The federal Labor government has announced a significant softening of the proposed vehicle emissions standards for utes and some popular 4WDs, and delayed the introduction of a “credit” scheme as it finally won approval from the Australian car lobby.
Key among the changes, revealed by transport minister Catherine King and climate and energy minister Chris Bowen on Tuesday, surrounded by executives from Toyota, Hyundai and Tesla and industry lobbyists, is the “re-categorisation” of popular 4WDs such as the Toyota Landcruiser, the Ford Everest and the Nissan Patrol.
(Full list of affected 4WDs in table below).
These will now be switched into the “light commercial” category which now has a softer trajectory to its emissions goals, and will have until the end of the decade to catch up with countries such as the US.
The other significant change is a delay to the credit scheme, which will now begin on July 1 next year, even though the new standards will take effect on January 1. Weight-based relative emissions limits have also been adjusted.
A softening of the federal government’s stance was expected after a fierce fight from the main car lobby, led by Japanese car makers, and was made more palatable after the Biden administration dialled back some of its vehicle emissions standards in response to pressure from car makers and unions in its market.
But the move is still being hailed as a victory, given that Australia – along with Russia – was the only advanced economy without vehicle emissions standards, a situation that has led it to become a “dumping ground” for dirty and inefficient cars, leading to higher fuel consumption and bills for Australian drivers.
“This is a great day for Australia,” said Behyad Jafari, the head of the Electric Vehicle Council of Australia. There was support too from the Climate Council, and renewable energy action groups such as Solar Citizens.
The debate around the National Vehicle Emissions Standards had caused ructions in the industry, with specialist EV makers Tesla and Polestar quitting the Federal Chamber of Automotive Industries, and VW standing down from its policy committee.
But Toyota, regarded as the ringleader of the campaign against the NVES, declared in a statement that it “always supported” an ambitious fuel efficiency standard, but wanted it “calibrated” for local conditions.
Toyota, which has punted on mild hybrids rather than full EVs, warned the industry still faced huge challenges.
“Our task now is to get on with the job of delivering diverse technologies that will enable our customers to choose vehicles with lower or zero carbon emissions that best suit their circumstances,” Toyota Australia CEO Matt Callachor said. Toyota succeeded in getting four of its 4WD models “recategorised” as part of the deal. (see table below).
The Climate Council said the new standard should lead to lower fuel bills and cleaner air.
“Manufacturers have been dumping their dirtiest cars here for years, and that has got to stop. When Australians go to buy a new car, they should be able to choose a low or zero pollution option that suits their needs,” CEO Amanda McKenzie said.
“Our cars produce more than 10 percent of Australia’s total climate pollution, and the average family pays over $5,000 a year for fuel. The New Vehicle Efficiency Standard will mean we can wave goodbye to those eye-watering fuel bills and unhealthy air, and get on the road to cleaner, more affordable transport.”
Hyundai, which has released a number of EVs into the Australian market, including the Ioniq, the Kona, and the Ioniq 5 – and more through its sister company Kia – said it plans to release more EVs.
“It is our intention to bring many more EVs to the Australian market, while substantially reducing the emissions profile of our entire range,” said Hyundai Australia chief operating officer John Kett.
“The New Vehicle Efficiency Standard will help us to do that and now we can look forward to getting on and selling some cars.”
Tesla, however, described it as a moderate standard that took the country from one of the worst of the world to the middle of the pack, but commended the government for getting approval for the standard.
“Australia has the best reserves of electric vehicle minerals in the world, and every EV sold globally is a win for the Australian economy,” Tesla’s Sam McLean told reporters. “This is a win for climate, Australian mining and Australian families.”
There is also a ratchet mechanism which prevents the federal Coalition, which has opposed the NVES, from diluting the standard in future years.
Interestingly, the FCAI – which was criticised from some outlandish claims on the impact of the NVES – was not present at the announcement in Canberra. It is understood that the decision by Tesla and Polestar to quit the car lobby is final, and they will report their sales data through a new portal being managed by the EVC.
The federal government says it will also provide $60 million to boost EV charging at Australian dealerships as part of the deal.
Giles Parkinson is founder and editor of The Driven, and also edits and founded the Renew Economy and One Step Off The Grid web sites. He has been a journalist for nearly 40 years, is a former business and deputy editor of the Australian Financial Review, and owns a Tesla Model 3.