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• 5. Ethanol and Blends

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• Regulating Biofuel Quality

5.1 Introduction

Ethanol (ethyl alcohol or the chemical compound C₂H₅OH) can be used as a fuel in neat form or high level blends in specifically designed vehicles or in conventional petrol vehicles when blended at low-levels. When used as a fuel, ethanol is generally denatured (made unsuitable for human consumption) so as to distinguish it from drinking alcohol and avoid the significant rate of excise that applies to alcoholic beverages.

Ethanol can be made in a variety of ways and is either bioethanol (made from biomass) or non-renewable ethanol (made from a non-renewable feedstock). Only bioethanol will count towards the Government's Biofuels Sales Obligation.²¹ Bioethanol is currently produced in New Zealand from whey. In the future it may be produced from other feedstocks such as wood waste. Overseas bioethanol is made predominately from sugar or maize.

There is no existing regulated specification in New Zealand for ethanol for blending with petrol. The Energy Efficiency and Conservation Agency (EECA) has however developed a voluntary specification based on the ASTM standard for denatured fuel ethanol (ASTM D 4806).

As for biodiesel, the conventional nomenclature for describing ethanol blends is EX where the X is the volume percent of ethanol in the blend, for example E100 is neat ethanol and E5 is a blend of 5% ethanol and 95% petrol.

The following sections discuss retail petrol/ethanol blends, a specification for ethanol for blending, non-retail petrol/ethanol blends and the use of E100 as a fuel, in that order.

5.2 Petrol/Ethanol Retail Blends

An ethanol content of up to 10% is generally considered the maximum suitable for use in conventional petrol engines. It is recognised however that not all petrol powered vehicles or equipment are suitable for ethanol blends up to 10%. The suitability of a particular vehicle for use with petrol/ethanol blends of different blend levels, as with appropriate octane requirements, varies and is best determined by the vehicle manufacturer or supplier.

Petrol/ethanol blends with up to 10% ethanol are permitted in a range of overseas jurisdictions including Australia, the United States, Canada and Thailand. A lower ethanol limit of 5% currently applies in Europe although increasing this to 10% is currently being considered. A 3% limit applies in Japan although there are also plans to increase this to 10% in the future. Brazil is the only major jurisdiction where over 10% ethanol is blended into petrol on a widespread basis, and Brazilian vehicles have been developed on that basis.

The PPSR allow for up to 10% ethanol to be blended with petrol for retail sale. Such blends are required to meet the specifications currently provided in Schedules 1 and 2 of the PPSR. It should be noted that since May 2007 the PPSR have included limited waivers for petrol/ethanol blends between 1% and 10% ethanol. These are to facilitate the blending of ethanol with existing petrol stocks. The waivers are as follows:

• Vapour Pressure: 7 kPa for summer and transition seasons;
• E70: Increase maximum by 1% per % ethanol; and,
• Flexible Volatility Index (FVI): Increase by 5 in transition seasons and by 15 in winter.

It is proposed that the ethanol component of a retail petrol/ethanol blend be required to meet the proposed ethanol specification discussed in the Section 5.3. The petrol component will also be required to meet the petrol specification and the blend will be required to meet the specification provided for petrol containing up to 10% ethanol.

5.3 Specification for Ethanol for Blending

5.3.1 Background

As noted above it is proposed that the ethanol component (E100) of any retail petrol/ethanol blend be required to meet a regulated specification for ethanol for blending. The rest of this section discusses that proposed specification.

A number of standards or specifications for fuel grade ethanol for blending with petrol are in use or development around the world. Prominent standards are shown in Table 7. All these standards apply to ethanol for blending with petrol and are for "anhydrous" ethanol, which means that the water content is minimised. "Hydrous" ethanol, which has a significant water content, is not suitable for blending with petrol but can be used as a fuel in neat form in specially developed vehicles and is discussed further in Section 5.5.

The voluntary specification for ethanol for blending with petrol developed by EECA uses ASTM D 4806 as a basis and requires that corrosion inhibitor also be added. ASTM D 4806 has been in place for a number of years and in addition to applying in the United States it has been used as the basis of standards in other jurisdictions including Canada, Australia and China. It has been updated over time, with the current version having been published this year.

The approach taken to the different ethanol standards/specifications vary in that some apply to denatured ethanol (ASTM D 4806 and the Draft Australian Standard) and some apply to undenatured ethanol (Pr EN 15376 and the Brazilian and Japanese specifications). They also have relevant to different blend levels. For example, whereas ASTM D 4806 and the Draft Australian Standard apply to ethanol used in petrol/ethanol blends of up to 10% ethanol, Pr EN 15376 is only for blends up to 5%. The Brazilian Specification applies to ethanol used in blends containing 25% ethanol.

As noted above it is proposed that a regulated specification be introduced for ethanol that is blended with petrol. Because it is not possible to determine all of the parameters of the ethanol component once it has been blended with petrol, suppliers would be responsible for ensuring that the ethanol met the specification prior to blending.

Specifications for ethanol used for blending with petrol apply to either denatured or undenatured ethanol. The approach taken in different jurisdictions depends on the nature of the relevant distribution system and where ethanol is tested for compliance. The advantage of a denatured ethanol specification is that fuel ethanol may only able to be traded or transported in that form (to avoid excise) and so it will likely be in that form immediately prior to being blended with petrol. The advantage of an undenatured specification is that different countries can have different requirements for denaturing ethanol.

As ethanol in New Zealand is required to be denatured to avoid being subject to alcohol excise duty it is assumed that the ethanol to be used for blending with petrol will be denatured. Accordingly it is proposed that the ethanol specification be for denatured ethanol. It is recognised however that distribution systems for ethanol have yet to develop significantly in New Zealand and so comment is sought on the appropriateness of the proposed approach.

ASTM D 4806, which forms the basis of the current voluntary EECA Standard and the Draft Australian Standard is considered to have the most relevance as a basis for an ethanol specification for New Zealand for the following reasons:

1. It is for denatured ethanol and is relevant to ethanol used in petrol/ethanol blends with up to 10% ethanol;
2. It has been widely used since 1988 and has been updated a number of times to take account of experience and technical developments; and,
3. New Zealand fuel suppliers and testing laboratories have significant experience with ASTM test methods.

5.3.2 Discussion of specific parameters for ethanol for blending

It is proposed that the regulated specification for ethanol for blending with petrol be a specification for high purity denatured anhydrous ethanol and be based on ASTM D 4806. The parameters of the proposed ethanol specification are discussed below.

The specification parameters provided in ASTM D 4806 and the Draft Australian Standard are shown in Table 8 below and form the basis of the discussion of individual parameters that follows. The Draft Australian Standard is generally only referred to when different from ASTM D 4806. The specification parameters provided in other ethanol standards noted above are not provided in the table but are referred to in the pursuing discussion where relevant.

5.3.2.1 Denaturant Content

As noted previously, some fuel ethanol specifications apply to undenatured ethanol and some to denatured ethanol. Those that apply to denatured ethanol (such as ASTM D 4806) tend to list approved denaturants and provide a lower minimum ethanol content to recognise the presence of the denaturant. ASTM D 4806 provides for denaturant content of between 1.96% and 5% by volume, which is substantially higher than that required in New Zealand.

Excise Item 99.35.45C of the Third Schedule to the Customs and Excise Act 1996 provides for duty free ethyl alcohol (ethanol) when denatured in accordance with a formula approved by the Chief Executive of Customs. A long list of approved denaturants are provided, including the addition of 1% by volume regular or premium grade petrol.²² It is proposed that only the addition of at least 1% petrol is permitted for denaturing ethanol for blending with petrol. Petrol is widely available and the use of petrol as the denaturant avoids the possibility of another denaturant having adverse impacts on fuel stability, fuel systems or engine operability. It is also proposed that denaturant content be limited to a maximum of 1.5%.

5.3.2.2 Ethanol Content

A minimum ethanol content is required to provide proper combustion and to ensure that other components that may have detrimental effects on operability or fuel performance are minimised. Higher ethanol contents are desirable from a vehicle operability point of view but increasing the purity beyond a certain point can have significant production cost implications with potentially few operability advantages.

ASTM D 4806 provides for a minimum ethanol content of 92.1% post denaturing. Allowing for the minimum amount of denaturant, the effective minimum ethanol content prior to denaturing is 94%. This is lower than that found in other standards. For example Pr EN 15376 requires a minimum content of 98.7% of ethanol and higher alcohols (discussed further below), giving an effective minimum required ethanol content of 96.7%. It should also be noted that as Pr EN 15376 applies to undenatured ethanol, the minimum ethanol requirement is higher as no denaturant is present. The Draft Australian Standard is based on ASTM D 4806 but only 1% denaturant is required in Australia for Customs purposes (as in New Zealand) and so the minimum ethanol requirement is increased to 95.6%.

It is proposed that the specification for ethanol for blending with petrol require a minimum ethanol content of 95.6%. This is essentially consistent with ASTM D 4806 after allowing for the reduction in the maximum denaturant content from 5.0% to 1.5%.

Higher alcohols can also be present in manufactured ethanol. They can be created during the fermentation process and removing them completely can impose significant costs. As these generally have little effect on operability at low levels and can be costly to remove, allowing a small amount of higher alcohols is considered appropriate.

Pr EN 15376 specifically allows up to 2% higher alcohols (C3 – C5) by volume and requires that at least 98.7% be either ethanol or higher alcohols. Neither ASTM D 4806 or the Draft Australian Standard impose a specific limit on higher alcohols but they are effectively limited to a few percent by other parameters. The presence of a small percentage of higher alcohols is unlikely to be harmful and so allowing a certain amount of higher alcohols whilst providing a high limit for both ethanol and higher alcohols could have some advantages. Nonetheless, to maintain consistency with ASTM D 4806 and the Draft Australian Standard it is not proposed that a specific parameter be provided for higher alcohols.

5.3.2.3 Methanol Content

Methanol (CH₃OH) can cause corrosion of metals and deterioration of elastomers.

ASTM D 4806 provides a methanol limit of 0.5% by volume whereas Pr EN 15376 allows up to 1%. The methanol content in the blend however will be the same as Pr EN 15376 is only for blends up to E5.

Blends up to E10 are allowed for retail sale in New Zealand and so it is proposed that a methanol limit of 0.5% by volume be imposed.

5.3.2.4 Solvent Washed Gum

Solvent washed gum can contribute to deposits on the surface of components, for example on carburettors, fuel injectors, intake manifolds and valves. The test for solvent washed gum measures the amount of residue after evaporation of the fuel and following a heptane wash. ASTM D 4806 provides a limit of 5 mg/100 ml, which is the same limit applied to petrol and petrol/ethanol blends under the PPSR.

It is proposed that a limit of 5 mg/100 ml be imposed for solvent washed gum.

5.3.2.5 Sulphate

Sulphates have been associated with service station pump filter clogging and fuel injection problems with some vehicles in the United States. To safeguard consumers a 4 mg/kg limit for sulphates was included within ASTM D 4806 in 2006. This limit was considered to provide sufficient safeguards whilst not creating significant problems for ethanol producers.

It is proposed that the regulated ethanol specification limits sulphates to a maximum of 4 mg/kg.

5.3.2.6 Water Content

The water content of ethanol for blending with petrol must be limited to reduce the risk of phase separation. Phase separation occurs because of the solubility of petrol, alcohol and water. The likelihood of phase separation occurring with a petrol/ethanol blend varies with changes in ethanol content, temperature and the level of aromatics in the petrol.

ASTM D 4806 permits a maximum of 1% water by volume but recommends that the production specification needs to be below 1% to allow for water-pick up in distribution.

New Zealand conditions and likely blend levels suggest that no more than 1% water content should be permitted and this is what is proposed. Any limit would apply up to when ethanol was blended with petrol and so it would be sensible for buyers and sellers to agree that at the time of production and delivery the ethanol contain significantly less than 1% water.

5.3.2.7 Inorganic Chloride Content

Chlorides are corrosive to metals used in fuel systems such as stainless steel. ASTM D 4806 provides a limit on inorganic chlorides of 32 mg/l whereas Pr EN 15376 provides a lower limit of 20 mg/l. Because of the possible impacts, vehicle and equipment manufacturers generally support a low limit for this parameter. The likely blend level is also relevant as chlorides blend linearly.

It is proposed that the ASTM D 4806 limit of 32 mg/l be included in the regulated ethanol specification.

5.3.2.8 Copper Content

Copper is an active catalyst for the low temperature oxidation of hydrocarbons, significantly increasing the rate of gum formation.

The majority of relevant ethanol standards provide for a maximum copper content of 0.1 mg/kg. Only the Brazilian Specification differs with a lower limit of 0.07 mg/kg. It should be noted however that Brazil allows significantly higher ethanol content in blends (25%) and so the effect of the ethanol on the blend is more significant.

A limit of 0.1 mg/kg appears appropriate and it is therefore proposed that this limit is provided for copper in the regulated ethanol specification.

5.3.2.9 Acidity

Dilute aqueous solutions of low molecular weight organic acids, such as acetic acid, are very corrosive to a wide range of metals and alloys. Accordingly it is necessary to keep such acids at a very low level and ethanol standards generally include an acid specification.

All relevant standards identified provide for an acidity (as acetic acid CH₃COOH) limit of 0.007 mass % maximum. This level appears appropriate and it is proposed that this limit is required in the regulated ethanol specification.

5.3.2.10 pHe

Low levels of strong acids might not always be detected by the acidity test and can contribute to the corrosion of some fuel system parts. Whilst total acidity (as acetic acid) is limited to 0.007 % mass, this is not always sufficient to detect more aggressive sulphuric based acids, and ethanol meeting the acidity requirement may still be of low pHe.

The test method for pHe measures acid strength and reports a pHe value. The pHe test is often done after denaturing and addition of corrosion inhibitors. Note that pHe is not directly comparable to pH values for water solutions.

All relevant standards identified require the pHe value of the ethanol to be between 6.5 and 9.0 and it is proposed that this is required by the regulated ethanol specification.

5.3.2.11 Appearance

All ethanol standards require that the ethanol be visibly free of suspended or precipitated contaminants. This is often expressed as requiring that the ethanol be "clear and bright". This is determined by visual inspection. It should be noted that fuels in New Zealand are not required to be coloured, as is the case in some jurisdictions for tax purposes.

It is proposed that the regulated ethanol specification require that ethanol for blending be clear and bright.

5.3.2.12 Sulphur Content

Ethanol is naturally low in sulphur when compared with refined petroleum products such as petrol. However, even at relatively low levels, sulphur can affect the performance of some emissions control equipment.

Sulphur limits for ethanol for blending with petrol tend to align with the sulphur limits applying to petrol in those jurisdictions. ASTM D 4806 limits sulphur to 30 ppm (mg/kg) whereas Pr EN 15376 limits sulphur to 10 ppm, which is the European petrol sulphur limit from 2009. The Japanese ethanol specification also limits sulphur to 10 ppm, making it consistent with the petrol sulphur limit.

The current sulphur limit under the PPSR for petrol is 150 ppm, but this is reduced to 50 ppm from 1 January 2008. Sulphur will ultimately be limited to 10 ppm, although the timing for this has yet to be determined.

It is proposed that the maximum sulphur limit for ethanol for blending be set initially at 30 ppm. This is consistent with ASTM D 4806 and the Draft Australian Standard and tighter than the petrol sulphur limit applying from 2008, meaning that the ethanol component won't cause a blend to be off specification. It is envisaged that the sulphur limit for ethanol will be reduced to 10 ppm when the petrol limit is reduced to 10 ppm to ensure that blends remain on specification.

5.3.2.13 Corrosion Properties

Petrol/ethanol blends can be more corrosive than petrol because of their tendency to attract water, and their conductive properties. Use of corrosion inhibitors can ensure that the corrosion properties of petrol/ethanol blends are no worse than that of neat petrol.

The Renewable Fuels Association (RFA) in the United States recommends the use of corrosion inhibitors at a treat rate sufficient to provide corrosion protection comparable to that of other available motor fuels. The RFA provides a list of eight corrosion inhibitors recommended for fuel grade ethanol but permits other corrosion protection additives of similar performance to be used.²³ The criterion used for inclusion of additives in the list is to add ethanol to an E rated gasoline (NACE Standard Test Method TM-01-72), the additive must then raise the NACE rating of the blend to B+ or better for the recommended additive treat rate.²⁴

To ensure that petrol/ethanol blends do not cause corrosion it is proposed that corrosion inhibitor be added so that the corrosion properties are no worse than that of neat petrol. It is not proposed that a specific list of corrosion inhibitors be provided. It would also be desirable to specify a test method for determining the corrosion properties of a petrol/ethanol blend.

5.3.3 Test Methods

It is proposed that test methods provided in ASTM D 4806 be included in the regulated specification. It is proposed to specify ASTM D 5453 as the only test method for sulphur. This is one of the methods already specified in the PPSR for testing sulphur in petrol and diesel. No test method is provided for denaturant content, the content is set by volumetric addition during the denaturing process.

The test methods proposed for ethanol for blending are shown in Table 9. Comments on these are sought.

5.3.4 Proposed Specification for Ethanol for Blending

The proposed specification for ethanol that is to be blended with petrol is shown in Table 9 below.

5.4 Non-Retail Petrol/Ethanol Blends

No limit on ethanol content is currently specified in the PPSR for petrol supplied via a written contract or supply agreement (i.e. non-retail). It is proposed that this approach continue. It should be noted, however, that use of ethanol blends above E10 would be subject to approval by the Environmental Risk Management Authority and compliance with any requirements.

The PPSR currently require that petrol/ethanol blends (regardless of the proportion of ethanol) meet the specification parameters provided for non-retail regular or premium petrol.²⁵ It is proposed that this requirement continue. As noted previously these parameters address primarily environmental and safety issues rather than engine operability issues. As such the purpose of requiring the neat ethanol in these blends to meet particular specifications would be instead to ensure vehicle operability.

Allowing flexibility with regard to ethanol used in non-retail petrol/ethanol blends might have some cost advantages. However, in the interests of building confidence in biofuels it is proposed that ethanol used for blending with petrol in non-retail blends (for example E20 or E85) also be required to meet the proposed specification for E100 discussed in this document. It is recognised that this specification is intended primarily for blends with up to 10% ethanol and that there is an ASTM specification for E85 (ASTM D 5798).

5.5 E100 as a Fuel

Neat ethanol can be used as a fuel, although vehicles must be specifically designed for this purpose. For example a large number of vehicles in Brazil (known there as "flex-fuel" vehicles but different from the E85 flex-fuel vehicles sold elsewhere) and some diesel engine buses in Sweden run on neat ethanol. The neat ethanol used in Brazil is "hydrous", which means it has a significantly higher water content than the "anhydrous" ethanol specification discussed in this document and is therefore unsuitable for blending with petrol due to phase separation issues.

Vehicles suitable for operating on neat ethanol are not currently available in the New Zealand market. It is therefore not considered necessary at this time to introduce a regulated specification for hydrous or anhydrous ethanol to be used a fuel in neat form (i.e. unblended).