Skip to Content

Brakes on cleaner fuels need to come off

by December 22, 2016 General


The Turnbull government’s habit of running policy ideas up the flagpole and then back down again at the first whiff of grapeshot is familiar to all. So there’s no reason to expect it would be particularly devoted to new proposals aimed at ensuring cleaner fuels, tighter air pollution standards, and more stringent vehicle efficiency standards. The three proposals, quietly released in a discussion paper this week, would help Australia meet its international climate-change commitments, improve air quality in the cities, and enable a new fleet of fuel-efficient cars and trucks.

But because one of the measures involves the phasing out of regular unleaded petrol, and because motorists will not see any immediate benefit from the introduction of better quality fuels, they’re likely to end up lying fallow – alongside the emissions intensity scheme for the electricity sector generators, and options for tax reform put on the table and then promptly removed again.

While it’s understandable governments want a lid kept on fuel prices, the Coalition’s unwillingness to prosecute sensible measures like this will not benefit motorists in the long run, nor save them from the inevitable consequences of changes well underway in global car manufacturing and oil refining and. Indeed, it’s arguable that the Turnbull government’s inaction on transport fuels and security of supply has already penalised motorists and jeopardised the national interest. That’s not to suggest previous Labor and Coalition governments have been any better.

It was obvious even in the mid 1990s that the international drive for more fuel-efficient cars (led by European governments and vehicle manufacturers) demanded ready supplies of low-sulfur fuels – and that these were then practically unattainable in Australia. New and improved fuel standards were mandated by the Howard government, but on a time scale that lagged well behind those being implemented in Europe, and still do. Nor did the government encourage Australian refiners to ensure they had the technical and operational capacity to produce ever-cleaner fuels.

Only four refineries remain in Australia, and none is particularly modern by international standards. Without billions of dollars of investment – which no oil company has said it’s prepared to make – the production of fuel that matches the current European standard of 10 parts per million of sulfur will be impossible. Indeed, phasing out regular unleaded may hasten the closure of those four remaining refineries, making Australia entirely dependent on imported petrol, diesel, and aviation fuel. Previous federal governments would not have countenance the loss of fuel security, but market concentration, the construction of mega refineries in centres like Singapore, and the use of ever-larger tankers has changed forever the dynamics of transport fuel production.

Readying Australia for the advent of more efficient cars and trucks powered by clean fuels will require the government to take difficult, even unpopular decisions. But this is an economic and environmental issued that cannot be dodged, only delayed at greater cost to the community.