What’s going on?
There are significant changes on the horizon for Australian motorists, vehicles and the broader automotive industry.
Essentially, Australia lags behind developed nations when it comes to emissions standards for light and heavy vehicles, and our low-quality fuel may be a barrier to the introduction of new standards as well as state-of-the-art vehicles.
A study published by Nature on Tuesday took aim at the Australian Government as well as other countries including Brazil, China, Mexico and Russia for being slow to adopt Euro 6 vehicle standards for trucks.
The report’s lead author, Susan Anenberg, says “the consequences of excess diesel NOx emissions for public health are striking,” and that more stringent tailpipe emission standards could prevent 174,000 premature deaths annually by 2040 – mostly in developing nations.
New cars in Australia have to meet Euro 6 standards by July 2018, but there is no concrete plan to adopt the latest emissions standards for heavy vehicles.
Local authorities are currently weighing up the adoption of Euro 6 rules for trucks as well as changes to minimum fuel quality through a Ministerial Forum on Vehicle Emissions that has sought feedback from the public, car makers, health experts, fuel providers and beyond.
The switch to Euro 6 rules may be twinned with a major charge to Australia’s fuel standards. Our current requirements state that 91 Octane unleaded fuel has a sulphur limit of 150 parts per million (150ppm), while 95 and 98 Octane premium fuels have a cap of 50ppm. Among developed nations in the OECD, only Mexico has worse petrol quality.
By some estimates, reducing that figure to 10ppm could reduce harmful NOx emissions by 20 per cent.
Why the big deal?
Because doing so would effectively force Australian drivers to buy more expensive premium fuel, driving up transport costs. The effect would be magnified among heavy vehicles, where Euro 6 rules would require transport operators to buy more expensive trucks, spend more maintaining them and use more fuel than existing models. Those costs would likely be passed on to consumers, making everyday goods more expensive.
There’s no doubt that a switch to cleaner vehicles with more sophisticated emissions systems would come at a fiscal cost to the community. But the government reckons that would be more than offset by public health benefits in the long run, predicting net benefits of $675million before 2040, largely because of “avoided health costs”.
The Department of Infrastructure and Regional Development says “there would be a direct benefit to the health and wellbeing of the Australian community under these options as a result of a reduction in air pollution. This would have an indirect benefit to governments in terms of reducing pressure on the public health system.”
Anyone (and anything) that breathes should care, because cleaner air can only be a good thing for respiratory health, particularly in increasingly crowded urban centres. Clearly the government has public health in mind, balancing that against the needs of business and industry.
Motorists should care because the price of cars will go up and fuel will become more expensive.
Car companies care about the issue because vehicles built to Euro 6 standards – those sold in Europe, Japan and the US – may not perform as intended when forced to use sub-par fuel. Industry research body IHS Automotive says “there are some doubts about emissions systems surviving” high-sulphur fuel in the long term, as the material can damage important oxygen sensors in the exhaust stream as well as making the latest catalytic converters less effective at reducing harmful emissions.
Toyota, the largest automotive brand in Australia, supports the introduction of Euro 6 requirements and petrol with 10ppm sulphur levels, as long as regulators offer an “appropriate lead time” for car companies to respond to the changes. BMW agrees that a change is needed, saying it could be done by 2020.
But fuel providers disagree.
Caltex says 10ppm sulphur fuel “is not required to implement Euro 6 light vehicle standards because there are no operatability benefits and very few environmental benefits of changing this particular fuel standard”.
The petroleum company says real-world sulphur levels are “substantially lower than current standards”, with Sydney bowsers averaging 28ppm and 16ppm levels that easily meet 150ppm and 50ppm minimum for 91 and 95 octane fuels.
It says the $500-$750 million cost of improving fuel quality to consistent 10ppm sulphur levels would “impact the viability” of its Lytton refinery, putting Australian jobs at risk, and that it would take about five years to introduce better fuel.
If the proposed changes came into effect, it’s likely that some cars will become more expensive to account for more sophisticated emissions hardware such as Exhaust Gas Recirculation and Selective Catalytic Reduction systems. Other models may disappear entirely as it may not be economically viable for car companies to invest vast sums in research and development to keep simpler models – particularly diesel cars such as the Toyota LandCruiser 70 Series – on the road.
A draft regulation impact statement prepared by the Department of Infrastructure and Regional Development estimates that the introduction of Euro 6 standards will push the price of petrol vehicles up by $30 to $1000, while diesel cars will increase by $300 to $1800.
Department of Infrastructure and Regional Development vehicle emissions discussion paper:
“Emissions from motor vehicles can affect our health by polluting the air we breathe and can also contribute to climate change… our increasingly urbanised and ageing population may be more susceptible to the health impacts of noxious emissions.”
Toyota’s response to proposed changes:
“Australia’s current fuel standards (91 Octane, 150ppm sulphur) lag behind other comparable nations with implications for engine performance, emissions controls and air quality… improvements to Australia’s fuel quality is considered paramount.”
Ray Minjares, researcher at the International Council on Clean Transportation:
“Globally, the single most important action to reduce the health impacts of excess diesel NOx emissions is for countries to implement and properly enforce a Euro VI tailpipe emission standard for heavy-duty vehicles. Combined with strengthened compliance for light-duty vehicles and next-generation standards, this would nearly eliminate real-world NOx emissions from diesel vehicles, which would avoid 174,000 air pollution-related deaths and 3 million years of life lost worldwide in the year 2040.”
The ministerial forum is likely to make formal recommendations in the second half of 2017, which would then be subject to parliamentary debate and approvals.
It seems Euro 6 standards for light and heavy vehicles are likely (along with 10ppm sulphur petrol), with Australian regulators suggesting that full Euro 6 compliance starts in 2019 to 2020 at the earliest, with newly approved vehicles subject to the standard from 2019 and new heavy vehicles from 2020.
Real-world emissions testing is also a distinct possibility as part of the new rules, as are changes to government fleet purchasing policies. Public servants are currently encouraged to purchase locally-built cars, but that could change next year when there is no Australian automotive manufacturing industry to protect.
DIRD has also flagged potential changes to luxury car tax, including a shift to promote high-efficiency petrol models over diesel vehicles currently promoted by the scheme. Such a move would likely be welcomed by the car industry, which is united in its opposition to the luxury car tax.