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Vehicle emissions standards: Why Australia needs them, and why they’re NOT a carbon tax

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The federal government was this week forced to squash claims it was putting a ‘carbon tax’ on cars as some industry groups stepped up their opposition to the introduction of vehicle emissions standards in Australia.

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The Environment and Energy Minister, Josh Frydenberg highlighted the absurdity of the claims by suggesting an Elvis Presley comeback was more likely than a ‘carbon tax’ on cars. He was right to do so. The proposed standard on vehicle emissions is not a tax and claims to the contrary are misleading and act against the best interests of motorists.

The proposed introduction of light vehicle emissions standards would provide net savings to consumers, ensure that Australians have access to the latest vehicle technologies, and substantially reduce emissions from the transport sector.

Vehicle emissions standards will deliver net benefits, not costs

Since 2015, the government, through the Ministerial Forum on Vehicle Emissions, has been consulting with the car industry, consumer bodies, environment groups and others about introducing CO2 light vehicle emissions standards. Currently CO2 light vehicle emissions standards cover 80 per cent of the global automotive market.

The lack of standards here means Australia’s light vehicle fleet is less efficient than many other countries, and this gap is set to widen.

In 2016, the average efficiency of new light vehicles sold in Australia (in grams of carbon dioxide emitted per kilometre) was 182g/km. By way of comparison, the average efficiency of new light vehicles sold in the European Union was 120 g/km for passenger vehicles and 168g/km for light commercial vehicles, while in the United States – traditionally home of the gas-guzzlers – it is 183g/km and set to go to 105g/km in 2025 using the same type of regulation proposed here in Australia.

On Monday, the government released of a proposed model for an Australian fuel efficiency standards for further consultation. The issues paper supported the introduction of a CO2 lightvehicle emissions standard of 105g/km to apply to all new vehicles sold in 2025.

Based on this proposed standard, the government’s own modelling shows that an average motorist purchasing an average performing passenger vehicle in 2025, could save $519 per year in fuel costs.

Using 2012 household energy costs data, this would cut household energy costs by up to 10 per cent, with even greater savings for low-income households. That same modelling shows that these standard will provide net economic benefits of $13.9 billion to 2040.

How it works

Claims by the industry that the proposed standard would increase the cost of some cars by thousands of dollars is misleading. The proposed standard is not applied to individual cars but would apply as an average across all vehicles sold by a manufacturer.

These standards allow manufacturers to sell vehicles with emissions higher than the standard as long as they are balanced out by lower emissions vehicles. This means there may not be any cost increase from potential penalties under these standards.

It will come down to how proactive a manufacturer can be in bringing new, fuel efficient models to the Australian market. This regulation will drive manufacturers to improve the efficiency of the fleet of vehicles on sale in Australia, which is ultimately a good thing for Australian motorists.

A manufacturer will have a number of options to ensure they meet the standard. They can either improve the efficiency of models on offer through technologies such as light weighting, or they can bring in a greater range of low and zero emission vehicles to bring down their fleet average.

Currently the uptake of electric and other low emissions vehicles in Australia is slow and the industry are saying this is in large part due to a lack of standards and other incentives. In one sense they can’t have it both ways. And while standards can act as an incentive to drive the uptake of low emission and electric vehicles they alone are not the silver bullet. A range of complementary measures should also be implemented in support of light vehicle CO2 emissions standard to help drive efficiency gains and build consumer awareness of fuel-efficient vehicles.

Emissions reductions

While reducing emissions may not be a top priority for all motorists, the task of cutting emissions from our transport sector is crucial if Australia is to meet our national and international emissions targets.

Light vehicles account for around 10 per cent of Australia’s emissions and contribute to increasing poor air quality in our cities. The proposed standard of 105g/km will deliver 6.5 per cent of Australia’s 2030 emissions reduction target at least cost across the economy.

The introduction of light vehicle CO2 emissions standards is good public policy that will deliver savings for motorists and substantial reduce Australia’s greenhouse gas emissions.

Given that groups such as the AAA have themselves highlighted the increasing pressure motorists are facing from fuel costs in their Transport Affordability Index, it is indeed interesting to see that they aren’t supporting the implementation of these standards which will help address this issue.

Lets hope ridiculous claims of standards being akin to a ‘carbon tax’ on cars have been put to rest and we can confirm instead that Elvis has definitely left the building!

Scott Ferraro is ClimateWorks Australia’s Head of Implementation  

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  • Ken Dyer

    You do not new vehicle emission standards, we have them already! What we need is for Government to get off its arse and legislate EV incentives. The carrot is mightier than the stick!
    https://myelectriccar.com.au/incentives/

    • DugS

      I agree and you are correct however we are up against an ideological brick wall here. Conservatives find incentives abhorrent because it is Government interfering with (play angelic choral music) The Market. As long as there is the Trump influence on the conservative mind set which legitimises nay eulogises, the Get Out Of The Way approach to capitalism regardless of the societal/environmental damage that can be expected as a result then Australian Liberals will consider incentives for EV’s anathema to their very political bones. When you add the considerable influence of the fossil fuel industry into this mix then the chance of effective incentives are zero. Thus the only option is to vote the bastards out of office and bring in a team that will stand up to the fossils. This means getting politically active at a grass roots level and agitating for change.

      • Marcus L

        Like the diesel fuel rebate? Isn’t that a subsidy, and a bloody big one! http://reneweconomy.com.au/australia-still-subsidising-fossil-fuels-at-rate-of-1712-per-person-a-year-33164/

      • Ren Stimpy

        The (play angelic choral music) Market is the WRONG fixation of the conservatives. They have lost their way in the quagmire of politics. What their fixation should really be is (play even more angelic choral music) Competition.

        The conservatives really need a long spell on the sideline, and perhaps a few sessions on their shrink’s leather couch, to rediscover themselves and what they actually stand for.

      • Brunel

        But 18L/min shower heads are banned under the LNP.

        Even though we have giant desalination plants now.

        So the LNP is not actually into the free market.

  • Charles

    “It will come down to how proactive a manufacturer can be in bringing new, fuel efficient models to the Australian market.” And the bonus here is that the initial cost of doing this is minimal – almost all manufacturers *already have* hybrid of electric models which are available overseas. They just aren’t brought here because they don’t have to.

    • Brunel

      The ban on parallel imports does not help.

      Do not cars in NSW have to undergo a roadworthy check anyway?

  • Just_Chris

    Fantastic article, if Canberra can’t get this through then I think there is little hope for them achieving anything.

  • Mike A

    If they don’t want a carbon tax then they could simply take all taxes off electric vehicles which would not raise prices for dirty cars but promote electric. Lots of other countries including America and Iceland have reduced taxes.

  • Brunel

    I prefer a 900% tax instead of a ban. That philosophy should apply to all products.

  • DJR96

    Actually, we don’t need tighter emissions standards or any incentive scheme for EV’s at all. Within 10 years EV’s will be cheaper than their equivalent ICE counterparts. Simple economics will see to it that ICE is pushed out of the market.

    • neroden

      Unfortunately, there’s evidence that carmakers use Australia as a dumping ground for their oldest, least efficient, and most polluting cars. You probably need some regulations to make them cut that out.

      Otherwise, as EVs take over the world, Australia will be flooded with cheap pollution-mobiles which are no longer wanted in Europe or the US or China.

      • DJR96

        First, we have emissions standards that for the most part are effectively a cycle behind Europe. Basically just a few years behind.
        Second, it doesn’t mean we get worse than the standards we have.
        Third, most manufacturers that produce models for the wider international market for the most part only make two versions of any particular model. Left and right-hand drive. Everything else is the same including the engine and emissions control systems. Sometimes, they may de-tune the engine a bit because our fuel isn’t the highest spec to be able to get the best performance. And that doesn’t mean it will be any more polluting either.

        All the big brands are now developing electric models. It won’t be many years before there is quite a choice on the market.

        The biggest hurdle will be getting charging infrastructure installed throughout the nation. Sadly there doesn’t seem to be much happening on that front yet.

  • MaxG

    Someone said elsewhere something along the lines: if we were to redirect the exhaust into the cage people would get the message very quickly…
    As it is often the case, people get used to anything; so to car fumes… I am realising this every time I drive into the city, here Brisbane, where I can’t stand the stink of the pollution any more; yet this never raised an eyebrow let alone a nose hair, while I was living and commuting there.
    No ordinary person would stick their nose into emission regulation, let alone look over the fence to Europe or elsewhere and see how it is done properly. Why would they? The majority of Australians live in the larger cities and inhale as normal 🙂 w/o realising what they inhale…

  • Brett Pattinson

    This is nonsense. Policies that target CO2 emissions will simply promote diesel vehicles, as has happened in the UK and throughout Europe – with concomitant deterioration of urban air quality.