NZRC chief executive Thomas Zengerly said the upgrade – the largest for the Northland refinery for 25 years - represented a major improvement for New Zealand’s fuels and brought this country up the same fuels standard as many other developed nations.

It would allow car companies to market their latest, fuel efficient models, which relied on the widespread availability of clean fuels in New Zealand.

The refinery could now produce petrol with only 1% benzene, down from 3%, and diesel with only 50 parts per million of sulphur, down from 500 ppm. Zengerly said the new fuels would start appearing at service stations within the next few weeks.

Transport Minister Pete Hodgson said Future Fuels was the result of a government-business collaboration.

NZRC worked with the government to secure exemptions from the planned NZ$15-per-tonne carbon tax from April 2007, in return for moving to world’s best practice in emissions management.

By reaching that agreement, the investment proceeded, refinery jobs stayed in New Zealand, and fuel emissions were significantly limited, transport minister Pete Hodgson said.

The cleaner fuels would significantly benefit the environment and New Zealanders' health, he said.

The refinery produces over 70% of New Zealand's petrol, diesel and aviation fuel needs, with the rest imported from Australia or Singapore.