The Albanese government has finally unveiled a “preferred model” for a New Vehicle Efficiency Standard as the country advances to finalizing regulations to accelerate Australia’s adoption of electric vehicles, according to the joint media release of the Minister for Climate Change and Energy and Minister for Transport.
New vehicle efficiency standard
Australia plans to introduce legislation for a New Vehicle Efficiency Standard, with a target of imposing it by January 1, 2025.
As per the joint media release, the preferred model will align with US standards by 2028. The Australian government believes that the NVES will aid drivers save approximately A$100 billion ($65 billion) in fuel costs through 2050. It will reportedly apply to new passenger and light commercial vehicles, enabling owners to save about $1000 per vehicle annually.
The proposed regulations would enforce average emissions standards across the fleets of vehicles sold by manufacturers in Australia, with the CO2 threshold yet to be determined.
“Because of a lack of action on an Efficiency Standard, Australian families are paying around $1000 a year more than they need to be for their annual fuel bill – the Albanese Government is delivering long-term cost-of-living relief to fix that for new vehicles and put money back in people’s pockets.
We’re giving Australians more choice to spend less on petrol by catching up with the US– this will save Australian motorists $100bn in fuel costs by 2050. This is about ensuring Australian families and businesses can choose the latest and most efficient cars and utes, whether they’re petrol and diesel engines, or hybrid, or electric.”
Minister Chris Bowen
Context
In hindsight, Australia’s center-left announced the road map to fuel efficiency standards in 2023.
This policy is crucial for the country to encourage automakers to launch more electric vehicles in Australia to accelerate the overall uptake.
According to the Labor government, Australia used to be the sole developed nation without or without plans for fuel efficiency standards apart from Russia.
Finally, it seems that the Albanese government is getting closer to imposing a New Vehicle Efficiency Standard to finally catch up with other developed nations across the world.
The industry’s response
The Australian government’s move to finally introduce New Vehicle Efficiency Standards delighted numerous industry advocates, including the EV Council’s Chief Executive Behyad Jafari, saying that the policy will offer drivers more choices and enable them to save on fuel expenses.
“Because previous federal governments failed to introduce New Vehicle Efficiency Standards, some car manufacturers have treated Australia as a dumping ground for their most inefficient models. This announcement from the federal government, when legislated, will give Australians a greater choice for the cars they want and put money back in their pockets through lower fuel bills.”
EV Council CEO Behyad Jafari
However, some industry bodies did not express the same enthusiasm about the New Vehicle Efficiency Standards, including Federal Chamber of Automobile Industries CEO Tony Weber.
CEO Weber is skeptical of the policy’s feasibility, citing Australia’s lack of necessary incentives, unlike the US.
“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.”
Federal Chamber of Automobile Industries CEO Tony Weber
That said, the FCAI CEO calls for the Australian government to conduct more studies in order to introduce a policy that “is right for Australia and supports Australian consumers.”
Nonetheless, the impending implementation of the New Vehicle Efficiency Standards can potentially aid the Australian government’s targets to reduce emissions by 43% by the end of the decade.
