Editorial

Dear Reader,

Welcome to the first edition of the new EFOA Newsletter. After a gap of more than five years, we have decided to relaunch the newsletter in an electronic format, and aim to produce three issues a year from now on.

Over the past five years, ethers such as MTBE, ETBE and TAME have experienced fluctuating fortunes. On the one hand, the European fuel specifications stemming from the 1998 Auto/Oil directive (implemented in 2000) have highlighted the benefits of ethers, which help the refining industry meet the challenges of supplying ever-cleaner fuels. At the same time, MTBE remains the subject of heated debate, essentially in the United States. Yet there has been a growing scientific consensus on the safety of MTBE, emphasised by the very recent publication of Europe's Risk Assessment report on MTBE. The controversy surrounding MTBE has led EFOA to adopt a much higher public profile. We have changed from being a specialist industry association with a limited audience, into a more vocal advocate of fuel oxygenates and the main point of contact for accurate technical information.

Exactly a year ago, we launched EFOA's website, which includes the MTBE Resource Guide, a comprehensive source of up-to-date information and expertise. The past two years in particular have been a period of intense activity for EFOA and its members, as industry provided data to the European Competent Authorities who had the task of preparing the MTBE Risk Assessment Report, monitored the completion of the Auto/Oil II programme and the adoption by the European Parliament of amendments to Directive 98/70/EC on fuel specifications, and continued to co-operate with all stakeholders interested in ethers, their benefits and their impact.

Our redesigned newsletter provides coverage of these and other important issues affecting the European fuel oxygenates industry. We hope you find the articles useful, and would appreciate your feedback on our new publication.

Yours sincerely,

Bruno Hé²¹
Director General, European Fuel Oxygenates Association
Email: efoa@efoa.org

Risk assessment conclusions based on sound science

An important milestone was passed on 4 December 2001, when the EU published in its Official Journal the overall conclusions of the Risk Assessment Report on MTBE.

After considering all the available scientific and technical information, based on more than 20 years of MTBE usage and research, the EU has concluded that MTBE is not expected to have any harmful impact on human health or the environment. A more detailed summary of the main conclusions is provided in the box below.

EFOA worked closely with the report's authors throughout the assessment process and supports the final conclusions.
"All the latest scientific data has been taken into account," says Hilkka Vahervuori, lead member of EFOA's risk assessment task force. "As a scientist, I am satisfied that the conclusions are based on sound scientific evidence."

Conducted by the Finnish competent authorities, who acted as Rapporteur on behalf of the 15 Member States, the MTBE risk assessment process began in 1997 and was carried out in two stages. Firstly, all known data on the health and environmental effects of MTBE, together with the potential for exposure, were evaluated in order to determine the overall risk, and the findings set out in a Risk Assessment Report. Secondly, in areas where risks were identified, the authorities recommended methods of minimising those risks. Their recommendations are listed in a separate Risk Reduction Strategy Report, and will be included in future EU legislation. The complete text of both reports will be published by the European Chemicals Bureau.

"Despite many previous scientific studies indicating that MTBE has no adverse effects on human health, there has still been a great deal of concern about its safety," says Bruno Hé²¹, Director General of EFOA. "The EU's authoritative report represents the state of the art in terms of assessing the risks of MTBE. We hope its conclusions will reassure the public and governments that MTBE is a safe component of cleaner fuels, with a key role to play in improving air quality. Liaising with the European competent authorities and providing them with detailed technical information has formed a large part of EFOA's activities over the past few years. We are pleased with the outcome of the risk assessment process, and feel that the EU's report provides a balanced and objective overview of the risks associated with MTBE. EFOA is supporting the conclusions and recommendations of the Rapporteur and will co-operate with all stakeholders to facilitate their implementation".

For further information:

• Description of the Risk Assessment Process available from the ECB (European Chemicals Bureau, Institute for Health and Consumer Protection of the Joint Research Centre in Ispra, Italy):
  http://ecb.jrc.it
• EU Official Journal conclusions of the MTBE Risk Assessment:
  http://europa.eu.int/eur-lex/pri/en/oj/dat/2001/l_319/l_31920011204en00300044.pdf
• The full text of the Risk Assessment Report is published by the ECB under:
  http://ecb.jrc.it/
  
  

 

Auto Oil 2 Directive : Fuel quality proposals put emphasis on sulphur content

Agreement on detailed fuel specifications for the year 2005 came a step closer on 29 November, when a key report on petrol and diesel fuel quality was adopted in first reading by the European Parliament. Produced by Heidi Hautala, MEP, the report reviewed and added further amendments to the proposals amending Directive 98/70/EC on fuel quality that were issued by the European Parliament in May 2001.

Adoption of the Hautala report is the latest stage in a continuous process of research, negotiation and legislation, which began with the first European Auto/Oil programme in the early 1990s. This programme's findings were incorporated into Directive 98/70/EC, which set out fuel quality specifications to take effect in two phases, the first starting on 1 January 2000 and the second on 1 January 2005.

However, the specifications for the latter phase were incomplete, so a second Auto/Oil programme was launched in 1997, to provide the analytical basis for detailed vehicle emissions and the remaining fuel parameters for 2005 e.g. olefins, cetane number, density, distillation. This second Auto/Oil programme accepted the maximum limits for sulphur and aromatics in petrol specified for 2005 by Directive 98/70/EC, and focussed instead on reducing ambient levels of particulate matter, nitrogen oxides and tropospheric ozone.

Whilst Auto/Oil II was still under way, vehicle manufacturers and several European countries, including Germany, Scandinavia and the UK, announced their intention of introducing petrol with a greatly reduced sulphur content. Instead of the 50 ppm already mandated for 2005, they proposed 10 ppm, a level so low that it is commonly referred to as "zero sulphur."

Given these developments, the Commission launched a public consultation on fuel sulphur levels in May 2000, to complement the work of the Auto/Oil II programme. This sulphur review concluded that zero sulphur levels will lead to significant improvements in fuel economy, as well as lower emissions of conventional air pollutants from the existing vehicle fleet. In addition, it found that sulphur in fuel can impair the effectiveness of exhaust gas after-treatment devices such as catalytic converters and particulate traps.

Following the completion of the Auto/Oil II programme, the Commission was charged by the Council of Ministers in December 2000 to submit proposals as soon as possible to confirm the fuel specifications for 2005. With the outcome of the sulphur review in mind, the Commission was also specifically requested to encourage the introduction of fuels with the lowest possible sulphur content. At the same time, in the light of the imminent publication of the MTBE Risk Assessment Report, the Commission was asked to consider the ongoing use of MTBE in petrol.

When the Commission's proposed Directive was finally published in May 2001, it centred on the introduction of zero sulphur fuels as the most important element, despite the fact that the original basis for the proposal - Auto/Oil II - did not include sulphur content in its investigations.

The proposed Directive mandated the introduction of zero sulphur fuels on a balanced geographic basis by 1 January 2005 and went on to propose full penetration of zero sulphur petrol by 1 January 2011. It concluded that, given the increased use of catalytic after-treatment systems in the European fleet, it is likely that zero sulphur fuels will have a greater impact on vehicle emissions than changes to the non-sulphur fuel parameters. Accordingly, the Commission does not propose any such changes.

In its consideration of MTBE use, the Commission was assisted by the preliminary conclusions of the EU Risk Assessment Report, as well as a study on MTBE and requirements for underground storage tanks by independent consultants Arthur D. Little. Whilst confirming that MTBE is not harmful to human health, the Risk Assessment recommends specific measures to limit risks related to unpleasant taste and odour of groundwater arising from leakage of petrol containing MTBE.

The proposed Directive endorses these recommendations and reiterates the need to use existing water quality legislation to prevent groundwater pollution. Although MTBE has been found in groundwater in some Member States, the Commission does not see this as a widespread problem. Moreover, the Arthur D. Little report concludes that groundwater contamination is unlikely to increase in Europe if existing standards governing the construction and operation of underground storage tanks are robustly enforced. Based on these findings, the Commission does not propose any amendment in respect of the MTBE content of petrol.

Having reviewed all the Commission's proposals concerning fuel specifications, consulted a range of stakeholders and added 70 amendments, the rapporteur Heidi Hautala presented her report on Petrol and Diesel Fuel Quality to the Environment Committee on 6 November, when it was adopted with a large majority.

One of the most important amendments to the proposed Directive included in the Hautala report was movement of the date for 100% availability of zero sulphur fuels from 1 January 2011 to 1 January 2008. In addition, the review clause of the Directive was moved forward one year, from 2006 to 2005, and important remaining questions, such as other fuel specifications, metallic additives and biofuels, were included in the review clause. It was the Hautala version of the proposed amendments to Directive 98/70/EC that was presented to the European Parliament on 29 November and adopted with a clear majority.

"The importance of this vote is that the European Parliament has shown the European Council of Environment Ministers that it has a very strong majority in favour of the proposals within the report, and thus a strong negotiating position," explains Sandrine Dixson-Decl趥, adviser to Heidi Hautala and European Affairs Director at the International Fuel Quality Centre. "The Council is expected to reach a common position under the Belgian Presidency at the mid-December Council and will have to take the European Parliament's first reading vote into account. Both the European Parliament and the Council would like to reach an agreement by the end of this year if possible. However, some remaining issues will most likely need to be solved in a second reading. Due to the full agenda of the European Parliament and next year's Spanish Presidency, the vote will probably not take place until late spring 2002."

From EFOA's point of view, the completion of Auto/Oil II and the adoption of the proposed Directive on fuel quality have not raised any major issues regarding MTBE. The Commission considers that the risks of MTBE in groundwater can be adequately dealt with through existing water quality legislation and strict enforcement of underground storage tank regulations. Most Member States are in agreement with these conclusions, with the exception of Denmark, which continues to express concern over the use of MTBE in petrol.

Says Sandrine: "Individual Member States have the right to request stricter environmental specifications in areas of particular sensitivity. Although the aim of the Auto/Oil programme and its associated legislation has been to improve air quality, Denmark is trying to extend this opt-out provision to cover water quality as well. The request is still under discussion, but the Commission has pointed out that restrictions on the sale of petrol that complies with EU specifications could impede the correct functioning of the internal market. Fortunately, the Commission and most Member States support the final conclusions of the MTBE Risk Assessment, which are that the continued use of MTBE does not pose a significant risk to the contamination of groundwater, and the best way to handle any possible risks is through better tank management and water quality policies across the EU."

 

Danish incentive encourages operators to replace leaking fuel tanks

Denmark has introduced a tax incentive scheme for petrol station operators, designed to prevent groundwater pollution caused by oil products, including MTBE in petrol, leaking from underground storage tanks. The initiative involves a reduction in the rate of excise duty of 0.03 kr (0.004 ?) per litre, on petrol distributed by service stations that meet stringent standards of equipment and operation. The tax differentiation came into effect on 12 October 2001, following authorisation by the EU Council of Ministers.

Water quality is a sensitive issue in Denmark, where drinking water is simply filtered, rather than chemically treated, before delivery to the consumer. In summer 2000, the Danish media featured several stories linking the controversy over MTBE in the United States with a potential threat to Denmark's water supplies.

The resulting public outcry led Danish government agencies to step up their search for solutions to the perceived problem of MTBE. These included an enhanced monitoring programme to discover the extent of MTBE pollution, a reassessment of the existing limit level of 0.03 mg/litre for MTBE in drinking water, and a possible new tax on MTBE.

In the light of these activities, the oil industry and the Danish Ministry of Environment and Energy came up with different initiatives for the prevention of MTBE contamination. The oil industry in Denmark led the way by undertaking to phase out the use of MTBE in standard unleaded petrol. MTBE is no longer added to 92-octane petrol, which is suitable for most cars on the road.

However, high performance cars and some older vehicles require 98-octane petrol, which still contains MTBE since it is considered to be the safest and most cost-effective octane enhancer. As a product with a limited market, 98-octane petrol is only available at selected service stations across the country. From 1 January 2002, there will only be 124 stations selling 98-octane, which is no more than 5% of the Danish network.

To improve the petrol distribution network, the Ministry of Environment and Energy has developed new rules on the operation of service stations, including the installation of special leak-resistant underground storage tanks. These standards will become compulsory from 1 January 2005.

In the meantime, Denmark sought the EU's permission for a reduction in excise duty, applicable until the end of December 2004, as a means of speeding up investment in new equipment. According to Mr Flemming Ludvigsen of the Danish Petroleum Industry Association, the initial idea for this tax incentive came from the industry. "Ideally, we would have liked to have a higher incentive for a longer period, but our proposals were scaled down during negotiations with the government. Nevertheless, the new law has been very well received within the industry."

Denmark's request was granted on 27 September without a debate, but in its decision, the Council of Ministers noted that "leakage of MTBE into groundwater does not represent a real health problem as this substance is harmful only when highly concentrated." However, it approved the measure on environmental grounds, since "even minute quantities of MTBE in groundwater impart an unpleasant taste and smell ? and water containing negligible quantities of MTBE would be undrinkable."

Swift, concerted action by industry and the Environment Ministry has significantly reduced public concern over MTBE in Denmark, and the government has decided to suspend proposals for a tax on MTBE until the effects of these initiatives are known.

Commenting on the Danish situation, EFOA's director-general Bruno Hé²¹ says: "EFOA supports the tax incentive scheme, which tackles the cause of possible groundwater pollution by MTBE - leaking storage tanks - rather than focussing on the product itself. We welcome Denmark's pragmatic approach to the issue, but since MTBE in groundwater is not perceived as a serious threat by other European countries, we have no plans to promote similar incentive schemes elsewhere."

 

MTBE in the USA: the story so far

In the United States today, MTBE remains dogged by controversy. Depending on your point of view, the product is either a solution to, or the cause of, environmental problems. When it was added to gasoline as an oxygenate under the provisions of the Clean Air Act in 1992, MTBE almost immediately became the focus of concern, with motorists reporting headaches and nausea after refuelling. The complaints triggered additional research, which culminated in an Environmental Protection Agency (EPA) report that found MTBE use in motor fuels caused no increased health risks.

Continued use of oxygenated fuels containing MTBE achieved widespread reductions in harmful exhaust emissions, with many areas experiencing very significant air quality improvements. The success of oxygenates in combating air pollution led to further tightening of fuel standards and the mandatory use of reformulated gasoline in 1995 for areas with the worst air quality.

However, later that same year, MTBE was detected in wells that supplied the city of Santa Monica in California with drinking water. By June 1996, the authorities were forced to shut down some of the city's groundwater wells, causing public alarm and starting a campaign to ban MTBE. In 1998, the University of California (UC) produced a report suggesting that MTBE would contaminate a considerable number of surface and groundwater resources across California until the year 2010. At that time, the incidence of MTBE detections in drinking water was spreading rapidly, increasing public unease and putting pressure on the politicians. Finally, the Governor of California, Gray Davis, decided to ban the use of MTBE from 2003 onwards.

Unfortunately, the Governor's action was taken without considering all the implications. Since the Clean Air Act makes oxygenates compulsory, California must find a substitute for MTBE. The most practical alternative is ethanol, but this could cost California's motorists an extra $1 billion each year at the pumps. The state therefore asked the EPA for a waiver of the oxygenate requirement, but this was denied in June 2001.

Brazil's offer to help California meet its growing demand for ethanol was rejected by the local "renewable" lobby. In an attempt to avoid the forced use of ethanol, California filed a federal lawsuit in August 2001 against the EPA's refusal to grant an oxygenate waiver.

Despite the EPA's denial, New York and the New England states have followed California's lead and made the same request. Across the US, 18 states have introduced measures against MTBE, making a total of 43 actions, 30 of which call for a phase-out of MTBE and 13 for further studies on the product.

Meanwhile, the Oxygenated Fuels Association (OFA) filed a lawsuit challenging California's ban on MTBE. The case was recently rejected by a US District judge, but OFA intends to appeal against the decision. In any case, it appears that California may postpone the problematic ban for one or two years. The state's governor could issue a decision on extending the deadline by the end of this year.

Now a new report has been published that disputes the assumptions in the UC study that formed the basis of Governor Davis' decision to ban MTBE. Produced by the environmental engineering firm Malcolm Pirnie, on behalf of the Methanol Institute, the report concludes that UC researchers greatly overstated the potential for MTBE contamination of both surface and groundwater resources. Since 1998, several mitigation measures, active remediation and a large amount of monitoring data indicate that the extent and costs of MTBE contamination are likely to be much less severe than predicted.

The Malcolm Pirnie report adds further complexity to a confused - and confusing - MTBE situation. Despite the plethora of political initiatives, there have been no actual changes to the federal regulations concerning MTBE over the past few months.

The House passed its energy bill (HR.4) in July, without an elimination of the oxygenate requirement or a ban on MTBE. The Senate was not scheduled to take up energy legislation until early 2002, but has come under pressure from Republicans to take action, particularly with regard to opening up Alaska's Arctic National Wildlife refuge (ANWR) to oil exploration. Democratic and Republican members of the Senate Energy Committee have been unable to reach agreement on an energy bill. Nevertheless, the Senate leadership could bypass the committee process and push through legislation by attaching the House energy bill (HR.4, with amendments) to either the Defense Appropriations bill or an economic stimulus bill.

Whilst the priority for Republicans is to open up the ANWR for drilling, there is a concern that additional measures such as elimination of the RFG oxygenate requirement and a ban on MTBE, which are supported by politicians of both sides, will be included as part of a total energy package. If such a package is passed on the Senate floor, a conference committee could reconcile the differences between House and Senate bills and get the legislation approved before the end of this year. Such is the sense of urgency over the ANWR that even supporters of MTBE may be willing to concede the issue in order to achieve this goal.

In the meantime, the US EPA is taking another look at fuel composition and is considering a reduction in the number of pollution-fighting gasoline blends from around a dozen formulas to three or four "boutique blends." It is regarded as likely that the EPA will eventually support eliminating the oxygen mandate in favour of a renewable fuels standard.

At the end of 2001, the outlook for MTBE in the United States is uncertain and difficult to predict. EFOA will continue to monitor developments whilst liaising closely with its sister organisation, OFA.

 

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