-ignition that causes knocking. Regular grade petrol has 91 octane and premium grade is sold with 96 octane (research octane number).

Olefins Olefins are created during refinery processing and the combustion of fuel. Olefins contribute to smog formation and tailpipe emissions of toxic pollutants, so their content in petrol is being reduced worldwide. The 18% limit is being implemented in Europe and Australia in 2005.

PAH PAH stands for polycyclic aromatic hydrocarbons, heavy diesel components that contain multiple benzene rings. PAHs contribute to particulate and other polluting emissions, so it is important to limit their content in diesel fuel. The 11% maximum specification is the same standard as the European PAH specification in force; Australia is implementing it in 2006.

For Petrol Specification details go to www.med.govt.nz - latest news section after 4pm


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