Raising bar on car emissions could halve fuel costs: report

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Report says adoption of best practice light vehicle emissions standards could cut Australian fuel use – and cost to consumers – in half.

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The adoption in Australia of global best practice car emission standards could cut drivers’ fuel costs in half, targeting one of the key cost-of-living concerns for households, while also reducing the nation’s carbon footprint, a report has found.

Released on Tuesday, the report – Improving Australia’s light vehicle fuel efficiency – by ClimateWorks Australia in partnership with CHOICE, calls on the federal government to introduce best practice light vehicle CO2 emission standards within the next two years to bring Australia back in line with Europe and the United States.

The report finds that while most major economies already have ambitious vehicle emissions standards in place, Australia has none, thus ensuring Australian drivers are spending more on fuel than they should be.

The analysis by ClimateWorks and transport analysts Rare Consulting looked at introducing best practice standards for light vehicles, targeting an average performance of 95 gCO2/km by 2024 – the same target the German government is now aiming for, having pushed it back from a 2020 timeframe.

In Australia, said ClimateWorks executive director Anna Skarbek, “this would achieve more than a 50 per cent reduction in the average vehicle’s fuel use over 10 years compared to our current average of 199 gCO2/km.

“This is akin to adopting the EU’s standards for passenger vehicles with a four year lag, and matching the US ambition of improving fuel efficiency by 50 per cent.

“Taking account of rising fuel prices, this would see the average driver pay less per year for fuel in 2020 than they do today, even after considering potential fuel price rises.”

Even those consumers who had to fork out to buy more efficient vehicles would see a net financial benefit – and a decent one at that, according to ClimateWorks acting head of engagement, Scott Ferraro.

“Our analysis shows that based on a conservative estimate of $2,500 for additional upfront cost for more efficient vehicles, the average driver could recoup these within three years through fuel savings, and this would be recouped even sooner for fleet drivers. These payback periods are well within the average ownership periods for new cars.

With these standards in place, said Ferraro, the average vehicle owner driving 14,000km/year would achieve fuel savings of up to $850 a year, while a fleet driver averaging about 20,000km a year would save up to $1,200 a year on fuel.

“Even considering a conservative estimate of additional upfront costs, this results in annual savings of $350 for the average driver over an average five year ownership period, and $380 for a fleet driver over a three year ownership period,” said Ferraro.

“This means Australia would save about 3.7 billion litres of fuel each year, alone worth $7.9 billion by 2024 (assuming a 50 per cent increase in fuel prices over this period). This is equivalent to reducing up to 50 per cent of all automotive fuel used in Australia in 2012.”

Ferraro said the introduction of best practice emission standards could also save 4 million tonnes of carbon dioxide equivalent by 2020, and 8.7 million tonnes by 2024.

“The introduction of emission standards is consistent with Direct Action and would be one way for the Federal Government to reduce emissions and save its budget allocation for other measures” he said.

“Indeed the government’s own Regulatory Energy White Paper and Emissions Reduction Fund issues papers called for suggestions of regulatory reform measures. Best practice vehicle emission standards is an example of a simple measure that is already in place in the US and EU.”

But the government would need to have these best practice emission standards in place within two years if they were to have any impact by 2020, Ferraro said.

Sophie Vorrath

Sophie is editor of OneStepOffTheGrid.com.au and deputy editor of its sister site, RenewEconomy.com.au. Sophie has been writing about clean energy for more than a decade.

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5 Comments
  1. Gongite 5 years ago

    A great idea, and fully consistent with Direct Action. Expect the government to completely ignore it as they can’t use it to whack Labor.

  2. Truthful Jones 5 years ago

    Sophie, a credible report by my excellent colleagues at ClimateWorks. But there’s a catch.

    How does someone like me find the money to *buy* a car of that sort? I’m not talking about the difference between a less efficient and a more efficient one.. I’m talking about the outright cost of $25K or $30K or whatever it will cost for this standard of vehicle.

    I’m 61, still working and needing to do so until at least 70 to have any hope of funding our retirement. The newest car that I own is 20 years old – that’s all I can afford and with a home mortgage still going, I don’t have the spare cash to spend on new cars. Insurances in particular are killing us – house (tripled in 2 yrs), medical, term life, cars.

    So how does someone like me ever hope to change over? And I suspect that there are a lot of people in our position too. So, great idea.. I’d love one.. but simply a dream unless they fall to around $5,000 to buy (will never happen).

    • Terry J Wall 5 years ago

      not that hard from what I have learnt. Take a small all wheel drive second hand suv: leave the petrol engine in, disconnect the rear differential and insert an electric motor driving the rear wheels. Think about it. most of your travel is on electric but your range is not reduced

    • Ronald Brakels 5 years ago

      If fuel efficiency standards are raised then more fuel efficient vehicles will start coming onto the second hand market. There’s no need to go and buy a brand new one. And even if you stick with an old inefficient vehicle, the fact that other people are driving more fuel efficient cars should help keep a lid on petrol prices for you.

      But adding things such as hybrid engines or battery packs is not the only way to get a fuel efficient car. One can also take things away, such as performance, or the rear seat if that’s not something you need, and increase fuel efficiency while at the same time lowering the cost of the car.

      And finally, perhaps if you work out how many kilometers you are likely to drive and what sort of vehicle you need to meet your needs, and how much petrol costs in the future, maybe you’ll find it is cost effective to use the equity in your home or other means to borrow money in order to get a car with lower running costs because the money you’ll save each week will more than cover the interest. I’m not saying this is likely to be the case, but it’s something to consider.

  3. Miles Harding 5 years ago

    Hi Sophie,

    I think that they may have got their analysis wrong by concentrating on the vehicle and ignoring the consumer.

    Getting the goons out of their SUVs would likely solve the problem!

    Setting the fuel price to that of the UK would do it in no time while raising a lot of revenue and resentment – perfect for the LNP

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