Australia to Introduce New Vehicle Emission Targets Next Year
Australia has proposed strict emission standards for new passenger vehicles and light commercial vehicles with the aim of keeping up with the U.S. and saving Australians money at the gas pump. The standards, known as the New Vehicle Efficiency Standard (NVES), will determine the average CO2 emissions for vehicles sold by a car company each year and impose financial penalties if they fail to meet the objectives. While the standards will not explicitly ban the sale of highly polluting new vehicles such as large four-wheel drive vehicles and utes, companies must sell enough low or zero-emission vehicles, or buy emission credits from other car manufacturers who have met the targets, to offset the highest polluters in their model ranges.
The new protocols will add to the strict exhaust emission laws announced at the end of last year, which will require each new gasoline or diesel vehicle to meet the same rigorous standards individually, rather than having an average for a car manufacturer’s range that some models can meet or others can have room to spare.
The NVES has been in the works since April 2023 and has reached the final stage of public consultations from 4 February to 4 March 2024. The government has proposed three versions of the efficiency standards to coincide with an announcement of stricter heavy vehicle emission standards for 2028. However, the government contends that the strict emission standards will not translate into increased vehicle prices for consumers. Rather, it is seen as a way to effectively align Australia with fleet emission standards in the U.S. around 2028 and to match the stringency of US standards, but not to seek to exceed it.
If the government’s proposal is approved, car manufacturers who do not meet the objectives will be facing an estimated $100 fine per gram of CO2 per kilometer.
The automotive industry is divided on the announcement and the government proposal. The head of the Federal Chamber of Automotive Industries noted concern that ambitious emissions improvements would be very challenging and costly. However, the head of the Electric Vehicle Council anticipates the proposal will spur the immediate availability of low and zero emission vehicles in Australia.
Likewise, motorists will still have the choice to buy what they want but will be offered far better options to choose from. It is proposed that from 2029, cars, SUVs, and 4×4 trucks would emit an average of 34 g/km.
While the government estimates the reduction in CO2 production from the proposed regulations to be 0.97 million tons by 2035 in comparison to 25.77 million tons under the current regulations, some are expressing skepticism that the more drastic emission reduction target of the Option C will be achieved due to the risk of vehicles becoming unavailable.
