Labor government to impose fuel efficiency standards on new cars

Chris Bowen says the new electric vehicle strategy to reduce carbon emissions will give Australians better access to more affordable EVs.

Chris Bowen in parliament. Picture: NCA NewsWire / Gary Ramage.

The Albanese government will impose fuel efficiency standards on new cars in a bid to reduce carbon emissions by three million tonnes by 2030 under the nation’s first electric vehicle strategy.

Energy and Climate Change Minister Chris Bowen said the new strategy will help motorists save $519 per year in fuel costs and give Australians better access to more affordable electric vehicles.

The fuel efficiency standards – which impose a pollutions cap on the average emissions from a fleet of cars sold by a manufacturer to encourage them to sell more EVs – are yet to be designed, with Labor now expected to undertake consultation with industry and experts.

Australia is the last developed economy after Russia which does not impose caps on car emissions, with passenger cars currently making up almost 10 per cent of national emissions.

Electric vehicle take-up in Australia has also been lagging behind other countries, with just four per cent of new cars sold compared to nine per cent globally.

The government said Australia’s absence of standards means Australian consumers are paying more in fuel costs to run their cars because manufacturers prioritise exporting more fuel efficient vehicles to countries with standards in place.

Government analysis found Australia uses 40 per cent more fuel than the European Union, 20 per cent more than the United States, and 15 per cent more than New Zealand.

With transport the third largest source of emissions in Australia, Labor forecasts the strategy will help cut national emissions by three million tonnes by 2030, and over 10 million tonnes in 2035.

Mr Bowen said the strategy was a “win-win” for motorists with electric vehicles cheaper and cleaner to run.

“This strategy delivers on our commitment to provide greater choice for Australians to drive cars that are cleaner and cheaper to run,” Mr Bowen said.

“The government has already cut taxes on EVs through the Electric Car Discount, saving up to $11,000 a year on a $50,000 electric vehicle. Thanks to the Albanese Government’s leadership, two and half times more EVs are being sold this year than they were at this time last year.”

The new strategy is part of a wider target set by Labor for 75 per cent of 10,000 commonwealth cars to be electric vehicles by 2025 along with the construction of 1800 public charging stations.

Modelling commissioned by Labor projects 89 per cent of new car sales in Australia to be electric by 2030.

But opposition infrastructure and transport spokeswoman Bridget McKenzie said Australians were unlikely to “rush out and buy expensive EVs” in the current inflationary environment, and argued Labor must not “pit one group of Australians against the other” in an attempt to lower emissions in the transport sector.

She said a goal of lowering transport emissions must be “more than just EVs and vested interests” and urged Labor to consider international evidence as it finalises new fuel efficiency standards.

“Australians do not turn our cars over, and particularly in a high inflationary environment where households are struggling, the thought that they are going to rush out and buy an expensive EV and change their current SUV is just ludicrous and unrealistic,” Senator McKenzie told The Australian.

But Infrastructure and Transport Minister Catherine King said the new standards would be designed to the Australian market and would send a “strong message” to international car manufacturers.

“This strategy offers a historic opportunity to develop fuel efficiency standards that learn from international best practice, while recognising the unique needs of Australians,” Ms King said.

“More than 85 per cent of all cars sold in the world are subject to fuel efficiency standards. It’s time Australians were offered the same choice.”

Greens Leader Adam Bandt said the new strategy failed to include a target for EV take-up or phase out a date for petrol and diesel vehicles, accusing Labor of being “still stuck in the slow lane”.

Mr Bandt said Australia will continue to be a “dumping ground for dirty, inefficient cars” without further action.

“We now have a road map but with no clear destination,” Mr Bandt said. “The government needs to set electric vehicle targets and get moving on implementing strong fuel efficiency standards.”

The government is expected to release proposed fuel efficiency standards by the end of the year.