Fuel efficiency standard creeps closer

Compared to other OECD countries, Australia receives some of the least efficient, most polluting internal combustion engine vehicles. As I noted recently in my article on the contenders for the UK’s WhatCar? awards – several of the vehicles on the list were either not offered here, or if they were, offered as less fuel efficient versions no longer sold in the UK.

The reasons for have been several fold:

1. our lack of a fuel quality standard to matches most of the rest of the world;
2. poorer pollution emissions standards that could not be improved without having world-standard fuel quality (no manufacturer is going to do the R&D to build cars with better
   emissions for one poor quality fuel market);
3. No standards for fuel efficiency or greenhouse emissions. (These are commonly lumped together and referred to as a Fuel Efficiency Standard or FES).

Thankfully, the first two were addressed recently with the creation of new Australian Design Rules that effectively mandate Euro 6d fuel quality and tailpipe emissions standards. Whilst these won’t apply until December 1 st , 2025 (for new model cars) and July 1 st , 2028 for existing models sold new, it was a distinct improvement on the previous government’s intention to not do anything until at least 2028.

The third point – an FES – appears to be a step closer with the release this weekend of a consultation paper alongside a proposed date for implementation. The Federal Government will now consult on their preferred model for a New Vehicle Efficiency Standard (NVES) for a month and introduce legislation as soon as possible, with the new rules to come into effect by 1 January 2025. As such, they will come in at the same time as the Euro 6d fuel quality and emissions standards. There is also a useful by-product of the coupling of the dates for improved fuel quality and
mandated limits on fuel inefficiency and emissions. It is also one that most people may focus on to the exclusion of their importance to the environment.

That by-product? Significant savings at the fuel bowser! According to Chris Bowen (Minister for Climate Change and Energy): “Because of a lack of action on an Efficiency Standard, Australian
families are paying around $1000 a year more than they need to be for their annual fuel bill”.

Coming back to the CO 2 emissions side of things: what are the options being offered in the Consultation Paper?

•  Option A: slow start.
  This is described as an amalgamation of views of stakeholders that would prefer a more modest and cautious approach. It would mirror the rate of decline in the US, as mandated under US new vehicle efficiency standards (NVES), but there would be no ability to catch up.
• Option B: fast but flexible start.
  The Government’s preferred position based on the arguments presented in their earlier consultations, and seeks to ‘balance ambition and achievability’. This option would enable
  Australia to catch up with the US around 2028 and then match the stringency of their standards, while not seeking to go beyond these standards.
• Option C: fast start.
  This is presented as an amalgamation of views of stakeholders that would prefer the most stringent and ambitious approach possible. This path would enable Australia to catch-up
  with the US around 2026 and then brings forward US targets for 2029-2031 to the Australian NVES in 2028 and 2029.

Note: these use NEDC as the standard for CO 2 calculations. The Consultation Paper makes the point that WLTP cannot be mandated until Euro 6d noxious emissions standards are fully implemented for new vehicles. To convert/compare these figures from NEDC to WLTP, the Consultation Paper suggests to use a conversion
factor of NEDC x 1.2421 to give an equivalent WLTP number, or for NEDC to real world: x 1.389.

Where to from here?

If you want to have a say in which of the three options is adopted and legislated you have until March 4 2024 to make a submission.

The consultation paper and how to have your say are to be found at:
https://www.infrastructure.gov.au/have-your-say/new-vehicle-efficiency-standard-cleaner-cheaper-run-cars-australia