Basic vehicle emissions standard could meet 10% of Australian target, says report

The federal government could achieve almost 10 per cent of Australia’s 2030 emissions reduction target simply by introducing best practice carbon emission standards for light vehicles, a new report has found.

But the ClimateWorks Australia report, released on Monday, also warns that a failure to introduce these basic standards – which already apply to 80 per cent of the global automotive market – risked locking in emissions, while turning Australia into a dumping ground for heavy polluting car models.

As you can see in the charts below, Australia, which has pledged to cut greenhouse gas emissions by 26-28 per cent on 2000 levels by 2030, remains one of the few developed countries in the world without light vehicle CO2 emission standards in place.

This has been widely criticised as yet another climate policy failure of the Abbott/Turnbull governments, when many other developed and developing countries have gone well beyond vehicle emissions standards, and – like Austria, just this week – are considering a blanket ban on all non-electric vehicles by as early as 2025.

As we wrote here, India wants petrol cars off the road by 2030, Norway wants them gone by 2025 and the Dutch want only EVs for sale by 2025; others say that will be the only choice by then, in any case.

In Australia, meanwhile, a lack of emissions standards and/or incentives for low-emissions vehicle uptake are evident in an EV market so small it is barely visible, apart from the growing number of $124,000-plus Tesla Model S vehicles sported by the wealthy.

“Best practice vehicle emission standards can help Australia meet its emissions reduction and energy productivity targets while providing financial savings to motorists and improving national fuel security,” said ClimateWorks head of Implementation, Scott Ferraro.

Ferraro said the analysis showed best practice standards for new light vehicles (passenger and light-commercial), equivalent to a performance target of 130gCO2/km in 2020 and 95gCO2/km in 2025, would reduced carbon emissions by about 100 million tonnes from 2020 to 2030.

“Our analysis shows that Australia can improve fuel economy …at 5 per cent per year, matching rates targeted in other markets,” Ferraro said.

Ferraro said this would reduce CO2 greenhouse gas emissions by around 100 million tonnes between 2020 and 2030, contributing to the 2030 target at the lowest cost to the economy.

Indeed, the report finds that the introduction of best practice CO2 emissions standards for light vehicles would not only achieve around 10 per cent of the federal government’s target, but would save the average Australian vehicle owner as much as $850 a year on fuel costs, or $1,200 a year for fleet drivers.

“The Australian government has the opportunity to introduce best practice standards, which if designed well in collaboration with industry and consumer stakeholders, and supported with suitable complementary measures, present a significant opportunity to reduce emissions from the transport sector whilst providing broader benefits for vehicle owners and the economy,” the report says.

Conversely, it adds, “in the continued absence of CO2 emission standards, Australia runs the risk of becoming the dumping ground for low-specification models and falling further behind international peers, resulting in relatively higher fuel costs for motorists and businesses, and missing out on a simple low-cost climate mitigation opportunity.

A delay in improving vehicle emissions standards would also “lead to a level of emissions lock-in – where a larger proportion of vehicles on our roads will be less efficient than they would be with standards in place – reducing the potential by which vehicle emission standards can contribute to Australia’s 2030 emission reduction target,” it said.

Further benefits of introducing strong vehicle emissions standards, according to the report, included enhanced fuel security, by reducing demand by between 40 to 66 million barrels of oil per year.

“These improvements can help ensure that Australia keeps pace with productivity gains in other comparable countries, reduces energy costs to consumers and business and achieve our emission reduction targets at lowest cost,” the report said.

Another benefit would be an increase in the range of ‘green’ vehicles available, the report said. In Australia, the proportion of green cars sold in 2015 was 4.7 per cent of total sales, compared with 2.8 per cent in 2014. There were 72 green car models available in Australia in 2015, compared with 59 in 2014. Figure 4 below shows the growth in the number of green vehicle models available for sale between 2008 and 2015.

As it stands in Australia, the Turnbull government last November set up a Ministerial Forum, chaired by the Minister for Major Projects Paul Fletcher, to examine national vehicle emissions standards and testing arrangements.

At the time, federal environment minister Greg Hunt said the government had a series of programs and policies already in place to target vehicle emissions, but that this new effort would continue work on meeting the challenge of reducing them further.

“This includes consideration of the independent Review of the Fuel Quality Standards Act 2000 which will report to the Government in the first half of next year,” Hunt said.

“We’re moving towards what’s called the Euro 6 standard, tighter emissions standards, cleaner air in our cities – probably a saving of about 75 million tonnes over the coming decade” – a move he described as “evolutionary”.

But as we noted back then, it looks like this evolution will take at least two years, with the working group not scheduled to report back on a draft implementation plan for new vehicle emissions measures until the end of March, 2017.