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Contents 3
Executive Summary 5
Light Vehicle Noxious Emissions Standards 5
Heavy Vehicle Noxious Emissions Standards 6
Options Explored 6
Cost-Benefit Analysis 6
Fuel Quality 7
Introduction 8
Your Comments 9
1 What is the Problem? 10
1.1 Introduction 10
1.2 Air Quality in Australia’s Urban Environment 12
1.3 Contribution of Road Vehicles to Air Pollution 12
1.4 Government Actions to Address the Problem 13
1.4.1 Current Noxious Emissions Standards 13
1.4.2 Fuel Quality Standards 15
1.4.3 National Clean Air Agreement 16
2 Why is Government Action Needed? 18
2.1 Current Government Action May Not Remain Effective 18
2.2 International Standards 19
3 What Policy Options Are Being Considered? 21
3.1 Available Options 21
3.1.1 Non-Regulatory Options 21
3.1.2 Regulatory Options 21
3.2 Discussion of Options 21
3.2.1 Option 1–Business as Usual 21
3.2.2 Option 2–Fleet Purchasing Policies 24
3.2.3 Option 3–Voluntary Standards 25
3.2.4 Option 4–Mandatory standards (Euro 6) for light vehicles 26
3.2.5 Option 5–Mandatory standards (Euro VI) for heavy vehicles 27
3.2.6 Option 6– Mandatory standards (Euro 6/VI) for light and heavy vehicles 27
4 What are the Likely Net Benefits of Each Option? 29
4.1 Option 1–Business as Usual 29
4.2 Option 4–Euro 6 for Light Vehicles 29
4.2.1 What Are the Quantitative Costs and Benefits? 29
4.2.2 What Are the Main Assumptions? 30
4.2.3 What Costs and Benefits are Included? 31
4.2.4 What Sensitivity Tests Were Considered? 31
4.3 Option 5–Euro VI for Heavy Vehicles 32
4.3.1 What Are the Quantitative Costs and Benefits? 33
4.3.2 What Are the Main Assumptions? 34
4.3.3 What Costs and Benefits Are Included? 34
4.3.4 What Sensitivity Tests Were Considered? 35
4.4 Option 6–Euro 6 for Light Vehicles and Euro VI for Heavy Vehicles 35
4.5 Summary of Benefit-Cost Analysis Results 36
4.6 Qualitative Impact Analysis 36
4.6.1 Identification of Affected Parties 36
4.6.2 Impacts of Viable Options 37
4.7 Regulatory Burden and Cost Offsets 37
5 Consultation 40
5.1 Previous Consultation 40
5.2 Consultation Plan 40
Appendix A–Euro 6 Benefit-Cost Analysis 41
Executive Summary 41
Introduction 41
Methodology for Estimating Health Benefits 42
Emissions of Air Pollutants 42
Average Health Costs 45
Benefit-Cost Analysis 45
Business as Usual 45
Euro 6 for Light Vehicles 46
Sensitivity Tests on Euro 6 for Light Vehicles 54
Appendix A References 58
Appendix B–Euro VI Benefit-Cost Analysis 63
Executive Summary 63
Introduction 63
Methodology for Estimating Health Benefits 64
Emissions of Air Pollutants 64
Average Health Costs 67
Benefit-Cost Analysis 68
Business as Usual 68
Euro VI for Heavy Vehicles 68
Net Economics Benefits and Benefit-Cost Ratio 78
Sensitivity Tests 80
Appendix B References 85
Appendix C–Acronyms and Abbreviations 90
