New hi-tech low-emissions petrol vehicles are being held back from Australian showrooms until our two remaining oil refineries are upgraded to the latest European standards.
The Australian car industry says it is counting down the days until the nation’s two remaining oil refineries are upgraded over the next two years, so they can introduce new hi-tech ultra-low-emissions petrol cars.
In May 2021, the Federal Government pledged a $2 billion support package to prop up Australia’s two remaining oil refineries – to avoid a complete reliance on imported bowser-ready fuels – and bring forward long overdue upgrades to produce world-standard unleaded petrol locally.
Within hours of last year’s announcement, energy giant Ampol (formerly Caltex) confirmed its Lytton Refinery near Brisbane would remain operational “subject to the government’s refining support package being successfully legislated as proposed”.
Ampol along with the Viva (formerly Shell) facility in Geelong are the last two oil refineries left in Australia. The majority of fuel pumped at bowsers across Australia is now refined overseas.
Two decades ago there were eight refineries in Australia. In 2015 the number of refineries was culled to four, and by the middle of 2021 Australia was left with just two.
While Australia remains one of the cheapest OECD nations for regular unleaded petrol, the quality (or sulphur content) of the fuel is ranked 85th when compared to all nations.
World’s best practice unleaded petrol contains a maximum 10 parts per million of sulphur rather than our current standards of 50ppm for premium unleaded and 150ppm for regular unleaded.
However, 10ppm unleaded will flow from petrol bowsers in Australia from 2024 after upgrades are made in 2023 – and, concurrently, better quality 10ppm unleaded fuel is imported.
The 2024 rollout of cleaner unleaded petrol is four years earlier than planned but still more than a decade after Europe mandated it. Australia switched to 10ppm diesel in 2009.
Although some European car brands have introduced a number of models equipped with sensitive petrol particulate filters optimised to run on unleaded with 10ppm of sulphur content, the Federal Chamber of Automotive Industries (FCAI) said a broader range of vehicles with the latest engine technology were not being imported due to warranty concerns caused by Australia’s current fuel standards.
“The poor fuel standards in Australia relative to regions such as Europe and Asia have meant that some car companies have been unable to introduce some of the world’s best fuel efficient and environmentally friendly technologies to the Australian market,” FCAI Chief Executive Tony Weber said in a media statement last year.
Announcing new-car sales results for 2021 last week, the FCAI said it is counting down the days for better quality fuel to pump from local bowsers.
The peak automotive body said it was senseless for the Federal Government to consider mandating lower emissions targets for motor vehicles, without access to better quality fuel that will help deliver those results.
“We must raise the perennial issue of fuel quality, which is a key factor in addressing emissions reduction,” Mr Weber said last week.
“Announcements in last year’s Federal Budget regarding investments in Australia’s two remaining oil refineries were a positive step,” he said.
“However, we do need clear direction and a commitment to improve our fuel quality that will allow Australia to be at the forefront of the best technology the world has to offer.
“The focus on (reducing) sulphur is good, but that focus needs to be extended to other issues such as RON and aromatics, to bring Australian fuel to world-class quality.”
The petroleum industry is yet to announce more specific timing about the refinery upgrades.
The car industry says until there is certainty around the arrival of 10ppm unleaded fuel at bowsers across the country, they are reluctant to introduce hi-tech low-emissions petrol-engined vehicles in vast numbers due to potential warranty problems caused by 50ppm sulphur premium unleaded.
The petroleum industry says random checks conducted at bowsers across Australia show our 98-octane premium unleaded typically has 30 to 40ppm of sulphur, well below the 50ppm limit.
Petroleum industry sources say 50ppm premium unleaded fuels sold in Australia are often blended with 10ppm unleaded bought at distress prices.