Under the microscope: Australia's fuel landscape.

Australian standards for carbon dioxide, noxious emissions and fuel quality need to be considered in unison as the nation, including Tasmania, continues its quest to improve vehicle emissions, the environment and human health.

​​​​​​Vehicle emissions are harmful to human health - in terms of respiratory problems faced in crowded urban centres. Environmentally, emissions place stress on parks and gardens, trees, urban wildlife and pets.

The Federal Government is aiming to reduce greenhouse gas emissions by 28% from 2005 levels by 2030 as part of climate change commitments within Australia's Paris Agreement.

As part of this agreement, the Federal Government's Ministerial Forum on Vehicle Emissions is investigating the implementation of the latest European noxious emission standards (Euro 6), as well as improved fuel quality standards and new measures to address the fuel efficiency of vehicles.

The Federal Chamber of Automotive Industries (FCAI), which represents the manufacturers and importers of vehicles and motorcycles in Australia, is lobbying for this Euro 6 to be implemented.

RACT also ​supports emissions reduction measures that consider carbon and pollutant emissions, fuel quality and adoption of low and zero emission vehicles.​


There are just over 19 million registered motor vehicles in Australia, with 74% using unleaded fuel and 23% using diesel. Passenger vehicles also make up 74% of Australia’s fleet.

Emissions from the transport sector currently account for approximately 17% of Australia’s emissions. Light vehicle emissions account for approximately 10 per cent of Australia’s total emissions.

The Federal Government is aiming to reduce greenhouse gas emissions as part of climate change commitments within the 2015 Paris Agreement, including carbon dioxide (CO2).

The Government expects carbon dioxide emissions from light vehicle to fall due to improvements in fuel efficiency, which is critical to meeting 2030 CO2 targets.

The Ministerial Forum on Vehicle Emissions is considering a reduction in carbon dioxide emissions from new light vehicles to an average of 105g/km by 2025. This is well down on the 181g/km recorded by the National Transport Commission in 2017.

This is a reduction from 192g/km in 2013 but still higher than the European average of 118g/km in 2017.

The proposed CO2 standards are projected to avoid 65 million tonnes of greenhouse gas emissions by 2030, which is close to the current annual emissions of all light vehicles (57 million).


Each of the six separate Euro standards, introduced gradually from 1992, stipulate the maximum amount of exhaust gas emissions from a vehicle.

Euro 6 was implemented in Europe in 2015 and aimed to reduce four main emission groups known as noxious emissions including: carbon monoxide, hydrocarbons, nitrogen oxides and particulate matter.

These impact on the quality of the air, leading to harmful health effects such as respiratory illness, cardiovascular disease and cancer for living beings, as well as detrimental effects to the environment.

The Federal Government has committed to Euro 5 standards but the Ministerial Forum is also aiming to further reduce noxious exhaust emissions in petrol and diesel cars through Euro 6, which was introduced in Europe in 2015.

The key difference between Euro 5 and Euro 6 is a 55% reduction in the emission limits for noxious emissions for light diesel vehicles, a particle number limit to reduce fine particle emissions from light petrol vehicles and better requirements for the performance of emission control systems.

Furthermore, as noted above, improved vehicle fuel economy in European standard vehicles directly reduces carbon dioxide output – a greenhouse gas emission. As part of separate European standards, a CO2 emissions target of 130 grams of CO2 per kilometre had to be met by 2015 for new passenger cars.

Critical to Australia meeting Euro 6 noxious emission standards and the proposed 2030 CO2 targets are better quality fuels and more efficient vehicles, respectively. See below sections for more.


Europe’s fuel quality standards are based on sulphur content, which is a natural component of crude oil found in refined fuel that impacts the environment and human health.

While Australia has implemented Euro 5 emission standards, the Federal Government has not committed to the fuel quality standards for petrol at this stage – which is 10 parts per million of sulphur for 95 and 98 octane fuel. This is the same standard for Euro 6 regulations.

The Australian Fuel Quality Standards Act 2000 states that 91 octane fuel can carry up to 150ppm of sulphur, while premium 95 and 98 octane fuels have caps of 50ppm. Diesel sold in Australia can have no more than 10ppm.

Putting that into perspective, Australia’s standards sit at the bottom of the 35 countries in the Organisation for Economic Co-operation and Development (OECD) and 70th in the world’s top 100 sulphur ranking. The sulphur content in 91 octane fuel even sits behind the likes of Algerian and even Iraqi standards (100ppm).

European countries such as Germany, Japan, Austria, Denmark and Sweden, as well as Japan and South Korea are at the top of the fuel quality ranking with 10ppm of sulphur, with the minimum fuel octane rating at 95.

However, in 2015 RACT commissioned fuel testing of 91 octane fuel shipped from Korea to Bell Bay near George Town. It found sulphur levels were far lower than these standards, with the recorded content being 19-21ppm.

Furthermore, a 2017 discussions paper to the Ministerial Forum on Vehicle Emissions made by the Australian Institute of Petroleum revealed Australian fuel quality has substantially lower sulfur levels than the maximum standard. In 2014-15 average levels in Sydney for 91 octane fuel were 28 ppm, with 95 octane tested to be 16 ppm. In Melbourne 91 octane was 60ppm and 95 octane was 28ppm.


In order to meet these European standards and 2030 carbon dioxide targets the Federal Government first needs to make European standards for unleaded and diesel fuels, in relation to sulphur content, widely available in Australia.

The Ministerial Forum on Vehicle Emissions released a draft regulation impact statement proposing improvements to fuel standards under the Fuel Quality Standards Act in January 2018. These changes are designed to bring Australia’s fuel quality into line with international standards.

Three options were discussed including:

  • Adopting European standards for petrol and diesel fuel and phasing out regular 91 octane, to be replaced by 95 octane fuel with 10ppm sulphur as Australia’s standard product. Changes to broaden the scope of the diesel standard.
  • Adopting the same European standards as above, with the exception that 91 octane fuel is retained but with a lower sulfur level of 10ppm. Changes to broaden the scope of the diesel standard.
  • Revision of the petrol standard to reduce sulfur to 10ppm consistent with European standards. No other changes to diesel.

Each option was considered against three different implementation dates, 2022, 2025 and 2027.

A cost analysis, for each of the above dates, considered the constraints, such as fuel refinery upgrades and operating costs, fuel price impacts, industry compliance and governmental administrative costs.

It also considered benefits such as avoided health costs, reduced fuel consumption and greenhouse gas emissions, price change benefits for retailers and reduced catalytic converter failures for vehicles due to lower sulphur fuels.

The analysis indicated option one would cost between $607 million and $718 million to implement. However, option two attracted between a benefit of $319 million and $641 million and option three between $317 million and $628 million.

In terms of refinery upgrades, the paper specified that operators of Australia's refineries, two in Victoria, one in Western Australia and another in Queensland, would have to spend around $979 million between them in upgrades to produce low sulphur fuel.

Additionally, operating costs are estimated to be about $132 million per year.

This could threaten the viability of refineries, but also cost the community due to increased prices for higher octane fuels. Estimated fuel price increases across the three options is about 2 cents per litre.


As noted previously, the Federal Government expects carbon dioxide emissions from light vehicle to fall due to improvements in fuel efficiency. This is critical for Australia to meet its 2030 CO2 targets.

Following changes to the Fuel Act, the FCAI states that adoption of Euro 6 in Australia can be achieved by updating the Australian Design Rules (ADR) for vehicles to include United Nations Regulations for noxious emissions and CO2 emissions.

These UN Regulations will inform the ADR in relation to vehicle testing for noxious and CO2 emissions in order for cars to meet Euro 6 standards.

The FCAI has suggested that Euro 6 compliance in Australia could be phased in for new vehicles from 2022, once the Act and ADRs are updated. FCAI expects Euro 6 compliance for all vehicles would be by 2027 as its implementation would be subject to vehicle and fuel quality standards being met.

This is because there are concerns from manufacturers that Euro 5 and 6 standard light passenger vehicles may not perform as efficiently while using higher sulphur fuels, which wouldn’t deliver the above community and environmental benefits.

Modern engines use less fuel but create more nitrogen oxides (NOx) and require high-tech exhaust gas recirculation and selective catalytic reduction systems.

These devices reduce the levels of NOx from the exhaust, as well as particulate matter and sulphur oxides, but can be damaged by high sulphur fuels. This can impact the performance of lean-burn engines in the long term.

FCAI claims the drawback here, particularly in Australia where the average vehicle fleet age is 10.1 years, is the additional cost of supplying a Euro 6 vehicle over a Euro 5 vehicle ranges from $300 to $800 per vehicle, and up to $1800 for some models.

The FCAI states that the introduction of Euro 6 would equate to an annual cost across all light vehicle sales of about $495 million, or an average of about $400 per car.

It’s also worth noting that Australia’s older vehicles may not provide the environmental benefits of using lower sulphur fuels, meaning people are paying more for fuel without helping the environment.

These issues will make for an interesting future in the landscape of Australia's fuel emission and quality standards