Cleaner fuels welcome, yet fuel security risks remain

Australia’s peak motoring group welcomes today’s announcement that scheduled improvements to local fuel quality standards will be brought forward three years to 2024; but questions the degree to which a refinery subsidy improves fuel security.

The Australian Automobile Association says improved fuel quality is necessary for Australians to access the latest engine technologies being sold to other first world nations.

AAA Managing Director Michael Bradley said: “Australia’s efforts to reduce noxious and greenhouse emissions from its vehicle fleet have been held back by the fact we’re being sold engine technologies designed for the fuel markets of Libya, Argentina, and Iraq.”

The presence of sulphur in Australian-refined fuel impairs the performance of pollution-reduction technologies used in modern vehicles. The Singapore-based energy consultant, Stratas Advisors, last year ranked 100 countries by fuel quality, with Australia claiming 85th place.

Mr Bradley said: “With the Government saying that our fuel quality challenges are soon to be solved, it is time to again seriously discuss the national policies required to drive Australia’s vehicle fleet transition.”

The refinery subsidy announced today will see taxpayers pay refiners to clean up their fuel and it will maintain Australia’s refinery capacity, but it’s impact on fuel security remains unclear.

Mr Bradley said: “COVID has crushed fuel demand globally and in Australia, it has hastened the demise of a refining sector that has for decades been losing ground to the newer, larger, more efficient, and cleaner refineries of Asia.”

As recently as 2010, Australia possessed seven refineries, but despite the Federal Government last year announcing this subsidy, we are now down to two and the prospect of Australia importing more than 80 per cent of its fuel into the future.

Mr Bradley said: “Protecting Australia’s remaining refiners sounds like a security solution until you consider they imported 81 per cent of the crude they refined in 2018-19.”

The website of the refiners’ lobby group, the Australian Institute of Petroleum raises questions about the subsidy’s security benefits, saying:

“Refinery closures have not weakened Australia’s supply security”, and “There is no significant difference in the supply risk between a crude and petroleum product shipment”.

Mr Bradley said: “The Government is right to be focussed on Australia’s need to comply with our International Energy Agency obligations, and it is right to be helping fund construction of an expanded network of fuel storage depots around Australia.

“The Government should also be congratulated for avoiding a funding mechanism that required a new tax or increased prices at the bowser.

“But if we are to significantly improve Australian fuel security, we need an integrated approach to fuel production, storage, technology transition, energy diversification, and emissions reduction.

“Fuel security can be bought, but we should reflect upon our recent history of subsidised car manufacturing and the relative benefit of enabling local adoption of fuels and technologies with the potential to not only improve fuel security, but also offer Australians greater vehicle choice, cleaner air, and cheaper household bills.”

The Australian Automobile Association says improved fuel quality is necessary for Australians to access the latest engine technologies being sold to other first world nations.

AAA Managing Director Michael Bradley said: “Australia’s efforts to reduce noxious and greenhouse emissions from its vehicle fleet have been held back by the fact we’re being sold engine technologies designed for the fuel markets of Libya, Argentina, and Iraq.”

The presence of sulphur in Australian-refined fuel impairs the performance of pollution-reduction technologies used in modern vehicles. The Singapore-based energy consultant, Stratas Advisors, last year ranked 100 countries by fuel quality, with Australia claiming 85th place.

Mr Bradley said: “With the Government saying that our fuel quality challenges are soon to be solved, it is time to again seriously discuss the national policies required to drive Australia’s vehicle fleet transition.”

The refinery subsidy announced today will see taxpayers pay refiners to clean up their fuel and it will maintain Australia’s refinery capacity, but it’s impact on fuel security remains unclear.

Mr Bradley said: “COVID has crushed fuel demand globally and in Australia, it has hastened the demise of a refining sector that has for decades been losing ground to the newer, larger, more efficient, and cleaner refineries of Asia.”

As recently as 2010, Australia possessed seven refineries, but despite the Federal Government last year announcing this subsidy, we are now down to two and the prospect of Australia importing more than 80 per cent of its fuel into the future.

Mr Bradley said: “Protecting Australia’s remaining refiners sounds like a security solution until you consider they imported 81 per cent of the crude they refined in 2018-19.”

The website of the refiners’ lobby group, the Australian Institute of Petroleum raises questions about the subsidy’s security benefits, saying:

“Refinery closures have not weakened Australia’s supply security”, and “There is no significant difference in the supply risk between a crude and petroleum product shipment”.

Mr Bradley said: “The Government is right to be focussed on Australia’s need to comply with our International Energy Agency obligations, and it is right to be helping fund construction of an expanded network of fuel storage depots around Australia.

“The Government should also be congratulated for avoiding a funding mechanism that required a new tax or increased prices at the bowser.

“But if we are to significantly improve Australian fuel security, we need an integrated approach to fuel production, storage, technology transition, energy diversification, and emissions reduction.

“Fuel security can be bought, but we should reflect upon our recent history of subsidised car manufacturing and the relative benefit of enabling local adoption of fuels and technologies with the potential to not only improve fuel security, but also offer Australians greater vehicle choice, cleaner air, and cheaper household bills.”

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