Australia’s transport emissions are rising and the chances of the federal government introducing fuel efficiency standards by the end of the year are shrinking by the day. That’s despite repeated assurances that long-awaited fuel efficiency standards would be launched by Christmas.
Progress on decarbonising the transport sector has been painfully slow, and further delays to the release of the standards are exacerbating concerns that the final policy will be inadequate, capitulating to industry scare campaigns.
At the recent COP28 climate talks in Dubai, United Nations Secretary-General António Guterres told delegates “we are living through climate collapse in real time”. Now that the meetings are over, feelings are mixed, with many climate experts lamenting the compromised language in the statement over the “transition away from” rather than a “phase-out” of fossil fuels – words that do not match the severity of the climate crisis.
Days before departing for COP28, Minister for Climate Change and Energy Chris Bowen released Australia’s Annual Climate Change Statement. While the minister neglected to mention whether emissions had gone up or down in the past year, the National Greenhouse Gas Inventory Quarterly Update, released at the same time, showed Australia’s emissions increased 0.8 per cent compared with the previous year, due in part to rising transport emissions.
That same day during Question Time, Infrastructure, Transport and Regional Development Minister Catherine King would not commit to a time line for the release of Australia’s fuel efficiency standards.
Fuel efficiency standards are a common tool used by governments around the world to reduce transport emissions and improve the efficiency of new cars. They are already in place in 80 per cent of the car market worldwide and Australia and Russia are now the only advanced economies yet to adopt them.
With Australians consistently identifying cost of living pressures among their highest concerns, and the effects of a rapidly changing climate being felt almost daily, the delay in delivering these measures is absurd.
Bowen has promoted the policy as a good cost of living measure and recently Greenpeace estimated Australian motorists would have saved more than $10 billion in petrol costs had standards been introduced in 2016. Then add to this increases in the cost of living owing to climate change. The government’s recent Intergenerational Report predicted rising temperatures caused by greenhouse gas emissions would likely cost the economy between $135 billion and $423 billion over the next four decades.
The bottom line is simple: the longer Australia takes to reduce emissions through policies such as fuel efficiency standards, the greater the costs will be.
This delay is the latest frustration in a poor record of attempts to introduce fuel efficiency standards in Australia. Since the Australian Transport Council first pushed for one in 2008, a mandatory fuel efficiency standard for light vehicles has been recommended by a series of inquiries and advisory bodies – from the Senate Select Committee on Electric Vehicles to the Climate Change Authority.
Two previous Labor governments have committed to introduce fuel efficiency standards, with a ministerial forum on vehicle emissions standards in 2016 undertaking a cost-benefit analysis of different targets, showing all targets would produce a net benefit, and estimating potential savings to the average motorist of up to $519 a year in fuel costs.
After decades of inertia on fuel efficiency standards and climate action, many hoped this government would be different. At the National Electric Vehicle Summit in August 2022, Chris Bowen publicly committed to a national electric vehicle strategy including fuel efficiency standards, prompting much celebration and a belief that Australia had finally hit a turning point in national transport policy.
Yet the electric vehicle strategy released in April this year was far from the ambitious vision expected. Its key measure was a commitment to release proposed fuel efficiency standards: a plan to announce a plan.
Beyond this, the strategy lacked meaningful measures to clean up the transport sector and was criticised as a missed opportunity to introduce new incentives for electric cars and bikes, address heavy vehicle emissions or commit to vehicle electrification targets. It became apparent Minister Bowen’s original announcement, widely lauded, was largely a commitment to commit to a consultation.
The delay in fuel efficiency standards comes despite submissions to the consultation overwhelmingly supporting their introduction. And worse than this disappointment is the possibility the transport minister is buying time to capitulate to industry pressure and water down the proposed standards.
Documents released through freedom of information laws show segments of the vehicle industry have lobbied to weaken the forthcoming standards by attempting to convince policymakers to adopt standards that are less stringent than those in other countries. The Federal Chamber of Automotive Industries (FCAI), which represents manufacturers and importers of passenger cars, undertook a coordinated lobbying campaign, well documented by the think tank InfluenceMap. According to notes taken at a meeting between motoring officials and Department of Climate Change staff, “[t]heir aim is to convince Minister Bowen that legislating the FCAI’s [existing] voluntary standard would effectively reduce emissions”. The FCAI voluntary standards were established in 2020 in the absence of a federally mandated scheme and are significantly weaker than international policies.
Some lobbyists opposed to strong standards have attempted to appeal on social justice grounds, falsely claiming their introduction would mean fewer choices for certain Australians. As a mechanic’s daughter from the small country town of Coonabarabran, I understand such concerns. But it is simply not the case that fuel efficiency standards would force some people to buy more-expensive cars – certainly not in the near future. In fact, the current lack of standards is restricting the range of electric vehicles in this country and making Australians pay more at the petrol pump because their cars are less efficient than models available elsewhere.
Technology is bringing much-needed changes across the country. Many now know Coonabarabran as a place to quickly charge your electric vehicle on the way to the Warrumbungle National Park.
Fuel efficiency standards will change the Australian vehicle landscape, for the better and without forcing people into cars they don’t want. That’s why I introduced a private member’s bill to clean up Australia’s fuel quality in addition to regulating vehicle efficiency – so every Australian, no matter what car they drive, can have a cleaner commute.
When the fuel efficiency standards are eventually released, it is imperative to read the fine print, not just the headline, to determine whether Australians are being sold a lemon. An indication of the strength of the standards will be the headline target – in terms of grams of CO2 emitted per kilometre – and the pace at which it declines. The government has already ruled out standards that decline in emissions intensity to zero by 2040, which would effectively end the sale of new combustion engine vehicles by that date. This means Australia will be lagging behind many countries and jurisdictions that have set phase-out dates for internal combustion engine vehicles. Britain, the European Union, Japan, Singapore and many others are aiming for all new light vehicle sales to be electric by 2035. Just this week, Canada also announced plans to require all new cars to be zero emission by 2035.
Even standards with reasonable targets could be riddled with loopholes. In particular, super credits and off-cycle credits could be used to obscure the real-world emission impact through tricky accounting methods and crediting. To ensure integrity of the standards, groups including the Climate Council, the Smart Energy Council and The Australia Institute have warned against including off-cycle credits in Australia’s fuel efficiency standards. Transparency and accountability mechanisms will be key, and should feature strong penalties, an independent compliance regime, publicly available data and review mechanisms. Without these measures, the standards may look good on paper but do little in reality.
Ultimately, the delayed fuel efficiency standards are indicative of a broader problem – when it comes to climate policies this government talks the talk but does not always walk the walk.
Two further promises for the end of this year are also broken. Reforms of Australia’s broken national environmental laws have been delayed and are now subject to a closed-door consultation process. The independent environmental protection authority is nowhere to be seen.
The government continues to endorse the expansion of the fossil fuel industry, having already approved four new coal projects, with 25 more in the pipeline. It also, along with state governments, continues to subsidise the production and consumption of fossil fuels to the tune of $11 billion a year.
Bipartisanship on climate policy is clearly impossible. The opposition seems more interested in playing the role of disrupter than proposing any real climate policies, and talks up nuclear energy despite its expense, history of cost blowouts and delays, uninsurability and glaring lack of social licence. Establishing a nuclear power industry in Australia from scratch is, in an economic sense, utterly unfeasible.
Commenting on the Annual Climate Change Statement, economist John Quiggin concluded “Australia is unlikely to achieve net zero by 2050 in the absence of radical policy changes”. Fuel efficiency standards aren’t radical. They’ve already been adopted by most of the vehicle market and will save Australian motorists money. If the government can’t quickly implement this relatively innocuous policy, how will it ever deal with more complex but necessary transport and climate decisions, such as improving public transport planning, modal shifting and cleaning up heavy mobility?
As we near Christmas, I’m abandoning my hopes for strong fuel efficiency standards but raising them for the new year.
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