Efficiency, Emissions Reduction

Australia adopts New Vehicle Efficiency Standard

Vehicle Efficiency Standard, kerbside EV charger

Australians will soon have access to cleaner, more fuel-efficient cars with Parliament passing legislation for a New Vehicle Efficiency Standard.

The standard, passed by the Federal Government, requires car makers to reduce emissions from new passenger vehicles by over 60 per cent by 2030. It also roughly halves emissions from new light commercial vehicles over the same period.

Motorists are predicted to save around $95 billion in fuel alone by 2050. Over that timeframe, transport emissions are expected to be reduced by 321 million tonnes of CO2.

“This is a monumental milestone for Australians, with this Standard to pave the way for Australians to access and benefit from the most advanced car, SUV and ute technology offered in other countries – which are cheaper to run and better for the environment,” Catherine King, Minister for Infrastructure, Transport, Regional Development and Local Government said.

“At every step of the way, we have listened to the views of Australians on how we can deliver a Standard that works uniquely for our country, which is what we have delivered today.”

The standard tailors requirements for Australian conditions. It begins on 1 January 2025 and applies only to new vehicles, allowing a transition to better diesel, petrol, hybrid and electric models entering the market.

According to the Government, Australian consumers will still be able to buy the vehicles they know and love while getting access to the safest, most modern, efficient cars.

Australia is joining most of the global car market in adopting such a standard, after being one of the few advanced economies without efficiency rules.

Minister for Climate Change and Energy Chris Bowen said the new standard marks an end to the decade of delay.

“This is not just a win for the environment, it’s a big win for motorists around the country who want access to a bigger variety of more efficient vehicles. The impact of this shift will benefit Australians for decades,” Bowen said.

The 2024-25 Federal Budget includes $84.5 million over five years to establish the scheme’s regulator and facilitate credit trading between manufacturers.

Motoring groups welcomed the legislation, saying it increases choice and cuts emissions.

Matthew Hobbs, CEO of Motor Trades Association of Australia, said the bill “signifies an important moment for the Australian automotive industry”.

“This legislation, a result of collaborative efforts between the Albanese Government and the automotive sector, marks a significant step forward in our collective journey towards decarbonisation,” he said.

Behyad Jafari, CEO of Electric Vehicle Council, said setting the new standard marked “a historic day for Australia”.

“Australian drivers will benefit from access to a greater choice of vehicles, lower fuel bills and real cuts to transport emissions,” he said.

James Voortman, CEO of the Australian Automotive Dealer Association, said the group welcomes the passage of the New Vehicle Efficiency Standard, which is something dealers have supported for a long time.

“Make no mistake, this is an ambitious standard which be very challenging to achieve, but dealers are ready to play their part in significantly lowering vehicle emissions,” he said.

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