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Australia urged to go hard, save big, on EVs and vehicle emissions

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The Australian government is being urged to go harder and quicker on its proposed vehicle emissions standards, with the country’s network operators, generators and leading research groups all saying this would deliver more savings to the community, both in dollars and in health.

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While the proposals were initially and absurdly described as a “carbon tax” on cars by the Murdoch press, prompting a recoil by the government, AGL and research groups ClimateWorks and Future Climate Australia say in newly released submissions that strong rules encourage the uptake of electric vehicles and low emission cars could save consumers billions of dollars, enhance fuel security for the country, help reinforce the grid and help emission reductions.

Vehicle standards in Australia are well overdue. The lack of any standards has caused the country to become a dumping ground for inefficient vehicles that cannot be sold elsewhere, and transport costs are now making up an increasing share (around 61 per cent) of the household energy bill.

Australia is also becoming increasingly exposed to geo-politics in south east Asia, from where it imports nearly all its transport fuel needs; and its failure to act means it risks being left behind in the rapid shift to electric vehicles, and the benefits that can bring to a grid that is also transitioning to clean energy.

Opposition to the idea – apart from the reflex ideological push-back against anything that is smarter, cheaper and cleaner than what we have now (think of Treasurer Scott Morrison’s Big Banana response to the Tesla big battery) – is based around the fear that EVs and fuel-efficient vehicles are more expensive than current models.

Initially that may be the case, but experts argue that this is a bit like arguing a cheap fridge is better value than an efficient one, because it ignores the significant running costs. And like solar and wind technology, the cost of battery storage and EVs is expected to fall quickly, particularly as more models become available.

Indeed, if the government were to adopt the highest standard proposed, fuel savings would be more than $16 billion by 2030, while total “economic savings” – which include the buying price of the vehicle – would be more than $8 billion.

ClimateWorks says that a strong target is essential to drive the uptake of low emissions vehicles in the Australian market and ensure motorists have access to the latest technology.

It suggest the government could be even more ambitious and deliver greater savings. It wants the standards to be introduced in 2020 rather than 2022, and suggests a lower threshold for emissions.

“Currently, the uptake of electric and other low emission vehicles in Australia is slow and the industry are saying this is in large part due to a lack of standards and other incentives,” ClimateWorks analyst Scott Ferraro says.

The submissions  follow the unveiling of the Tesla Model 3 last weekend, and recent announcements by France and the UK to ban sales of diesel and petrol vehicles by 2040. Norway and the Netherlands are aiming for 2025.

Australia won’t see the Model 3 until 2019, and total EV sales in Australia in 2017 are expected to be around 50 per cent below their 2015 peak because many models are almost impossible to obtain.evs-row-620

“Australia is one of the last developed markets to implement these fuel efficiency standards, with standards now covering over 80 per cent of the global automotive market,” Ferraro said.

Both ClimateWorks and AGL says that the strong emissions standards – 105g of CO2 per kilometre – will deliver $8 billion more in savings than the weakest standard (135kgCO2/km), and save $17 billion in fuel costs over business as usual. Including the cost of vehicles, the savings would be $8 billion.

ClimateWorks wants the new standards to start being phased in by 2020 rather than 2022, reaching the targeted 105gCO2/km by 2025. Phasing in from 2022 would result in another 2.6 million  vehicles being sold without standards.

It also suggests the government should go beyond the current standard proposals, saying that a 95 gCO2/km by 2025 would deliver greater net benefits and is technically feasible based on achievements in other markets. This would bring it in line with European standards to be imposed by 2021.

With no current standard, the average emissions per vehicle in Australia is estimated to be around 180gCO2/km, falling to around 165gCO2/km if nothing else happens. That’s a gain of just 1 per cent a year.

AGL also called for the most ambitious standard to be adopted, saying that it would increase vehicle choice, result in more money being spent in the local economy (on electricity rather than transport fuels), and add flexibility to the grid, enabling it to make a quicker transition to zero carbon energy.

“EV charging has the potential to help protect and enhance the reliability and affordability of Australia’s electricity,” it says.

“A car with a 20 kWh battery stores as much electricity as the average Australian home consumes in a day. Considered as a pooled resource, the growing number of EV batteries could provide valuable grid services, from demand response and voltage regulation to distribution-level services, without compromising driving,” it says.

AGL also notes that Australian cities, because of their high household incomes and suburban sprawl, could be among the first to adopt autonomous vehicles and measures to promote EV adoption will help this, and improve road safety and reduce transport costs.

The standard will apply to vehicle manufacturers, and applies to their whole fleet. So, if they want to sell some high emission vehicles, they will need to sell more very low emission vehicles, or EVs, to meet the quota.

An EV will count for three vehicles. Credits are given, but these are not traceable with other companies. If a manufacturer fails to meet the standard, then it will be hit with a penalty of around $50/tonne.

ClimateWorks and FCA suggest the government introduce an education program to promote the purchase of more efficient vehicles, including on total ownership costs, and encourage the uptake of low and zero emissions vehicles in its own fleet and corporate fleets.

It says this will provide the community with exposure to low or zero emissions vehicles and will provide flow on benefits for the second-hand market.

Those thoughts were echoed by AGL, which noted the initial reaction to the proposed standards that highlighted the “market failure” that sees consumers “excessively discount operating cost savings in favour of upfront costs.”

“Locally, the existence of this market failure has been most recently illustrated in media coverage of the Proposed Model, which has focused solely on the potential impact on vehicle purchase prices while ignoring the operating cost savings that would be delivered,” it said.

ClimateWorks and FCA also want the government to consider financial incentives to promote the uptake of low or zero emissions vehicles, through changes to the Luxury Car Tax or Fringe Benefit Tax, and to support emerging technologies, such as intelligent transport systems, which can also improve the efficiency and emissions of the vehicle fleet.

  

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  • john

    Considering moving forward Australia will have zero car manufacturers, how about we set some standards instead of allowing the manufacturing selling 2 year old cars to the plebs down under who know no better.

    Just make it mandatory that every vehicle sold has to have a battery and motor that will allow it to go at least 80 km, no ifs or buts, that is the first year and lift it progressively.

    So some manufacturer can not meet this standard hard luck old chum you have treated Aussies as chumps for years.

    I have personally seen a 2 year old over seas vehicle sold here as this years model and the poor buyer did not know.

    The sooner we have a few more like the Sea electric light truck manufacturer starting up the better and this country has to be wide open for an electric commute vehicles for urban travel.

    • MaxG

      Corporations (and in particular those who create shareholder value) are all about ripping of the customer; milk the cow as long as possible, on change if the competition can grab some market share…

  • Rod

    One model that I have always supported is rolling some of the standing costs like registration, licensing, third party insurance etc. into the fuel cost.
    Of course this would need to be Australia wide.
    This gives incentive to use low or no fossil fuel vehicles as well as encouraging public and active transport.

    • Andy Saunders

      Interesting, but how? If it’s by simply increasing fuel excise by the amount otherwise collected from rego etc then almost certainly fuel excise will be undercollected. that’s actually a good thing, as it means fewer miles driven.

      • Rod

        State Governments collect rego etc and know how much they need. It could be an agreed State fuel tax/levy or administered Federally and returned to the States (Like GST but fairer)
        That is the idea. It rewards not driving or driving less as well as driving EVs.
        Dare I say, a carbon tax on driving.

        • MaxG

          Axe the tax 🙂 we can’t have that…

          • Rod

            Funny how the Libs managed to slip in the renewal of indexation on fuel excise without much fanfare.

      • Barri Mundee

        A per km charge could replace all those taxes?

  • Ian

    The enemy of my enemy is my friend! The fossil fuel generators could be a valuable ally in the fight to decarbonise transportation. They stand to gain a huge new outlet for their product, namely electricity, and the mediatary effect of batteries can allow slow and sluggish coal and gas to coexist with mercurial renewables.

    • Barri Mundee

      Yes they are “fremenies” in the context of EV’s.
      AGL’s support is most likely to be self-interest as they stand to gain from the switch to EV’s (and they are very much driven by shareholder return considerations) but it seems to be a positive development overall.

      • Ian

        When you train an animal you need to follow their instincts, there are no morals, just self interest. To be successful corporation or politician whisperers we need to know which instinctive or behavioural buttons to press.

        • Phil

          Why support dysfunction ? My current Biz model is FUNCTIONAL = INVEST , DYSFUNCTIONAL = DIVEST . Look at Commbank , how much are those shareholders going to lose ? Even though THEY knew the animal .

  • MaxG

    AGL is just a bunch of leeches, like any other retailer; however, what they are seeing is something I do agree with: all these EVs need charging, and most will not be able to use their solar PV — as such, charging for cash will be the bread winner for those guys.

    What I see in addition to that: the connection charge will drop, while the kWh will rise, to increase revenue even further.
    Once enough EVs have come on board… just like gas will be at par with the kWh from oil — in fact, considering the are almost 10kWh in petrol, at 25 Cents a kWh, electricity is already more expensive compared to petrol. E.g. 10 x 25C = $2.50 the equivalent energy in petrol. Luckily, EVs like the Tesla 3 work on 20kWh per 100km… also demonstrating that comparable ICE Sedan chews up 8l or 80kWh per 100km, thus being an energy waster beyond compare.
    Interesting times…

    • Phil

      That’s a fact about fossil fuels being cheaper than electricity as many rural users are now going off grid.

      Rural industries are using diesel for ALL electricity. My local sawmill is 100% Diesel genset (300kw). The grid is too expensive to use.

      Irrigators in Qld are also using fossil fuels for pumps as Electricity is too expensive.

      If anyone needs proof of a dodgy or broken system,this is it. Australia IS a 1st world country when it comes to the electricity grid. And the NBN for telecommunications is right up there with it too.

      • George Darroch

        Increasingly farmers and rural industries are going solar, leaving their generators as backup.

    • Ian

      Yeh, that’s the thing, electric motors, batteries and switchgear have very good efficiencies. Petrol has enormous energy storage density, so what you lose on the swings you gain on the roundabouts. The calcs are these: 18 million cars, 40km per day average 200WH/km = 144 GWH per day = (from a FF or AGL point of view) 6GW of coal baseload thingies. A damn fine potential market for their dwindling customer base!

  • Phil

    I wonder why HERE they are recognising the value of EV battery storage shared with the home.

    Yet the finkel report mostly ignored this ?