Monday 6 August 2001 Media Statement
Public Discussion Document on Fuel Quality Released

Associate Energy Minister Paul Swain is encouraging anyone concerned with the quality and safety of motor vehicle fuel used in New Zealand to read the discussion document he is releasing today.

The document is the result of a major review of the rules governing the quality and safety of petrol and diesel and suggests some significant changes to the standards used in this country.

"There is a need for a major upgrade of New Zealand specifications to ensure our petrol and diesel quality standards are in line with international standards," Paul Swain said.

“International trends are towards specifications that give better vehicle performance and are better for the environment.

"If we do not change our regulations, New Zealanders may not be able to run the more fuel-efficient and environmentally friendly vehicles being manufactured.

"More importantly we would be setting lower environmental, health and consumer standards.

“Timing issues, industry competitiveness and costs, however, also need to be considered alongside the advantages to be gained from our fuel meeting higher performance, health and environmental standards.

"Some of the major proposed changes we are suggesting for petrol include:
- Reducing the maximum benzene levels from 4.2% to 1% by 2007
- Immediately reducing aromatics levels in regular grade petrol from 48% to 40%
- Reducing aromatics levels in premium grade petrol from 48% to 42% by 2007.
For diesel, we are proposing to:
- Reduce the maximum sulphur levels in diesel from 3,000ppm to 50ppm by 2007
- And to specify maximum levels of PAHS (aromatics containing multiple benzene rings).

"We're also proposing a new filterability test for diesel to help avoid the filter clogging problems experienced by diesel users earlier this year.

"The proposed implementation dates for these changes are to be made in two stages to take into account the schedules being used by other countries, such as Australia, and the availability of new vehicle technology and estimated times for refinery upgrading.

"Stage one of the changes are proposed to happen by 2003/2004 and stage two by 2006/2007.

Paul Swain said the review, which started late last year, has proven to be very timely given the recent concerns about 'dirty diesel' and sulphur content in diesel.

“These issues have made everyone more aware of the quality of fuel they use, and I would encourage those who have an interest in this subject to take the time to make a submission," Paul Swain said.

Submissions close on 15 October 2001. The government intends to change the regulations based on feedback in early 2002.

Copies of the public discussion document can be obtained from the Ministry of Economic Development by visiting www.med.govt.nz, emailing fuelquality@med.govt.nz, faxing 04 4990969 or telephoning 04 4720030.
Submissions close on 15 October 2001

ENDS

Attached questions answers:

QUESTIONS AND ANSWERS

1. What do the regulations cover?
The Petroleum Products Specifications Regulations specify a number of properties and limits for both premium grade and regular grade petrol and for diesel. They include, for example, minimum requirements for octane number and maximum limits for such components as sulphur and benzene.

2. What is the purpose of the review?
The Petroleum Products Specifications Regulations were first issued in 1988 and have changed very little since then (aside from the elimination of lead and controls on aromatics levels in petrol in 1996). However, during that period, there have been developments in engine technologies, innovations in refining petrol and diesel, and changes in international petroleum standards. We also now know more about the environmental and health effects of petrol and diesel. After 12 years, the review is a good way to check if the regulations are the best possible for New Zealand’s situation, or if they need to be changed in some way to incorporate technological advances and to address health and environmental issues.

3. Will the review lead to increased costs for consumers?
Not necessarily. If the petrol and diesel specifications are changed, fuel prices may also change. However, any potential increase in the cost of fuel as a result of the review would need to be balanced by increased benefits to consumers in the form of enhanced fuel performance or increased health and environmental protection.

4. How do the proposed changes to our fuel compare with Australian, European and other international fuel standards?
The current European specifications were adopted in January 2000 and are commonly known as Euro 3. A tighter Euro 4 standard will be required from 2005.

Australia, a significant source of New Zealand’s imported fuels and blendstocks, is working towards specifications matching the Euro 3 and eventually the Euro 4 standards. Australia has recently finalised its national environmental standards for petrol and diesel quality. Operability and performance standards are currently under development.

The changes proposed for New Zealand are broadly in line with the Australian specifications and the Euro 4 proposals.

5. What environmental and health considerations did the review take into account?

Primary consideration was given to air quality and its effect on human health. By world standards, New Zealand’s air quality is good. However, in some urban areas, levels of contaminants sometimes reach concentrations that are high enough to cause adverse effects on human health and the environment. Since discharges of contaminants to air from the use of petrol and diesel are some of the greatest contributors to air pollution in New Zealand, particular attention was paid in the review to reducing the impact of petrol and diesel on air quality. The discussion document includes recommendations for changes to the specifications that will reduce emissions of air pollutants directly, as well as changes that will enable advanced emissions control systems in vehicles to operate more effectively.

Water quality impacts were also considered in the review. Runoff from paved roads can contribute to pollution of aquatic environments, and limiting air emissions of pollutants will help to limit the amount of pollutants that gets washed into waterways. The review has also examined parameters with a direct link to water quality issues. MTBE, for example, is a blending component that has tainted groundwater in other countries through leaking petrol storage tanks. The review is recommending a very low allowable limit of MTBE in petrol to prevent its use in New Zealand.

6. What are the major changes recommended?
Petrol:
- Benzene: Progressively reduce from about 4.2% to 1% by volume
- Aromatics: Immediate reduction from 48% to 40% by volume for regular grade; progressive reduction to 42% for premium grade
- Sulphur: Progressively reduce to 50 parts per million
- Olefins: Specify and progressively reduce from 25% to 18% by volume
- Lead: Reduce allowable contamination level from 13 to 5 milligrams per litre
- MTBE: Immediate limit of 1% by volume for contamination only
- MMT: Immediate limit of 0.25 miiligrams per litre of manganese for contamination only

Diesel:
- Density: Progressively narrow allowable density range to 845-820 kilograms per cubic meter
- Cetane Number: Progressively increase from 45 to 51
- Sulphur: Reduce from 3,000 parts per million to interim level of 500; further reduction to 50 parts per million by 2006-2007
- PAHs: Limit to 11% by mass by 2003-2004

7. Do the recommended changes advocate lower sulphur levels in fuel for Auckland versus the rest of the country?
No. For diesel, there are proposals to change the nationwide maximum limit from 3,000 parts per million (ppm) to 500 in two to three years’ time, followed by a limit of 50 ppm by 2006-2007. Changes to sulphur diesel levels in the short term are still under consideration, pending results from the two industry trials that are being conducted to study the feasibility of a national versus a regional grade of lower sulphur diesel.

For petrol, the review proposes an immediate reduction of sulphur from 500 ppm to 150 ppm, followed by a further reduction to 50 ppm by 2006-2007.

8. When is the Government proposing to implement any changes to the fuel specifications?
Proposed changes to the regulations are timed to occur over the next five to six years. Changes proposed to have immediate effect, generally to regulate for current good practice, will apply as soon as new regulations are able to be issued, probably about mid-2002. Other changes are proposed to coincide with technological advances in the fuel processing and vehicle manufacturing industries and are proposed to occur either in Stage 1 (2003-2004) or Stage 2 (2006-2007). These stages recognise the timetables for changing specifications elsewhere in the region, estimated lead times for refinery upgrading, and the interdependence of many of the specified fuel properties.

9. Who has been consulted as part of the review?
In order to gain a broad perspective of fuel quality issues, a wide range of key stakeholders with an interest in fuel quality and vehicle use have been contacted. These organisations include consumer groups, regional councils, government agencies, oil supply companies, and commercial fuel user groups.

10. How can I have a say in this process?
We invite comments on the proposed recommendations. Comments should be forwarded to the Ministry of Economic Development by 15 October 2001 by email, fax, post or hand delivery to:
Petrol and Diesel Quality Review
Ministry of Economic Development
33 Bowen Street
PO Box 1473
Wellington
New Zealand
Phone: +64-4-472-0030
Fax: +64-4-499-0969
Email: FuelQuality@med.govt.nz

QUESTIONS ABOUT PETROL AND DIESEL IN GENERAL

11. What is petrol and how is it made?
Petrol is a blend of different components found in crude oil, which itself is a mixture of many different substances. Most of these substances are hydrocarbons, which are molecules composed of carbon and hydrogen atoms. Oil companies blend different petrol components together depending on the octane number, vapour pressure, and other properties required for a particular petrol product.

12. What does the octane number mean?
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 is passed by the spark plug. 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.

13. Why is vapour pressure important?
Vapour pressure is a measure of how easily a liquid vaporises, or changes into a gas. Petrol is supplied in liquid form, but at least part of it must be vapour to ignite in an engine combustion chamber. This means that on a cold day in a cold engine, enough petrol must vaporise to enable ignition. On the other hand, on a hot day in a completely warmed-up engine, it is also important that the petrol does not vaporise and expand so much that it does not allow any air to be mixed with it in the cylinder. Oil companies balance these two extremes when blending petrol, taking into account the climate and the season where the petrol will be sold.

14. Why was lead ever added to petrol and why was its use disallowed in 1996?
Adding certain lead compounds to petrol was an effective and cost-efficient way to increase the petrol’s octane number. Lead is known to be toxic to humans, and its use in petrol is being phased out on a worldwide basis. New Zealand banned lead from petrol in 1996.

15. How is the octane number of petrol increased today?
The petrol that you buy at a service station is actually a mixture of different petroleum components. Each component has its own properties, including octane number. By blending carefully, the oil companies can come up with a formula that has the properties they require for a given type of fuel, including octane.

16. What is diesel and how is it different from petrol?
Like petrol, diesel fuel is blended from various petroleum components produced in a refinery. However, diesel contains components that are heavier and have higher boiling points than petrol components. Vapour pressure is not an important consideration in the production of diesel, since the fuel does not need to change to a gas in a diesel engine. Diesel engines inject liquid fuel into the cylinder, unlike petrol-powered engines with carburettors. However, temperature can have an effect on the operation of diesel fuel in an engine. At low temperatures, diesel fuel may thicken and restrict the flow of fuel to the cylinder. Oil companies produce diesel blends that are formulated for specific climates and times of the year to prevent problems in cold weather.

17. Does diesel have an octane number?
No. Diesel engines do not have spark plugs and depend on the fuel igniting itself by compression, unlike petrol engines. The measure of a diesel fuel’s ignition quality is called the cetane number, which indicates the readiness of a diesel fuel to ignite spontaneously under the temperature and pressure conditions in the combustion chamber of an engine. The higher the number, the shorter the delay between fuel injection and ignition.

18. Why is there sulphur in petrol and 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. The proposal to limit sulphur in diesel to 500 parts per million by 2003-2004 will improve air quality by directly reducing particulate emissions. Limiting sulphur in both petrol and diesel to 50 parts per million by 2006-2007 will enable modern technology emissions-control systems in vehicles.

19. What are cold flow properties in diesel?
Under cold conditions, the paraffins in diesel can form wax crystals that can block fuel filters and interrupt fuel supply. Cold flow properties are used to assess the performance of diesel in cold operating conditions and to determine the temperature at which fuel filters may begin to become blocked.

Cloud point is the temperature at which wax crystals start to form and the fuel becomes cloudy. Cold filter plugging point is the lowest temperature at which the fuel is liquid enough to pass through a test filter under standard conditions and is used to predict fuel performance in an engine. Cold flow properties depend on the proportion of waxy components in the diesel (controlled by the selection of crude oils and the refining and blending processes). Cold flow improving additives lower the cold filter plugging point by changing the size and shape of the wax crystals that form at low temperatures

ENDS

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