Swiss tax pushes “sulfur-free” fuels
Switzerland is using financial incentives to make very low sulfur fuels market-competitive by 2004, similar to programs already in place in Denmark, Germany, Finland, Sweden, and the United Kingdom. The Swiss action puts the country ahead of European Union (EU) efforts to bring about a mandatory switch.
With sulfur removal cost estimates hovering around a few cents per liter, the new Swiss law calls for an additional tax of 3 to 5 cents per liter to be levied, beginning in 2004, on fuels containing more than 10 parts per million (ppm) of sulfur. Fuels with a sulfur content of less than 10 ppm, which the Swiss consider sulfur-free, will be exempt from the tax. In the United States, the EPA will require refiners to produce fuels with an annual average sulfur content of 120 ppm as of 2004, with a limit of 30 ppm by 2006. For diesel, EPA will require a sulfur content of 15 ppm by 2007.
Within Europe, the upper limit for sulfur in fuels is currently 150 ppm for gasoline and 350 ppm for diesel. The EU mandates a 50-ppm limit in 2005 for both fuels. However, an ongoing EU debate could force a complete switch to much lower sulfur content fuels, as low as 10 ppm, by 2008. The European Commission proposed a 2005 deadline for some “sulfur-free” fuels to be available to consumers and 2011 for a complete switch, but the European Parliament rejected these deadlines in late November, calling instead for a complete switch by 2008.
Very low sulfur fuels allow the use of updated catalytic converters that achieve better fuel economies, thus producing lower CO2 emissions.
If past experience is any indication, the Swiss expect similar results with the new law as they obtained from an earlier rule levying higher taxes on sulfur-containing heating oils. Within weeks after that rule went into effect, only very low sulfur containing heating oil was sold on the open market, according to the Swiss environment agency.
Meanwhile, in late December, the EU's Council of Environment Ministers approved a 2009 deadline. The parliament and council will now have to work out a compromise. —KRIS CHRISTEN
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