///ACFA NEWS

ACFA NEWS interviews Ms. Heidi Hautala, Member of the Finnish Parliament, who provides an insight on the European Union (EU) Auto-Oil Programme as well as her views on the Asian MTBE industry.[:]

From 1995-2003, Ms. Hautala was a Member of the European Parliament and acted as a
rapporteur for several fuels directives including sulphur content of marine fuels, sulphur content of petrol and diesel fuels, quality of petrol and diesel fuels, and reduction of the sulphur content in petroleum-based fuels. Today, Ms. Hautala has returned to national politics but continues to partake in the ongoing discussion of the future of fuels as well as to promote cleaner fuel alternatives.

(Q) Ms. Hautala, you have been involved with the EU Auto-Oil Programme. Could you tell us its key objectives and some success stories?

The EU Auto-Oil Programme brought the auto and oil industries around one table, as there had been such a deep division between them about the burden-sharing of costs to clean air. The programme was based on scientific models that were not entirely undisputed, however. When the proposals reached the legislators in the EU, the Parliament and the Council of Ministers (which represents the 15 member states’ government), we in the Parliament felt they were asking a bit too little of the oil industries in relation to what would be possible to reach by improving key specifications of transport fuels. The Parliament organized hearings and spoke to a large number of stakeholders and decided to support a more stringent set of specifications.

It was understood that reducing sulphur was essential as it enabled the functioning of modern engines, in particular after-treatment technologies. The legislation also respects the industries’ need for proper lead-time to fulfill the legal requirements. This is why the Parliament also added specifications for the year 2005, matching with EURO 4 for car emission standards, seven years ahead of the target year. Since some South-European
member states of the EU had more difficulties reaching the targets, a possibility for derogations (short transition time delays between one and three years) for some
specifications (lead and sulphur) was accorded, without sacrificing the overall ambition of the legislation.

A further step of the fuel quality standards followed in 2003 for the year 2009, bringing sulphur levels of transport fuels to close to zero, and anticipating the alignment of non-road fuel and road fuel sulphur standards by about the same year. A review in 2005 will
take a more look at the need to improve other specifications. It must be emphasised that from now on, in Europe, the challenge is to tackle CO2 emissions from transport, which are stable or growing because of increasing road transport. The technical means to
reduce CO2 from cars are not significant.

The success story? It is simply this: By striking what is thought to be a just balance in burden-sharing between the key industries, traditional pollutants from transport
have been reduced to just a fraction since the early 1980´s. The EU Auto-Oil programme resulted in the best fuel quality and the most stringent car emission standards in the world, and both are now the model for many other regions in the world, including Australia and Asia. Throughout the years, there has been a close cooperation between the authorities in the United States and Europe to keep similar pace in fuel quality developments.

(Q) Most countries in Asia are planning and implementing clean fuel standards. To this end, what can Asian countries adopt from the EU Auto-Oil Programme and the success of fuel policies and specifications in the EU?

I believe that the Asian countries could save a lot of time and efforts by following the EU decisions on the burden-sharing of costs between the auto and oil industries. In China, I have seen that the auto makers are quite impatient to have cleaner fuels to cost-effectively match the requirements of the new engines and air quality standards. The fast growing economies will cause a lot more pollution with the expansion of car fleets. It is advisable that, from the beginning, the Asian governments take a comprehensive approach to transport related pollution problems. This means mobility managements, road pricing, support of public transport schemes, etc. are essential by the side of technical improvements of fuels and engines. I was certainly shocked to learn recently that Shanghai is prohibiting bicycles from its main streets!

(Q) In your opinion, will alternative fuels play a significant role in the next 10-15 years or will cleaner gasoline and diesel still dominate the transport fuels industry? What would be the linkage between EU and Asia?

Alternative fuels such as biofuels and LPG can play an important role, especially in local captive fleets because of the possibility to organise the distribution of fuel efficiently. Agriculture producers in Europe are very eager to promote biofuels to reduce greenhouse gas emission, but unfortunately they are not always very cost efficient, which is the stated merit. So I would say that cost efficiency studies and environmental impact assessments must be made properly to assess if it makes sense to invest in biofuels – or rather in other ways to reach the same environmental goals.

I assume that we are all waiting for the fuel cell car run by hydrogen, but it will still take some time to be truly commercialised. So I would say that meanwhile we will have to live mostly with traditional transport fuels and improve their quality. The linkage between EU and Asia is very obvious, not only because the EU wants to support Asian countries to learn from its experiences in air quality, but also because many European car makers are already very present in Asia. European consumers would certainly want to see that the technology used for Asia is as good as for Europe.

(Q) What are your views on the EU Risk Assessment on MTBE? Do you think the use of MTBE as a fuel component will continue to prevail in the EU and Asia due its unique properties? What are the main reasons?

MTBE can be a very cost-efficient component in cleaner gasoline to reduce air pollution from cars, specifically and very importantly from old cars. The EU has conducted
a comprehensive risk assessment. The conclusions are that MTBE is not a human health hazard, but due to its water solubility it leaks to ground water far more quickly than
other fat-soluble components of gasoline. As said, it is not toxic but it does spoil groundwater taste and gives it an unpleasant odour. This is why it is not advisable to use
MTBE in gasoline if it is not possible to repair leaking storage tanks. It is important that authorities conduct such a leaking tank problem assessment and add the cost of the repair programme into their cost-benefit analyses before taking a decision to allow MTBE to be added to gasoline.

The EU has not banned the use of MTBE since it is mainly a leaking tank problem, unlike what we have seen in the US. But it has allowed certain areas to put restrictions in place as needed to protect groundwater. Of course, some producers are turning to MTBE alternatives, but it must be stated that their air quality benefits may not always be as good. In the US, the powerful agriculture lobby has used the opportunity for vast expansion of the use of grain-based ethanol. One must see the various economic and political interests behind each alternative!