Australia, Industry Issues, Transport Features, Transport News

Is the new vehicle efficiency standard giving Australia’s transport industry enough time to transition?

Debate over the timing and implementation of Australia’s new vehicle efficiency standard rages as manufacturers prepare for the 2025 mandate

In late March, Australia officially removed itself from an unwanted list. Prior to March 26, Australia and Russia were the only developed countries and advanced economies to not have a legislated new vehicle efficiency standard in place.

The unveiling of Australia’s new vehicle efficiency standard (NVES), courtesy of federal transport and infrastructure minister Catherine King and federal climate change and energy minister Chris Bowen, now provides a roadmap for Australia’s vehicle emissions future.

In the lead-up to the official confirmation of the standard, the Australian Renewable Energy Agency (ARENA) moved to welcome the impending announcement. In a release, ARENA supported the early introduction of the NVES to allow Australians to secure a sufficient supply of lower and zero-emissions vehicles and help meet 2030 greenhouse gas emission reduction targets.

ARENA was first involved in NVES consultation last year, with the agency proposing that the federal government include the consideration of other right-hand drive markets as a group when implementing the NVES. In ARENA’s submission, it urged the federal government to begin the NVES sooner with a softer standard rather than leave it to a later start date with steeper requirements, while also asking the government to consider vehicle-to-everything (V2X) capability, or the capability to plug in appliances and export electricity to the home or grid, as a potential bonus credit in the standard.

The initial release of consultations for the NVES came out earlier in the year, with the government proposing three options. These options started with; A, where a slow start wouldn’t seek to meet other jurisdictions quickly; B, where a fast but flexible approach would balance extremely high vehicle costs with supplier investment and the omission of technology credits; and C, focusing on a fast start to catch up to the US’ standard by 2027.

In the end, the federal government softened its initial approach, recategorising a limited number of 4WD models from passenger cars to light commercial vehicles. This acknowledged that some off-road wagons use similar ladder-frame chassis, with models such as the Toyota Landcruiser and Nissan Patrol requiring a comparable towing capacity above three tonnes. The NVES also smoothed the emissions trajectory for light commercial vehicles, reflecting adjustments announced by the US Environmental Protection Authority (EPA) to its own standard.

The final standard also adjusts the weight-based relative emissions limits, known as the break point, recognising that heavier vehicles emit more, while also staging an implementation period to enable the preparation of essential data reporting capabilities. The end goal is that the NVES begins on January 1, 2025, with manufacturers not able to begin earning credits or penalties until July 1 that year.

While this doesn’t reflect the stronger standard option C that ARENA elected to go with, the likes of Climate Council CEO Amanda McKenzie is still welcoming the movement towards a more sustainable transport future.

“Manufacturers have been dumping their dirtiest cars here for years, and that has got to stop,” McKenzie says.

“When Australians go to buy a new car, they should be able to choose a low or zero pollution option that suits their needs.

“Our cars produce more than 10 per cent of Australia’s total climate pollution, and the average family pays over $5,000 a year for fuel. The NVES will mean we can wave goodbye to those eye-watering fuel bills and unhealthy air, and get on the road to cleaner, more affordable transport.”

Within the Climate Council, head of policy and advocacy Dr Jennifer Rayner says the formalised NVES responds to industry feedback while delivering benefits for Australians.

“Having landed their final settings on the NVES, the federal government now needs to come up with other transport policies to keep Australia on track to hit our national emission reduction target,” Rayner says.

“Enabling people in our big cities to use shared and active transport more often is the best way to cut climate pollution quickly this decade. This shift to shared and active transport should be at the centre of the federal government’s upcoming Transport and Infrastructure Net Zero Roadmap.”

In the environmental space, Greenpeace Australia Pacific welcomed the NVES as a win for climate action.

“This important climate decision will make all the difference when it comes to urgently bringing more affordable electric vehicles into Australia and is crucial if Australia is to meet its climate targets,” Greenpeace Australia Pacific campaigner Joe Rafalowicz says.

“Strong vehicle efficiency standards will bring about real cuts to pollution and cleaner, quieter cities for us all to enjoy. This will mean less toxic, harmful pollution from the petrol and diesel burnt in our cars: a great outcome for Australian communities and our planet.”

However, Rafalowicz and Greenpeace warned that the late decision to weaken the standard for light commercial vehicles means “around 20 per cent more carbon pollution will be allowed by 2030 compared to the original proposal”. This is leading Greenpeace to join the chorus calling on the federal government to look at other options to reduce transport pollution in order to meet climate targets.

While Greenpeace is against this weakening of the NVES, it’s most critical of the government’s decision to keep the standard’s start date in January 2025 and wants the federal government to do more to reduce upfront costs and increase charging accessibility for all citizens.

Simultaneously, Greenpeace also raised the influence of petrol and diesel car lobby group, the Federal Chamber of Automotive Industries (FCAI), in the modern transport landscape.

“We raise how the FCAI is fighting to keep Australian vehicles as toxic and polluting as possible, while asking motorists to keep paying high prices for imported petrol,” Greenpeace says.

“The NVES is an important step towards achieving Australia’s climate targets, laying the groundwork for more action on transport emissions,” Rafalowicz says.

“By working closely with the states to make major and necessary investments in active transport, the government can continue to accelerate its climate ambitions.”

In response to Greenpeace’s statement, the FCAI welcomed the adapted NVES after previously calling on the federal government to match the US’ EPA emissions reduction target and timeline. EPA in the US decided to amend its timeline due to finding the impact on consumers and manufacturers to be too severe.

FCAI chief executive Tony Weber says the US has joined the UK and New Zealand in renewing the pace of the introduction of strict fuel efficiency standards to allow consumers and manufacturers to have the correct amount of time to make the switch. While groups like Greenpeace have welcomed the pace of the NVES, Weber wants to see consideration in the future of the transport emissions transition.

“A vehicle efficiency standard is a major step for Australia, and we should take the time to ensure that car companies have sufficient time to increase the supply of zero and low emission vehicles into the local market,” Weber says.

“Like in the US, Australian consumers should have time to embrace the shift, and ensure they have access to the types of vehicles they want and need at prices they can afford.

“The federal government has consistently said that it’s using the US scheme as a guide. Rushing to introduce a scheme in just nine months’ time without learning from the US experience is a recipe for disaster in Australia.”

While the FCAI welcomed the confirmation of the NVES, it still reiterated its concerns about the impending challenges facing industry and motorists.

“We call on the government to release the full legislation and modelling that forms the basis for their policy,” the FCAI says.

In the manufacturing sphere, MG Motor Australia hasn’t called for a slower approach, instead welcoming the NVES publicly after initially opting for option B in the consultation process. The brand says it’s fully committed to working with the federal government and transport industry to provide a wide range of affordable low and zero-emissions vehicles.

“With majority of the international car market already covered by fuel efficiency standards, we are fully supportive of Australia’s move to help provide consumers with cleaner and more affordable cars to own and run,” MG Motor Australia COO Peter Ciao says.

“The standard is a win for customers with rising costs of living and a win for our extensive dealer network who can do their bit to reduce emissions in their local communities in line with Australia’s commitment to decarbonise.”

Ciao says MG chose the middle option as it wanted to help Australia’s transport industry catch up with other standards seen in other advanced economies. While bodies and associations continue to debate the timing and roll-out of the NVES, MG is instead looking to move forward and help usher in a more sustainable Australian transport future.

“We know that change is never easy and it took a lot of initiative from the government to make such a move,” Ciao says.

“But we also know that having a strong fuel efficiency standard will not only help reduce household costs but also provide healthier neighbourhoods.”

Previous ArticleNext Article
  1. Australian Truck Radio Listen Live
Send this to a friend