Cheaper bills, more EVs: Emissions cut will require consumer buy-in
Labor will have to ensure half of all cars sold by 2035 are electric to meet its emissions-reduction target, but consumers’ power bills could drop 13 per cent if the green energy shift goes to plan.
Australia will stake a heavy piece of its emissions-reduction target on consumer buy-in, but industry groups say the Albanese government must change course to shift purchase habits and move away from light-touch intervention.
The Climate Change Authority’s 2035 Targets Advice cites analysis by the Australian Energy Market Commission suggesting a 20 per cent reduction in household energy prices within the decade, or $1000 annually. It hinges on a co-ordinated green energy rollout, suggesting the most eager adopters of electrification could cut costs by up to 70 per cent.
The consumer shift will require a hefty swing towards electric vehicles.
Half of all cars sold by 2035 will have to be electric, according to the CCA’s report, signing the Albanese government up for widescale intervention in consumer habits.
The CCA in its report said Australia would have to put “more than 20 times the number of battery electric passenger vehicles on the road than there are today” in order to reach the 62 to 70 per cent emissions reduction target by 2035.
It estimated transport and building electrification would constitute 11 to 14 per cent of the reduced emissions.
“This means over five million EVs that would otherwise have been petrol and diesel vehicles. Around half of all light vehicles sold between now and 2035 would need to be EVs,” the report reads.
Climate Minister Chris Bowen however was adamant his government did not “have an EV sales target” in its climate agenda, after announcing $40m in funding for more EV charging stations.
“We don’t have an EV sales target, we never have as a country,” he said at a press conference on Thursday.
“We want Australians to have more choices, and our new Vehicle Efficiency Standards is driving that very well.
“We haven’t even really seen that have any impact yet. But the number of EVs that will be available to Australians over the next 12 months is about to explode. You’re going to see much more choice for Australians as importers respond to the new Vehicle Efficiency Standards.”
The Federal Chamber of Automotive Industries pushed back on the CCA’s goal and Mr Bowen’s laissez-faire approach to it.
Australia would fall far short of the required 20-fold rise without a shift in approach, FCAI chief executive Tony Weber said.
“Consumers are not yet purchasing EVs at the rate that was expected, nor at the rate required to meet the emissions targets. Key to driving EV take-up is ensuring there is adequate charging infrastructure, reducing the total cost of ownership, and that EVs meet the needs and desires of Australian motorists,” Mr Weber said.
The shift to electric vehicles represents the pointy end of consumer-driven emissions reductions, alongside the replacement of household appliances and solar and battery installation.
The CCA however argued household costs would be necessitated by the regular replacement of assets.
“Much of the so-called ‘cost’ of achieving a target is actually investment to replace ageing assets like old coal plants, vehicles, appliances and industrial gear with cheaper-to-run technology – it’s investment that has to happen regardless of the emissions-reduction imperative,” the report reads.
“EVs are forecast to achieve cost parity with internal combustion engine vehicles, which currently account for more than half of all transport emissions, this decade or early next, across most major markets.”
Electric Vehicle Council chief executive Julie Delvecchio pushed for the government to maintain its electric car discount and New Vehicle Efficiency Standard, fearing their early end would take the wind out of EV adoption.
“Transport accounts for a fifth of our national emissions and is also one of our fastest-growing sources of pollution. Any genuine plan to meet the 2035 climate target has to include speeding up transport electrification,” Ms Delvecchio said.
“We strongly encourage political leaders who are serious about our nation’s future prosperity to act on electrifying Australia’s vehicle fleet as quickly as possible.
“We must look beyond passenger cars – decarbonising heavy vehicles is just as critical. Australia should also invest in emerging technologies like vehicle-to-home and vehicle-to-grid.”
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