CEFC invests another $50m to encourage car fleets to lower emissions

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Clean Energy Finance Corporation puts $50m towards program making it cheaper and easier to adopt low-emissions fleet vehicles in Australia.

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A plan to incentivise the use of low-emissions cars as fleet vehicles Australia has won $50 million in backing from the Clean Energy Finance Corporation (CEFC).

The $50 million funding package, announced on Tuesday, will go to ASX-listed Eclipx Group, one of Australia’s largest independent fleet leasing companies, to provide its corporate, government and not-for-profit fleet buyers with access to reduced loan interest rates for eligible vehicles.

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According to the release, the Sydney-based Eclipx has more than $1.7 billion of fleet assets under management or financed across Australia and New Zealand – more than 10 per cent of the Australian-funded commercial vehicle leasing market.

All up, Australia’s fleet leasing and management industry has a total portfolio in excess of 450,000 vehicles, according to an industry source that collects statistics from 14 of its members, including Eclipx’s fleet brands FleetPartners and FleetPlus.

CEFC CEO Oliver Yates said the “important initiative” would reduce companies’ emissions and operating costs, achieving productivity and environmental gains.

Indeed, this is not the first time the CEFC have used their funds to incentivise cleaner transport.

In June, it supported a scheme made available through the National Australia Bank, which offered loans to participating businesses at a rate 70 basis points below NAB’s standard equipment finance rate, with one of its main aims being to help accelerate the switch to greener vehicles – hybrid and pure EVs, and the charging infrastructure to support them.

“Transport is a leading factor in Australia’s greenhouse gas emissions, with light vehicles alone accounting for an estimated 10 per cent of our total emissions,” Yates said in a statement on Tuesday.

“Cutting energy costs has never been more important for Australian businesses,” said CEFC CEO Oliver Yates in a statement on Tuesday.

“This is clearly an area where we need to take action, and by focusing on fleet buyers we are hoping to see an accelerated uptake of low emissions vehicles.”

Yates added that in working with Eclipx, the CEFC had deliberately taken a targeted approach.

“Given the size of fleet purchases, this will make a positive difference in lifting the cost competitiveness of low emissions vehicles,” he said.

To be eligible for the CEFC finance, Eclipx customers must ensure the vehicles meet a CO2 emissions threshold that is 20 per cent below the most recently published Australian averages for new passenger and light commercial vehicles.

The finance will provide an incentive for vehicle fleet users to make more emissions-sensitive buying decisions.

“The CEFC finance will be available through an Eclipx sponsored, publicly-rated securitisation warehouse, providing a significant demonstration of the potential of alternative funding structures to finance low emissions technologies,” Yates added.

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2 Comments
  1. Malcolm Scott 4 years ago

    This initiative is pathetically inadequate and will achieve nothing that would not already happen. I’m struggling to see the good in this tokenistic scheme that will inevitably be rorted by business without providing benefits.

    20% below average CO2 emissions for most recent is 153 g/km. This is in the space of some variants of Corolla, Mazda 3, i30, Camry Hybrid, CX-5 and perhaps the Golf. These are best selling cars. They are ordinary purchase choices within the normal range of choices. They do not need incentives for business to preference these vehicles. They are justifiable simply on the basis of if they meet the functional needs, then the economics is all the justification needed. An added discount for financial engineering is a waste of capital without environmental benefit. That capital could be put to more productive use.

    What is needed are greater incentives that drive purchase decisions in the zero emission (battery electric), < 50 g/km (plug-in hybrid electric), and hybrid <100 g/km markets where business finds it hard to justify where annual distances travelled are not very high for vehicles to offset the financed high costs of the purchased vehicle. This would start to align the Australian market with the European fuel efficiency standards at the time that we also adopt their emission standards. This means instead of a Corolla, et al, financing that supports purchases of Nissan Leaf, Renault ZOE and Kangoo Z.E., Mitsubishi Outlander PHEV, Holden Volt, Audi A3 e-tron and perhaps in the mainstream market, even the BMW i3, plus any new entrant like e-Golf, e-Polo, Holden Bolt, Nissan e-NV200 (all variants), and Kia Soul EV.

    Very frustrated

    • Peter Campbell 4 years ago

      Hear, hear. Our petrol Golf gets 5L/100km routinely on highway trips but that we regard as the gas-guzzler we leave at home most of the time. For trips around town we use our electric car, on 100% GreenPower.
      Fleet choice is what drives availability on the second-hand market a few years later.

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