Select Committee on European Scrutiny Ninth Report


COM(01) 241

Draft Council Directive on the quality of petrol and diesel fuels and amending Directive 98/70/EC.
Legal base: Article 95 EC; co-decision; qualified majority voting
Document originated: 11 May 2001
Forwarded to the Council: 11 May 2001
Deposited in Parliament: 20 June 2001
Department: Transport, Local Government and the Regions
Basis of consideration: EM of 24 July and SEM of 19 November 2001
Previous Committee Report: None
To be discussed in Council: 12 December 2001
Committee's assessment: Politically important
Committee's decision: Cleared


  15.1  In 1998, the Council adopted, as part of its so-called "Auto Oil" proposal, Directive 98/70/EC,[40] which set various quality standards for petrol and diesel fuels, aimed at complementing other measures intended to improve emission standards from road transport. In particular, the Directive prohibited the marketing of leaded petrol from 1 January 2000, subject to a derogation allowing its use under exceptional circumstances until 1 January 2005. It also allowed, with effect from 1 January 2000, the marketing of unleaded petrol and diesel meeting certain detailed standards, coupled with the requirement for all such petrol and diesel to meet those standards by 1 January 2005. However, although the latter include a maximum sulphur content of 50mg/kg (parts per million), the specification is in other respects incomplete. The Commission is therefore required to review it, and to make a further proposal in the light of air quality needs and the progress in vehicle emission abatement technology. The results of that review are set out in the current proposal.

The current proposal

  15.2  In presenting its proposal, the Commission notes that, in a Communication[41] last year, it said that, although large improvements in urban air quality can be expected by 2010, a number of environmental objectives will still not be met, with important challenges remaining as regards particulate matter, ozone levels, and localised levels of nitrogen dioxide. It says that the Council subsequently endorsed the conclusion in the Communication that further action was needed to tackle these problems, and invited it to bring forward proposals to cover the fuel specification for 2005, and to encourage the progressive and harmonised introduction of fuels with the lowest possible content of sulphur. The Commission was also asked to make efforts to reduce particulate emissions, to commence work on additional vehicle emission standards to come into force by 2010, and to consider the ongoing use of Methyl Tertiary Butyl Ether (MTBE)[42] in petrol.

  15.3  In considering its proposal for sulphur, the Commission says that some Member States and fuel producers had already indicated their intention to introduce zero sulphur fuels, and, in view of this, it launched a consultation exercise in May 2000. This showed that sulphur in fuels can impair the effectiveness of several existing and emerging technologies. For example, although EURO IV emission standards[43] for petrol cars can be attained using the 50ppm sulphur fuel quality set for 2005, zero sulphur petrol will lead to a 1-5% improvement in the fuel economy of new cars, and to lower emissions of conventional pollutants from the existing fleet: similar benefits arise in the case of diesel. On the other hand, the production of zero sulphur fuel increases emissions of carbon dioxide from refineries, and, were all fuels to be zero sulphur, such emissions across the Community could rise by about 5% (or 4.6 million tonnes) a year.

  15.4  Notwithstanding this last consideration, the Commission is now proposing that sulphur-free fuels (defined as those containing less than 10 parts per million (ppm) of sulphur) must be available in Member States by 1 January 2005, and that, by 1 January 2011, all petrol and diesel sold should be sulphur-free. However, it also suggests that, in the case of diesel, the latter date should be subject to a review to be carried out by 31 December 2006. In addition, the proposal requires that the sulphur content of fuel used in non-road mobile machinery and agricultural tractors should be limited to 2000 ppm, reducing to 1000 ppm in 2008.

  15.5  These proposals would be complemented in two ways. First, Directive 98/70/EC specifies the measurement methods used to verify compliance with the limits set, and these are developed by the Committee for European Normalisation (CEN), a technical body specialising in this type of work. The Commission is proposing that Member States should in future be bound by changes to specified CEN methods in order to avoid having routinely to update the Directive. Secondly, it wants there to be an obligation on Member States to establish a monitoring system to ensure that CEN standards are attained, and to prescribe penalties for non-compliance with national law giving effect to the limits set out in the directive.

  15.6  The Commission says that the proposal to allow zero sulphur fuel by 1 January 2005 is consistent with the entry into force then of the new EURO IV vehicle emission limits and the requirement of some new automotive technologies to use such fuels in order to attain those limits. It should also assist manufacturers meet their voluntary commitments to reduce average carbon dioxide emissions of the new car fleet to 140 grammes per kilometre by 2008. It acknowledges that the initial quantities needed will vary between Member States according to levels of new vehicle sales, but says that it is important for sufficient quantities to be available in order to permit the free circulation of these new vehicles, without compromising the capacity of producers to supply fuels complying with the 50 ppm sulphur limit.

  15.7  Nevertheless, the Commission adds that the optimum saving in greenhouse gas emissions will be achieved by phasing in zero sulphur fuels to match the quantity required by new vehicles, so as to avoid unnecessary additional costs and emissions of carbon dioxide at the refineries, but that, in the case of conventional air pollutants, optimal reductions are obtained by full market penetration of such fuels as soon as possible, particularly for petrol vehicles. It says that, as it is difficult to predict how refinery technologies will advance, the magnitude of the costs and additional carbon dioxide emissions from refineries are uncertain, but it suggests that there are already several promising approaches for petrol which appear to have substantially less impact on emissions (and that there is likely also to be further optimisation in the case of diesel).

  15.8  Against this background, the Commission considers that its proposal for full penetration of zero sulphur petrol by 1 January 2011 will give a suitable mix of conventional air quality benefits, fuel cost savings, and overall carbon dioxide emissions. However, in the case of diesel, it recognises that, unlike petrol, the distribution infrastructure is designed for a single grade of product, and that the supply of two grades may introduce additional costs. Consequently, although it regards this deadline as giving a clear signal for diesel, it sees the proposed review as enabling account to be taken of any technological developments in the meantime in both refining and vehicles.

  15.9  As regards the non-sulphur parameters, the Commission says that increasing use of exhaust after-treatment devices means that the relationship between such parameters and emissions has become less apparent, and that its current information relates essentially to the existing generation of vehicles. It is not therefore proposing any changes to the non-sulphur parameters laid down in Directive 98/70/EC, though it intends to keep these under review. Likewise, it regards any issues arising from the use of MTBE as best considered within the Water Framework Directive (2000/60/EC), and consequently is not proposing any amendment to Directive 98/70/EC.

The Government's view


  15.10  In his Explanatory Memorandum of 24 July 2001, the Parliamentary Under-Secretary of State at the Department for Transport, Local Government and the Regions (Mr David Jamieson) said that the main aim of the proposal is to facilitate new fuel-efficient technology. He pointed out that the motor industry regards fuel of this quality as being essential to help it meet environmental targets, and that the proposal would enable it both to optimise the fuel consumption of future vehicles (reducing carbon dioxide emissions in the medium to longer term) and to improve emissions from existing vehicles. He suggested that there would be a small increase in the cost of manufacturing fuel to this quality, but that there would be a benefit to consumers, with the promise of improved fuel economy.

  15.11  The Minister also said that the Government was considering the detailed implications of the proposal, including ways of encouraging the availability of the fuel, and that it would be providing a Regulatory Impact Assessment. In the meantime, he had provided an initial estimate of the costs and environmental benefits. This suggested that the former would arise as a result of the additional investment and operational costs at refineries, which in the UK were provisionally put at £1 billion, equivalent to an annual £117 million cost increase over a 15 year investment period. This translated into an increased fuel cost of 0.15p per litre for petrol and 0.42p per litre for diesel, though the Minister pointed out that new refining technologies referred to by the Commission promised sulphur removal at substantially lower cost with minimal carbon dioxide increase. In that event, the £1 billion figure was likely to be a maximum value.

  15.12  The Minister said that, for motorists using sulphur-free fuels in current vehicles, the increased fuel costs, if passed on directly to the consumer, would result in an estimated annual increase of roughly £2.60 for a typical car and about £250 for a heavy truck. However, there would be annual savings of £34 and £907 respectively for new vehicles, and the reduction in emissions of nitrogen oxides and particulates from existing vehicles would have a direct benefit for human health and the environment. There would be no financial implications for non-road mobile machines and tractors in the UK, as they were already supplied with fuel conforming to the proposal.

  15.13  The Minister said that the implications for fuel quality monitoring had yet to be established, but that the proposal would require a comprehensive national system to be established and funded appropriately.

Supplementary Explanatory Memorandum of 19 November 2001

  15.14  The Minister has now provided a Regulatory Impact Assessment under cover of his Supplementary Explanatory Memorandum of 19 November 2001. In part, this confirms the figures in paragraphs 15.11 and 15.12 above, but it also provides a more detailed analysis of the overall impact of the proposal. As regards the benefits, it points out that road transport accounts for about 25% of all UK emissions of carbon dioxide, and that the reduction arising from the use of sulphur-free fuel would make a major contribution towards mitigating the likely changes in the world's climate and meeting the Government's Climate Change Programme. It puts the potential savings at around 0.2 million tonnes of carbon a year, though it says that, with increased efficiency, these could rise to 0.3-0.4 million tonnes by 2020. However, it also points out that, in the short term, the savings could be matched by the increase in carbon emissions at refineries arising from the production of zero sulphur fuels, though it expects the latter figure to decrease over time as improved refinery technology becomes available. So far as other pollutants are concerned, the Assessment estimates that the introduction of sulphur-free petrol would decrease nitrogen dioxide emissions in 2010 by about 5%, which might have a particularly significant impact in those areas where current concentrations are highest, and that particulate matter emissions by 2010 would be reduced by around 300 tonnes a year, implying a gain of 3,000 to 7,000 life-years.

  15.15  The Regulatory Impact Assessment also examines the potential costs of enforcing and monitoring the new arrangements. It points out that there are nine or ten grades of road fuel, and that, although the sampling requirements would vary according to sales volumes, there could be a minimum UK sampling requirement of 360 for petrol and diesel, plus a further 100 for gas oil. Sampling costs have been put at £500 for a full analysis, and about £200 for gas oil, resulting in an overall annual cost of £180,000-200,000 (though the Assessment points out that this could in practice be as high as £330,000-370,000 if CEN procedures were adopted). In addition, a charge of £15,000 a year might be needed to administer the scheme.


  15.16  This is an important proposal in its impact both on private and commercial transport and on the environment. In the former case, we note that the extra costs for existing cars are likely to be limited, and that there should be cost savings both for private and commercial new vehicles: in the latter case, we note that the net reduction in carbon dioxide emissions expected eventually depends on certain assumptions regarding both increases in vehicle efficiency and future levels of emissions from the refineries, whereas there appear to be clear benefits as regards emissions of nitrogen dioxide and particulates. Having said that, we believe that the various issues which arise from the document have been brought out clearly by the Commission and in the material provided subsequently by the Government. We are therefore clearing it.

40   OJ No. L 350, 28.12.98, p.58. Back

41   (21714) 12321/00; HC 23-xxxi, paragraph 23 (29 November 2000). Back

42   This is a chemical containing oxygen which is blended into petrol primarily to boost octane rating, allowing other high-octane components to be substituted. Although it does not pose any risk to human health, it is readily soluble in water, and its odour and taste can render undrinkable ground water contaminated by leakages. Back

43   Those complying with the requirements of Directives 98/69/EC and 1999/96/EC. Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 18 December 2001