New carbon rules for car makers
Popular car makers face fines unless they lower the carbon intensity of their Australian fleets by more than 60pc by the end of the decade.
Popular car makers such as Toyota, Ford and Hyundai face fines unless they lower the carbon intensity of their Australian fleets by more than 60 per cent by the end of the decade, under the Albanese government’s ambitious model for vehicle emissions standards that is scheduled to begin next year.
Transport Minister Catherine King is claiming the initiative will have no impact on the price of cars, with the government’s preferred model to bring the carbon intensity of new vehicles in line with the US by 2028.
“The international evidence is that it does not have an impact on price,” Ms King said.
Ms King said Australia was the only advanced economy, other than Russia, that did not have vehicle emissions standards, with the car fleet 40 per cent more carbon intensive than the European Union and 20 per cent more than the US.
But with the government aiming to pass legislation through parliament in the first half of the year to set up the scheme, the Coalition signalled it was dubious over the proposed measure while the car industry is pushing for financial incentives to encourage more production of low emission vehicles.
Ms King said the reform would be a “good cost-of-living measure for Australian consumers”, with the government’s modelling showing motorists will save $12bn on petrol by the end of the decade.
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.
This will require companies such as Ford, Hyundai, MG, Nissan, Holden and Toyota to progressively sell more electric cars and hybrids into Australia to offset emissions from their petrol fleet, effectively making it harder to buy a new petrol car over time.
It would 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 fell short.
Car makers will be fined about $100 a gram of carbon their fleet exceeds the threshold.
While the government has outlined three potential models in a report released on Sunday, its preferred approach would see the carbon output of newly-sold cars reduce by 12 per cent a year, from an average of 141 grams per kilometre to 58g/km by the end of the decade.
Utes and vans will be required to lower their emissions from 199g of carbon released per kilometre to 81g.
Exemptions likely apply to cargo trucks, military vehicles, ambulances, police cars, motorhomes, horse trucks, motorcycles and equipment used in the agriculture, mining and construction industries.
After Labor was punished at the 2019 election with Scott Morrison’s claim the party’s electric vehicle policy would “end the weekend”, Climate Change Minister Chris Bowen stressed there was not a requirement on car manufactures to send a particular model to Australia.
“They have to meet an average (carbon intensity) across their fleet,” Mr Bowen said.
“It’s not a restriction on what Australians can buy. You can still buy a ute, an SUV, whatever you like.”
Opposition transport spokeswoman Bridget McKenzie said the Coalition would “not tolerate any measure which piles further pressure on family budgets at a time when Australians are already struggling”.
“Australian’s favourite vehicles could soon be unaffordable if Labor’s fuel efficiency standard fails to strike the correct balance,” Senator McKenzie said in a joint statement with opposition climate change spokesman Ted O’Brien.
“There is a risk Labor’s scheme will be just another subsidy for the rich and large corporations with fleets.”
Federal Chamber of Automotive Industries chief executive Tony Weber signalled car companies would push for financial support to meet the “very ambitious” standards.
“The preferred option suggests that Australia considers adopting the type of targets that are currently in place in the US. 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,” Mr Weber said.
Australian Automobile Association managing director Michael Bradley said the government needed to be more transparent about the impact of the proposed scheme.
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