New standard paves way for cleaner, cheaper transport

Thursday, 15 February, 2024

New standard paves way for cleaner, cheaper transport

The federal government’s proposed settings for a New Vehicle Efficiency Standard have been welcomed by Australia’s Climate Council, with the organisation’s CEO Amanda McKenzie saying that the announcement had got the nation off the starter’s grid and on the road to cheaper, cleaner transport.

Transport is the largest source of Australia’s emissions after energy, and cars and light commercial vehicles alone make up almost two-thirds of Australia’s transport pollution. There is also evidence indicating that transport pollution is harmful to people’s health, with vehicle emissions in Australia estimated to be responsible for more than 11,000 premature deaths of adults, more than 19,000 admissions to hospital for cardiovascular and respiratory issues, and 66,000 asthma cases every year.

The aim of the fuel efficiency standard is to reduce the greenhouse gas emissions Australia’s new cars release by setting a yearly limit on the average carbon emissions across a manufacturer’s new car sales. Over time, the maximum amount of CO₂ that can be emitted is reduced — this means car makers must offer an increasing number of new low- and zero-emissions vehicles to avoid penalties.

With fuel efficiency standards already covering over 85% of the global car market, Australia and Russia remain the only two developed nations not to have these standards. With Australia’s New Vehicle Efficiency Standard set to apply from 1 January 2025, and annual targets for fleet emissions gradually reducing from there, the government is aiming for Australia to catch up to the standards in other equivalent international markets (such as the US) by 2028.

The proposed standard will only apply to new vehicles sold in Australia after the policy takes effect. It will not apply to any existing car already on the road, nor to second-hand vehicles that are sold at any time.

Along with reducing carbon dioxide emissions, the new standard should ease the cost of living for Australian drivers by reducing the amount of fuel they use. It will also lead to more choice for consumers as car manufacturers are incentivised to offer a greater variety of low- and zero-emissions vehicles to Australian drivers.

As of mid-2023, only 60 battery electric models were being offered in Australia, compared to the almost 250 sold in the EU. This lack of models means Australians are likely paying a premium for new lower- and zero-emissions vehicles.

There are about a million new cars sold in Australia each year, and every new vehicle sold today will likely be on the road for at least the next 10 years. In 2023, EV sales more than doubled at 7.2% of the market — a jump from 3.1% of sales in 2022.

Under the standard, no vehicle models will be banned. SUVs, vans and utes will still be able to be sold, with manufacturers incentivised to bring the most efficient versions of these vehicles to Australia. Hybrids will also continue to be part of the mix of vehicles available.

“A fuel efficiency standard will benefit all Australians — no matter what type of new car they are buying,” said Climate Councillor and energy expert Greg Bourne.

“Aussie drivers who have long commutes from our suburbs and regions are hurt the most by high and rising petrol bills. This means they’ll also see the biggest benefits from getting access to a wider range of affordable lower and zero emissions vehicles that are cheaper to run,” he continued.

“Australians — especially those in our suburbs and regions — deserve access to the same choice of affordable, clean and safe cars that are already being sold in their millions overseas. A strong fuel efficiency standard can help deliver this.”

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