TABLE OF CONTENTS

REPORTS OF THE STANDING COMMITTEES

AND OTHER COMMITTEES

As Considered by

The Council of the City of Toronto

on October 28, 29 and 30, 1998

BOARD OF HEALTH

REPORT No. 12

1Air Quality and a Federal Standard for Sulphur in Fuel

City of Toronto

REPORT No. 12

OF THE BOARD OF HEALTH

(from its meeting on October 13, 1998,

submitted by Councillor John Filion, Chair)

As Considered by

The Council of the City of Toronto

on October 28, 29 and 30, 1998

1

Air Quality and a Federal Standard for Sulphur in Fuel

(City Council on October 28, 29 and 30, 1998, amended this Clause by:

(1)deleting from the recommendation of the Board of Health, Recommendation No. (3) of the report dated July 29, 1998, from the Environmental Task Force, viz.:

"(3)City Council establish a high level delegation of Councillors and appropriate staff, including the Mayor, if possible, to make representations at both the federal and provincial levels;"; and

(2)adding thereto the following:

"It is further recommended that the federal and provincial governments be requested to purchase low sulphur fuel for their fleets of vehicles as soon as possible.")

The Board of Health recommends the adoption of the second Recommendation of Councillor Chow's Motion contained in the communication (October 9, 1998) from the City Clerk which reads:

"AND BE IT FURTHER RESOLVED THAT Council adopt Recommendation Nos .(3) and (5) of the Environmental Task Force report (July 29, 1998), as follows:

'(3)City Council establish a high level delegation of Councillors and appropriate staff, including the Mayor, if possible, to make representations at both the federal and provincial levels; and

(5)the City Clerk forward a copy of the report (July 13, 1998) from the Medical Officer of Health and a copy of Council's decision, to all Provincial and Federal Ministers.'"

The Board of Health submits Council's action taken on October 1 and 2, 1998 as contained in the transmittal letter (October 9, 1998) from the City Clerk:

City Council, at its meeting held on October 1 and 2, 1998, referred the following Motion to the Board of Health for consideration:

Moved by:Councillor Chow

Seconded by:Councillor Pantalone

"WHEREAS City Council, at its meeting held on July 29, 30 and 31, 1998, adopted ClauseNo.2 of Report No. 10 of the Board of Health, headed 'Air Quality and a Federal Standard for Sulphur in Fuel'; and

WHEREAS the Environmental Task Force submitted to Council for that meeting a report (July 29, 1998) forwarding recommendations in this regard from its meeting on July 28, 1998; and

WHEREAS Council, in adopting the aforementioned Clause No. 2 of Report No. 10, took no action with regard to the report from the Environmental Task Force; and

WHEREAS there is a need to ensure that Council's concerns adopted on July 29, 30 and31, 1998, are effectively conveyed to the federal and provincial governments;

NOW THEREFORE IT BE RESOLVED THAT, in accordance with Section 46 of the Council Procedural By-law, Clause No. 2 of Report No. 10 of the Board of Health, headed 'Air Quality and a Federal Standard for Sulphur in Fuel', be re-opened for further consideration;

AND BE IT FURTHER RESOLVED THAT Council adopt Recommendation Nos . (3) and (5) of the Environmental Task Force report (July 29, 1998), as follows:

'(3)City Council establish a high level delegation of Councillors and appropriate staff, including the Mayor, if possible, to make representations at both the federal and provincial levels; and

(5)the City Clerk forward a copy of the report (July 13, 1998) from the Medical Officer of Health and a copy of Council's decision, to all Provincial and Federal Ministers.'"

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(Communication dated July 29, 1998, appended

to the foregoing Motion)

The Environmental Task Force at its meeting on July 28, 1998, considered a memorandum dated July22, 1998, from Councillor Jack Layton, Chair, Environmental Task Force, together with a copy of the report dated July 10, 1998, from the Medical Officer of Health, headed "Air Quality and a Federal Standard for Sulphur in Fuel".

The Environmental Task Force recommended that:

(1)City Council be advised that the Environmental Task Force endorses the recommendations, as adopted by the Board of Health at its meeting of July 27, 1998, regarding the report from the Medical Officer of Health, headed "Air Quality and a Federal Standard for Sulphur in Fuel";

(2)City Council request other Municipal Councils in Ontario to endorse the recommendations, as adopted by the Board of Health at its meeting of July 27, 1998;

(3)City Council establish a high level delegation of Councillors and appropriate staff, including the Mayor, if possible, to make representations to the relevant Ministers at both the federal and provincial levels;

(4)the City Solicitor forward a copy of the report requested by the Board of Health, regarding the feasibility of enacting a Municipal By-law to control sulphur levels in gasoline and diesel fuel in the City, to the Environmental Task Force for information; and

(5)the City Clerk forward a copy of the report (July 13, 1998) of the Medical Officer of Health and a copy of Council's decision, to all Provincial and Federal Ministers.

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(Communication dated July 29, 1998, appended

to the foregoing Motion)

That the Environmental Task Force endorse the following recommendations, including Recommendation No. (1) made by the Medical Officer of Health to the Toronto Board of Health at its meeting on July 27, 1998, and advise City Council accordingly.

Recommendations:

It is recommended that:

(1)the Federal Minister of Environment:

(a)establish sulphur limits for gasoline at an annual average of 30 ppm and a maximum of 80 ppm across Canada, effective January 1, 2002, as outlined by option A.1 in the report of the Government Working Group;

(b)establish sulphur levels for diesel, particularly for off-road vehicles, that maximize the health benefits for residents across Canada before the year 2000;

(c)establish an environmental income replacement program, complete with re-education funds, to assist workers dislocated by plant closures that may result from sulphur standards set for gasoline and diesel; and

(2)City Council request other Municipal Councils in Ontario to endorse Recommendation No.1.)

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The Board of Health also submits the following Clause 2 of Report No. 10 of the Board of Health, titled "Air Quality and a Federal Standard for Sulphur in Fuel", which City Council on July 29, 30 and 31, 1998, adopted, without amendment:

The Board of Health recommends:

(1)that Council endorse the action taken by the Board of Health whereby the Board adopted the report ( July 13, 1998) from the Medical Officer of Health subject to:

(a)amending Recommendation 2 by adding thereto the following:

"and the Provincial Minister of the Environment";

(b)amending Recommendation 2(b) by deleting the words "particularly for off-road vehicles" and adding thereto the following:

"and that standards for off-road vehicles be brought into line with on-road vehicles";

(c)amending Recommendation 2(c) by adding the words "from federal and provincial fuel taxes" after the words "income replacement program";

so that such Recommendation now reads:

"(2)the Federal Minister of Environment and the Provincial Minister of the Environment:

(a)establish sulphur limits for gasoline at an annual average of 30 ppm and a maximum of 80 ppm across Canada, effective January 1, 2002, as outlined in option A.1 in the report of the Government Working Group;

(b)establish sulphur levels for diesel that maximise the health benefits for residents across Canada before the year 2000, and that standards for off-road vehicles be brought into line with on-road vehicles;

(c)establish an environmental income replacement program from federal and provincial fuel taxes, complete with re-education funds to assist workers dislocated by plant closures that may result from sulphur standards set for gasoline and diesel; and"

(2)that Council's action in this respect and the report (July 13, 1998) from the Medical Officer of Health be forwarded to:

(a)the Federation of Canadian Municipalities and the Association of Municipalities of Ontario for endorsement;

(b)to all Municipalities in Ontario with a population over 50,000 for endorsement together with a covering letter from Mayor Lastman outlining the extenuating circumstances of this matter;

(3)that a review of the City of Toronto's Fuel Purchase Program be undertaken and request the Medical Officer of Health to report to both the Board of Health and Corporate Services Committee on the possibility of requiring that all fuel provided to City of Toronto and City Agency vehicles meets the 30 ppm standards as recommended in her report dated July 13, 1998; and

(4)that Council be encouraged to accelerate its Green Fleet Program.

The Board of Health reports, for the information of Council, having:

(1)requested the City Solicitor to report back to the Board of Health on the feasibility of enacting a Municipal By-law to control sulphur levels in gasoline and diesel fuel in the City;

(2)requested the Medical Officer of Health to report to its next meeting on September 15, 1998 on the implementation of the provincial government's Drive Clean Program, in particular its Vehicle Emission Testing Program; and

(3).urged the Chief Executive Officers of all gasoline producers to act on the foregoing action taken by the Board of Health with respect to its adoption, as amended, of the recommendations contained in the report dated July 13, 1998 from the Medical Officer of Health.

The Board of Health submits the following report (July 13, 1998) from the Medical Officer of Health:

Purpose:

To provide comments to the Federal Minister of Environment and the Government Working Group on the sulphur standards proposed for gasoline and diesel.

Recommendations:

It is recommended that:

(1)the comments prepared and submitted to the Government Working Group by the Medical Officer of Health be received for information (see attached letter);

(2)the Federal Minister of Environment:

1. establish sulphur limits for gasoline at an annual average of 30 ppm and a maximum of 80 ppm across Canada, effective January 1, 2002, as outlined by option A.1 in the report of the Government Working Group

b)establish sulphur levels for diesel, particularly for off-road vehicles, that maximize the health benefits for residents across Canada before the year 2000

2. establish an environmental income replacement program, complete with re-education funds, to assist workers dislocated by plant closures that may result from sulphur standards set for gasoline and diesel; and

(3)That City Council be asked to endorse this report and these recommendations.

Background:

In 1996, Environment Canada established a process to set limits for sulphur in gasoline and diesel in collaboration with other federal departments, provincial governments, industry and non-governmental organizations in response to recommendations from the Canadian Council of Ministers of the Environment (CCME). As part of this process, three expert panels were struck to prepare reports on issues related to the various proposed sulphur levels: the Atmospheric Science Expert Panel, the Health and Environmental Impact Assessment Panel, and the Cost and Competitiveness Assessment Panel. Nine sulphur scenarios were examined: six sulphur levels for gasoline; one sulphur level for off-road diesel; and two sulphur levels for on-road diesel (see Table3). Reports prepared by these panels were released in the fall of 1997.

A Government Working Group, with representatives from five federal departments and six provincial ministries, has prepared a preliminary report, "Setting a Level for Sulphur in Gasoline and Diesel", which summarizes and analyses the expert reports and other background information, and presents a variety of options for government action. That report was released in May 1998 for public comment. The final report is scheduled to be completed this summer and is expected to be tabled by the Federal Minister of Environment at a CCME meeting in the fall of 1998.

Comments:

Trend in Sulphur Levels in Gasoline

Worldwide, the trend is towards lower levels of sulphur in gasoline. Currently, the average level of sulphur in gasoline is higher in Canada, at 340 parts per million (ppm), than in many other developed nations. Within Canada, the sulphur levels are highest in Ontario with an average of 540 ppm.

In the United States, sulphur levels in gasoline are affected by the U.S. regional reformulated gas program (RFG) started by the federal government in 1995. The RFG program applies to regional areas that do not comply with ambient air standards. Phase 2 of the program, commencing in 2000, will indirectly control sulphur levels in gasoline through nitrogen oxide emissions performance modelling. This is projected to result in an average sulphur level of between 130 and 180 ppm in RFG areas. The sulphur content of conventional gasoline outside the RFG areas has been frozen at 1990 levels since 1995 at an average level of 295 ppm.

In the State of California, sulphur levels in gasoline have been capped at an average of 30 ppm or a maximum of 40 ppm since 1996. In Japan, the government limits sulphur levels in gasoline at a maximum of 100 ppm. The European Union has agreed to apply a 150 ppm sulphur limit to gasoline in the year 2000, and its Council of Ministers have proposed a 50 ppm limit for the year 2005.

Sulphur Limits and Air Pollution

Sulphur affects the performance and operation of current and newly developed technologies used to control vehicle emissions. Consequently, when sulphur levels in gasoline are reduced, vehicle emissions of carbon monoxide, nitrogen dioxide and fine particulates are reduced as well as sulphur dioxide and sulphates. The Atmospheric Science Expert Panel has calculated the changes in ambient air quality for each of the nine sulphur scenarios. For gasoline scenarios, the 30 ppm sulphur level would produce the greatest reductions in ambient air levels of carbon monoxide, nitrogen oxides, sulphates and sulphur dioxide (see Table 1). For example, the Panel estimated that the 30 ppm sulphur level could reduce carbon monoxide levels in air by 10-68 ppm in the seven Canadian cities examined (ie. Halifax, Saint John, Montreal, Toronto, Winnipeg, Edmonton and Vancouver) by the year 2020. The greatest reductions in all of the pollutants examined for gasoline were predicted for the Toronto area because of the large number of vehicles and high sulphur levels.

Sulphur Limits and Human Health

The Health and Environmental Impact Assessment Panel used the Damage Function Approach applied by the United States Environmental Protection Agency, to compute the impacts and benefits associated with the nine different sulphur scenarios. The Damage Function Approach involves five steps: in the first step, the changes in air emissions are calculated for each scenario; in the second step, the air emissions are translated into changes in ambient air quality; in the third step, the human health impacts are calculated; in the fourth step, the human health effects are assigned an economic value; and in the fifth step, the benefits are computed for different health impacts, locations and time periods.

Using this approach, the Health and Environmental Impact Assessment Panel determined that the 30 ppm sulphur limit in gasoline could prevent 1,352 premature deaths, 1,537 hospital admissions, 3,760 emergency room visits, 517,000 asthma symptom days, 62,000 incidents of bronchitis in children, and 17.9 million acute respiratory symptoms in the seven Canadian cities over a twenty year period (see Table 2).

For the Toronto area, the Panel estimated that the 30 ppm sulphur limit could prevent 136 cases of chronic respiratory disease and 513,571 cases of acute respiratory symptoms in the year 2001. The monetary value of the health effects avoided in the Toronto area with a 30 ppm limit was estimated at $205 million in the year 2001. This compares with estimates of $165 million with a 150 ppm limit and $92 million with a 360 ppm limit.

When the monetary benefits of the avoided health outcomes were calculated for all seven Canadian cities over a twenty year period, it was estimated that the 30 ppm sulphur limit was worth $5.2 billion in health benefits with a 3 percent discount for inflation built in. This can be compared to health benefits worth $3.9 billion with a 150 ppm sulphur limit and $2.1 billion with a 360 ppm sulphur limit (see Table 3).

Benefit-Cost Analysis

While the compliance costs associated with the 30 ppm sulphur standard are substantial, the health benefits are much greater. The Cost and Competitiveness Assessment Panel estimated that it could cost the refining industry $1.8 billion in one-time capital costs and $119 million in annual operating costs to comply with a 30 ppm sulphur limit for gasoline. The Panel suggested that these compliance costs could threaten the viability of 3 or 4 of the 17 refineries operating in Canada, 1 or 2 of which operate in Ontario. The 30 ppm sulphur limits could result in gasoline price increases of $0.01 per litre.

However, when the compliance costs were compared against the monetary value of the avoided health outcomes, it was determined that the health benefits associated with the 30 ppm sulphur level would outweigh the compliance costs by a 2:1 ratio for Canada as a whole. In Ontario, where sulphur levels are the highest, a greater proportion of vehicles are gas powered, and the population is the greatest, it was determined that the health benefits would outweigh the compliance costs by a 4:1 ratio. The health benefits of the 30 ppm limit for Ontario when calculated for a twenty year period were estimated at $6.14 billion.

While the health benefits will be shared by Canadians across the country, albeit disproportionately by those living in areas with the poorest air quality, the compliance costs may be born inequitably by workers dislocated from refineries that could close as a result of the 30 ppm sulphur standard. To ameliorate the effects of this dislocation, the federal government should establish an environmental income replacement program, complete with re-education funds, to assist workers who may be affected.

Sulphur Levels and Vehicle Technology

The Association of International Automobile Manufacturers of Canada and the Canadian Vehicle Manufacturers' Association have indicated that vehicle manufacturers cannot continue to improve vehicle emissions or fuel efficiency without commensurate improvements in the quality of vehicle fuels. These Associations have indicated that sulphur reduces the efficiency and performance of vehicle emission control technologies, particularly those designed for low emission vehicles. They have also indicated that the new technologies designed to improve fuel efficiency are more susceptible to sulphur. This view has been expressed by staff in the United States Environmental Protection Agency (US EPA) as well. In a May 1998 report entitled,"Staff Paper on Gasoline in Sulphur Issues", the US EPA indicates that:

"While sulphur has a large impact on emissions from current low-emission vehicles, technological advances are also being made to improve the fuel efficiency of the nation's vehicles. Gasoline direct injection engines and fuel cells are two of the advanced power plants being developed. Both of these technologies may be more sensitive to sulphur than current vehicles."

Vehicle manufacturing associations in the United States have petitioned the US EPA to promulgate a regulation which caps sulphur levels in all gasoline at an average of 30 ppm and a maximum of 80 ppm as quickly as possible.

Options for Action on Sulphur in Gasoline

The Government Working Group has presented five options for action on sulphur levels in gasoline (see Table 4). The 30 ppm sulphur limit for gasoline has been supported by the Ontario Medical Association, International Joint Commission, and Pollution Probe. The International Automobile Manufacturers of Canada and the Canadian Environmental Law Association (CELA) have recommended that the 30 ppm sulphur standard should be implemented according to option A.1. The Cities of Welland, St. Catharines and Mississauga have passed resolutions calling for meaningful reductions in the sulphur content of gasoline. The Canadian Petroleum Products Institute (CPPI) has recommended a policy of "harmonization of Canadian sulphur levels with conventional gasoline in the United States". This proposal would allow Canadian sulphur levels in gasoline to follow those established for non-reformulated gasoline areas where the average is currently 295 ppm.

Given the compelling health and socioeconomic benefits associated with the 30 ppm sulphur limit for gasoline, sulphur levels greater than 30 ppm cannot be recommended. Arguments can be made in favour of both implementation options A.1 and A.2. Option A.2 may reduce disruption and dislocation in the petroleum industry by providing a longer period in which to comply. However, it does not provide a maximum level of protection to Canadians in regions outside the Southern Ontario-Montreal corridor until the year 2005. In addition, it may have a negative impact on low emission and fuel efficient vehicles operating in high sulphur regions. Option A.1 is recommended because it provides the maximum health benefits to all Canadians in the shortest time frame.

Sulphur in Diesel

With the implementation of the federal Diesel Fuel Regulations, which limited sulphur levels in diesel used in on-road vehicles to 500 ppm as of January 1, 1998, the average sulphur level in low sulphur diesel in Canada is 270 ppm. The average for the remaining diesel pool is over 2,200 ppm. The findings of the Atmospheric Science Expert Panel indicate that limits on sulphur levels in diesel, particularly off-road diesel, could result in substantial reductions in ambient air levels of sulphates, fine particulates and sulphur dioxide (see Table 1).

The Health and Environmental Impact Assessment Panel estimated that a 400 ppm limit for off-road diesel could produce health benefits worth $2.9 billion in the seven Canadian cities examined over a twenty year period. Likewise, the Panel estimated that the 50 ppm limit for on-road diesel could produce health benefits worth $1.2 billion in the seven Canadian cities over a twenty year period (see Tables 2 & 3).

When a benefit-cost analysis was conducted on the various diesel scenarios, it was determined that the health benefits associated with the 400 ppm off-road diesel standard outweighed the compliance costs by a 2:1 ratio.

Action Recommended for Sulphur in Diesel

The Government Working Group has recommended that the sulphur in diesel levels should be considered in early 1999 when several uncertainties respecting costs and benefits have been addressed. Given the health and economic benefits that could result from the reduction of sulphur levels in diesel, particularly for off-road diesel, it is recommended that new sulphur limits should be established for diesel before the year 2000, and that those limits should maximize the health benefits for residents across the country.

Conclusions:

Given the compelling health and economic benefits associated with the 30 ppm sulphur limit for gasoline, sulphur levels greater than 30 ppm cannot be recommended. Implementation option A.1 is recommended because it provides the maximum health benefits to all Canadians within the shortest time frame.

Given the health and economic benefits that could result from the regulation of new sulphur levels for diesel, particularly for off-road diesel, it is recommended that new sulphur standards should be established for diesel before the year 2000, and that those standards should maximize health and economic benefits for residents across the country.

Contact Name:

Kim Perrotta

Environmental Protection Office

Toronto Public Health

(416) 392-6788

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Table 1:Reductions in Ambient Air Levels by 2020, Across Seven Canadian Cities:

Table 2:Avoided Health Outcome Over Period 2001-2020, Different Sulphur Scenarios, Total for Seven Canadian Cities:

Table 3:Monetary Value of Avoided Health Outcomes Over Period 2001-2020, Different Sulphur Scenarios, Total For Seven Cities, ($ Billions)

Table 4:Proposed Actions for Sulphur in Fuel

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(Communication dated June 25, 1998,

addressed to the Chair, Government Working Group,

Sulphur in Gasoline and Diesel Fuel, Environment Canada,

from the Medical Officer of Health)

Introduction:

This report contains comments on the "Preliminary Report of the Government Working Group on Sulphur in Gasoline and Diesel" as promised in my letter of May 28, 1998.

Staff in the Environmental Protection Office in Public Health have consulted with staff in Toronto Works and Emergency Services in the preparation of these comments. The documents received from the Government Working Group are listed in the appendix attached to this report.

Members of the Government Working Group are aware that air quality is a public health priority for the new City of Toronto. The following reports on air quality have been prepared by Public Health and adopted by City Council over the past two years:

• "Outdoor Air Quality in Toronto and Respiratory Health", August 1996;
• "Actions With Respect to Vehicle Emissions", August 1996;
• "Emergency Plan Options for Outdoor Air Quality Episodes", August 1996;
• "Impact of Emissions from the Main Sewage Treatment Plant and Lakeview Generating Station", August 1996;
• "Global Climate Change", June 1997;
• "Catching Your Breath -- A Corporate Model For Clean Air", July 1997;
• "Burning of Waste Oil -- Health and Environmental Impacts", May 1998; and
• "Corporate Smog Alert Response Plan -- 1998 Implementation Plan", May 1998.

Background:

In 1996, Environment Canada established a process to establish limits for sulphur in gasoline and diesel in collaboration with other federal departments, provincial governments, industry and non-governmental organizations in response to recommendations from the Canadian Council of Ministers of the Environment (CCME). As part of the process, three expert panels were struck to prepare reports on the issues related to a variety of proposed sulphur levels for gasoline and diesel: the Atmospheric Science Expert Panel, the Health and Environmental Impacts Assessment Panel, and the Cost and Competitiveness Assessment Panel. Those reports were released in the fall of 1997 and are referenced in the appendix.

A Government Working Group, with representatives from five federal departments and six provincial ministries, has prepared a preliminary report, "Setting a Level for Sulphur in Gasoline and Diesel", which summarizes and analyses the expert reports and other background information, and presents a variety of options for government action. That report was released in May 1998 for public comment. The final report is scheduled to be completed this summer and is expected to be tabled by the federal Ministers of Environment at a CCME meeting in the fall of 1998.

The preliminary report presents five options for action on sulphur levels in gasoline:

Option A.1The establishment of a 30 ppm annual average and an 80 ppm maximum effective across Canada on January 1, 2002;

Option A.2The establishment of a 30 ppm annual average and an 80 ppm maximum effective in the Southern Ontario-Montreal corridor on January 1, 2002, and in the rest of Canada on January 1, 2005;

Option A.3The establishment of a 30 ppm annual average and an 80 ppm maximum effective in the Southern Ontario-Montreal corridor and Lower Fraser Valley on January 1, 2002, with sulphur levels frozen at 1994 levels in the rest of Canada;

Option BThe establishment of a 150 ppm annual average and a 200 ppm maximum effective across Canada effective January 1, 2002;

Option CAction on sulphur levels in gasoline is deferred. Future standards to match the least restrictive fuel requirements of the Tier 2 vehicle standard in the United States.

The Government Working Group has recommended that sulphur levels in diesel should be considered in early 1999 when several uncertainties respecting costs and benefits have been addressed.

Comments:

Recommendation #1:It is recommended that sulphur levels in gasoline should be set at an annual average of 30 ppm and a maximum of 80 ppm across Canada effective January 1, 2002 as outlined by Option A.1.

The worldwide trend is towards lower sulphur levels in gasoline. Currently, the average level of sulphur in gasoline is higher in Canada, at 340 parts per million (ppm), than in many other developed nations. Within Canada, the sulphur levels are highest in Ontario with an average of 540 ppm. In the United States, the average sulphur level is 295 ppm in the areas to which the Federal government's Reformulated Gas Program (RFG) does not apply. The average sulphur level is lower in the areas to which the Reformulate Gas Program does apply, and is expected to decrease to 150 ppm, in the next few years with the implementation of Phase 2 of the Reformulated Gas Program. In Japan, sulphur levels in gasoline are limited to a maximum of 100 ppm. The European Union has agreed to apply a 150 ppm sulphur limit to gasoline in the year 2000, and its Council of Ministers have proposed a 50ppm limit for the year 2005.

The 30 ppm limit is technically achievable. Sulphur levels in gasoline have been capped at an average of 30 ppm or a maximum of 40 ppm since 1996 in the State of California.

The 30 ppm sulphur level would produce substantial reductions in the ambient levels of a wide range of air pollutants. Sulphur affects the efficiency of current and advanced emission control technologies on vehicles. Therefore, when sulphur levels in gasoline are reduced, vehicle emissions of hydrocarbons, carbon monoxide, and nitrogen oxides are reduced, as well as sulphur dioxide and sulphates. The Atmospheric Science Expert Panel has calculated that the 30 ppm sulphur limit in gasoline would produce substantial reductions in ambient air levels of carbon monoxide, nitrogen dioxides, fine particulates, sulphur dioxide and sulphates in all of the seven Canadian cities examined. For example, it was estimated that the 30 ppm sulphur level would reduce carbon monoxide levels by 10-68 ppm in the seven Canadian cities examined (i.e. Halifax, Saint John, Montreal, Toronto, Winnipeg, Edmonton, Vancouver) by the year 2020. The greatest reductions for all air pollutants examined in relation to gasoline were predicted for the City of Toronto.

The 30 ppm sulphur level provides the greatest health and socioeconomic benefits for Toronto and Canada as a whole. The Health and Environmental Impact Assessment Panel has demonstrated that reductions in premature mortality, chronic respiratory disease, hospital admissions and asthma symptoms days would be greatest with the 30 ppm sulphur limit. Over a twenty year period, the Panel has estimated that 1,352 premature deaths, 4,770 chronic respiratory disease cases, 848 cardiac hospital admissions, 517,000 asthma symptom days, 17,900,000 acute respiratory symptoms, and many other health effects, could be avoided in the seven Canadian cities with the establishment of a 30 ppm sulphur level in gasoline. The Panel has indicated that these health benefit numbers underestimate the true extent of the health benefits that could result from a lowering of the sulphur limit in gasoline because they do not include the health effects that result from the independent action of toxics such as carbon monoxide.

In the year 2001, in the Toronto area, the 30 ppm sulphur limit could prevent 136 cases of chronic respiratory disease, 513,571 cases of acute respiratory symptoms, and many other health effects. The monetary value of these avoided health effects has been calculated to be $205million. This compares with estimates of $165million in health benefits with a 150 ppm sulphur limit and $92 million in health benefits with a 360 ppm limit.

When the monetary benefits of the avoided health outcomes were calculated for the seven Canadian cities over a twenty year period, it was estimated that the 30 ppm sulphur limit was worth $5.2 billion in health benefits with a 3% discount for inflation built in. This can be compared to health benefits worth $3.9 billion with a 150 ppm limit and $2.1 billion with a 360 ppm limit.

While the compliance costs associated with the 30 ppm sulphur standard are substantial, the health benefits are much greater. The Cost and Competitiveness Assessment Panel estimated that it could cost the refining industry a maximum of $1.8 billion in one-time capital costs and $119million in annual operating costs to comply with the 30 ppm sulphur standard for gasoline. It was estimated that the 30 ppm standard would increase the cost of gasoline by approximately $0.01 per litre. It was also determined that the 30 ppm sulphur limit could threaten the viability of 3 or 4 of the 17 refineries currently operating in Canada.

However, when a benefit-cost analysis was conducted, the health benefits outweighed the compliance costs by a 2:1 ratio for Canada as a whole. In Ontario, where sulphur levels are the highest, a greater proportion of vehicles are gas powered, and the population is the greatest, the health benefits outweighed the compliance costs by a 4:1 ratio. The health benefits, when calculated for the entire population of Ontario over a twenty year period, were estimated at $6.14 billion.

While the health benefits will be shared by Canadians across the country, albeit disproportionately by those living in areas with the poorest air quality, the compliance costs may be born inequitably by workers dislocated from refineries that could close as a result of the 30 ppm sulphur standard. To ameliorate the effects of this dislocation, the federal government should establish an environmental income replacement program, complete with re-education funds, to assist workers who may be affected.

Gasoline with higher sulphur levels reduces the efficiency and performance of low emission vehicles and high fuel efficiency vehicles. The Association of International Automobile Manufacturers of Canada and the Canadian Vehicle Manufacturers' Association have indicated that vehicle manufacturers cannot continue to improve vehicle emissions or fuel efficiency without commensurate improvements in the quality of vehicle fuels. These Associations have indicated that fuels with higher sulphur levels can adversely affect the efficiency and performance of emission control technologies, particularly those designed for low emission vehicles. They also indicate that new technologies designed to improve vehicle fuel efficiency are more susceptible to sulphur than current technologies. These views have been expressed by staff in the United States Environmental Protection Agency (US EPA) as well. In a May 1998 report entitled, "Staff Paper on Gasoline in Sulphur Issues", the US EPA indicates that:

"While sulphur has a large impact on emissions from current low-emission vehicles, technological advances are also being made to improve the fuel efficiency of the nation's vehicles. Gasoline direct injection engines and fuel cells are two of the advanced power plants being developed. Both of these technologies may be more sensitive to sulphur than current vehicles."

The vehicle manufacturing associations in the United States have petitioned the US EPA to establish a year round limit on sulphur in gasoline for the entire gasoline pool "that is as low as practicable but in no case greater than 40 ppm per gallon by weight, or ... in no case greater than 30 pm annual average by weight with a per gallon cap of 80 ppm." They are asking that the US EPA to promulgate a sulphur regulation and to make it effective "as rapidly as possible".

Implementation Option A.1 provides the greatest health benefits in the shortest time frame.

Implementation options A.1 and A.2 both have arguments in their favour. Option A.2, which provides a longer time frame for the introduction of the 30 ppm limit to the rest of Canada, may be less disruptive to the petroleum industry. However, it provides a lesser level of health protection to Canadians outside of the Southern Ontario - Montreal corridor for an additional three years. It may also have a negative impact on low emission vehicles and high fuel efficiency vehicles operating in higher sulphur regions. Option A.1 is recommended because it provides the maximum health benefits to all Canadians in the shortest time frame, while eliminating the technological problems associated with high sulphur fuels in low emission vehicles.

Recommendation #2:It is recommended that sulphur limits for diesel, particularly for off-road vehicles, should be established before the year 2000, and that those standards should maximize the health benefits for residents across Canada.

Substantial health benefits could result from a 400 ppm sulphur limit for off-road diesel and from a 50 ppm sulphur limit for on-road diesel. With the implementation of the federal Diesel Fuel Regulations, which limited sulphur levels in on-road diesel at 500 ppm as of January 1, 1998, the average sulphur level in low sulphur diesel in Canada has decreased to 270 ppm. The average for the remaining diesel pool is over 2,200 ppm.

The Atmospheric Science Expert Panel has indicated that sulphur limits for diesel could result in substantial reductions in ambient air levels of sulphates, fine particulates and sulphur dioxide. For example, the Panel estimated that the 400 ppm sulphur limit for diesel used in off-road vehicles could reduce ambient air levels of sulphur dioxide by 0.11 to 1.09 ppb in the seven Canadian cities by the year 2020.

The Health and Environmental Impact Panel has demonstrated that the 400 ppm limit for off-road diesel could reduce chronic respiratory cases by 2,660 and acute respiratory symptoms by 10,000,000 in the seven Canadian cities over the twenty year period from 2001 to 2020, while the 50 ppm limit for on-road diesel could reduce chronic respiratory disease cases by 1,120 and acute respiratory symptoms by 4,220,000.

The Panel has estimated that the 400 ppm limit for off-road diesel, when calculated over a twenty year period, could produce health benefits worth $2.9 billion for the seven Canadian cities, while the 50 ppm sulphur limit for on-road diesel could produce health benefits worth $1.2 billion. When a benefit-cost analysis was conducted, it was determined that the health benefits associated with the 400 ppm off-road diesel standard outweighed the compliance costs by a 2:1 ratio.

The Government Working Group has recommended that the sulphur in diesel levels should be considered in early 1999 when several uncertainties respecting costs and benefits have been addressed. Given the health and socioeconomic benefits that could result from action on sulphur levels in diesel, particularly for off-road diesel, it is recommended that the federal government should establish new sulphur standards for diesel before the year 2000, and that those standards should maximize the health and socioeconomic benefits for all Canadians.

Conclusions

Environment Canada, and the other departments, ministries and organizations that have been involved in the development of Panel reports and the Government Working Group report should be commended. The sulphur in fuel issue has been subject to extensive research, comprehensive analysis and broad consultation. The preliminary report and background documents provide compelling health and socioeconomic evidence in support of the 30 ppm limit for gasoline and the 400 ppm limit for off-road diesel. The Government Working Group should move quickly to establish sulphur standards for fuel which maximize the health benefits for all Canadians.

Public Health Division staff gave a presentation to the Board of Health in connection with the foregoing matter.

Councillor Jack Layton, Don River, appeared before the Board of Health in connection with the foregoing matter, and filed a copy of his presentation in regard thereto.

(Appendix attached to the letter dated June 25, 1998, to the Government Working Group by the Medical Officer of Health, referred to in the foregoing report was forwarded to all Members of Council with the agenda of the Board of Health for its meeting on July 27, 1998, and a copy thereof is on file in the office of the City Clerk.)

(City Council on July 29, 30 and 31, 1998, had before it, during consideration of the foregoing Clause, the following report (July 29, 1998) from the City Clerk:

The Environmental Task Force at its meeting on July 28, 1998, considered a memorandum dated July22, 1998, from Councillor Jack Layton, Chair, Environmental Task Force, together with a copy of the report dated July 10, 1998, from the Medical Officer of Health, headed "Air Quality and a Federal Standard for Sulphur in Fuel".

The Environmental Task Force recommended that:

(1)City Council be advised that the Environmental Task Force endorses the recommendations, as adopted by the Board of Health at its meeting of July 27, 1998, regarding the report from the Medical Officer of Health, headed "Air Quality and a Federal Standard for Sulphur in Fuel";

(2)City Council request other Municipal Councils in Ontario to endorse the recommendations, as adopted by the Board of Health at its meeting of July 27, 1998;

(3)City Council establish a high level delegation of Councillors and appropriate staff, including the Mayor, if possible, to make representations to the relevant Ministers at both the federal and provincial levels;

(4)the City Solicitor forward a copy of the report requested by the Board of Health, regarding the feasibility of enacting a Municipal By-law to control sulphur levels in gasoline and diesel fuel in the City, to the Environmental Task Force for information; and

(5)the City Clerk forward a copy of the report (July 13, 1998) of the Medical Officer of Health and a copy of Council's decision, to all Provincial and Federal Ministers.

(Communication dated July 22, 1998, addressed to

the Environmental Task Force, from

Councillor Jack Layton, Chair, Environmental Task Force)

That the Environmental Task Force endorse the following recommendations, including Recommendation No. (1) made by the Medical Officer of Health to the Toronto Board of Health at its meeting on July 27, 1998, and advise City Council accordingly.

Recommendations:

It is recommended that:

(1)the Federal Minister of Environment:

(a)establish sulphur limits for gasoline at an annual average of 30 ppm and a maximum of 80 ppm across Canada, effective January 1, 2002, as outlined by option A.1 in the report of the Government Working Group;

(b)establish sulphur levels for diesel, particularly for off-road vehicles, that maximize the health benefits for residents across Canada before the year 2000;

(c)establish an environmental income replacement program, complete with re-education funds, to assist workers dislocated by plant closures that may result from sulphur standards set for gasoline and diesel; and

(2)City Council request other Municipal Councils in Ontario to endorse Recommendation No.1.)

(City Council also had before it, during consideration of the foregoing Clause, a communication (July27, 1998) from Ms. Cathy Walker, Director, CAW Health & Safety Department, CAWTCA Canada, expressing concerns regarding the air quality in Toronto; and requesting City Council to endorse the report of the Medical Officer of Health.)

Respectfully submitted,

JOHN FILION,

Chair

Toronto, October 13, 1998

(Report No. 12 of The Board of Health was adopted, as amended, by City Council on October 28, 29 and 30, 1998.)