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Feedback, improvements to Australia’s fuel efficiency standard

Fuel Efficiency Standard

The long-awaited fuel efficiency standard that will limit the average emissions of each carmaker over their fleet of new cars in Australia has been met with mixed reactions across Australia.

The Federal Government has promised a greater choice in fuel-efficient cars and electric vehicles under the pollution limits that it hopes will save drivers $1000 in fuel a year.

Under the new standard, called the New Vehicle Efficiency Standard which will be open for month of consultation, car makers will be required to lower average vehicle emissions across their fleets by 61 per cent by 2029.

Grams of carbon emitted per kilometre will need to drop from 141 grams per kilometre in 2025 to  58 grams by 2029.

Australia currently has emissions on average of 170 grams of carbon dioxide per kilometre travelled, 20 per cent higher than the US and 40 per cent higher than the European Union.

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The Electric Vehicle Council has welcomed the proposed New Vehicle Efficiency Standard and saying it was critical to bring Australia in line with over 85 per cent of the global car market that already has these standards.

“The Government’s proposed New Vehicle Efficiency Standard will drive down fuel bills for Australians while improving the choices consumers have to purchase more efficient petrol, diesel, hybrid and electric vehicle models. It also aligns with Australia’s 2030 emissions reduction target.”

However, the standard has called into question the future of high emitting cars such as larger ICE vehicles and reignited a political debate capitalising on Australia’s love affair with large utes, which make up three out of five of the top new cars sold.

Total EV sales in 2023 amounted to 7.2 per cent of new vehicles, which combined with hybrids equal about 15 per cent of cars.

The idea behind the limits is car manufacturers will need to offset their higher emitting ICE range with more EVs and low emitting vehicles in their range.

But leading automotive bodies have argued the standard must continue to ensure the affordability and mobility of Australian consumers.

More is more

FCAI Chief Executive Tony Weber said the automotive industry has been seeking a fuel efficiency standard in a united effort to combat high emissions, but this should not be at the expense of choice.

Image: ckybe/

“Most important is that Australian families and businesses can continue to access the style of vehicle that suits their needs for work and recreation,” Weber said.

“On the surface, the targets seeking a 60 per cent improvement in emissions are very ambitious, and it will be a challenge to see if they are achievable taking into account the total cost of ownership.

“The preferred option suggests that Australia considers adopting the type of targets that are currently in place in the United States. The targets in that country are supported by significant financial incentives yet the discussion paper makes no reference to any additional incentives to support the uptake of low emission vehicles.

“There is a great deal of further analysis to do, and we look forward to continuing to work with the Government on the development of a standard that is right for Australia and supports Australian consumers.”

Australian Automobile Association managing director Michael Bradley told the media after the Sunday launch of the standard the government must ensure vehicles remain affordable and called on the government to release modelling including its forecasted fuel bill savings.

“The government should be commended for pursuing this regulatory change,” Weber added.
“However, it must be transparent about the three scenarios presented, the winners and losers they each create, and their respective positive and negative impacts upon the price and availability of different vehicles.”

More information can be found at the government website while submissions and feedback can be made here.

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