FUEL QUALITY comparative analysis of the quality of fuels available

in Poland and in selected European Union countries(Germany, Austria, Latvia, Ireland and the Czech Republic)

OFFICE OF COMPETITION AND CONSUMER PROTECTION

FUEL QUALITY comparative analysis of the quality of fuels available

in Poland and in selected European Union countries(Germany, Austria, Latvia, Ireland and the Czech Republic)

The study with its summary

An analysis carried out on the basis of the data obtainedfrom the national authorities responsible for fuel quality scrutinizing

Agnieszka Jankwukasz Garstecki

Warsaw 2007

The following publication was prepared for the O ce of Competition and Consumer Protection within the Transition Facility Project No. 2004/016-829.02.04 System of Consumer Protection.

ISBN 978-83-60632-12-3

O ce of Competition and Consumer ProtectionPlac Powstacw Warszawy 100-950 WarsawPh.: (+48 22) 22 55 60 800www.uokik.gov.pl

Warsaw 2007

Skad, druk i oprawa:Agencja Wydawnicza ARGItel. 071 78 99 218www.argi.plargi@wr.home.pl

TABLE OF CONTENTS

I. The study

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

1. Organization of fuel quality scrutinizing system . . . . . . . . . . . . . . . . . . . . . . 111.1. Introduction (Community requirements, standards) . . . . . . . . . . . . . . . . . . . . 111.2. System in Poland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131.3. System in Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191.4. System in Austria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201.5. System in Latvia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241.6. System in Ireland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251.7. System in the Czech Republic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271.8. Comparative table January 2005. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291.9. Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

2. Fuel and its quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312.1. Fuel types, their use and characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . 312.2. Factors determining fuel quality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372.3. Fuel quality testing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412.4. The parameters scrutinized for the petrol . . . . . . . . . . . . . . . . . . . . . . . . . . 432.5. The parameters scrutinized for diesel fuel . . . . . . . . . . . . . . . . . . . . . . . . . . 472.6. Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

3. Fuel quality scrutiny results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513.1. The scrutiny results in Poland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513.2. The scrutiny results in Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543.3. The scrutiny results in Austria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 553.4. The scrutiny results in Latvia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563.5. The scrutiny results in Ireland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 573.6. The scrutiny results in the Czech Republic . . . . . . . . . . . . . . . . . . . . . . . . . . 583.7. Comparative analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613.8. Summary of the results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

4. Comparison of prices in the countries under the study . . . . . . . . . . . . . . . . . . . 65

5. Summary - Poland against the background of other countries . . . . . . . . . . . . . . 69

II. Summary of the study

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

1. Organisation of the fuel quality control system . . . . . . . . . . . . . . . . . . . . . . . . 74

2. Fuel types, their use and characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

3. Results of the fuel quality scrutiny . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

7INTRODUCTION

Introduction

Fuel quality is one of the most signi cant reasons why drivers choose a particular lling station. Trust in good fuel quality in uences client satisfaction and loyalty. This is con rmed by the marketing researches which the authors of this study have been carrying out for years now, inter alia at the request of fuel companies. Practically, in every project concerning driv-ers behaviour and their satisfaction with the services of the given networks of lling stations, the respondents are asked the same question: Why do you use the services of these lling stations?. The three most popular answers (usually given in the following order) are: station location, con dence in fuel quality and the price of fuel.

Results of one of the marketing researches mentioned above (carried out in autumn 2005) are available e.g. on the website of Roland Berger Strategy Consultants Sp. z o.o. (www.rolandberger.pl), which also contains a description of the introduction of the new lling station brand BLISKA, due to the PKN ORLEN lling station network being divided into the premium and the economic segment. The starting point was the segmentation of clients of the lling stations. It occurred that the most signi cant criterion is the relation between the clients con dence in the quality o ered (mostly the quality of fuels but also the quality of services) and the prices of fuel. It was found that most clients of lling sta-tions aim at reaching a compromise between price and quality. Two groups of clients were identi ed:! quality purchasers for whom high quality (of fuel and services) is the most impor-

tant and who are ready to pay more for that;! value seekers i.e. drivers expecting quality, however at a reasonable price.In the case of both of the groups quality of fuel is of key importance. The former expect

the highest quality, the latt er satisfying quality at lowest possible price, but the minimum level of con dence that the fuel tanked up does not harm the engine is always the necessary condition.

The price and location are easy for the consumers to verify. However, the perception of fuel quality is usually based on the skill of the branding experts and not on the observations, experience and knowledge of the clients. The quality of fuel can be objectively assessed only by testing the samples according to applicable standards and procedures in a professional laboratory.

The above mentioned asymmetry of knowledge between the buyer of fuel and its seller requires a great deal of trust on the part of the clients and at the same time constitutes a great temptation for the sellers to abuse their favourable position. The media have broadly covered this issue a few years ago.

In order to reduce the abovementioned asymmetry and consequently to make sure that the fuel meets the quality standards, Poland and other countries established authorities acting as impartial, objective experts scrutinizing the quality of fuels placed on the market.

In Poland such an authority is the O ce of Competition and Consumer Protection (OCCP, www.uokik.gov.pl). Fuel quality monitoring plays a signi cant role in the OCCPs operations. The O ce is responsible for enabling Poland to discharge its obligations resulting from its European Union membership and related to monitoring the quality of liquid fuels placed on the market, as well as drawing up reports for the European Commission presenting the results of liquid fuels quality inspections carried out across the whole country. To this end, the system of monitoring and scrutinizing of the quality of liquid fuels and bio-fuels was established and implemented in Poland (according to the guidelines set forth in the applicable EU directives and standards). The system has been in operation since 1 May 2004.

8INTRODUCTION

Of course similar systems operate in other EU countries. Adopting the Directive 98/70/EC in 1998, the European Parliament speci ed requirements concerning quality of fuels placed on the market, whilst, the Member States, accepting the directive and the applicable standards as the starting point, developed appropriate regulations and organized systems of fuel quality monitoring within their territories.

One of the objectives of this study was to describe the systems in Poland and in other se-lected countries (Germany, Austria, Latvia, Ireland and the Czech Republic), by presenting: ! review of the legal basis;! outline of the authorities involved in the monitoring and scrutinizing of fuel quality;! description of time and territorial scope of the inspections;! organization of the inspections (what parameters are analysied, what types of fuels are

inspected, how samples are selected, etc.).The comparative analysis showed that the organization of the fuel quality monitoring and

scrutinizing system in Poland is not only not worse from the systems in more developed coun-tries of the EU, but stands out in a positive sense, as it responds to noti cations sent by con-sumers who suspect that non-compliant fuel is in circulation.

Due to the educational and popularising role of the study, issues related to fuel quality and scrutiny are discussed from the technical and chemical point of view (e.g. presenting the consequences for the engine). The essence of a fuel quality inspection is checking if a given parameter meets the requirements of a standard or not. Therefore, it is worth know-ing what a given parameter means and what the consequences of exceeding or failing to meet its acceptable values are e.g. for a car engine or the environment. That shows what a complex product fuel is (both petrol and diesel), how important the optimum composition of its components is and what the possible threats for fuel quality occur in the process of fuel production and distribution. Moreover, the Reader, having acquainted him or herself with the introduction and the theoretical background of the study, will be fully prepared to comprehend the results of the inspections carried out in di erent countries, to interpret the data and to draw conclusions.

Another objective of the analysis is to present and review the results of the inspections of fuels sold in Poland against the background of the results of the inspections carried out in selected countries of the European Union (Germany, Austria, Latvia, Ireland and the Czech Republic). The following criteria were applied for selection of the countries for comparison:! widest possible cross-section of di erent countries (old and new EU Member

States, more and less developed economies, large and small countries), without, how-ever, blurring the transparency of the study by too many countries and making it dif- cult for the Reader to grasp the entire material;

! Comparing the situation in Poland and in the countries which obtained the best results of fuel quality inspections in the 2nd half of the 2004 (i.e. Germany, Austria and Latvia), as well as in the countries where similar levels of irregularities were found as in Poland in the same period (Ireland and the Czech Republic).

The data concern inspections carried out in the selected countries in 2005. This is because Poland, the Czech Republic and Latvia were not obliged to run a system of fuel quality moni-toring and scrutinizing until their accession to the European Union, i.e. the 2nd half of 2004. It was only in 2005 that the samples of fuels were collected and tested in the course of the whole year, taking into consideration the division into summer and winter period. As for the data for 2006, the Member States are obliged to make them known to the European Commission only by the end of June 2007.

The table below contains an index of the sources of information used for elaboration and analysis of the results of fuel quality inspections in 2005 and the systems of fuel quality moni-toring in the di erent countries.

9INTRODUCTION

DATA - COUNTRY SOURCE

Poland Department of Market SurveillanceO ce of Competition and Consumer Protection Plac Powstacw Warszawy 1, 00-950 Warsaw, Poland

GermanyAEA Energy & EnvironmentThe Gemini Building, Fermi AvenueHarwell, Didcot, OX11 0QR, Great Britain

Umweltbundesamt Schadsto minderung und Energieeinsparung im Verkehr Wrlitzer Platz 1, 06844 Dessau, Germany

AustriaVerkehr, Lrm & UmweltmanagementUmweltbundesamt GmbHSpitt elauer Lnde 51090 Vienna, Austria

LatviaAEA Energy & EnvironmentThe Gemini Building, Fermi AvenueHarwell, Didcot, OX11 0QR, Great Britain

Latv as Republikas Ekonomikas Ministr aBrivibas str. 55, Riga, LV 1519, Latvia

Ireland AEA Energy & EnvironmentThe Gemini Building, Fermi AvenueHarwell, Didcot, OX11 0QR, Great Britain

Czech Republic Ministerstvo prmyslu a obchoduNa Frantiku 32, 110 15 Praha 1, Czech Republic

European Commission European Commission, DG Environment and AEA Energy & EnvironmentThe Gemini Building, Fermi AvenueHarwell International Business CentreDidcot, OX11 0QR, Great Britain

The results of the drivers opinion polls referred to at the beginning show that fuel quality is of key importance both in the premium and the economic segment. By making this dis-tinction we touch upon the issue of the relation of fuel quality to its price. Therefore, this study contains also a comparison of fuel prices in the discussed co untries.

The analysis was made for the O ce of Competition and Consumer Protection. The au-thors are fuel market experts cooperating with the European Training and Expertise Center (www.csee.pl) on the project: Transition Facility 2004/016-829.02.04.0 /P Part 1 Consumer Protec-tion System Consumer studies and expertise.

The authors would like to thank all the persons who contributed to the preparation of this analysis.

Agnieszka Jankw (ajankow@pentor.pl)ukasz Garstecki (lgarstecki@pentor.pl)

Warsaw, 20 April 2007

11

ORGANIZATION OF FUEL QUALITY SCRUTINIZING SYSTEM

1. Organization of fuel quality scrutinizing system

1.1. Introduction (Community requirements, standards)

According to Directive 98/70/EC on petrol and diesel fuels quality, all the Member States of the European Union are committ ed to scrutinizing the quality of fuels sold at the lling stations in their respective countries. This obligation has been established as a result of the di erences in the legal and administration regulations adopted by the Member States with regard to the speci cations of fuel used in vehicles with the spark ignition engines and com-pression-ignition engines. It has been acknowledged that the di erences in the regulations create trade barriers in the Community and hence they may directly in uence the internal market functioning, as well as the international competitiveness of the European car and re ning industry.

Moreover, human health and environment protection was taken into consideration as the air pollutants i.e. nitric and sulphur oxides, unburned hydrocarbon, solid par-ticles, carbon monoxide, benzene and other toxic substances generated in the exhaust fumes of the engine powered vehicles pose direct and indirect risks. Due to the above, in 2003, the European Parliament adopted Directive 2003/17/EC replacing Directive 98/70/EC, establishing new, stricter environment specifications for the fuels present on the market.

The scrutinizing system is based on the European standards EN 14274:2003 Automo-tive fuels. Assessment of petrol and diesel quality. Fuel quality monitoring system (FQMS) and EN 14275:2003 Automotive fuels. Assessment of petrol and diesel fuel quality. Sam-pling from retail site pumps and commercial site fuel dispensers. These standards de ne precisely the principles of selecting the samples, their minimum number, the method of sampling at the lling stations, the rules of transportation, storage and testing. The main premises of the system de ned in the aforementioned standards are based on the follow-ing principles:! a Member State ought to be divided into regions, in which the samples would

be taken proportionally to the fuel sales volume. If full information on the sales volume is missing, the region division may be based on the number of filling sta-tions in the region or on other criteria (e.g. the number of vehicles, people). It is also possible to make the division according to geographical and administrative borders. In case of small countries like Luxembourg, regional division is not ap-plied;

! for monitoring purposes, a year is divided into two periods winter and summer, this again results from di erent values of vapour pressure parameter in these periods, which are included in the quality standards for motor petrol;

! the minimum number of samples taken for inspection purposes in the countries classi- ed as small ones (sales up to 15 mln tones per year) is 100 for each fuel type per region, each monitoring period; in the countries where yearly sales exceed 15 mln tones, the minimal number of samples is 200;

! fuel distribution outlets for inspections are selected at random, and the samples are taken at the lling stations (open access and company stations);

! for sampling purposes unused containers of approximately 4 litres ought to be used; these containers should have external mountings in order to enable to seal them; the continuers may be lled with maximum 3 litres;

! each container must have the following marking elements: the place, date and hour of sampling, name and kind of product, sample identi cation code.

12

Introduction (Community requirements, standards)

Dividing the country into regions determines the choice of one of the three possible moni-toring system models pursuant to the EN 14274:2003 standard A, B or C.

Model A is based on the division of the country into geographical macro regions in a way where in every region the entire amount of the fuel being analysed and the number of distribu-tion places are similar. Such an action mode is recommended for all the countries, as it enables to depict e ciently fuel multiplicity, and as a result lesser number of taken samples. If region grouping in terms of geographical, administration or other division does not help to meet all of the criteria in order to design this recommended model, then subsequently B model is taken into account, which is based on geographical and administration country division. Instead, C model is selected in case of a small country where the division of the territory into macro regions or regions is impossible.

The chosen regional division format, country size, calculated on the basis of yearly sales and the share of a given fuel type in the sales, all determine the minimum number of distribu-tion outlets in a particular country where samples ought to be taken.

The minimum number of distribution outlets in a particular country where samples of the fuel types with the market share of 10 % and more should be taken is shown in the Table 1, pursuant to the provisions of EN 14274:2003.

Table 1. Minimum number of samples of each fuel type in the winter and summer periodsModel A B CSmall countryPetrol of a given type 50 100 50Diesel 50 100 50Big countryPetrol of a given type 100 200 -Diesel 100 200 -

The minimum number of samples of a particular fuel type with the market share of 10 % is calculated in proportion to the number of samples of its corresponding native fuel type, ac-cording to the following formula:

Nfuel typeXMarket Share (fuel type X)Market Share (native

=

type) native fuel typeN

Conformity with the requirements provided for in the Directives with respect to the petrol and diesel sold in the Member States is monitored on the basis of the analytic methods set forth in the European standards EN 228 and EN 590, accordingly.

Each year, all Member States send a report to the European Commission on the quality of fuels sold on their territory.

13

ORGANIZATION OF FUEL QUALITY SCRUTINIZING SYSTEM

1.2. System in Poland

European Union regulations on fuel quality scrutiny (Directives 98/70/EC, 2003/17/EC and others) were transposed to the Polish legal system by the Act of 23 January 2004 on liquid fuel and bio-fuel quality monitoring and scrutinizing system (Journal of Laws of 2004, No 34, item 293, as amended). Currently, since 1 January 2007, these matt ers are governed by the Act of 25 August 2006 on fuel quality monitoring and scrutinizing system (Journal of Laws of 2006, No 169, item 1200) and by the following regulations of:! Minister of Economy and Labour of 17 September 2004 on liquid fuel and biofuel

quality monitoring method and scrutinizing (Journal of Laws of 2004, No 211, item 2146);

! Minister of Economy, Labour and Social Policy of 31 March 2004 on the sampling meth-od (Journal of Laws of 2004, No 64, item 595);

! Minister of Economy and Labour of 19 October 2005 on the qualitative requirements for liquid fuel (Journal of Laws of 216, item 1825). Until 31 November 2005 the pro-visions on the qualitative requirements for liquid fuel, of 16 August 2004, of the Minis-ter of Economy, Labour and Social Policy resolution were in force (Journal of Laws 2004, No 192, item 1969);

! Minister of Economy of 3 November 2006 on the liquid fuel quality inspection method (Journal of Laws of 2006, No 220, item1606). Until 15 December 2006, the Resolution of the Minister of Economy and Labour, of 16 August 2004 on the liquid fuel quality test methods (Journal of Laws of 2004, No 192, item 1970) were in force;

! Minister of Economy of 8 September 2006 on the qualitative requirements for liquid biofuel (Journal of Laws of 2006, No 166, item 1182);

! Minister of Economy of 28 February 2007 on inspection method of the liquid biofuel quality (Journal of Laws 2007, No 44, item 281);

! Minister of Economy of 28 December 2006 on the qualitative requirements for the liq-ue ed gas (LPG) (Journal of Laws of 2006, No 251, item 1851);

! Minister of Economy of 31 January 2007 on the lique ed gas sampling method (LPG) (Journal of Laws of 2007, No 44, item 279);

! Minister of Economy of 23 March 2007 on the lique ed gas quality inspection method (LPG) (Journal of Laws of 2007, No 59, item 399);

! Minister of Economy of 28 December 2006 on the compressed natural gas qualitative requirements (CNG) (Journal of Laws of 2006, No 251, item 1850);

! Minister of Economy of 4 January 2007 on the qualitative requirements for sulphur content in oils and the types of installation and conditions in which heavy heating oil will be used, (Journal of Laws of 2007, No 4, item 30);

! Minister of Economy of 21 February 2007 on the sampling of light heating oil, heavy heating oil and engine oil for inland shipping ships (Journal of Laws of 2007, No 41, item 261);

! Minister of Economy of 21 February 2007 on the quality inspection method for the light heating oil, heavy heating oil and engine oil for inland shipping ships (Journal of Laws of 2007, No 41, item 262);

! Minister of Economy of 22 January 2007 on the qualitative requirements for liquid bio-fuel applied in the eets and produced by the agriculturist for their own use (Journal of Laws of 2007, No 24, item 149);

! Minister of Economy of 31 January 2007 on the liquid biofuel sampling method by the agriculturist for their own use (Journal of Laws of 2007, No 24, item 150).

The Act of 25 August 2006 on fuel quality monitoring and scrutinizing system, which sub-stituted the Act on the monitoring system (of 23 January 2004) along with the aforementioned regulations and the Act of 15 December 2000 on the Trade Inspection (Journal of Laws of 2001,

14

System in Poland

No 4, item 25 as amended) and the executive acts issued on its basis, constitute the legal basis for liquid fuel quality monitoring and scrutinizing system functioning in Poland.

THE BODIES INVOLVED IN THE MONITORING AND SCRUTINIZING OF FUEL QUALI-TY IN POLAND

The President of the O ce of Competition and Consumer Protection is responsible for the operation of the system and performs his duties in cooperation with the Trade Inspection re-sponsible for fuel scrutiny. His primary responsibilities include: ! keeping the register of enterprises, lling stations (both open access and company sta-

tions) and warehouses trading in fuel on the basis of the data made accessible by the General Statistical O ce, the Energy Regulatory O ce, the State Fire Service and the O ce of Technical Inspection:

! assigning identi cation numbers to the enterprises, lling stations, company stations and warehouses, for the System purposes;

! keeping the register of accredited laboratories authorised to carry out the fuel tests on the basis of the data made available by the Polish Centre for Accreditation;

! de ning the minimum number of open access and company lling stations where in-spections are to be carried out;

! sett ing up fuel quality scrutiny programs, de ning the activities of the Trade Inspec-tion;

! sett ing up the manner of sample marking in order to prevent identi cation of the en-terprises, lling stations or plants stations, in the course of the inspections;

! drawing up yearly common reports on the performance of the liquid fuel and bio-fuel quality inspections, which are submitt ed to the European Commission and Polish Council of Ministers;

! gathering and keeping the statistical data on liquid fuel and biofuel quality for the Sys-tem purposes.

The above mentioned obligations are vested in the President of the O ce of Competition and Consumer Protection under the Act of 23 January 2004. They are maintained in the Act on fuel quality monitoring and scrutinizing, of 25 August 2006, which additionally sets forth the following obligations: ! to keep the register of enterprises dealing with fuel production, transport and

storage;! to keep the register of the owners and users of the selected eets;! to keep the register of the agriculturists producing liquid biofuel for their own use, on

the basis of the data made available by the Agricultural market Agency;! to assign identi cation numbers to the enterprises dealing with fuel production and

storage and to assign identi cation numbers to the agriculturists who produce biofuel for their own use, for the System purposes;

! to de ne the minimum number of fuel warehouses, enterprises whose operations in-volve fuel production and storage as well as introducing light heating oil to the market, who will be subject to scrutiny ;

! to de ne the minimum number of lling stations (both open access and company sta-tions), where lique ed gas (LPG) or compressed natural gas (CNG) quality scrutiny is to take place;

! to draw up yearly common reports on the quality of lique ed gas (LPG) and natural gas (CNG);

! to draw up the yearly common reports on the content of sulphur in light heating oil, heavy heating oil, oil for engines applied in the ships designed for inland shipping and in the shipping fuel used in sea ships.

15

ORGANIZATION OF FUEL QUALITY SCRUTINIZING SYSTEM

Frames of the System for Trade Inspection tasks include:! carrying out inspections;! taking and handing over the samples for testing, which are performed by the laborato-

ries with accreditation certi cates issued by the Polish Centre for Accreditation;! preparing quality results analyses;! drawing up periodic statements and yearly reports on the carried out scrutinises.

PERIODIC AND TERRITORIAL SCOPE OF THE INSPECTIONS

According to Directive 98/70/EC and the regulations of the Minister of Economy and La-bour on the method of fuel quality monitoring resulting from the Directive, and above all ac-cording to the qualitative requirements for fuels, de ned in the qualitative standards for petrol - EN 228 and diesel fuel - EN 590,,respectively, the scrutiny and quality monitoring has been divided into two periods of the year:! summer:

for motor petrol from 1 May to 30 September; for diesel fuel from 16 April to 30 September;

! winter: for motor petrol from 1 October to 30 April; for diesel fuel from 1 October to 15 April.

Samples are taken every month of the year. Inspections are carried out on the whole territory of Poland. For the purposes of fuel quality monitoring, the country has been divided into areas corresponding the voivodships, i.e. according to the administrative division of the country.

SCRUTINY ORGANISATION FROM 1 MAY 2004 TO 31 DECEMBER 2006

During the period from 2004 to the end of 2006, as it has already been mentioned, the legal basis for the functioning of the liquid fuel and biofuel quality monitoring and scrutinizing sys-tem was provided by the Act of 23 January 2004 on liquid fuel and biofuel quality monitoring and scrutinizing system.

The liquid fuel quality monitoring and scrutinizing system was divided into two parts:! the European part, the aim of which was the monitoring in terms of statistical liquid

fuel quality introduced to the trade and drawing up the report for the European Com-mitt ee presenting the statistical data concerning the fuel quality on the market;

! the national part, aimed at eliminating from the market liquid fuel which does not meet quality requirements provided for in the Resolution of the Minister of Economy and Labour of 16 August 2004 on the qualitative requirements for liquid fuel (Journal of Laws of 2004, No 192, item 1969), replaced by the Resolution of 10 October 2005 on the quality requirements for liquid fuel (Journal of Laws of 2005, No 216, item 1825) and to draw up the report including fuel quality scrutiny results for the Council of Ministers.

The scrutiny covered the types of fuel being traded on the whole territory of Poland, that is:! 95 lead-free petrol;! 98 lead-free petrol;! 95 universal petrol (withdrawn from circulation at the end of 2004);! diesel fuel.

EUROPEAN PART OF THE SYSTEM

Pursuant to the regulations, the monitoring and fuel quality inspections have been carried out within this part of the system at the lling stations, where liquid fuels is sold (commonly available) and at the company stations.

16

System in Poland

Liquid fuels samples taken for inspection purposes, have been inspected in terms of all the quality parameters listed in Directive 98/70/EC of 13 October 1998 on the petrol and diesel fuel quality (as amended by Directive 2003/17/EC of 3 March 2003), which are also listed in the Resolution on the qualitative requirements for liquid fuel.

For each of the fuel types listed above, the minimum number of lling stations in which the scrutiny took place in each monitoring period (summer and winter) equalled 100 for the entire country. It was the result of fuel sales volume during the whole year on the territory of Poland and applying the division into the regions in accordance with the administrative division. On the basis of the fuel sold during the year (approximately 11 mln tons), in accordance with the EN 14274:2003 standard, Poland has been classi ed as a small country. Samples taken for in-spection purposes have been selected at random by the computer system for each monitoring period, separately for each voivodship and within each fuel type.

The number of stations, where inspections have been carried out on the territory of a par-ticular voivodship, has been established pursuant to the Resolution on the method of liquid fuel and biofuel quality monitoring.

The number of stations in particular voivodships, for the purpose of selecting the stations, in which inspections took place during the monitoring period starting in a particular calendar year, has been accepted on the basis of the data at the end of the previous year.

Moreover, in order to test each fuel type in a particular voivodship, 10% stations has been selected at random, in case any of the selected stations to be inspected was temporarily closed or liquidated.

Table 2. Schedule with the number of samples (in total 600) taken in Poland within the frames of the European part of fuel quality monitoring and scrutinizing system

Summer period Winter period95 lead-free petrol 100 samples (+10%) 100 samples (+10%)98 lead-free petrol 100 samples (+10%) 100 samples (+10%)diesel fuel 100 samples (+10%) 100 samples (+10%)

NATIONAL PART OF THE SYSTEM

This part of the monitoring and scrutinizing system, as it has already been mentioned, is aimed at eliminating from the market fuel which does not meet the quality requirements set forth in the Resolution on the qualitative requirements for liquid fuels, but also at checking fuel quality improvement ratio o ered at the lling stations, in which in course of previous scrutinises abnormalities have been noticed. Carrying out an inspection was also possible in the case when the scrutiny authorities had been informed about improper fuel quality or on the basis of the suspicion that such a situation might have occurred. Usually, such inspections resulted from the complaints of the drivers, information provided by the Police or the Central Investigation Bureau.

Within the frames of this part of the system, in addition to the lling stations, the scrutiny covered fuel warehouses as well. The enterprises whose operations involve wholesale of liquid fuel, were selected at random from the register kept by the O ce of Competition and Consumer Protection, pursuant to the Resolution on the monitoring of liquid fuel and biofuel quality scru-tiny, in the number of 50% out of the total number of the enterprises listed in the register.

The liquid fuel samples taken for inspection purposes within the country part of the sys-tem, have been tested in terms of all or selected qualitative parameters listed in the Resolution on the qualitative requirements for liquid fuels. This kind of solution has been accepted due to high costs to be borne in order to inspect a fuel sample in terms of all qualitative parameters. Inspection of only a part of the parameters enabled to scrutinize a grater number of stations and taking more samples.

17

ORGANIZATION OF FUEL QUALITY SCRUTINIZING SYSTEM

ORGANISATION OF THE SCRUTINY FROM 1 JANUARY 2007

The Act of 25 August 2006 has signi cantly expanded and changed the fuel quality moni-toring and scrutinizing system in Poland, comparing with the former Act of 23 January 2004, which was in force to the end of December 2006. Quality scrutiny is currently carried out to a considerably larger scale. The scrutiny encompasses the whole fuel distribution chain from lling stations, through fuel basis and warehouses, to the fuel producers. Additionally, the scrutiny covers all the liquid fuel types present on the market, that is:! 95 lead-free petrol;! 98 lead-free petrol;! diesel fuel;! liquid biofuels (including those applied in the selected vehicle eets and manufactured

by the agriculturists for their own use);! propane-butane (LPG);! compressed natural gas (CNG);! light heating oil.In addition to inspecting the open access and company stations and the fuel warehouses,

which took place to the end of December 2006, currently the scrutiny covers as well the fol-lowing enterprises:! fuel producers;! enterprises which store fuel;! enterprises transporting fuels (inspection at the request of the police);! owners and user of the selected vehicle eets;! open access and company lling stations, in which the liquid biofuels, lique ed gas

(LPG) and compressed natural gas (CNG) are inspected;! enterprises launching new light heating oil on to the market;! agriculturalists producing liquid biofuels for their own use.The above results from the fact that fuel quality deterioration takes place at various stages

of its distribution, and additional places to be scrutinized, in addition to the lling stations and warehouses, enable to eliminate possibly the greatest sales volume of fuel which does not meet the qualitative requirements.

Since the Act of 25 August 2006 has such a great scope, the division prevailing under the Act on 23 January 2004, that is a division into the country and European parts, was given up. It is only to distinguish the scrutiny activities carried out in order to prepare the report for the European Commission on the fuel quality (pursuant to Directive 98/70/EC of the European Parliament and of the Council, of 13 October 1998, on the diesel petrol and diesel fuel replaced with Directive 2003/17/EC of the European Parliament and of the Council, of 3 March 2003) why the name European part of the fuel quality monitoring and scrutinizing system was maintained, which pertains to the scrutiny :! of PB 98 lead-free petrol, PB 95 lead-free petrol, diesel fuel, diesel fuel with 20%

of esters, pure ester;! carried out exclusively at lling stations and company stations;! which include fuel sampling in the amount resulting from the European standard EN

14 274: 2005 Automotive fuels. Assessment of petrol and diesel fuel quality. Fuel quality monitoring system;

! which include taking one sample for one fuel type at the station.Selecting the entities (warehouses, open access and company lling stations, where the

LPG lique ed gas is sold or CNG compressed natural gas, enterprises which deal with fuel manufacturing and storing, enterprises which are involved with introducing the light heat-ing oil into the market) to be tested in terms of fuel quality are selected at random from the registers kept by the O ce of Competition and Consumer Protection. Except for the mini-mum numbers set forth by the President of the O ce of Competition and Consumer Protec-

18

System in Poland

tion, these entities may also be appointed to be scrutinized in case of receiving the informa-tion about improper fuel quality or if circumstances occur which indicate the possibility of improper fuel quality.

The scrutiny at the open access and company lling stations, where the liquid fuels and biofuels are sold (as in the previous case, that is within the period when the Act of 23 Janu-ary 2004 on liquid fuel quality monitoring and scrutinizing system was in force), are carried out upon receiving the information on improper fuel quality or if circumstances occur which indicate the possibility of improper fuel quality. In practice, this kind of scrutinises result from the complaints of the drivers, information acquired from the Police, including Central Bureau of Investigation.

The same procedure of appointing the scrutinises pertains as well to the owners and users of the selected eets and the agriculturists producing biofuels for their own use.

The samples taken in the course of the scrutiny are inspected in the laboratories having the accreditation certi cates issued by the Polish Centre for Accreditation. Petrol and diesel fuel samples are tested with regard to all of the or some of the qualitative parameters. However, biofuels and LPG and CG samples are subject to the detailed scrutiny in terms of all the param-eters de ned in the relevant resolutions on the qualitative requirements (in the Resolution of 8 September 2006 on the qualitative requirements for biofuels, in the Resolution of 28 December 2006 on the qualitative requirements for the lique ed gas (LPG) and in the Resolution of 28 December 2006 on the qualitative requirements for the natural gas (CNG)).

A signi cant change in comparison with the previous Act on liquid fuel and liquid biofuels quality monitoring and scrutinizing system is that the President of the O ce of Competition and Consumer Protection or the Chief Inspector of the Trade Inspection immediately appoints for scrutiny the supplier of a particular enterprise where an inadequate fuel quality has been stated. In case, there is no stationary fuel tank, the Trade Inspection undertakes the scrutiny activities in order to select another enterprise, from whom the fuel called into question comes from, and who does have the stationary tank.

The O ce of Competition and Consumer Protection is responsible for drawing up the re-ports for: ! The European Commission (until 30 June) on:

liquid fuel quality and liquid biofuels quality; content of sulphur in the light heating oil, in the heavy heating oil (on the basis of the

Chief Inspectors for the Environment Protection data), in the oil for the engines in the ships for the inland shipping (on the basis of the Chief Inspectors for the Envi-ronment Protection data), in the shipping fuels applied in the sea ships (on the basis of the reports drawn up by the Directors of the Maritime Authorities);

! the Council of Ministers (until 31 May) on: the quality of liquid fuels, liquid biofuels, lique ed gas (LPG) and compressed natu-

ral gas (CNG).

19

ORGANIZATION OF FUEL QUALITY SCRUTINIZING SYSTEM

1.3. System in Germany

LEGAL BASIS

German legal regulations on the fuel quality monitoring have been based on the European standards (EN 14274:2003, EN 14275:2003) and the premises of EU Directives (Directive 98/70/EC of 13 October 1998 and Directive 2003/17/EC, which replaced it). The marking and qual-ity requirements concerning of the motor petrol, motor oils and liquid gas by establishing the European standards as the minimum requirements which regulate the tenth resolution on the fuel quality and fuel quality marking (Verordnung ber die Bescha enheit und die Auszeichnung der Qualitten von Kraft sto en, 10. BImSchV, vom 21. Mrz 2002, Bundesanzeiger No 62, S. 6758).

By adopting the general administration provisions on the uniform performance, in German lands the inspection criteria have been established, ensuring the uniformity of performance in the entire federation.

With regard to the type and the scope of the samples taken, the reference is made to the counterparts of the standards EN 14274:2003 and EN 14275:2003 marked as DIN-EN 14274:2003 and DIN-EN 14275:2003.

However, the inspection of all the parameters included in the European standards has not been applied for the fuel quality monitoring purposes, but only parameters of great impor-tance for the environment, for example content of sulphur and the parameters important for consumer protection, e.g. octane number and density, or in accordance with the experience in former inspections parameters indicating defectiveness of a product, e.g. ignition tempera-ture with regard to the diesel fuel.

In addition to the premises of the European system, the entities with regard to which there are certain suspicions of selling fuel not complying with the qualitative requirements or whose fuel has been complained about, are subject to the scrutiny.

The aforementioned di erences in fuel quality monitoring system in Germany comparing with the requirements of the European law are big enough, not to classify it to any of the mod-els of the system, which are obligatory pursuant to the EN 14274:2003 standard. It is therefore regarded as a country system.

INSTITUTIONS INVOLVED IN MONITORING AND SCRUTINIZING FUEL QUALITY

The Ministry of Environment (Bundesministerium fr Umwelt, Naturschutz und Reaktorsicher-heit, www.bmu.de) is responsible for supplying the yearly report to the European Commis-sion. This report, based on the data provided by German o ces of the federal states and the statistics of the Federal O ce of Economics and Export Control (Bundesamt fr Wirtschaft und Ausfuhrkontrolle BAFA, www.bafa.de) is drawn up by the Federal Environment O ce (Umwelt-bundesamt UBA, www.umweltbundesamt.de).

The tasks of the union countries and their relevant o ces (among others, state o ces for environment protection, state o ces for the labour inspection) include the realisation of the fuel quality monitoring and scrutinizing system accepted by Germany (that is a selection of distribution places to be scrutinized, sampling for inspection purpose, conformity analyses of the taken fuel samples with the qualitative standards).

The Federal O ce of Economics and Export Control, pursuant to the Act on the mineral oils data gathers instead the data on the volume of fuel sold on the territory of Germany.

PERIODIC AND TERRITORIAL SCOPE OF CONTROL

In accordance with the qualitative requirements with regard to the motor petrol vapour pres-sure, set forth in Directive 98/70/EC, EN 228 standard and in the legal regulations (10. BImSchV), the scrutiny and monitoring of fuel quality have been divided into three periods of the year:

20

System in Austria

! a summer product must be o ered within the period from 1 May to 30 September. Pet-rol vapour pressure must re ect the values stated in the standard from 40 kilo Pascals (kPa) to 60 kPa;

! a winter product is sold within the period from 16 November to 15 March. Vapour pressure equals then from 60 kPa to 90 kPa;

! within the period from 1 October to 15 November, and from 16 March to 30 April (so called the interim period), the pressure of vapour can not exceed the maximum value from the winter period (90 kPa) and can not be lower than the value from the summer period (40 kPa).

Samples are taken every month of the year.The scrutiny is carried out on the territory of the whole country. For fuel quality scrutiniz-

ing purposes, the territory of Germany has been divided into the areas corresponding to the 16 political regions (Lnder) of Germany, without taking into consideration the method of fuel distribution in the country.

INSPECTED FUEL AND PARAMETERS

As a part of the monitoring system, samples are taken usually from the lling stations in all political regions in Germany. The inspections cover the basic fuels corresponding to the motor petrol and diesel fuels speci ed in Directive 98/70/EC, that is:! 91 lead-free petrol (Normal, pursuant to the EN 228 standard);! 95 lead-free petrol (Super, pursuant to the EN 228 standard);! 98 lead-free petrol (Super Plus, pursuant to the EN 228 standard);! diesel fuel (pursuant to the EN 590 standard).As it has already been said, German fuel quality monitoring system is not entirely compli-

ant with the European directives and standards with regard to the functioning of such a sys-tem in a particular Member State.

In the German system, the samples taken for inspection are not inspected with regard to the amount of all the parameters included in the European standards. The parameters being de ned are only those, which are especially signi cant to environment and consumers protection.

German law regulating fuel quality monitoring states that:! while testing motor petrol samples, it is recommended to measure the amount of sul-

phur, resilience to the pinking, that is estimating the octane number, vapour pressure, fractional composition, content of aromatic hydrocarbon with speci cation for ben-zene and density;

! for diesel fuels it is necessary to mark that the sulphur content, cetane number, plug-ging point for cold lter, fractional composition, ignition temperature (it is not required according to the EU Directive).

Other parameters, in addition to the named, are examined in detail only in case of suspicion of trading in bad quality fuel or in case of complaints.

1.4. System in Austria

LEGAL BASIS

The legal basis of the fuel quality monitoring and scrutinizing system on the territory of Austria is formed by the directives, resolutions of the European Parliament and of the Council as well as the corresponding state legislation.

European law:! Directive 98/70/EC (replaced by Directive 2003/17/EC) environment speci cation

for fuels;

21

Information on fuelproduction, sales,inventory, import/

exportCustoms Service

Ministry ofFinance

Ministry of Agriculture andLabour

The Ministry of Agriculture,Forests, Waters andEnvironment

Federal EnvironmentOffice

An annual report for theEuropean Commission

Projectconcept

Sampling Laboratoryanalysis

Report

ORGANIZATION OF FUEL QUALITY SCRUTINIZING SYSTEM

! EN 14274:2003 Standard monitoring system speci cation, reporting;! EN 14275:2003 Standard speci cation on sampling, transport, storing of the taken

samples.

State legislation:Federal Act on motorization (Kraft fahrgesetz (KFG) Novelle, 1967, BGBl. No 267, and its sub-

sequent amendments: Bundesgesetz BGBl. I No 175/2004, Bundesgesetz BGBl. I No 117/2005 and Bundesgesetz BGBl. I No57/2006 of 9 May 2006).

THE INSTITUTIONS INVOLVED IN THE MONITORING AND SCRUTINIZING OF FUEL QUALITY

The quality of motor petrol and diesel fuels sold at the lling stations in Austria is under scrutiny of the Federal Environment O ce (Umweltbundesamt UBA, www.umweltbundesamt.at) and submitt ed to the Ministry of Agriculture, Forests, Waters and Environment (Bundesminis-teriums fr Land- und Forstwirtschaft , Umwelt und Wasserwirtschaft , www.lebensministerium.at) in the form of the report. Then, the Ministry submits this report to the European Commission.

The diagram presented below illustrates the institutions and their tasks within the fuel scrutinizing system.

Diagram 1. Institutions and scope of responsibilities

22

System in Austria

PERIODIC AND TERRITORIAL SCOPE OF SCRUTINY

Pursuant to the qualitative requirements for fuels, de ned in the qualitative standards with regard to the petrol - EN 228 and diesel fuels - EN 590, the scrutiny and monitoring of the fuel quality has been divided into two periods of a year:! summer:

for motor petrol from 1 May to 30 September; for diesel fuels from 16 April to 30 September.

! winter: for motor petrol from 1 October to 30 April; for diesel fuels from 1 October to 15 April.

The samples for inspection are taken each month of a year.The estimated time for sampling during a particular scrutiny period takes 15 days. Mean-

while, the controllers traverse approximately 7.000 kilometres.The scrutiny is carried out on the territory of the whole country. As Austria has only one

re nery (Schwechat), the production of which covers most part of countrys demand, while quality di erences comparing with import fuels are imperceptible, which is stated on the basis of several years of scrutinises. Austria is regarded as a one region.

SCRUTINY ORGANISATION

Within the framework of the monitoring system, samples are taken from the lling stations on the entire territory of Austria. Examination covers the basic fuels corresponding to the en-gine petrol and diesel fuels speci ed in Directive 98/70/EC, that is:! 91 lead-free petrol (Normal, corresponding to EN 228 standard);! 95 lead-free petrol (Super, corresponding to EN 228 standard);! diesel fuel (in accordance with EN 590 standard).The number of samples from the basic fuels for the purposes of analysis is set on the basis of

the EN 14274:2003 standard, taking into account the volume of fuel sold per year as well as the regional di erentiation in terms of the quality of sold fuel. As it has already been mentioned, fuel manufactured by the only re nery in Austria, is not much di erent in quality from import fuel, that is why it has been stated that the area of Austria may be treated as a one region. Fuel consumption per year estimated by the Ministry of Agriculture and Labour (Bundesministe-rium fr Wirtschaft und Arbeit - BMWA, www.bmwa.gv.at) amounts approximately 8 million ton, for several years.

In accordance with EN 14274:2003 standard, Austria has been classi ed as a small country with regard to the entire fuel consumption (a country, in which the entire fuel sales is less than 15 million ton per year). At the same time, the Federal Environment O ce acknowledged that the lack of regional di erentiation enables to employ the C statistical model. As a result, pur-suant to the European standard on the fuel quality monitoring system, the minimum number of samples has been stated, that is 50 for each fuel type in each monitoring period for the whole country.

In addition, in Austria 98 Super Plus fuel is also available, which is also subject to the in-spection, however, the number of samples of that fuel taken for inspection is compliant with its market share comparing to the mother fuel share, that is the petrol type with the highest market share. It was a result of EN 14274:2003 standard, for the minimum number of distribu-tion places from which the samples need to be taken with regard to fuel whose share in the market is less than 10%.

The number of distribution places is calculated on the basis of the following formula:- X type fuel with the market share less than 10 %,- N the number of taken samples

23

ORGANIZATION OF FUEL QUALITY SCRUTINIZING SYSTEM

N = Market share (for X type)

Market share (for for X type mmother type)x N for mother fuel

The number of scrutinized stations with regard to the 98 Super Plus fuel quality during the whole year, for several years oscillates between 5-6 lling stations which results from:

N =

Super Plus 98 market share- oscillates be

Super Plus 98ttween

"Super" 95 petrol market share -oscillates

3 and 4%

bbetween

x N "Super" 95 petrol

68 and 70%

- N Super 95 petrol the number of stations to be scrutinized with regard to the quality of 95 Super fuel within the entire year equals 100.

The registration and the selection of lling stations to be scrutinized are performed due to the following schedule:

Diagram 2. The registration of lling stations in Austria

The location list of filling stations drawnup and submitted by the Association of

Austrian Petroleum Industry which includeOMV, BP, Esso, Shell, Agip, Conoco

The list of independent filling stationslocations drawn up and submitted by theAssociation of filling stations and

vehicle service stations

The list of independent fillingstations placed on the InternetFilling stations register of the

Federal Environment Office(~3000 entries)

24

System in Latvia

Diagram 3. Facilities selection for the purposes of scrutinizing of the quality of fuels sold

Subsequent random selection for the sameregion and company to which the former

selected station belonged

Random selection of petrol stations

The list of stations to be inspected

Filling stations register of theFederal Environment Office

(~3000 entries)

Verification with regard to the existenceof the randomly selected stations

The samples for inspection purposes are taken in accordance with the EN 14275:2003 stand-ard. In case, the station refuses to have the fuel samples taken by the representative of the Fed-eral Environment O ce, pursuant to the Act on motorization, he is entitled to take samples even with the help of the Police. In practice however, the representatives of the Environment O ce make a phone call to the relevant persons in a particular concern or the owner of the stations, if the refusal was given by the independent station.

While carrying out the analyses of both motor petrol and diesel fuels, all parameters are examined pursuant to Directive 2003/17/EC and the EN 14274:2003 standard.

Most of the parameters are measured in the accredited laboratory of the Federal Environ-ment O ce, in Vienna. In the external laboratories only the octane number values are de ned (for petrol) and the cetane number (for diesel fuel).

1.5. System in Latvia

LEGAL BASIS

Quality monitoring system of fuels sold on the territory of Latvia, functions in accord-ance with the Act on the Internal Revenue Services, of 28 October 1993 (Likums par Par Valsts iemumu dienestu, Publicts: Latv as Vstnesis 105 11.11.1993) and with the Resolution No 332 of 26 September 2000 on the evaluation of petrol and diesel fuels quality (Noteikumi par benzna un dzedegvielas atbilstbas novrtanu, Latv as Republikas Ministru kabineta noteikumi No 332, Publicts: Latv as Vstnesis 341/343 (2252/2254) 29.09.2000). The Resolution No 332 is compliant with the European requirements of Directive 98/70/EC and Directive 2003/17/EC.

THE INSTITUTIONS INVOLVED IN FUEL QUALITY MONITORING AND SCRUTINIZING

The main institution in charge of the fuel quality scrutiny in Latvia is the Excise Tax Depart-ment of the Internal Revenue Service (Valsts iemumu dienests VID, www.vid.gov.lv). With regard

25

ORGANIZATION OF FUEL QUALITY SCRUTINIZING SYSTEM

to the system, the State Internal Revenue Service has concluded an agreement on the bilateral cooperation with other state institutions, the most important of which is Latvian Certi cation Centre (Latv as serti kc as cents - LATSERT, www.latsert.lv) and the economic Police division by the State Police. These institutions are responsible for complaints gathering on the low fuel quality and taking certain actions in order to prevent from such situation in the future.

In order to carry out the testing of the taken samples, the District Internal Revenue Serv-ice manages three express laboratories, which are authorised to scrutinize fuel quality on the territory of Latvia. In case of more detailed inspections to be carried out, SRS hands over the taken samples for the analyses to the accredited laboratories.

PERIODIC AND TERRITORIAL SCOPE OF THE SCRUTINY, INSPECTED FUEL

Fuel quality inspections are organised in a way which enables to cover all the entities trad-ing in fuel. The entities need special licences to trade in fuel on the territory of Latvia. The number of issued and valid licences is a basis to register/ update the list of the companies which are subject to scrutinises. On the territory of Latvia there are approximately 600 lling stations which operate, 216 of which were issued the licences to carry out business operations. Wholesale is conducted on the basis of approximately 47 licences.

The samples are taken from the enterprises possessing the licence to trade in fuel ( lling stations and warehouses) and from the tax warehouses. Most of the samples (approximately 90%) are taken at the lling stations. It is also possible to take samples from the places super-vised by the customs service (terminals and customs warehouses), however, it is not practiced. The selection of places to take samples is performed in accordance with the fuel type. The samples are taken each month of the year.

The laboratory analysis with regard to all the parameters included in the Resolution No 332 on the evaluation of petrol and diesel fuels quality, covers samples of the fuel available on the Latvia fuel market, that is:! 92 Lead-free petrol (corresponding to the lead-free petrol 91 included in the directives

and the European standards);! 95 Lead-free petrol; ! Diesel fuel.

1.6. System in Ireland

LEGAL BASIS

The legal basis of the monitoring and fuel quality scrutinizing system on the territory of Ireland is formed by the following directives, resolutions of the European Parliament and the Council:! Directive 98/70/ EC (replaced with Directive 2003/17/ EC);! Standard EN 14274:2003;! Standard EN 14275:2003.

INSTITUTIONS INVOLVED IN THE FUEL QUALITY MONITORING AND SCRUTINY

Quality of motor petrol and diesel fuels traded on the territory of this country is under the scrutiny of Internal Revenue Services (The Irish Revenue Commissioners, www.revenue.ie). The taken samples are analysed by The State Laboratory (www.statelab.ie).

Information on the yearly sales of fuel are gathered and supplied the Ministry of Transport (De-partment of Public Enterprise, changed in 2002 into the Department of Transport, www.transport.ie).

26

System in Ireland

Department of the Environment, Heritage and Local Government, (htt p://www.environ.ie/en/) is the unit responsible for drawing up and sending a yearly report on the monitoring of fuel quality in Ireland.

PERIODIC AND TERRITORIAL SCOPE OF THE SCRUTINY

In accordance with the qualitative requirements for petrol, de ned by the European Committ ee for Standardization, Technical Committ ee No 19, working group No 21 with regard to the EN 228 standard de ning the speci cs of lead-free petrol, summer period on the basis of petrol vapour pressure in Ireland has been set to be a period from 1 June to 31 August. The winter period lasts from 1 September to 31 May. Samples are taken each moth of the year.

The scrutiny is carried out on the whole territory of the country. Ireland has got only one oil refinery in Whitegate, County Cork. All products are comprehensively tested by the refinery operator before release and subsequently transported via inland and sea transport to the recipients. Owing to the documentation kept for the purposes of a quality certificate, it is possible to follow the route of any cistern or sea cargo of each manufactured part, and therefore it has been assumed that the area of Ireland may be regarded as a one region.

SCRUTINY ORGANISATION

With regard to the fuel quality monitoring system operating in Ireland, for the testing pur-poses the following fuel types are taken: ! 95 lead-free petrol (quality as in the EN 228 standard);! diesel fuel (as in the EN 590 standard).The samples are tested with regard to all of the parameters set forth in Directive

98/70/EC.For each fuel type (95 lead-free petrol and diesel fuel) the minimum number of samples

in each monitoring month has been established on the basis of the fuel sales per year (ap-proximately 4 million ton per year) and assuming that the entire area of Ireland may be regarded as a one region. On this basis, in accordance with the EN 14274:2003 standard, Ireland has been classi ed as a small country (less than 15 million ton of fuel consumption per year), for which C model has been assigned (pursuant to the standard, this model is possible to be applied upon proving that the division into macro regions and regions is impossible).

As a result, the minimum number of samples should be 50 for each fuel, in each monitoring period for the entire country.

Samples of the fuel products are taken in the fuel terminals by the Internal Revenue Service once every three months:! Dublin;! Cork;! Garlway;! Limerick;! Waterford;! News Ross;! Rosslare;

and aft er each fuel lling up/ re lling in a country fuel reserve bank in Bantry. In addition, the Internal Revenue Service take samples form the lling stations, road cisterns, trucks and lor-ries in order to avoid failing to pay excise duty.

The monitoring system also includes inspections carried out by the Irish Association for Oil Industry, which takes its own samples for the testing from 23 parking places and the re nery

27

ORGANIZATION OF FUEL QUALITY SCRUTINIZING SYSTEM

in Whitegate, each year in each of the periods July/ August and December. The fuel companies association takes in total 48 samples per year, and their results are included into the yearly report for the European Commission.

1.7. System in the Czech Republic

LEGAL BASIS

Legal regulations on the fuel quality monitoring in the Czech Republic (the Resolu-tion of the Ministry of Industry and Trade No 229/2004 and the Resolution No 311/2006 which replaced it - ZKON ze dne 23. kvtna 2006 o pohonnch hmotch a erpacch stanicch pohonnch hmot a o zmn nkterch souvisejcch zkon, zkon o pohonnch hmotch, Pedpis . 311/2006 Sb., zdroj: SBRKA ZKON ronk 2006, stka 96, ze dne 22.06.2006.) are based on the qualitative requirements pursuant to the European standards (EN 14274:2003, EN 14275:2003). Whereas, these standards are based on the EU directives (Directive 98/70/EC of 13 October 1998 and Directive 2003/17/EC, which replaced it).

The Resolution No 229/2004 regulates the requirements concerning quality of automotive fuels, as well as the requirements on the monitoring procedure of their quality.

Quality of fuels is marked in accordance with the European standards EN 228 for motor petrol and EN 590 for diesel fuel.

INSTITUTIONS INVOLVED IN FUEL QUALITY MONITORING AND SCRUTINY

The institution responsible for fuel quality monitoring and data gathering required for drawing up the report for the European Commission, is Czech Ministry of Industry and Trade (Ministerstvo prmyslu a obchodu, www.mpo.cz). The yearly report for the European Commission is drawn up on the basis of the data provided by the Czech Trade Inspection (Cesk obchodn inspekce, www.coi.cz), which is responsible for the scrutinises of fuel distri-bution outlets.

PERIODIC AND TERRITORIAL SCOPE OF THE SCRUTINY

In accordance with the qualitative requirements with regard to the vapour pressure of mo-tor petrol, sset forth in Directive 98/70/EC, EN 228 standard and the national legal provisions, the scrutiny and fuel quality monitoring has been divided into two periods of a year:! summer - from 1 May to 30 September;! winter - from 1 October to 30 April.Samples are taken each month of a year.The scrutiny is carried out on the whole territory of the country.

SCRUTINY ORGANISATION

With regard to the monitoring system, samples are taken from the lling station on the en-tire territory of the Czech Republic. The testing covers basic fuel types, being counterparts of the lead-free petrol and diesel fuel speci ed in Directive 98/70/EC, i.e.:! 91 lead-free petrol (Normal, as in the EN 228 standard);! 95 lead-free petrol (Super, as in the EN 228 standard);! diesel fuel (as in the EN 590 standard).Pursuant to the EN 14274:2003, the Czech Republic has been classi ed as a small country (a

country in which the total fuel sales is less than 15 million ton per year) due to the total, yearly

28

System in the Czech Republic

fuel consumption, which is approximately 6,5 million ton per year. It has also been acknowl-edged that the entire territory of the country may be regarded as a one region. As a result the entire monitoring system is based on the statistical C model described in the EN 14274:2003 standard as a model suitable for a small country without the regional di erentiation. Pursuant to the model, Czech Trade Inspection ought to take samples at least from minimum 59 distri-bution outlets ( lling stations) for each fuel, which accounts for more than 10% of sales for a particular fuel type (petrol, diesel fuel), in each scrutiny period.

The number of distribution places from which samples ought to be taken for the fuel with the market share less than 10% is calculated on the basis of the following formula:

- X type fuel with market share of less than 10%,- N the number of taken samples

N = Market share (for X type)

Market share (for for X type mother type)x N for mother fuel

Because of the fact, that the Czech fuel quality monitoring system has not only been launched to inspect the parameters required under the EU Directives in order to protect the environment, but also for the consumers protection, the state Resolution has imposed an ob-ligation to scrutinize a greater number of samples by de ning their number at the following minimum levels:

Table 3. Minimum number of samples to be taken with regard to the particular fuel types

Petrol(all petrol in total)

Diesel fuels

In accordance with the Resolution 229/2004

Summer period:1 May 31 October 350 350

Winter period:1 November 30 April 350 350

In accordance with the Resolution 311/2006 prevailing from 1 July 2006.

Summer period:1 May 31 October 500 500

Winter period:1 November 30 April 500 500

The Ministry of Industry and Trade keeps an electronic register of lling stations. The con-trollers from 13 inspectorates aft er the prior schedule preparation (sampling date and number of sample) take samples from the entire area of the Czech Republic.

The samples are taken pursuant to the EN 14275:2003 standard. While carrying out the analysis of both motor petrol and diesel fuels, all of the parameters are taken into account in accordance with Directive 98/70/EC, as well as in accordance with the Resolution of the Minis-try of Industry and Trade No 229/2004.

29

ORGANIZATION OF FUEL QUALITY SCRUTINIZING SYSTEM

1.8. Comparative table January 2005Po

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30

Summary

1.9. Summary

Undoubtedly, international regulations on fuel quality are necessary. The European Union is rst of all a common economic area, common market. Its participants include both indi-vidual clients and companies as well as institutions. For all of them, road transport plays an important role and concerns private and company cars, by delivery trucks, lorries or buses. It is not easy to evaluate the bene ts resulting from the possibility of refuelling in any country. It is as well a factor which stimulates motorization industry development. Let us add to it en-vironment protection and care for the health and consumer protection against unfair practices or producers negligence and fuel dispensers (what may have a negative impact on the engine, but the next chapter touches on the subject).

Therefore, fuel quality scrutinizing system is necessary and useful both at the national and international level. Hence, there is a need to create and implement such systems at a level of government ministries or central o ces having wide scrutinizing authorities.

Each system under the analysis uses the statistic principles and is based on the random se-lection of samples. Control of all the lling stations would be too expensive and troublesome in terms of organization. That is why the speci c and minimum number of stations is selected at random. It is important so that the random selection rule would be observed (each station has the same chance to be found among the scrutinized ones) most oft en it is assured by the relevant computer programme, which draws at random from the lling station list in a par-ticular country. This selection takes into account the territorial dispersion, thanks to which the scrutiny will cover the fuels from di erent producers, from various sources. In the presented systems, di erent periods division has been applied, which results from the multiple fuel properties in di erent temperatures.

The general principles of system functioning are set forth by the European Union direc-tives. Each country, however, constructs its system in a slightly di erent way. These di er-ences do not have practical signi cance for fuel users, it means that 95 petrol, octane or diesel fuel are more or less the same in the entire Europe. Modi cation in particular countries may be based on the selection of the parameters, other than the recommended one (the example of Germany). The Member States are obliged to run the system, which provides the data for the EU. Some of the countries (Poland or the Czech Republic) create just by the way so called country systems, thanks to which they achieve more promptly the fuel quality level compar-ing with other EU members.

31

FUEL AND ITS QUALITY

2. Fuel and its quality

2.1. Fuel types, their use and characteristics

A signi cant part of the vehicles, over 800 million, are propelled with spark ignition en-gines (ZI), which are mainly the source of power in the passenger cars and delivery trucks (so called petrol engines). The remaining part operates by compression ignition engines (ZS) known as Diesel engines or high-pressure engines. The are commonly applied to operate lor-ries and delivery trucks, tractors, road vehicles, marine vehicles, and more oft en as the power unit in the passenger cars. Diesel engines, being outstandingly economic and environment friendly, become more and more popular. Currently, every third passenger car sold in Poland is equipped with Diesel engines. In the Western Europe, this share approaches 50%, and if the present trends continue, the share will grow up to 60% in 2010, the experts predict.

Engine petrol is commonly used to feed the spark ignition engines, which rst of all con-sists of the products derived from crude oil processing. Petrol is a mixture of light liquid hy-drocarbons with the boiling point of 30 - 215 C, emitt ed from the crude oil during the distil-lation process (that is crude oil evaporation and a split into so called fractions) and which are subject to the processing in catalytic processes, such as reforming, cracking, isomerization or alkylation (generally speaking, their role is to process of secondary treatment which enables the change in the chemical composition of products and achieving fuel quality which is of-ten demanded). The composition and mutual hydrocarbon proportions vary according to the character of the processed crude oil and to the technological processes applied while petrol production.

Engine petrol with proper (required) properties is achieved from the composition of certain amount of ingredients, among which the most important are [1,2]:! hydrocarbons (products of crude oil processing):

butane, light petrol, isomerise, reformat, cracking petrol, alkylate,

! other chemical compounds,! ennobling additives.Other chemical compounds used while composing petrol include alcohols and ethers. These

compounds, in addition to carbon and hydrogen, include oxygen, which is helpful in the fuel perfect combustion process.

In the Table 4, presented below, there are presented some properties of the components taken into consideration while composing the engine petrol [1].

32

Fuel types, their use and characteristics

Table 4. Properties of particular petrol components

HYDROCARBONS

Properties Butane Light petrol Isomerise ReformatCracking

petrol Alkyl

Density in 15 C [g/m] 0.580 0.655 0.655 0.810 0.740 0.720Research octane number (RON) 97 70 88 100 92 94

Motor octane number (MON) 93 68 84 88 80 91

Pressure [kPa] 420 114 100 30 55 60Benzene content [% of volume] No 2 No 6 0.7 No

Alcohols EthersProperties Methanol Ethanol MTBE ETBE TAME

Density in 15 C [g/m] 0.796 0.794 0.75 0.75 0.78Research octane number (RON) 125 120 118 118 112

Motor octane number (MON) 100 105 101 101 98

Pressure [kPa] 350 250 54 35 20Oxygen content [% of weight.] 50 35 18.2 15.7 17.7

MTBE methyl tertiary butyl etherETBE ethyl tertiary butyl etherTAME tertiary amyl methyl ether

Ennobling additives are not extorted by the qualitative standard, however, the professional producers use them in the companies fuels. The additives are to improve the use properties of fuel and, thanks to their activity, prolong engine operation without breakdowns. They are add in a form of so called packages, which are selected individually for petrol characteristic for a particular producer. Such a package may include [1]:! detergent (prevents from sediments to deposit in the fuel supply system on the inlet

valves and injectors),! corrosion inhibitor (slows down the process of corrosion in the metal engine parts,

which have contact with fuel),! deemulgator (prevents from forming the emulsion and at the same time it helps in

water separation),! antioxidant (prevents from resin creation),! other additives like the colouring ones, are used in order to distinguish and identify the

petrol types, aromatic additives are used where the petrol scent is an obstacle in its sales.

Applying the set of the additives concerns actually all petrol types, and it should not be identi ed exclusively with so called premium fuels, like e.g. V-Power (Shell), 98 Verva (ORLEN), 98 Ultimate (BP), Suprema (Statoil). Of course, di erent additives packages are applied in these types of petrol, but they are also di erentiated by the production process itself, which subsequently results in a lesser content of sulphur (in accordance with standards, which will come into force just in 2009). It is an issue for the following elaboration, which exceeds the scope of this document.

33

FUEL AND ITS QUALITY

According to the regulations of PN-EN228 standard on the Automotive fuels. Lead-free petrol. Requirements and inspection modes, in Poland there are 2 types of lead-free motor petrol, which di er in the resistance to the pinking combustion (that is in values of the octane numbers) [2]:! 95 lead-free petrol, with RON less than 95.0 and MON less than 85.0,! 98 lead-free petrol, with RON less than 98.0 and MON not less than 88.0 (RON/MON

researched/motor octane number, description of these parameters included in the chapter 2.4).

The other parameters of both motor petrol type are the same and ought to re ect the same values as in the Table 5.

Table 5. The basic normative parameters of lead-free motor petrol used in Poland pursuant with the requirements of the PN-EN228 standard

Parameter Unit of measurement95 lead-free

petrol98 lead-free

petrol

The research octane number, RON - min. 95.0 min. 98.0The motor octane number, MON - min. 85.0 min. 88.0Density in 15C kg/m3 min.720 max.775Fraction composition:- distils up to 70C (E70)

- distils up to 100C (E100)- distils up to 150C (E150)- temp. of the end of distillation Tk (FBP)- remains aft er distillation

% of capacity

% of capacity% of capacity

C% of capacity

min.20 max.48 for the summer period min.20 max.50 for the interim periodmin.22 max.50 for the winter period

min.46 max.71min.75

max. 210max. 2

Vapour pressure (DVPE method) kPamin.45 max.60 for the summer periodmin.45 max.90 for the interim periodmin.60 max.90 for the winter period

Volatility index (VLI= 10 DVPE + 7E70) - max. 1150 only for the interim periodsInduction period minutes min. 360Examination of the coordination action with regard to the copper shims (3 h, 50C) Patt ern Class 1

Lead content mg/l Max. 5Sulphur content mg/kg Max. 50Hydrocarbon content:- ole n- aromatic

% of capacity% of capacity

Max. 18max. 35

Benzene content % of capacity Max. 1Oxygen content % of capacity Max. 2,7

Content of the organic oxygen compounds - methyl alcohol (necessary stabilizer) - ethyl alcohol (optional stabilizer)- isopropyl alcohol - isobutyl alcohol- tert-butyl alcohol - ethers (5 and more carbon atoms)- other oxygen compounds

% of capacity

Max.35101071510

Appearance pale and clear

34

Fuel types, their use and characteristics

The following types of motor petrol are traded in Poland:! 95 type (Premium with RON95):

95 Eurosuper, produced by the majority of our re neries under this trade name or as 95 lead-free petrol or 95 AL lead-free petrol (LOTOS Group AL lett ers denote that it includes the elements of ethanol);

! 98 type (with RON98): 98 Super Plus (PKN ORLEN), 98 lead-free petrol (LOTOS Group).

Until the end of 2004, 95 Uniwersalna lead-free petrol has been sold on our market as well. It was designed for the feed of the engines of the older generation, which have unhardened valve seats. It had all of the parameters the same like in 95 lead-free petrol, however additionally it contained potassium compound with 4 2 mg/kg concentra-tion, which prevents from excessive wear of such seats. In Poland, Polonez engines pro-duced before 1990, and Fiat engines produced until 2 July 1992 were equipped with the unhardened valve seats. Using lead-free petrol in such engines, even with low mileage (5000 8000 km) [3] causes excessive consumption of the seat face of an exhaust valves. It results in power decrease, increase in fuel consumption and greater exhaust fumes emission, as well as the need to replace the valve seats or the whole engine head. The withdrawal of this fuel from the market resulted from the lesser and lesser demand on it. Currently the owners of these vehicles may feed them with 95 Eurosuper, to which a user adds a special additive on his own in the amount of 1 ml per 1 litre of the refuelled 95 Eurosuper.

Constant improvements of the sparking ignition engines (ZI) is closely connected with the necessity of using engine petrols with varying properties. The engine petrol currently present on the market are modi ed in a way to achieve:! limitation of pinking combustion (in more and more compressed engines which

require fuel with higher and higher octane number) by means of introducing the organic oxygen compounds (alcohols, ethers), including those gained from the renewable resources. The oxygen is also helpful in the petrol perfect combustion process;

! reduction of toxic impact on the natural environment (decrease in aromatic and ole n hydrocarbon content, elimination of lead compounds, minimum limit on the sulphur content).

As it has already been mentioned, in addition to petrol engines, high-pressure engines are becoming more are more popular (aka Diesel engines). Fuel applied in the compression igni-tion engine is diesel fuel. It is a mixture of hydrocarbon, like in case of petrol, which are emit-ted from the crude oil during the distillation processes, however the distillates of the diesel fuel ha