Australia’s new fuel-efficiency standard remains stuck in traffic

Major changes that could determine what car you buy next have hit a speed bump.

Eight months after the federal government promised to pass a law to bring more low-emission vehicles to Australia, its progress faces significant congestion.

The minister in charge of a fuel-efficiency standard says the government needs to take “time to get the design right”.

But electric vehicle groups say delays will push Australia further behind the rest of the world in cutting transport emissions, and environmental groups warn it will mean motorists keep paying too much at the petrol pump.

Representatives from the automotive industry are more patient, however, saying they would rather the government take additional time than deliver a “childish, simplistic solution” that pushes up vehicle prices or restricts the sale of popular models.

An outcome may not be revealed until next year and experts say it may not come into force until 2025.

A fuel-efficiency standard has long been on the wishlist for many organisations, including car manufacturers themselves.

The law would put an emission limit on each car maker’s fleet, meaning they would have to balance sales of high-polluting vehicles with those producing lower emissions, such as hybrid and electric models.

Brands that sell only electric cars may earn credits, while others that exceed emissions limits would pay penalties.

Most developed nations have a fuel-efficiency standard in place,  such as the US and UK, and Australia is one of very few countries without one.

That looked like it would change with the launch of the National Electric Vehicle Strategy in April, in which the federal government committed to introducing a standard.

At the time, Federal Transport Minister Catherine King said the government would seek to have a “draft of the legislation ready at least by the end of the year”.

But delays appear to have extended its timeline.

King says the government is still “committed to introducing a strong fuel-efficiency standard as soon as possible” but it may take longer than expected.

“In order to deliver a successful (fuel-efficiency standard) that results in more modern, cheaper-to-run and cleaner cars, the government is ensuring it takes the time to get the design right,” she said.

Australian Electric Vehicle Association national president Chris Jones says the setback is disappointing and will push Australia further behind other nations in the transport transition.

“Every month that ticks over where nothing’s progressing on a vehicle-emission standard is another month of petrol and diesel vehicle sales, another 6000 diesel vehicles on the road that will stay on the road for another decade,” he said.

“Every time we kick that can down the road, we’re making our task harder.”

Dr Jones says the delay is particularly disappointing as similar nations like New Zealand have successfully introduced fuel-efficiency standards, and the European Parliament drafted and legislated its standard in less than a year.

In the meantime, he says, Australian motorists will continue to miss out on a wider range of electric vehicles available in other countries and larger supplies of electric cars already in Australia.

“It’s not like car makers haven’t had any warning – the whole world has been moving to electrification for the last 10 years,” he said.

“Every significant manufacturer knows that this is coming.”

But Tony Weber, chief executive of the Federal Chamber of Automotive Industries that represents 68 car brands in Australia, says it’s a misconception that manufacturers do not want emission caps in place.

“We should have had a fuel-efficiency standard or an equivalent 15 years ago,” he said.

“What’s really important is that the government takes time now to get this right.”

What does concern car brands, he says, are the targets and the features of Australia’s future standard.

If it has the “ridiculous ambition” of the UK model to end petrol car sales by 2035, Weber says, or if it restricts the sale of “large SUVs and utes… that are very hard to electrify,” it will be poorly received by car makers.

“Manufacturers want to see a well-developed policy position, they want to see the government do the research, to understand the implications right across the economy and how it will impact different consumers,” he said.

“A childish, simplistic solution will not stand the test of time.”

But Climate Council advocacy head Dr Jennifer Rayner says without ambitious targets, a standard would not cut fuel bills for motorists or rising transport pollution for the nation.

“Australians are paying too much at the petrol pump and anyone who doesn’t support a fuel-efficiency standard is saying that should continue,” she said.

“Australia’s new cars use about 20% more fuel than those sold in a place like America and our inefficient cars are costing us a lot.”

Dr Rayner says delays to a fuel-efficiency standard are unfortunate but the council believes the government remains committed to introducing vehicle-emission targets and urges politicians to progress it in the new year.

“We should have a fuel-efficiency standard in place as soon as possible and that will mean moving quickly from legislation, through the parliament, and getting it into place,” she said.

“That could be at the start of the next financial year or on January 2025 at the latest but we really can’t keep delaying it.”