3. General
3.1 Purpose of Document
Biofuels are fuels that are derived from biomass (recently living organisms or their metabolic by-products). They are a renewable energy source, unlike petroleum fuels or fuel derived from coal or natural gas. In general, biofuels can be used as a substitute for, or additive to, petrol and diesel in most transport and non-transport applications. The most commonly used biofuels are biodiesel and bioethanol.
With the introduction of biofuels in New Zealand, aided by the Biofuels Sales Obligation from April 2008, and to build and maintain consumer confidence in the quality of biofuels it is necessary that appropriate regulated specifications are in place for biodiesel and ethanol. The ethanol specification should apply to both bioethanol and non-renewable ethanol. Biodiesel and ethanol specifications are not currently regulated in New Zealand. Petrol and diesel are regulated by the Petroleum Products Specifications Regulations (PPSR).
As for petrol and diesel, biodiesel and ethanol specifications should specify parameters to ensure consistency in fuel quality that is suitable for New Zealand's vehicle fleet, whilst addressing environmental, health and safety concerns. Specifications also provide certainty of expectations regarding fuel quality, which will protect consumers and help inform business planning and investment.
The purpose of this document is to discuss biodiesel and ethanol specifications appropriate for regulation in New Zealand. It also discusses diesel/biodiesel and petrol ethanol blends.
In considering the material covered in this document, it is important to keep the following key principles in mind:
- Biofuels should be of an appropriate quality for New Zealand's vehicle fleet.
- Quality standards should minimise impacts on the environment and public health.
- Biofuels should be competitive and affordable.
- Specifications should be performance based.
- The regulations should be consistent, where appropriate, with similar international fuels specifications.
While the focus of this discussion document is on the use of fuel in vehicles. It is recognised however that both petrol and diesel are used in a range of non-vehicular applications.
3.1.1 Next Steps
Once decisions on appropriate biodiesel and ethanol specifications have been made, the Petroleum Products Specifications Regulations (PPSR) will be re-issued under a new name incorporating these fuels and any other updates. This will likely be in early 2008.
As with petroleum petrol and diesel, specifications for biodiesel and ethanol will reflect the knowledge and experiences so far acquired. Thus, the process of standardising engine fuels of all natures can be regarded as a dynamic process, and so the specifications will be updated in future in line with domestic and international developments.
3.2 The Petroleum Products Specifications Regulations
The PPSR are issued pursuant to the Ministry of Energy (Abolition) Act 1989. They set a range of minimum requirements for the quality of petrol and diesel supplied in New Zealand. Each specified property has a corresponding limit and the test method used to measure it. Also included in the PPSR are requirements for retail fuel pumps and sampling.
The PPSR are very similar to fuel quality standards in Europe and Australia. The PPSR are considered to provide an appropriate level of protection for consumers while ensuring that the costs of supplying compliant fuel are reasonable.
The PPSR are available online, go to the regulations section of the New Zealand Legislation website and search for "petroleum products".
3.2.1 Retail vs. Non-Retail
The PPSR distinguishes between all fuel "supplied, or available or intended for supply" and fuel that is sold by retail. Retail sale is defined by the PPSR as the sale of fuel "to an end use who has no written supply agreement or written contract with the supplier". Fuel for retail sale must meet all the specification requirements of the PPSR. Petrol and diesel for all other types of sale must meet only those specifications that protect the environment, public health, and human safety; for example, the restriction on the use of lead in petrol and limits of sulphur levels.
This differentiation enables specially blended petrol and diesel fuel to be sold through commercial agreements, where there is a written agreement between the buyer and the supplier to supply fuel to specific requirements.
The PPSR includes an overarching "fit for common purposes" requirement for petrol and diesel sold by retail. This strengthens the level of consumer protection, particularly in relation to fuel quality problems arising from properties not directly specified. It is common practice for the oil industry to have more stringent requirements than those in the PPSR to ensure that fuel is fit for common purpose. The "fit for common purposes" requirement will also apply to retail biodiesel and ethanol, and associated blends.
3.3 Fuel Quality Testing
Petrol and diesel in New Zealand is currently monitored for quality compliance by the Measurement and Product Safety Service, a group within the Ministry of Economic Development (MED). Under its Fuel Quality Monitoring Programme, samples of petrol and diesel are collected from service stations around the country and tested to ensure that they meet the specifications provided in the PPSR. The penalty for non-compliance is up to $10,000.
The quality of biodiesel and ethanol, and blends, will similarly be monitored under the Fuel Quality Monitoring Programme.
3.3.1 Test Methods
Test methods for engine fuels have been developed by a number of internationally recognised standardisation organisations, including ASTM International (formerly the American Society for Testing and Materials), CEN (European Committee for Standardization), ISO (International Organisation for Standardization) and JIS (Japanese Industrial Standards). The American, European and Japanese fuel standards generally specify the ASTM, CEN and JIS and test methods respectively.
The PPSR predominately specifies ASTM test methods for petrol and diesel. It is understood that most testing in New Zealand uses ASTM test methods. The individual test methods to be specified in the regulations for biodiesel and ethanol are discussed separately under the relevant sections.
For all engine fuels, in the event of a dispute where more than one method is specified, the first method in the appropriate table will take precedence.
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