Car and oil industries head for showdown

Date: 15/06/2000

By Renée Cordes

ENVIRONMENT chief Margot Wallström is considering calling for further mandatory cuts in the sulphur content of motor fuels, setting the stage for a fierce battle between car makers and oil refiners.

Under current EU rules, the sulphur content of fuels was limited to 150 parts per million (ppm) from the start of this year and is set to fall to 50 ppm in 2005. The restrictions are aimed at boosting the efficiency of catalytic converters, whose ability to cut polluting gases is hampered by high sulphur levels.

But Wallström has now asked interested parties to submit comments by the end of July on the environmental benefits of setting even lower limits on sulphur levels. The Commissioner has warned that further restrictions might be needed to reduce greenhouse gas emissions and acidification, which can erode buildings and create ground-level ozone.

If this approach is accepted, it could lead to the third installment of the EU's Auto-Oil programme, aimed at reducing air pollution, pitting car-makers who favour tougher rules on sulphur content against oil refiners who fear this would add to costs.

Germany, which plans to introduce national tax incentives for sulphur-free fuel by 2003, has asked the EU executive to investigate whether it would be possible to impose the same level across the entire 15-member bloc in 2007. Fuel with less than 10 ppm is normally considered sulphur-free.

Car-makers in Europe and beyond say they would welcome the introduction of lower EU-wide sulphur levels, mirroring standards in other parts of the world. "The only way to reach our emissions targets is to sell cars with modern direct-injection engines," said Darcy Nicolle, a spokesman for the Japan Automobile Manufacturers Association. "The purer the fuel, the better the machine will run."

But the oil industry is urging policy-makers not to rush to cut sulphur levels further, warning this might require heavy investments by refiners in new technology and add to transport costs.

Environment chief Margot Wallström is considering calling for further mandatory cuts in the sulphur content of motor fuels, setting the stage for a fierce battle between car makers and oil refiners.