Vehicles Emission Standards

ClimateWorks Australia is calling on the Federal Government within the next two years to work with industry and consumer groups to design and introduce best practice light vehicle CO2 emission standards and supporting complementary measures that maximise the economic and environmental benefits available.

This Briefing Paper highlights that:

  • Australian new light vehicles have improved in efficiency by 20% since 2002. However, at an average of 199 gCO2 /km our cars and light commercial vehicles are still far less efficient than those in most developed economies.
  • Three-quarters of all new cars sold globally each year are regulated under some form of CO2 emissions standard, and without standards in place, Australia will fall further behind other developed economies. 
  • The financial benefit to light vehicle owners of introducing best practice standards is significant. If efforts in the European Union are targeted with a 4 year lag, by 2020 an average driver could pay up to $170 per year less for fuel than they do today, and within 10 years they would pay up to $410 less than they pay today, even factoring in rising fuel prices.
  • While improving fuel efficiency means higher upfront costs for car buyers, with a conservative estimate of $2,500 per vehicle for a 50% efficiency gain in 2024, our analysis indicates that average car owners would recover these additional costs within 3 years through fuel savings, well within the average length of vehicle ownership of about 5 years. This results in net annual savings of $352 for average drivers over this 5 year ownership period.
  • The broader economic benefits are also tangible. Within 10 years, we could save up to $7.9 billion per year across our economy through reduced fuel use.
  • Further, fuel efficiency helps to enhance Australia’s fuel security, with fuel demand reducing under best practice standards by between 40 and 66 million barrels per annum in 2024, equivalent to 30%-50% of all automotive fuel used in Australia in 2012.
  • Of all the opportunities identified in ClimateWorks’ Low Carbon Growth Plan for Australia, reducing emissions from cars and light commercial vehicles through improved fuel efficiency presents the lowest cost opportunity to reduce emissions across our economy, and could deliver reductions of 4 Mt CO2e in 2020 and 8.7 Mt CO2e in 2024, equivalent to taking 2.2 million cars off the road in 2024. 
  • A partnership approach is required to ensure a robust solution is developed that delivers the optimal benefits to consumers and the environment, and current inertia can be overcome.