Australian fuel efficiency standards aimed at cutting petrol bills, 'catching up' with US

[whynot]

The Australian
10:30PM MARCH 12, 2024
Motoring body’s reality plug for Chris Bowen’s ‘go electric’ plan
By GEOFF CHAMBERS
CHIEF POLITICAL CORRESPONDENT
and JOE KELLY
NATIONAL AFFAIRS EDITOR

Half of the new utes and light commercial vehicles sold by 2029 would need to be electric to meet Labor’s fuel efficiency standards and new incentives to shift more motorists away from petrol and diesel will likely fail, according to new industry modelling.

As the Greens threaten to scuttle Labor’s fuel efficiency standards, the nation’s peak motoring body on Wednesday will attack the Albanese government for failing to negotiate a more realistic new vehicle emissions standard, warning Labor’s model would “benefit some consumers and impose costs on others”.

In a major intervention following weeks of stoushes between Climate Change Minister Chris Bowen, the Coalition, car dealers and manufacturers, the Australian Automobile Association rejects Labor’s claims that the NVES will replicate existing US regulations.

With Anthony Albanese seeking to legislate the fuel standards by July, ahead of the scheme starting next year, the Greens have warned they will oppose the NVES if the government strikes a deal with the Coalition to secure the passage of changes to the Petroleum Resource Rent Tax.

Amid growing internal pressure on Mr Bowen over his failure to sell the plan, which the government needs to achieve its 43 per cent emissions reduction target by 2030, AAA chief executive Michael Bradley called on the government to release its $785,000 modelling and be more transparent about the impacts on *vehicle types, choice and prices.

The AAA, representing *motoring clubs with 9.3 million members including the RACQ, NRMA and RACV, has warned the government that “a poorly designed standard and overly stringent targets will deliver bad outcomes for both consumers and the environment”.

Economic modelling by The Centre for International Economics, commissioned by the AAA, found the government’s preferred model would require more than 40 per cent of new passenger vehicles and about 50 per cent of new light commercial vehicles to be electric vehicles in 2029. The AAA’s submission to government said motoring clubs supported a fuel efficiency standard but believed the government had not demonstrated how it would balance “ambition and achievability” under its NVES.

Based on previous polling of more than 3000 Australians, CIE found that electric passenger cars would need to be $30,800 cheaper than their conventional equivalents to create incentives to take up electric vehicles to the level *required under the government’s model.

Assessing consumer preferences and sentiment over availability of charging stations, running costs, range, subsidies, taxes, towing capacity and other behavioural factors, CIE found that larger electric utes and light commercial vehicles would need to be $142,300 cheaper. Electric SUVs would need to be $47,200 cheaper.

Under the government’s preferred model, to be finalised with industry consultation ahead of the scheme becoming active in 2025, carmakers will have to bring down the average carbon output of their stock sold into Australia. Labor’s goal is to achieve a 60 per cent reduction in average new car emissions by 2029.

This will require companies such as Ford, Hyundai, MG, Nissan, Holden and Toyota to sell increasingly more electric cars and hybrids in Australia to offset emissions from their petrol fleet, effectively making it harder to buy a new petrol car over time. It will also encourage car companies to produce petrol cars that are more efficient.

There will be a credit-trading system under the standards, with suppliers who beat the targets able to trade credits with those who fall short. Car makers will be fined about $100 per gram of carbon over which their fleet exceeds the threshold.

The Motor Trades Association of Australia has compiled a list of cars that will struggle to survive the imposition of the new vehicle efficiency standards.

It showed the Ford Ranger, Australia’s top selling car last year, and the Isuzu D-Max, the third highest selling car, sat atop the list. The MTAA warned “not every car company is going to make it”.

The CIE modelling suggested that compliance with the government’s preferred model would require “very dramatic changes to Australia’s passenger and light commercial fleets”.

The AAA submission said the LDV eT60 was currently the only electric ute available in Australia and 15 of these vehicles were sold in the fourth quarter of last year.

After The Australian previously debunked comments by Mr Albanese and Mr Bowen that the Australian fuel efficiency standard scheme would replicate the US model by 2028, the AAA also questioned the claim.

It said the US excluded *heavier pick-up trucks, did not lock in targets beyond 2026 and allowed the pooling and trading of credits.

Mr Bradley said regulations to modernise the vehicle fleet would benefit some consumers and impose costs on others.

“The government must be more open about both sides of this equation if it is to garner community support and reduce political division,” Mr Bradley said. “The AAA encourages both sides of politics to work towards implementing an efficiency *standard that is both ambitious and achievable.”

The AAA said it wanted different vehicle buyers to be able to understand the positive and negative impacts of the standard on their future vehicle choices.

“Given the global lack of *affordable and ready alternatives for existing popular vehicles, it is incumbent on the government to provide robust analysis showing how it sees its headline targets for light commercial vehicles being met,” the AAA submission said.

Mr Albanese on Tuesday took aim at the “scare campaign” against his fuel-efficiency policy, arguing it had failed to sway voters at the Dunkley by-election this month, and said he would “stand up for Australia’s national interest”.

With the Coalition rejecting Labor’s current model, Greens leader Adam Bandt wrote to Mr Albanese on Monday warning the minor party would use legislation for the NVES as a ransom to block a major party deal to *secure passage of the PRRT.

Mr Bandt said the Greens would only support the car pollution reduction scheme if Labor scrapped key parts of separate legislation before the parliament aimed at simplifying offshore oil and gas approvals processes.

He told Mr Albanese the Offshore Petroleum and Greenhouse Gas Storage Legislation Amendment contained provisions that would weaken environmental protection laws and “financially benefit Santos”.

Mr Bandt said the emissions reductions achieved by Labor’s new car pollution standards by 2050 would be obliterated by the extra pollution released by *Santos’s Barossa gas project – if it proceeded.