Sulphur in Fuels - Toronto's Fuels Purchase Program
The Strategic Policies and Priorities Committee recommends the adoption of the
recommendations of the Economic Development Committee contained in the report
(December 14, 1998) from the City Clerk which recommends that the joint report
(October 9, 1998) from the Commissioner of Corporate Services, the Medical Officer of
Health and the Director, Fleet Management Services, appended to the communication
(October 19, 1998) from the City Clerk, be adopted.
The Strategic Policies and Priorities Committee submits the following communication
(December 14, 1998) from the City Clerk:
Recommendation:
The Economic Development Committee recommends the adoption of the joint report
(October9,1998) from the Commissioner of Corporate Services, the Medical Officer of Health
and the Director, Fleet Management Services appended to the communication (October 19,
1998) from the City Clerk, and requested that its action in this respect be forwarded to the
Strategic Policies and Priorities Committee for its December 15, 1998 meeting.
Background:
At its meeting on December 11, 1998, the Economic Development Committee gave
consideration to the communication (November 16, 1998) from the City Clerk advising the
Economic Development Committee that the Corporate Services Committee on November 9,
1998:
(1)submitted the communication (October 19, 1998) from the City Clerk respecting Sulphur
in Fuels to the Strategic Policies and Priorities Committee, without recommendation;
(2)forwarded a copy of the aforementioned communication to the Economic Development
Committee for consideration and report thereon to the Strategic Policies and Priorities
Committee; and
Re: (3) submission from the Canadian Petroleum Products Institute (CPP), titled "Sulphur in
Gasoline"
Mr. T.R. (Bob) Clapp, Vice President, Ontario Division, Canadian Petroleum Products
Institute, appeared before the Economic Development Committee in connection with the
foregoing matter.
The Strategic Policies and Priorities Committee also submits the following
communication (November 16, 1998) from the City Clerk:
Recommendation:
The Corporate Services Committee on November 9, 1998:
(1)submitted the communication (October 19, 1998) from the City Clerk respecting Sulphur
in Fuels, to the Strategic Policies and Priorities Committee, without recommendation; and
(2)reports having forwarded a copy thereof to the Economic Development Committee for
consideration and report thereon to the Strategic Policies and Priorities Committee.
Background:
The Corporate Services Committee on November 9, 1998, had before it a communication
(October19, 1998) from the City Clerk, advising that the Board of Health on October 13,
1998, recommended to City Council, through the Corporate Services Committee, the adoption
of the joint report (October 9, 1998) from the Commissioner of Corporate Services, the
Medical Officer of Health and the Director, Fleet Management Services, wherein it is
recommended that:
(1)City Council request that the Province eliminate the Provincial Fuel Tax from on-road
diesel fuel when it is used in off-road vehicles to encourage its use for that purpose;
(2)the City purchase on-road diesel fuel for its off-road vehicles if the Province eliminates the
Provincial Fuel Tax for that purpose; and
(3)when making bulk purchases of gasoline, on-road diesel fuel and off-road diesel fuel, the
City should consider sulphur content, as well as cost, as a selection criteria.
The Corporate Services Committee also had before it a communication (November 4, 1998)
from Mr. T. R. (Bob) Clapp, Vice President, Ontario Division, Canadian Petroleum Products
Institute, requesting an opportunity to appear before the Corporate Services Committee
respecting the report regarding the City of Toronto's Fuels Purchase Program.
The following persons were unable to appear before the Corporate Services Committee in
connection with the foregoing matter; and submitted information respecting sulphur in
gasoline for consideration by the Strategic Policies and Priorities Committee and the
Economic Development Committee when the Committees give consideration to this matter:
-Mr. Bob Clapp, Canadian Petroleum Products Institute; and
-Mr. Don Green, Independent Retail Gasoline Marketers Association of Canada.
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(Communication dated October 19, 1998,
addressed to the Corporate Services Committee
from the City Clerk)
Recommendation:
The Board of Health recommends to City Council, through the Corporate Services
Committee, the adoption of the joint report (October 9, 1998) from the Commissioner of
Corporate Services, the Medical Officer of Health and the Director, Fleet Management
Services.
Background:
At its meeting on October 13, 1998, the Board of Health gave consideration to the joint report
(October 9, 1998) from the Commissioner of Corporate Services, the Medical Officer of
Health and the Director, Fleet Management Services, recommending that:
(1)City Council request that the Province eliminate the Provincial Fuel Tax from on-rod
diesel fuel when it is used in off-road vehicles to encourage its use for that purpose;
(2)the City purchase on-road diesel fuel for its off-road vehicles if the Province eliminates the
Provincial Fuel Tax for that purpose; and
(3)when making bulk purchases of gasoline, on-road diesel fuel and off-rod diesel fuel, the
City should consider sulphur content, as well as a selection criteria.
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(Joint report dated October 9, 1998, addressed
to the Board of Health and Corporate Services Committee from the
Commissioner of Corporate Services, Medical Officer of Health and
the Director of Fleet Management Services)
Purpose:
To respond to the Board of Health request to review the City of Toronto Fuel Purchase
Program and report to both the Board of Health and the Corporate Services Committee on the
possibility of requiring that all fuels provided to the City of Toronto and City Agency vehicles
meet the 30 ppm (parts per million) standard recommended by the Board of Health for sulphur
in fuel.
Funding Sources, Financial Implications and Impact Statement:
See discussion.
Recommendations:
It is recommended that:
(1)City Council request that the Province eliminate the Provincial Fuel Tax from on-road
diesel fuel when it is used in off-road vehicles to encourage its use for that purpose;
(2)the City purchase on-road diesel fuel for its off-road vehicles if the Province eliminates the
Provincial Fuel Tax for that purpose; and
(3)when making bulk purchases of gasoline, on-road diesel fuel and off-road diesel fuel, the
City should consider sulphur content, as well as cost, as a selection criteria.
Background:
At its meeting of July 29, 30 & 31, 1998 the Council of the Corporation of the City of Toronto
had before it Clause No.2 contained in Report No. 10 of the Board of Health, entitled, "Air
Quality and a Federal Standard for Sulphur in Fuel". This report provided compelling human
health and socioeconomic arguments in support of a 30 ppm federal standard for sulphur in
gasoline and a 400 ppm federal standard for off-road diesel fuel. Council adopted this Clause
without amendment. Recommendation No. 4 requested that a review of the City of Toronto's
Fuel Purchase Program be undertaken and requested the Medical Officer of Health 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 meet the 30 ppm standard.
Staff from Toronto Public Health and Corporate Services Department's Fleet Management
Services Division prepared this report in consultation with Financial Services' Purchasing and
Materials Management Division.
Discussion:
The City of Toronto and its purchasing partners, will require more than 14 million litres of
gasoline, more than 8 million gallons of diesel fuel for on-road vehicles, and almost 4 million
litres of diesel fuel for off-road vehicles for corporate use in 1999 (see Appendix A).
At the present time, refueling of City vehicles occurs in several different ways. In some of the
former municipalities, bulk fuel is purchased and dispensed through City-owned fuel sites,
usually in yards used by Works and Emergency Services or Parks and Recreation operations,
or through pumps located at emergency services stations or maintenance facilities. Other
former municipalities utilize private sector gas stations, while others use a combination of
City-owned and private sector refueling locations. When fuel is purchased at private sector
locations, the sulphur content of the fuel purchased is unknown. With bulk fuel purchases for
City-owned fuel sites, information on sulphur levels is provided when fuel is delivered.
Gasoline:
According to a report prepared by Environment Canada, there are three refineries and five
importers operating in Canada that sell gasoline with sulphur levels lower than 100 ppm.
Because this information is considered proprietary and confidential, Environment Canada can
not identify the names and locations of these companies. However, staff have been informed
that the three refineries producing low sulphur fuel are western refineries that can not supply
gasoline by pipeline to Ontario. While none of the five importers are currently providing
gasoline with sulphur levels of 30 ppm to Ontario, it is possible that they could provide it
from California or Europe. To buy gasoline from either the importers or the western refineries,
the City would have to pay for shipping by truck and storage in addition to the gasoline. It is
expected that transportation and storage costs would make these options prohibitively
expensive and impractical at this time.
Within Ontario, there are five major refineries which provide gasoline with sulphur levels
which range from less than 200 ppm to greater than 800 ppm. Once again, because this
information is considered proprietary and confidential, Environment Canada can not tell City
staff which company is producing gasoline with the lower levels of sulphur. When City staff
contacted the companies operating refineries in Ontario, the companies indicated that they
were unable to release information about the sulphur levels in their gasoline.
Working in consultation with Public Health and Fleet Management Services, the Purchasing
and Materials Management Division has released a quotation for the purchase of fuel for
1999, which indicates that the City will consider both price and fuel sulphur levels when
awarding its tender. Suppliers have been asked to provide the annual average level of sulphur
in their gasoline when submitting their bids. If companies provide this information, the City
will be able to weigh the human health impacts associated with sulphur as well as cost when
selecting fuels for corporate use. The deadline for bids from suppliers was October 8, 1998.
City staff will review the bids that meet the appropriate specifications, and report to the Board
of Health with any further recommendations.
Diesel:
The situation with diesel is different than with gasoline because there are currently two kinds
of diesel readily available on the market. Sulphur levels in diesel fuel to be used in on-road
vehicles have been regulated at a maximum of 500 ppm. Sulphur levels in diesel fuel to be
used in off-road vehicles have not yet been regulated. The off-road diesel fuel has been
coloured red to distinguish it from the low sulphur diesel required for on-road vehicles. In
Ontario, the average level of sulphur in off-road diesel fuel is about 2,200 ppm, while the
average level of sulphur in on-road diesel fuel is about 270 ppm.
The City could reduce its contribution to poor air quality by buying on-road diesel for its
off-road vehicles. However, on-road diesel fuel costs about 40.3 cents per litre; approximately
16 cents per litre more than off-road diesel. It would cost the City approximately $637,000.00
more per year than the $947,000.00 per year it currently spends, to buy on-road diesel fuel for
the City's off-road vehicles. This is clearly prohibitively expensive.
Of the 16 cents per litre difference between on-road and off-road diesel, 14.3 is paid to the
province as a provincial fuel tax. The City could ask the Province to eliminate the provincial
fuel tax when on-road diesel is used in off-road vehicles to encourage owners and operators of
off-road vehicles to select a cleaner fuel which has a lesser impact on human health and the
environment. The Province would not be losing money because it is not currently collecting
tax on off-road diesel used in these vehicles. If the province complied with the City's request,
it would cost the City approximately $40,000.00 per year to use the on-road diesel with lower
sulphur levels in its off-road vehicles. The impact of this increase would be reduced by
savings expected from the reduction of the fleet size and related fuel savings.
On-road and off-road diesel fuels have been included with gasoline in the tender released by
the City's Purchasing and Materials Management Division. As with gasoline, suppliers have
been asked to provide annual average sulphur levels for both on-road and off-road diesel fuels.
It is likely that there is a range in the sulphur levels in both the on-road and off-road diesel
fuels provided by companies operating in Ontario as well. It is recommended that the City
should consider both the sulphur levels and the price when awarding the tender for diesel fuels
as well as for gasoline.
Conclusion:
To reduce the City's contribution to poor air quality, the City should consider sulphur levels
in fuels, in addition to cost, when evaluating bulk fuel purchases for City of Toronto and City
Agency vehicles. City Council should request that the Province eliminate the Provincial Fuel
Tax from low sulphur diesel fuel when it is used for off- road vehicles to encourage the use of
cleaner fuel in off-road vehicles. The City should buy on-road diesel for its off-road vehicles
if the province eliminates the provincial fuel tax for that purpose.
Contact Name:
Swee Hoh, Fleet Management Services, Corporate Services, Tel: 392-7791
Kim Perrotta, Environmental Protection Office, Toronto Public Health, Tel: 392-6788.
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Appendix A
Estimated Annual Requirements (in Litres) for Fuel
The Strategic Policies and Priorities Committee also had before it the following
reports/communications which were forwarded to all Members of Council with the agenda of
the Strategic Policies and Priorities Committee for its meeting on December 15, 1998, and
copies thereof are on file in the office of the City Clerk:
-(October 9, 1998) from the City Clerk forwarding the action of City Council on October1and
2, 1998;
-Clause No. 2 of Board of Health Report No. 10, entitled "Air Quality and a Federal Standard
for Sulphur in Fuel", which was adopted by Council on July 29, 30 and 31, 1998;
-(November 4, 1998) addressed to the Corporate Services Committee from T.R. (Bob) Clapp,
Vice President, Ontario Division, Canadian Petroleum Products Institute;
-(October 26, 1998) addressed to Mr. John A. Honderich, Publisher, The Toronto Star and
Ms. Christine Stewart, The Minister of the Environment from Mr. Michael T. Budd,
Executive Vice-President, Independent Retail Gasoline Marketers Association of Canada
(IRGMA); and
-Submission from the Canadian Petroleum Products Institute (CPP), titled "Sulphur in
Gasoline".
