Raising bar on car emissions could halve fuel costs: report

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.