ACTING ASSISTANT SECRETARY, ENERGY SECURITY BRANCH
DEPARTMENT OF THE ENVIRONMENT AND ENERGY
NOTICE UNDER SECTION 17D OF THE FUEL QUALITY STANDARDS ACT 2000 CONCERNING A DECISION TO VARY APPROVALS GRANTED UNDER SECTION 13
OF THAT ACT
I, Dwayne Purdy, Acting Assistant Secretary, Energy Security Branch, delegate of the Minister for Energy and Emissions Reduction, provide the following information concerning my decision to vary a set of approvals granted under section 13 of the Fuel Quality Standards Act 2000.
Name of approval holders
- Viva Energy Australia Pty Ltd (formerly The Shell Company of Australia Limited),
granted on 11 October 2011 - Mobil Oil Australia Pty Ltd, granted on 24 May 2012
- Caltex Australia Petroleum Pty Ltd, granted on 24 May 2012
- BP Australia Pty Ltd, granted on 9 September 2014
Details of the variation
The listed approvals were granted to vary the Fuel Standard (Automotive Diesel) Determination 2001 to permit the supply of diesel biodiesel blends as specified in the original grants of approval or subsequent variations.
Pursuant to section 17D of the Act, the period of operation of each approval listed has been extended until 30 June 2020, or until both a revised diesel standard and a B20 diesel biodiesel standard have been put in place, whichever occurs first.
Period of operation
This variation comes into force on the date of signing and remains in force for each approval listed until 30 June 2020.
Summary of reasons for the variation
Having consulted with the Fuel Standards Consultative Committee as required by section 17D(3) of the Act, I grant the variation to each listed approval as provided for in section 15 of the Act for the following reasons:
a) The protection of the environment
Tailpipe emissions from diesel biodiesel blend use, compared to diesel, will have both positive and negative impacts on air quality as the level of biodiesel in the blend increases. In general, emissions of nitrogen oxides increase but particulate matter, hydrocarbons and carbon monoxide emissions all decrease.
b) The protection of occupational and public health and safety
In terms of safety data, diesel with up to 20 per cent biodiesel has been shown to be similar to diesel. Its impact on occupational and public health and safety should be no greater than diesel already supplied to the market.
c) The interests of consumers
As required under the original conditions of approval, the diesel biodiesel blends may only be supplied under contract to commercial users and not at forecourts. Fuel dispensers must also be clearly labelled to advise consumers that the diesel contains biodiesel to address any potential warranty issues.
d) The impact on economic and regional development
As the level of biodiesel has been capped at five per cent in the diesel standard and in the absence of a B20 diesel biodiesel standard, industry cannot legally supply blends containing higher than five per cent biodiesel. This results in a barrier to the development of an Australian alternative fuels market. If the extensions to the approvals are not granted, the restriction of blend levels could have a negative effect on the development of the Australian biodiesel industry.
The variation is granted subject to the conditions specified in section 17 of the Act.
Dwayne Purdy
Acting Assistant Secretary, Energy Security Branch
16 September 2019
Overview
The Fuel Quality Standards Act 2000 was enacted by the Parliament of Australia to establish a framework for the regulation of fuel quality, ensuring that fuels sold in Australia meet certain quality standards. This legislation was introduced to address the need for uniform national standards for fuel quality, ensuring environmental protection, consumer safety, and public health. The Act provides for the setting of fuel quality standards, the approval of fuel quality assurance schemes, and the regulation of the sale of fuels that do not meet the prescribed standards. In the context of the notice under section 17D of the Act concerning the variation of approvals, the policy objective is to balance the environmental benefits and potential risks of using biodiesel blends in diesel, while also considering the interests of consumers, occupational health and safety, and the development of the alternative fuels market in Australia. The variation aims to extend the period of operation of the approvals to facilitate the development of the biodiesel industry, subject to the conditions set out in the Act.
Scope and Application
The Fuel Quality Standards Act 2000 applies to entities and individuals involved in the production, supply, and distribution of fuel within Australia, particularly those granted specific approvals under the Act. This includes companies such as Viva Energy Australia Pty Ltd, Mobil Oil Australia Pty Ltd, Caltex Australia Petroleum Pty Ltd, and BP Australia Pty Ltd, as illustrated by the approvals granted to them for the supply of diesel biodiesel blends. The Act's jurisdictional reach is nationwide, governing the quality and standards of fuel supplied across the country. The Act provides for variations to these approvals based on specific criteria, such as environmental protection, occupational and public health and safety, consumer interests, and economic and regional development. Notably, the Act does not specify exclusions or exemptions within this particular variation but extends its application through subordinate instruments, allowing for adjustments in fuel quality standards and operational periods for those granted specific approvals.
Key Provisions
Under the Fuel Quality Standards Act 2000, the Acting Assistant Secretary, Energy Security Branch, has issued a notice varying certain approvals granted to fuel companies for supplying biodiesel blends under section 17D (paragraphs 1-3). The approvals vary the Fuel Standard (Automotive Diesel) Determination 2001 to allow the supply of diesel biodiesel blends. The companies granted variations are Viva Energy Australia Pty Ltd, Mobil Oil Australia Pty Ltd, Caltex Australia Petroleum Pty Ltd, and BP Australia Pty Ltd. The period of operation for each approval has been extended until 30 June 2020, or until both a revised diesel standard and a B20 diesel biodiesel standard have been established, whichever occurs first (section 17D).
The Act imposes certain obligations and requirements on the parties involved. The Acting Assistant Secretary must consult with the Fuel Standards Consultative Committee before varying the approvals (section 17D(3)). The fuel companies must supply the diesel biodiesel blends only to commercial users under contract and not at forecourts, and they must ensure that fuel dispensers are clearly labelled to inform consumers that the diesel contains biodiesel (section 17). This labelling is necessary to address any potential warranty issues.
The Act does not explicitly state any offences, penalties, or civil/criminal consequences for breach of the approval variations. However, failure to comply with the conditions of the approvals, such as supplying biodiesel blends to unauthorised users or failing to label fuel dispensers correctly, could result in regulatory action. Such action might include the revocation of the approvals, fines, or other enforcement measures under the Act. The precise penalties would depend on the specific breach and the applicable provisions of the Fuel Quality Standards Act 2000.