Air Quality and a Federal Standard for Sulphur in Fuel
The Board of Health recommends:
(1)that Council endorse the action taken by the Board of Health whereby the Board adopted the report ( July
13, 1998) from the Medical Officer of Health subject to:
(a)amending Recommendation 2 by adding thereto the following:
"and the Provincial Minister of the Environment";
(b)amending Recommendation 2(b) by deleting the words "particularly for off-road vehicles" and adding
thereto the following:
"and that standards for off-road vehicles be brought into line with on-road vehicles";
(c)amending Recommendation 2(c) by adding the words "from federal and provincial fuel taxes" after the
words "income replacement program";
so that such Recommendation now reads:
"(2)the Federal Minister of Environment and the Provincial Minister of the Environment:
(a)establish sulphur limits for gasoline at an annual average of 30 ppm and a maximum of 80 ppm across
Canada, effective January 1, 2002, as outlined in option A.1 in the report of the Government Working Group;
(b)establish sulphur levels for diesel that maximise the health benefits for residents across Canada before the
year 2000, and that standards for off-road vehicles be brought into line with on-road vehicles;
(c)establish an environmental income replacement program from federal and provincial fuel taxes, complete
with re-education funds to assist workers dislocated by plant closures that may result from sulphur standards
set for gasoline and diesel; and"
(2)that Council's action in this respect and the report (July 13, 1998) from the Medical Officer of Health be
forwarded to:
(a)the Federation of Canadian Municipalities and the Association of Municipalities of Ontario for
endorsement;
(b)to all Municipalities in Ontario with a population over 50,000 for endorsement together with a covering
letter from Mayor Lastman outlining the extenuating circumstances of this matter;
(3)that a review of the City of Toronto's Fuel Purchase Program be undertaken and request the Medical
Officer of Health to report to both the Board of Health and Corporate Services Committee on the possibility of
requiring that all fuel provided to City of Toronto and City Agency vehicles meets the 30 ppm standards as
recommended in her report dated July 13, 1998; and
(4)that Council be encouraged to accelerate its Green Fleet Program.
The Board of Health reports, for the information of Council, having:
(1)requested the City Solicitor to report back to the Board of Health on the feasibility of enacting a Municipal By-law
to control sulphur levels in gasoline and diesel fuel in the City;
(2)requested the Medical Officer of Health to report to its next meeting on September 15, 1998 on the implementation
of the provincial government's Drive Clean Program, in particular its Vehicle Emission Testing Program; and
(3).urged the Chief Executive Officers of all gasoline producers to act on the foregoing action taken by the Board of
Health with respect to its adoption, as amended, of the recommendations contained in the report dated July 13, 1998
from the Medical Officer of Health.
The Board of Health submits the following report (July 13, 1998) from the Medical Officer of Health:
Purpose:
To provide comments to the Federal Minister of Environment and the Government Working Group on the sulphur
standards proposed for gasoline and diesel.
Recommendations:
It is recommended that:
(1)the comments prepared and submitted to the Government Working Group by the Medical Officer of Health be
received for information (see attached letter);
(2)the Federal Minister of Environment:
a) establish sulphur limits for gasoline at an annual average of 30 ppm and a maximum of 80 ppm across Canada,
effective January 1, 2002, as outlined by option A.1 in the report of the Government Working Group
b)establish sulphur levels for diesel, particularly for off-road vehicles, that maximize the health benefits for residents
across Canada before the year 2000
c) establish an environmental income replacement program, complete with re-education funds, to assist workers
dislocated by plant closures that may result from sulphur standards set for gasoline and diesel; and
(3)That City Council be asked to endorse this report and these recommendations.
Background:
In 1996, Environment Canada established a process to set limits for sulphur in gasoline and diesel in collaboration
with other federal departments, provincial governments, industry and non-governmental organizations in response to
recommendations from the Canadian Council of Ministers of the Environment (CCME). As part of this process, three
expert panels were struck to prepare reports on issues related to the various proposed sulphur levels: the Atmospheric
Science Expert Panel, the Health and Environmental Impact Assessment Panel, and the Cost and Competitiveness
Assessment Panel. Nine sulphur scenarios were examined: six sulphur levels for gasoline; one sulphur level for
off-road diesel; and two sulphur levels for on-road diesel (see Table 3). Reports prepared by these panels were released
in the fall of 1997.
A Government Working Group, with representatives from five federal departments and six provincial ministries, has
prepared a preliminary report, "Setting a Level for Sulphur in Gasoline and Diesel", which summarizes and analyses
the expert reports and other background information, and presents a variety of options for government action. That
report was released in May 1998 for public comment. The final report is scheduled to be completed this summer and is
expected to be tabled by the Federal Minister of Environment at a CCME meeting in the fall of 1998.
Comments:
Trend in Sulphur Levels in Gasoline
Worldwide, the trend is towards lower levels of sulphur in gasoline. Currently, the average level of sulphur in gasoline
is higher in Canada, at 340 parts per million (ppm), than in many other developed nations. Within Canada, the sulphur
levels are highest in Ontario with an average of 540 ppm.
In the United States, sulphur levels in gasoline are affected by the U.S. regional reformulated gas program (RFG)
started by the federal government in 1995. The RFG program applies to regional areas that do not comply with
ambient air standards. Phase 2 of the program, commencing in 2000, will indirectly control sulphur levels in gasoline
through nitrogen oxide emissions performance modelling. This is projected to result in an average sulphur level of
between 130 and 180 ppm in RFG areas. The sulphur content of conventional gasoline outside the RFG areas has been
frozen at 1990 levels since 1995 at an average level of 295 ppm.
In the State of California, sulphur levels in gasoline have been capped at an average of 30 ppm or a maximum of 40
ppm since 1996. In Japan, the government limits sulphur levels in gasoline at a maximum of 100 ppm. The European
Union has agreed to apply a 150 ppm sulphur limit to gasoline in the year 2000, and its Council of Ministers have
proposed a 50 ppm limit for the year 2005.
Sulphur Limits and Air Pollution
Sulphur affects the performance and operation of current and newly developed technologies used to control vehicle
emissions. Consequently, when sulphur levels in gasoline are reduced, vehicle emissions of carbon monoxide, nitrogen
dioxide and fine particulates are reduced as well as sulphur dioxide and sulphates. The Atmospheric Science Expert
Panel has calculated the changes in ambient air quality for each of the nine sulphur scenarios. For gasoline scenarios,
the 30 ppm sulphur level would produce the greatest reductions in ambient air levels of carbon monoxide, nitrogen
oxides, sulphates and sulphur dioxide (see Table 1). For example, the Panel estimated that the 30 ppm sulphur level
could reduce carbon monoxide levels in air by 10-68 ppm in the seven Canadian cities examined (ie. Halifax, Saint
John, Montreal, Toronto, Winnipeg, Edmonton and Vancouver) by the year 2020. The greatest reductions in all of the
pollutants examined for gasoline were predicted for the Toronto area because of the large number of vehicles and high
sulphur levels.
Sulphur Limits and Human Health
The Health and Environmental Impact Assessment Panel used the Damage Function Approach applied by the United
States Environmental Protection Agency, to compute the impacts and benefits associated with the nine different
sulphur scenarios. The Damage Function Approach involves five steps: in the first step, the changes in air emissions
are calculated for each scenario; in the second step, the air emissions are translated into changes in ambient air quality;
in the third step, the human health impacts are calculated; in the fourth step, the human health effects are assigned an
economic value; and in the fifth step, the benefits are computed for different health impacts, locations and time
periods.
Using this approach, the Health and Environmental Impact Assessment Panel determined that the 30 ppm sulphur limit
in gasoline could prevent 1,352 premature deaths, 1,537 hospital admissions, 3,760 emergency room visits, 517,000
asthma symptom days, 62,000 incidents of bronchitis in children, and 17.9 million acute respiratory symptoms in the
seven Canadian cities over a twenty year period (see Table 2).
For the Toronto area, the Panel estimated that the 30 ppm sulphur limit could prevent 136 cases of chronic respiratory
disease and 513,571 cases of acute respiratory symptoms in the year 2001. The monetary value of the health effects
avoided in the Toronto area with a 30 ppm limit was estimated at $205 million in the year 2001. This compares with
estimates of $165 million with a 150 ppm limit and $92 million with a 360 ppm limit.
When the monetary benefits of the avoided health outcomes were calculated for all seven Canadian cities over a
twenty year period, it was estimated that the 30 ppm sulphur limit was worth $5.2 billion in health benefits with a 3
percent discount for inflation built in. This can be compared to health benefits worth $3.9 billion with a 150 ppm
sulphur limit and $2.1 billion with a 360 ppm sulphur limit (see Table 3).
Benefit-Cost Analysis
While the compliance costs associated with the 30 ppm sulphur standard are substantial, the health benefits are much
greater. The Cost and Competitiveness Assessment Panel estimated that it could cost the refining industry $1.8 billion
in one-time capital costs and $119 million in annual operating costs to comply with a 30 ppm sulphur limit for
gasoline. The Panel suggested that these compliance costs could threaten the viability of 3 or 4 of the 17 refineries
operating in Canada, 1 or 2 of which operate in Ontario. The 30 ppm sulphur limits could result in gasoline price
increases of $0.01 per litre.
However, when the compliance costs were compared against the monetary value of the avoided health outcomes, it
was determined that the health benefits associated with the 30 ppm sulphur level would outweigh the compliance costs
by a 2:1 ratio for Canada as a whole. In Ontario, where sulphur levels are the highest, a greater proportion of vehicles
are gas powered, and the population is the greatest, it was determined that the health benefits would outweigh the
compliance costs by a 4:1 ratio. The health benefits of the 30 ppm limit for Ontario when calculated for a twenty year
period were estimated at $6.14 billion.
While the health benefits will be shared by Canadians across the country, albeit disproportionately by those living in
areas with the poorest air quality, the compliance costs may be born inequitably by workers dislocated from refineries
that could close as a result of the 30 ppm sulphur standard. To ameliorate the effects of this dislocation, the federal
government should establish an environmental income replacement program, complete with re-education funds, to
assist workers who may be affected.
Sulphur Levels and Vehicle Technology
The Association of International Automobile Manufacturers of Canada and the Canadian Vehicle Manufacturers'
Association have indicated that vehicle manufacturers cannot continue to improve vehicle emissions or fuel efficiency
without commensurate improvements in the quality of vehicle fuels. These Associations have indicated that sulphur
reduces the efficiency and performance of vehicle emission control technologies, particularly those designed for low
emission vehicles. They have also indicated that the new technologies designed to improve fuel efficiency are more
susceptible to sulphur. This view has been expressed by staff in the United States Environmental Protection Agency
(US EPA) as well. In a May 1998 report entitled,"Staff Paper on Gasoline in Sulphur Issues", the US EPA indicates
that:
"While sulphur has a large impact on emissions from current low-emission vehicles, technological advances are also
being made to improve the fuel efficiency of the nation's vehicles. Gasoline direct injection engines and fuel cells are
two of the advanced power plants being developed. Both of these technologies may be more sensitive to sulphur than
current vehicles."
Vehicle manufacturing associations in the United States have petitioned the US EPA to promulgate a regulation which
caps sulphur levels in all gasoline at an average of 30 ppm and a maximum of 80 ppm as quickly as possible.
Options for Action on Sulphur in Gasoline
The Government Working Group has presented five options for action on sulphur levels in gasoline (see Table 4). The
30 ppm sulphur limit for gasoline has been supported by the Ontario Medical Association, International Joint
Commission, and Pollution Probe. The International Automobile Manufacturers of Canada and the Canadian
Environmental Law Association (CELA) have recommended that the 30 ppm sulphur standard should be implemented
according to option A.1. The Cities of Welland, St. Catharines and Mississauga have passed resolutions calling for
meaningful reductions in the sulphur content of gasoline. The Canadian Petroleum Products Institute (CPPI) has
recommended a policy of "harmonization of Canadian sulphur levels with conventional gasoline in the United States".
This proposal would allow Canadian sulphur levels in gasoline to follow those established for non-reformulated
gasoline areas where the average is currently 295 ppm.
Given the compelling health and socioeconomic benefits associated with the 30 ppm sulphur limit for gasoline,
sulphur levels greater than 30 ppm cannot be recommended. Arguments can be made in favour of both implementation
options A.1 and A.2. Option A.2 may reduce disruption and dislocation in the petroleum industry by providing a
longer period in which to comply. However, it does not provide a maximum level of protection to Canadians in
regions outside the Southern Ontario-Montreal corridor until the year 2005. In addition, it may have a negative impact
on low emission and fuel efficient vehicles operating in high sulphur regions. Option A.1 is recommended because it
provides the maximum health benefits to all Canadians in the shortest time frame.
Sulphur in Diesel
With the implementation of the federal Diesel Fuel Regulations, which limited sulphur levels in diesel used in on-road
vehicles to 500 ppm as of January 1, 1998, the average sulphur level in low sulphur diesel in Canada is 270 ppm. The
average for the remaining diesel pool is over 2,200 ppm. The findings of the Atmospheric Science Expert Panel
indicate that limits on sulphur levels in diesel, particularly off-road diesel, could result in substantial reductions in
ambient air levels of sulphates, fine particulates and sulphur dioxide (see Table 1).
The Health and Environmental Impact Assessment Panel estimated that a 400 ppm limit for off-road diesel could
produce health benefits worth $2.9 billion in the seven Canadian cities examined over a twenty year period. Likewise,
the Panel estimated that the 50 ppm limit for on-road diesel could produce health benefits worth $1.2 billion in the
seven Canadian cities over a twenty year period (see Tables 2 & 3).
When a benefit-cost analysis was conducted on the various diesel scenarios, it was determined that the health benefits
associated with the 400 ppm off-road diesel standard outweighed the compliance costs by a 2:1 ratio.
Action Recommended for Sulphur in Diesel
The Government Working Group has recommended that the sulphur in diesel levels should be considered in early
1999 when several uncertainties respecting costs and benefits have been addressed. Given the health and economic
benefits that could result from the reduction of sulphur levels in diesel, particularly for off-road diesel, it is
recommended that new sulphur limits should be established for diesel before the year 2000, and that those limits
should maximize the health benefits for residents across the country.
Conclusions:
Given the compelling health and economic benefits associated with the 30 ppm sulphur limit for gasoline, sulphur
levels greater than 30 ppm cannot be recommended. Implementation option A.1 is recommended because it provides
the maximum health benefits to all Canadians within the shortest time frame.
Given the health and economic benefits that could result from the regulation of new sulphur levels for diesel,
particularly for off-road diesel, it is recommended that new sulphur standards should be established for diesel before
the year 2000, and that those standards should maximize health and economic benefits for residents across the country.
Contact Name:
Kim Perrotta
Environmental Protection Office
Toronto Public Health
(416) 392-6788
--------
Table 1:Reductions in Ambient Air Levels by 2020, Across Seven Canadian Cities:
Scenario |
SO4
(ug/m3) |
PM2.5
(ug/m3) |
SO2
(ppb) |
CO (ppb) |
Nox (ppb) |
VOC
(ug/m3) |
Gas
30 ppm |
.02-.38 |
.02-.32 |
.35-1.55
|
9.97-68.3 |
.95-3.41 |
.06-.64 |
Off-road diesel 400
ppm |
.02-.20 |
.02-.13 |
.11-1.09 |
NA |
NA |
NA |
On-road diesel 50
ppm |
.01-.07 |
.012-.04 |
.15-.46 |
NA |
NA |
NA |
Greatest Reductions |
Toronto |
Toronto |
Toronto for
30 ppm gas |
Toronto |
Toronto |
Toronto |
Table 2:Avoided Health Outcome Over Period 2001-2020, Different Sulphur Scenarios, Total for Seven Canadian
Cities:
Avoided Outcome |
Gas 30 ppm |
Off-Road Diesel 400
ppm |
On-Road Diesel 50
ppm |
Premature Mortality |
1352 |
756 |
318 |
Chronic Respiratory Disease Cases |
4770 |
2660 |
1120 |
Respiratory Hospital Admissions |
848 |
474 |
200 |
Cardiac Hospital Admissions |
689 |
385 |
162 |
Emergency Room Visits |
3760 |
2100 |
887 |
Asthma Symptom Days |
517,000 |
289,000 |
122,000 |
Restricted Activity Days |
749,000 |
419,000 |
177,000 |
Acute Respiratory Symptoms |
17,900,000 |
10,000,000 |
422,000 |
Lower Respiratory Illness (child) |
62,000 |
35,000 |
15,000 |
Table 3:Monetary Value of Avoided Health Outcomes Over Period 2001-2020, Different Sulphur Scenarios, Total For
Seven Cities, ($ Billions)
Discount Rate |
360
ppm gas |
250
ppm gas |
200
ppm gas |
150
ppm gas |
100
ppm gas |
30 ppm
gas |
400 ppm
off-road diesel |
350 ppm
on-road diesel |
50 ppm
on-road diesel |
0% |
2.8 |
3.9 |
4.7 |
5.4 |
6.1 |
7.2 |
4.0 |
0.8 |
1.7 |
3% |
2.1 |
2.9 |
3.5 |
3.9 |
4.5 |
5.2 |
2.9 |
0.5 |
1.2 |
Table 4:Proposed Actions for Sulphur in Fuel
Option A.1 |
A 30 ppm annual average and an 80 ppm maximum to be effective across Canada on January 1, 2002 |
Option A.2 |
A 30 ppm annual average and an 80 ppm maximum to be effective in the Southern Ontario-Montreal
corridor by January 1, 2002, and in the rest of Canada on January 1, 2005 |
Option A.3 |
A 30 ppm annual average and an 80 ppm maximum to be effective in the Southern Ontario-Montreal
corridor and Lower Fraser Valley by January 1, 2002, with sulphur levels frozen at 1994 levels in the
rest of Canada |
Option B |
A 150 ppm annual average and a 200 ppm maximum to be effective across Canada effective January
1, 2002 |
Option C |
Action on sulphur levels in gasoline to be deferred. Future standards to match the least restrictive fuel
requirements of the Tier 2 vehicle standard in the United States |
--------
(Communication dated June 25, 1998,addressed to the Chair, Government Working Group,Sulphur in Gasoline and
Diesel Fuel, Environment Canada,from the Medical Officer of Health)
Introduction:
This report contains comments on the "Preliminary Report of the Government Working Group on Sulphur in Gasoline
and Diesel" as promised in my letter of May 28, 1998.
Staff in the Environmental Protection Office in Public Health have consulted with staff in Toronto Works and
Emergency Services in the preparation of these comments. The documents received from the Government Working
Group are listed in the appendix attached to this report.
Members of the Government Working Group are aware that air quality is a public health priority for the new City of
Toronto. The following reports on air quality have been prepared by Public Health and adopted by City Council over
the past two years:
- "Outdoor Air Quality in Toronto and Respiratory Health", August 1996;
- "Actions With Respect to Vehicle Emissions", August 1996;
- "Emergency Plan Options for Outdoor Air Quality Episodes", August 1996;
- "Impact of Emissions from the Main Sewage Treatment Plant and Lakeview Generating Station", August 1996;
- "Global Climate Change", June 1997;
- "Catching Your Breath -- A Corporate Model For Clean Air", July 1997;
- "Burning of Waste Oil -- Health and Environmental Impacts", May 1998; and
- "Corporate Smog Alert Response Plan -- 1998 Implementation Plan", May 1998.
Background:
In 1996, Environment Canada established a process to establish limits for sulphur in gasoline and diesel in
collaboration with other federal departments, provincial governments, industry and non-governmental organizations in
response to recommendations from the Canadian Council of Ministers of the Environment (CCME). As part of the
process, three expert panels were struck to prepare reports on the issues related to a variety of proposed sulphur levels
for gasoline and diesel: the Atmospheric Science Expert Panel, the Health and Environmental Impacts Assessment
Panel, and the Cost and Competitiveness Assessment Panel. Those reports were released in the fall of 1997 and are
referenced in the appendix.
A Government Working Group, with representatives from five federal departments and six provincial ministries, has
prepared a preliminary report, "Setting a Level for Sulphur in Gasoline and Diesel", which summarizes and analyses
the expert reports and other background information, and presents a variety of options for government action. That
report was released in May 1998 for public comment. The final report is scheduled to be completed this summer and is
expected to be tabled by the federal Ministers of Environment at a CCME meeting in the fall of 1998.
The preliminary report presents five options for action on sulphur levels in gasoline:
Option A.1The establishment of a 30 ppm annual average and an 80 ppm maximum effective across Canada on
January 1, 2002;
Option A.2The establishment of a 30 ppm annual average and an 80 ppm maximum effective in the Southern
Ontario-Montreal corridor on January 1, 2002, and in the rest of Canada on January 1, 2005;
Option A.3The establishment of a 30 ppm annual average and an 80 ppm maximum effective in the Southern
Ontario-Montreal corridor and Lower Fraser Valley on January 1, 2002, with sulphur levels frozen at 1994 levels in
the rest of Canada;
Option BThe establishment of a 150 ppm annual average and a 200 ppm maximum effective across Canada effective
January 1, 2002;
Option CAction on sulphur levels in gasoline is deferred. Future standards to match the least restrictive fuel
requirements of the Tier 2 vehicle standard in the United States.
The Government Working Group has recommended that sulphur levels in diesel should be considered in early 1999
when several uncertainties respecting costs and benefits have been addressed.
Comments:
Recommendation #1:It is recommended that sulphur levels in gasoline should be set at an annual average of 30 ppm
and a maximum of 80 ppm across Canada effective January 1, 2002 as outlined by Option A.1.
The worldwide trend is towards lower sulphur levels in gasoline. Currently, the average level of sulphur in gasoline is
higher in Canada, at 340 parts per million (ppm), than in many other developed nations. Within Canada, the sulphur
levels are highest in Ontario with an average of 540 ppm. In the United States, the average sulphur level is 295 ppm in
the areas to which the Federal government's Reformulated Gas Program (RFG) does not apply. The average sulphur
level is lower in the areas to which the Reformulate Gas Program does apply, and is expected to decrease to 150 ppm,
in the next few years with the implementation of Phase 2 of the Reformulated Gas Program. In Japan, sulphur levels in
gasoline are limited to a maximum of 100 ppm. The European Union has agreed to apply a 150 ppm sulphur limit to
gasoline in the year 2000, and its Council of Ministers have proposed a 50 ppm limit for the year 2005.
The 30 ppm limit is technically achievable. Sulphur levels in gasoline have been capped at an average of 30 ppm or a
maximum of 40 ppm since 1996 in the State of California.
The 30 ppm sulphur level would produce substantial reductions in the ambient levels of a wide range of air pollutants.
Sulphur affects the efficiency of current and advanced emission control technologies on vehicles. Therefore, when
sulphur levels in gasoline are reduced, vehicle emissions of hydrocarbons, carbon monoxide, and nitrogen oxides are
reduced, as well as sulphur dioxide and sulphates. The Atmospheric Science Expert Panel has calculated that the 30
ppm sulphur limit in gasoline would produce substantial reductions in ambient air levels of carbon monoxide, nitrogen
dioxides, fine particulates, sulphur dioxide and sulphates in all of the seven Canadian cities examined. For example, it
was estimated that the 30 ppm sulphur level would reduce carbon monoxide levels by 10-68 ppm in the seven
Canadian cities examined (i.e. Halifax, Saint John, Montreal, Toronto, Winnipeg, Edmonton, Vancouver) by the year
2020. The greatest reductions for all air pollutants examined in relation to gasoline were predicted for the City of
Toronto.
The 30 ppm sulphur level provides the greatest health and socioeconomic benefits for Toronto and Canada as a whole.
The Health and Environmental Impact Assessment Panel has demonstrated that reductions in premature mortality,
chronic respiratory disease, hospital admissions and asthma symptoms days would be greatest with the 30 ppm sulphur
limit. Over a twenty year period, the Panel has estimated that 1,352 premature deaths, 4,770 chronic respiratory
disease cases, 848 cardiac hospital admissions, 517,000 asthma symptom days, 17,900,000 acute respiratory
symptoms, and many other health effects, could be avoided in the seven Canadian cities with the establishment of a 30
ppm sulphur level in gasoline. The Panel has indicated that these health benefit numbers underestimate the true extent
of the health benefits that could result from a lowering of the sulphur limit in gasoline because they do not include the
health effects that result from the independent action of toxics such as carbon monoxide.
In the year 2001, in the Toronto area, the 30 ppm sulphur limit could prevent 136 cases of chronic respiratory disease,
513,571 cases of acute respiratory symptoms, and many other health effects. The monetary value of these avoided
health effects has been calculated to be $205million. This compares with estimates of $165million in health benefits
with a 150 ppm sulphur limit and $92 million in health benefits with a 360 ppm limit.
When the monetary benefits of the avoided health outcomes were calculated for the seven Canadian cities over a
twenty year period, it was estimated that the 30 ppm sulphur limit was worth $5.2 billion in health benefits with a 3%
discount for inflation built in. This can be compared to health benefits worth $3.9 billion with a 150 ppm limit and
$2.1 billion with a 360 ppm limit.
While the compliance costs associated with the 30 ppm sulphur standard are substantial, the health benefits are much
greater. The Cost and Competitiveness Assessment Panel estimated that it could cost the refining industry a maximum
of $1.8 billion in one-time capital costs and $119million in annual operating costs to comply with the 30 ppm sulphur
standard for gasoline. It was estimated that the 30 ppm standard would increase the cost of gasoline by approximately
$0.01 per litre. It was also determined that the 30 ppm sulphur limit could threaten the viability of 3 or 4 of the 17
refineries currently operating in Canada.
However, when a benefit-cost analysis was conducted, the health benefits outweighed the compliance costs by a 2:1
ratio for Canada as a whole. In Ontario, where sulphur levels are the highest, a greater proportion of vehicles are gas
powered, and the population is the greatest, the health benefits outweighed the compliance costs by a 4:1 ratio. The
health benefits, when calculated for the entire population of Ontario over a twenty year period, were estimated at $6.14
billion.
While the health benefits will be shared by Canadians across the country, albeit disproportionately by those living in
areas with the poorest air quality, the compliance costs may be born inequitably by workers dislocated from refineries
that could close as a result of the 30 ppm sulphur standard. To ameliorate the effects of this dislocation, the federal
government should establish an environmental income replacement program, complete with re-education funds, to
assist workers who may be affected.
Gasoline with higher sulphur levels reduces the efficiency and performance of low emission vehicles and high fuel
efficiency vehicles. The Association of International Automobile Manufacturers of Canada and the Canadian Vehicle
Manufacturers' Association have indicated that vehicle manufacturers cannot continue to improve vehicle emissions or
fuel efficiency without commensurate improvements in the quality of vehicle fuels. These Associations have indicated
that fuels with higher sulphur levels can adversely affect the efficiency and performance of emission control
technologies, particularly those designed for low emission vehicles. They also indicate that new technologies designed
to improve vehicle fuel efficiency are more susceptible to sulphur than current technologies. These views have been
expressed by staff in the United States Environmental Protection Agency (US EPA) as well. In a May 1998 report
entitled, "Staff Paper on Gasoline in Sulphur Issues", the US EPA indicates that:
"While sulphur has a large impact on emissions from current low-emission vehicles, technological advances are also
being made to improve the fuel efficiency of the nation's vehicles. Gasoline direct injection engines and fuel cells are
two of the advanced power plants being developed. Both of these technologies may be more sensitive to sulphur than
current vehicles."
The vehicle manufacturing associations in the United States have petitioned the US EPA to establish a year round limit
on sulphur in gasoline for the entire gasoline pool "that is as low as practicable but in no case greater than 40 ppm per
gallon by weight, or ... in no case greater than 30 pm annual average by weight with a per gallon cap of 80 ppm." They
are asking that the US EPA to promulgate a sulphur regulation and to make it effective "as rapidly as possible".
Implementation Option A.1 provides the greatest health benefits in the shortest time frame.
Implementation options A.1 and A.2 both have arguments in their favour. Option A.2, which provides a longer time
frame for the introduction of the 30 ppm limit to the rest of Canada, may be less disruptive to the petroleum industry.
However, it provides a lesser level of health protection to Canadians outside of the Southern Ontario - Montreal
corridor for an additional three years. It may also have a negative impact on low emission vehicles and high fuel
efficiency vehicles operating in higher sulphur regions. Option A.1 is recommended because it provides the maximum
health benefits to all Canadians in the shortest time frame, while eliminating the technological problems associated
with high sulphur fuels in low emission vehicles.
Recommendation #2:It is recommended that sulphur limits for diesel, particularly for off-road vehicles, should be
established before the year 2000, and that those standards should maximize the health benefits for residents across
Canada.
Substantial health benefits could result from a 400 ppm sulphur limit for off-road diesel and from a 50 ppm sulphur
limit for on-road diesel. With the implementation of the federal Diesel Fuel Regulations, which limited sulphur levels
in on-road diesel at 500 ppm as of January 1, 1998, the average sulphur level in low sulphur diesel in Canada has
decreased to 270 ppm. The average for the remaining diesel pool is over 2,200 ppm.
The Atmospheric Science Expert Panel has indicated that sulphur limits for diesel could result in substantial reductions
in ambient air levels of sulphates, fine particulates and sulphur dioxide. For example, the Panel estimated that the 400
ppm sulphur limit for diesel used in off-road vehicles could reduce ambient air levels of sulphur dioxide by 0.11 to
1.09 ppb in the seven Canadian cities by the year 2020.
The Health and Environmental Impact Panel has demonstrated that the 400 ppm limit for off-road diesel could reduce
chronic respiratory cases by 2,660 and acute respiratory symptoms by 10,000,000 in the seven Canadian cities over the
twenty year period from 2001 to 2020, while the 50 ppm limit for on-road diesel could reduce chronic respiratory
disease cases by 1,120 and acute respiratory symptoms by 4,220,000.
The Panel has estimated that the 400 ppm limit for off-road diesel, when calculated over a twenty year period, could
produce health benefits worth $2.9 billion for the seven Canadian cities, while the 50 ppm sulphur limit for on-road
diesel could produce health benefits worth $1.2 billion. When a benefit-cost analysis was conducted, it was determined
that the health benefits associated with the 400 ppm off-road diesel standard outweighed the compliance costs by a 2:1
ratio.
The Government Working Group has recommended that the sulphur in diesel levels should be considered in early
1999 when several uncertainties respecting costs and benefits have been addressed. Given the health and
socioeconomic benefits that could result from action on sulphur levels in diesel, particularly for off-road diesel, it is
recommended that the federal government should establish new sulphur standards for diesel before the year 2000, and
that those standards should maximize the health and socioeconomic benefits for all Canadians.
Conclusions
Environment Canada, and the other departments, ministries and organizations that have been involved in the
development of Panel reports and the Government Working Group report should be commended. The sulphur in fuel
issue has been subject to extensive research, comprehensive analysis and broad consultation. The preliminary report
and background documents provide compelling health and socioeconomic evidence in support of the 30 ppm limit for
gasoline and the 400 ppm limit for off-road diesel. The Government Working Group should move quickly to establish
sulphur standards for fuel which maximize the health benefits for all Canadians.
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Public Health Division staff gave a presentation to the Board of Health in connection with the foregoing matter.
Councillor Jack Layton, Don River, appeared before the Board of Health in connection with the foregoing matter, and
filed a copy of his presentation in regard thereto.
(Appendix attached to the letter dated June 25, 1998, to the Government Working Group by the Medical Officer of
Health, referred to in the foregoing report was forwarded to all Members of Council with the agenda of the Board of
Health for its meeting on July 27, 1998, and a copy thereof is on file in the office of the City Clerk.)