Driving vehicle emissions standards in Australia

Currently, there are over 15 million passenger cars and light commercial vehicles in Australia, and 1 million new cars are bought every year, making us the 11th-largest car market in the world. Unfortunately, new cars, which are manufactured or sold in Australia, are particularly inefficient by world standards, in part due to a lack of strong vehicle emissions standards.

For example, Australian new cars are far less efficient than those in South Korea, the European Union, Japan and China. Without standards, the United States - home of the gas guzzlers - will continue to outperform us in the next few years because of the strong standards they have adopted.

The ClimateWorks’ ‘Low Carbon Growth Plan for Australia’ shows the light vehicle sector provides the lowest cost opportunity for reducing Australia’s emissions. Our analysis shows the introduction of strong vehicle emission standards for Australia would reduce emissions as well as provide significant benefits for our economy.

The analysis shows that if we introduce strong standards in the next few years, within 10 years we would be paying less for fuel than we are today - even taking into account rising fuel costs. Strong standards could achieve more than a 50% reduction in the average vehicle’s fuel use by 2025 compared to current averages. This means Australia would save about 3.7 billion litres of fuel each year, worth $7.9 billion by 2025 (assuming a 50% increase in fuel prices over this time).

In an efficient vehicle, the average private vehicle owner would save $852 a year (based on 14,000 kilometres a year), while a driver averaging about 20,000 kilometres a year (the average distance for a NSW Government fleet vehicle) would save $1218 a year.

From a consumer’s perspective, strong vehicle emissions standards make sound economic sense but they are also good for the environment.

Currently, the transport sector makes up about 17% of Australia’s emissions with cars and light commercial vehicles contributing 62% of the sector’s emissions. Australian cars and light vehicles produce an average of 199 grams of CO₂ per kilometre. If we introduced strong vehicle emissions standards we could reduce this to 95 grams of CO₂ per kilometre within 10 years while still delivering financial savings to households and businesses.

If Australia implements strong standards, by 2020 it could save 4 million tonnes of carbon dioxide equivalent which would be a 7.7% reduction in emissions compared with business as usual.

And the motoring enthusiast need not fear the drive to reduce vehicle emissions. The introduction of strong emissions standards does not mean that everyone has to start driving a ‘smart car’. People can still choose to drive larger cars but they will simply be more efficient and there will be a greater mix of smaller cars in the market, in line with trends in consumer preferences.

Our analysis shows that it is also important to act quickly to implement new vehicle emissions standards. Even if the standards were introduced this year, 30% of cars built before 2014 would still be on the road in 10 years’ time.

There is no doubt the Australian car industry is facing tough times with strong competition from international manufacturers and fears of local job losses. International research, however, shows that strong vehicle emissions standards can be implemented alongside efforts to revitalise a local car industry. Stronger standards can be implemented in combination with other complementary measures that focus on raising awareness and providing incentives for consumers to purchase more efficient cars.

Strong vehicle emissions standards could achieve a range of positive outcomes, including financial savings for drivers, fuel savings and the lowest cost emissions reductions across Australia, in harmony with the revitalisation of the car industry. What then are we waiting for?

*Meg Argyriou is Head of Engagement at ClimateWorks Australia. She leads a team that is informing policy debate on vehicle emissions standards, encouraging energy efficiency for large industrial users and SMEs across the supply chain and logistics sector, and supporting building owners and tenants to use environmental upgrade agreements. She previously led the development of low-carbon growth plans for Melbourne, Geelong, Gippsland and Macquarie Park.