Operation of the Fuel Quality Standards Act 2000

The Fuel Quality Standards Act 2000 (FQS Act) is the legislative basis for national fuel quality and fuel quality information standards for Australia. The FQS Act regulates the quality of fuel supplied in Australia and ensures that, where appropriate, information about fuel is provided where the fuel is supplied.

Fuel quality standards exist for petrol, automotive diesel, biodiesel and liquefied petroleum gas (autogas). A fuel information standard exists for ethanol, when blended with petrol.

The FQS Act sets out criminal and civil penalties for non-compliance with Australian fuel quality standards. The department’s monitoring, compliance and enforcement team takes fuel samples for testing against the appropriate standard and investigators take any necessary enforcement action.

The Fuel Standards Consultative Committee is an advisory body to the minister on fuel matters. The committee is established under the FQS Act and the minister appoints members from each state and territory, the Commonwealth, and various organisations with interests in fuel production and supply, vehicle manufacturing, consumer concerns and environmental protection.

When a state or territory has fuel quality standards in place, the Commonwealth standards operate concurrently. State or territory standards apply when they regulate a fuel characteristic not covered by the Commonwealth standards.

The minister may vary fuel standards on a short-term basis and for longer periods after consultation with the committee.

The minister must keep a Register of Prohibited Fuel Additives. There are currently no entries on the register.

Under the FQS Act, fuel suppliers must keep appropriate records and provide annual statements to the department.

Fuel pump.

Purpose

The purpose of the FQS Act is to regulate the quality of fuel in Australia to:

• reduce the level of pollutants and emissions arising from the use of fuel that may cause environmental and health problems
• facilitate the adoption of better engine and emission control technology and allow for more effective operation of engines
• ensure that appropriate information about fuel is provided when it is supplied to the public.

The Fuel Quality Standards Regulations 2001 (FQS Regulations) cover the regulation of fuel and fuel additives; the operations of the FSCC; the publication of notices about entries in the Register of Prohibited Fuel Additives; enforcement, and record keeping and reporting obligations.

Operation

Fuel quality standards

Fuel Quality Standard Determinations set specific standards for petrol, automotive diesel, biodiesel and autogas. The determinations specify standards for a range of parameters, which address both environmental and operational performance.

The review of the Fuel Standard (Autogas) Determination 2003 progressed during 2010–11, after submissions were made on the public discussion paper in January 2010.

Amendments to the Fuel Quality Standards Act 2000

The department is pursuing a series of amendments to the FQS Regulations to support the amendments to the FQS Act and respond to emerging trends in the fuel industry with fuel blends. The amendments to the FQS Regulations are expected to be finalised in the second half of 2011.

The next statutory review of the FQS Act is due to begin in the second half of 2011.

Compliance and enforcement

The Australian Government runs a fuel sampling program to monitor the quality of fuels sold in Australia. Fuel samples of all grades of fuel covered by the standards are taken throughout the fuel supply chain in all states and territories. The monitoring program takes representative samples in each of the fuel markets around Australia, and uses information obtained from consumers about poor quality fuel.

Fuel sampling is undertaken at distribution terminals, depots, service stations and other outlets. Samples are screened for compliance with the standards and if required, are further tested at an independent laboratory accredited by the National Association of Testing Authorities. Testing methods are accredited to international standards.

During 2010–11 the department’s fuel quality inspectors tested 2 983 petrol, diesel, biodiesel and autogas samples from 623 sites across Australia. A total of 207 fuel quality compliance incident reports were received from consumers. In comparison, 3 302 samples were taken during 2009–10 from 865 sites, and 264 compliance incidents were reported.

Test results indicate a high level of compliance with the fuel standards. Where non-compliance is detected, further compliance action, ranging from education to prosecution, is undertaken.

On 25 May 2011 the Federal Court ordered that Fullport Pty Ltd only supply diesel with a flashpoint greater than 61.5°C. The order was made for two years and the company was required to pay costs.

On 18 May 2011 the EG Khoury Group Pty Ltd gave an undertaking to the Federal Court, on a without admission basis, that it will only supply diesel fuel that meets the diesel standard. The undertaking is for two years and the company was required to pay costs.   

Audits of the terms and conditions of approvals to vary fuel standards under section 13 of the FQS Act are also conducted by fuel quality inspectors. During 2010–11, 15 audits were completed. The results indicate a generally high level of compliance.

Freedom of information

Two freedom of information request were received during 2010–11 involving the FQS Act and Regulations.

Administrative Appeals Tribunal

No Administrative Appeals Tribunal appeals were received.

Reporting

This section fulfils the reporting requirements of the Fuel Quality Standards Act 2000 (section 71) for the period 1 July 2009 to 30 June 2010.

Monitoring and evaluation

Fuel Quality Standards Act 2000 review—no action in this year.

Financial information

The department’s 2010–11 operating costs for the FQS Act, including staff salaries and allowances, consultancies, advertising and other related expenses, were $3.1 million.

Committees

Section 24 of the FQS Act establishes the Fuel Standards Consultative Committee as a formal consultation mechanism. The committee is required to include one representative from each state and territory and the Australian Government. It must also include one person representing fuel producers, one representing a non-government body with an interest in the protection of the environment, and one representing the interests of consumers. The minister may also appoint other members to the committee. In 2010–11 the committee included representatives from the motor vehicle manufacturing industry, independent fuel importers and suppliers, the alternative and renewable fuels industry, and the truck manufacturing industry.

Table 1 lists members of the committee during 2010–11.

During 2010–11 the committee had two formal meetings—September 2010 and March 2011. The committee also considered several issues out-of-session in July and December 2010 and in June 2011.

Under section 24A the minister must consult the committee before:

• granting an approval
• making a fuel quality standard
• making a fuel quality information standard
• deciding whether to enter a fuel additive to, or remove a fuel additive from, the Register of Prohibited Fuel Additives
• preparing guidelines for more stringent fuel standards.

Under section 13 of the FQS Act, the committee also provides advice on applications to vary fuel standards, including recommendations on the conditions to be applied. In 2010–11 the committee considered and made recommendations on 12 new applications under section 13 (see Table 2). Eight of these were for the supply of racing fuels, three were for the supply of diesel containing biodiesel and one for the supply of biodiesel. A total of $345 750 in fees was collected from applicants seeking approvals.

The committee also made a recommendation on an application to extend approvals for 20 per cent biodiesel content in diesel (B20) from 1 March 2011 to 30 June 2012, when a fuel quality standard for these fuels is expected to be in place.

Additionally the minister approved six applications to add regulated persons to approvals. These applications do not attract fees and do not require consultation with the committee.

Australian Government fuel quality testing.

Approvals granted in 2010–11