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Australians will soon have access to a range of cleaner and more efficient cars thanks to a $1.6 billion investment by the Federal Government to upgrade local fuel refineries.
With the injection of funding the two remaining fuel refineries - an Ampol site in Brisbane and a Viva Energy (formerly Shell) plant in Geelong - will improve fuel quality beginning in 2024, instead of 2027 as originally planned. The upgrades will see the sulphur content in Australian fuel reduced from its current level of 150 parts per million (ppm) in regular unleaded and 50ppm in premium petrol down to 10ppm.
The change has been hailed as a major win for several car brands that have been pushing the government to drive these changes through. One of the most vocal brands was Volkswagen, and the German brand’s managing director, Michael Bartsch, said the improved fuel would allow the company to offer its latest and most efficient powertrains.
“Volkswagen was the first and remains the foremost voice to call for the cleaning up of Australia's highly sulfurous petrol,” Bartsch said.
“Minister [Angus] Taylor's announcement this morning is potentially a big step forward to enabling Volkswagen to introduce the world's most advanced and efficient conventional engines. Though VGA is examining the details, we are eager to discuss this new direction with our factory.”
Whilst it’s too early for any brand to announce any definitive new model plans, the changes are likely to see more brands - but especially the European ones - offer a wider variety of powertrains.
Volkswagen is likely to introduce its latest 110kW 1.5-litre four-cylinder turbo petrol engine in the latest generation Golf, probably as a replacement to the carry-over engine in the upcoming entry-level model. But the brand is also now able to consider a range of its small capacity, Miller cycle engines that require the lower sulphur fuel; including the Golf 1.0 eTSI which is powered by a 1.0-litre in-line three-cylinder petrol engine with mild-hybrid system.
The improved fuel quality should also make it easier for brands to utilise powertrains featuring petrol particulate filters (PPF), which help reduce tailpipe emissions. While there are already some models in the country using a PPF - the Peugeot 308 GT was the first, followed by the Audi RS3 - most brands have opted to delete them from Australian specification vehicles due to the challenges of making them work reliably with the lower grade petrol.
While the upgrades to the refineries will produce better quality fuel and will likely lead to a price rise at the pump, it will give Australia an opportunity to move to Euro 6 emissions standards sooner than planned. Prior to yesterday’s announcement (and pending any official change) Australia was committed to making the switch from Euro 5 to Euro 6 in 2027, 12 years after Europe introduced the standard and a year after it is due to adopt stricter Euro 7.