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VW Aus slams government inaction on fuel standards

Fuel for thought: Volkswagen Australia believes the local market needs to embrace improved fuel standards or else “become a dumping ground” for dirty engines.

Lower-sulphur fuel and stricter emissions or Australia will be left behind: VW

General News logo25 Jun 2018

By DANIEL DeGASPERI

VOLKSWAGEN Group Australia (VGA) managing director Michael Bartsch has slammed the federal government for failing to regulate for cleaner fuel standards, insisting that the alarmingly high level of sulphur in local unleaded would not be compatible with more efficient next-generation petrol engines.
 
Mr Bartsch argued that vested interests were protecting local oil companies from investing in improved refinery technologies based on a scare campaign that this would increase fuel prices.
 
“Right now the best thing about our fuel standards is that we’re better than Tanzania, Bolivia and Uganda, and even Mexico is better than us,” Mr Bartsch told GoAuto at a media event in Sydney last week.
 
“The fuel companies are pulling wool over people’s eyes. The AAA (Australian Automobiles Association) making statements aligning themselves to the fuel companies in saying that if you move to low-sulphur fuels, it’s going to cost the buyer of vehicles more … it’s the complete opposite.
 
“Manufacturers are responding to building cleaner engines, but we can’t bring those engines in because the sulphur buggers up the particulate filters. (So) we’re becoming outsiders. It won’t be long before vehicles here are going to have to be produced purely for these really poor sulphur countries. 
 
“We’ll start getting lower common denominator products and, contrary to what the AAA will tell you and contrary to what the fuel companies will tell you, we will start paying more for the cars. Because we’ll be doing special testing and special runs, keeping old model lines alive and keeping old engines going to keep a few markets happy. 
 
“We’ll become a dumping ground. How long do you think that’s sustainable for a market that only sells one million cars per year?”
 
Europe has mandated sulphur levels of 10 parts per million (ppm, or milligrams per litre of unleaded) whereas Australia’s regular 91 research octane number (RON) fuel consists of 150ppm. Even premium 95RON contains 50ppm locally.
 
Although currently used to reduce the emissions output of diesel engines, particulate filters are starting to be introduced on petrol engines from a variety of Continental brands. And Mr Bartsch has clearly seen Volkswagen’s future model pipeline and what his Australian dealerships could miss out on.
 
In January 2018, the Australian government released a ‘Better fuel for cleaner air: draft regulation impact statement’ detailing four options for fuel quality regulation between 2020 and 2027 – including no change to fuel standards, harmony with the European Union, retaining 91RON and delaying 10ppm sulphur until 2027, as the Australian Institute of Petroleum (AIP) and AAA argued for. 
 
The New South Wales Environmental Protection Authority (EPA) also estimated that a reduction in sulphur from 50ppm to 10ppm would, by 2036, deliver in-fleet emissions reductions of 31 per cent and by 47 per cent annually. 
 
The draft regulation statement also said that improving fuel standards could save up to 82 lives per year between 2022 and 2040.
 
However, the AIP/AAA argued that Australia’s four ageing oil refineries would require significant upgrades that would be passed onto consumers via price increases. They further claimed that sulphur does not have to be reduced in order to meet stricter Euro 6 emissions standards (up from Australia’s Euro 5), however the Federal Chamber of Automotive Industries (FCAI) also refuted this. 
 
The cost-benefit analysis in the impact statement said that retaining 91RON, but otherwise conforming to EU standards was most the cost effective.
 
Either way, Mr Bartsch argued that Australia is already too far behind on fuel quality, owing to protecting the former local automotive industry.
 
“This go-slow that this country has been bound up in, because we’ve pandered to the local manufacturers here, is the net result of protecting Ford and General Motors and Toyota manufacturing here for too long,” he continued.
 
“They were not forced to move along and now we are paying the price. And I am talking beyond the Volkswagen brand here, I’m talking about being a citizen of Australia – I want clean air, I want the latest technology here.
 
“If I take that approach purely as an Australian citizen then I want to move as fast as possible to the removal of sulphur from the fuel, I want to be able to buy the most efficient cars as soon as I can, and I want the fuel companies moving in sync with the global standards that are available that are the benchmarks. I think that’s a fair request that any Australian should make.
 
“It has been a story of Australia since we ripped the wool off the back of sheep. We’ve got out of the gates fast, and once there has been vested interests put in place, then there has been a failure to move with the times, and this is another classic example. 
 
“We simply need to learn the lesson of history that putting our head in the sand and putting things off ultimately becomes more expensive. We’re just too slow to respond and we shouldn’t be.”
 
Mr Bartsch was aware of the irony that a managing director of Volkswagen, a brand caught up in a diesel emissions cheating scandal, could be seen to be speaking out about the reduction of emissions. 
 
However, he reiterated that those caught up in the scandal did not alter the views of himself or the stance of VGA – and he maintained that, in Australia, the lowest emitting vehicle brands were Audi, Volkswagen, Honda and Mercedes-Benz; and among the worst were Holden, Ford and Toyota.
 
The local managing director also went a step further, insisting that VGA also encouraged that Australia switches to the stricter World-harmonised Light-vehicle Testing Procedure (WLTP) for emissions regulation locally. 
 
The WLTP has been designed to be a more ‘real world’ representation of fuel consumption and will therefore increase current ratings. 
 
But Mr Bartsch said this was needed, despite the German giant facing significant production delays as it homologates its model range to the new standard.
 
“(WLTP) is only a short-term capacity issue,” he said.
 
“You can’t on the one hand insist that you have testing procedures that reflect real-world driving conditions, and then with the best of intentions the manufacturers and bodies that we assign responsibility to test and ensure those standards are being delivered … but then don’t allow it to be the compliant standard here in Australia, well, you can’t have your cake and eat it too.
 
“You can’t say we want a real-world testing environment but then end up with an environment here that doesn’t allow it. It’s too slow. When it’s something to do with front-line government legislation that then allows one to move, we’re too slow.”

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