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Minister for the Environment, Water, Heritage and the Arts 2001-2004

The Hon Dr David Kemp, MP



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Media Release
Federal Minister for the Environment and Heritage
Dr David Kemp

15 June 2004

The Minister for the Environment and Heritage Dr David Kemp has welcomed the linking of fuel excise credits to environmental performance criteria, announced today by the Prime Minister.

The package of reforms reduces the excise tax burden on businesses and households, simplifies the tax rebate system, and provides a sound basis for future investment.

To ensure that these reforms also contribute to a better environment, they include three important environmental measures.

"The Greenhouse Challenge continues to provide a strong platform for industry in identifying and implementing cost effective abatement. This conditionality of excise payments demonstrates that all large energy users have a responsibility to ensure they manage their greenhouse emissions wisely," said Dr Kemp.

The excise reforms will follow a further tightening of vehicle emission and fuel standards, which are key actions for achieving lower air pollution. New low sulphur standards commence on 1 January 2005 for all grades of petrol and on 1 January 2006 for diesel. A further future step to lower sulphur is supported by incentives, announced in the 2003 budget, for the early production of 50 parts per million (ppm) sulphur in premium unleaded petrol expected from 2006 and 10ppm sulphur in diesel expected from 2007.

"Lower sulphur will mean much better air quality in Australia's cities. These reductions will have an immediate impact on particle emissions from the existing vehicle fleet, but of equal importance, they will give Australians access to the next generation of cleaner vehicle engines and emission controls," Dr Kemp said.

"Pollution from particulate matter will be immediately reduced by five per cent nationally with the introduction of 10ppm diesel. Reductions will increase as new vehicle technologies come on stream, designed to run on this virtually sulphur free diesel.

"This is the first time that government excise credits have been directly tied to environmental performance," Dr Kemp said.

"The excise reforms represent a clear example of good economic policy being coupled with good environment policy.

White Paper details are available at

Commonwealth of Australia