Australia’s vehicle emissions standards are at least a decade behind Europe, but the car industry has now adopted new targets to reduce the CO2 of its new vehicle fleet.
- shares

The Australian car industry has introduced new voluntary CO2 emissions standards for the next decade – to 2030 – as Federal regulations continue to lag 11 years behind world’s best practice.

However, the car industry promises the scheme won’t lead to higher prices to discourage the sale of our most popular vehicles – such as utes, SUVs and four-wheel-drives – which typically have higher CO2 emissions.

And electric cars will get a free pass as they are considered zero emissions vehicles under the scheme.

Instead, from 2021 onwards the car industry will publish an annual report card showing how every major automotive brand in Australia is tracking with its CO2 emissions targets.

Federal Government vehicle emissions standards are currently rated at the EU5 level – introduced in Europe in 2009 – and stricter EU6 standards have been enforced internationally since 2014.

While Australia is still years away from adopting EU6 standards, the local car industry has signed up to a new voluntary agreement to reduce vehicle CO2 emissions between 2021 and 2030.

However, the targets will not be as strict as those in Europe, which sets stringent CO2 vehicle emissions targets across the entire fleet.

In Australia, the CO2 emissions targets will vary according to the size and type of vehicle.

For example, passenger cars and most SUVs will be required to meet a lower CO2 emissions average than utes, vans, and heavy duty four-wheel-drives.

New passenger cars and most SUVs will be required to reduce their average CO2 emissions by 4 per cent each year (to a target of 100g/km by 2030), whereas heavier vehicles such as utes, vans, and four-wheel-drives will need to reduce their average emissions by 3 per cent each year (to 145g/km by 2030).

Critics of such a scheme say the voluntary code does not do enough to discourage the use of bigger, heavier and thirstier vehicles – such as the Toyota HiLux and Ford Ranger utes, Australia’s top two selling cars outright – which pump out higher CO2 emissions than do smaller vehicles.

The car industry says the voluntary code reflects the type of cars Australians buy, and is more closely aligned with standards in the US, where pick-ups and SUVs dominate the market.

“As an industry we want reduce our CO2 output, but maintain choice for consumers,” said the chief executive of the Federal Chamber Automotive Industries, Tony Weber.

Mr Weber said utes and vans and other “light commercial vehicles” now represent 25 per cent of sales “and for many people, they need those vehicles for their work or the way they live, and we’re not going to stop that. We’re not going to dictate what cars people buy.”

The car industry lobby group says the voluntary CO2 emissions targets could pave the way for the introduction of more fuel-efficient vehicles.

At the moment, the global car industry prioritises its most efficient engines for countries with stricter vehicle emissions standards, and so Australia often misses out on the latest technology.

Mr Weber said the voluntary CO2 emissions targets will provide an incentive for “the latest and most sophisticated fuel-saving technology” to be introduced in Australia.

Despite creating more realistic CO2 emissions targets for large vehicles, and stricter targets for smaller and more efficient vehicles, Mr Weber insisted the targets are “ambitious given the broader policy environment”.

Although a number of car companies have begun offering advanced petrol engines that run petrol particulate filters (PPF), Mr Weber said Australia’s “poor fuel quality” was holding back the broader introduction of the latest emissions-saving technology.

Most major countries – including Europe, China, the US and India – have a minimum fuel standard of 10 parts per million of sulphur.

In Australia, regular unleaded is permitted to have up to 150ppm of sulphur, and premium unleaded is allowed to have up to 50ppm.

“Poor fuel quality in Australia ties one hand behind our back,” said Mr Weber. “Research and development (by car companies) focus on engines for those major markets that run 10ppm fuel, not our low grade fuel. At the moment, (vehicles with) those engines are sent to countries with tougher emissions targets.”

As a result, he said, Australian consumers are “missing out on a wider selection of even more efficient cars.”

Mr Weber said there was no risk car companies would increase the prices of bigger and heavier vehicles – popular with many Australians – in an attempt to reach CO2 emissions targets, because there is no financial penalty for brands that don’t meet the requirements.

“I don’t see any price rises because of this code. I can’t see any (car companies) discouraging sales of certain vehicles,” said Mr Weber. “The amount of competition in the market is enormous.”

Furthermore, the targets for bigger, heavier, thirstier – and more profitable vehicles – are not as strict as those for smaller passenger cars, and therefore easier to meet.

Instead, if car companies don’t hit their CO2 emissions targets, they will be “embarrassed” by regular public reporting of their figures.

“We won’t be penalising our members (car companies),” said Mr Weber. “But we will be transparent.”

Mr Weber said the Federal Chamber of Automotive Industries will publish a “public scoreboard” – a report listing the CO2 emissions across the entire fleet of each brand – annually from 2021 through to 2030.

“That will provide consumers with additional information … which can inform their decision about which vehicle they buy,” said Mr Weber.

The chief executive of the Electric Vehicle Council of Australia, Behyad Jafari said the voluntary code "proves the industry recognises that CO2 standards benefit consumers".

"The government should follow the lead and introduce mandatory standards comparable to the US, the EU, and most other markets," said Mr Jafari. "Until this happens, we'll just have to accept that a huge proportion of the world's most appealing (electrified vehicles) will be unavailable to Australian consumers."

Mr Jafari said future government standards need to be designed to encourage wider adoption of hybrid, plug-in hybrid and electric cars. "Australians are early adopters, but they’re missing out on many of the benefits of (electric vehicles) because our governments have failed to act," he said.

Are Australia's voluntary CO2 emissions targets hard to meet? Here's how some popular cars rate today:

Passenger cars (2030 CO2 target: 100g/km)
Toyota Corolla petrol auto: 139g/km
Toyota Corolla hybrid: 97g/km
Mazda3 petrol auto: 146g/km
Hyundai i30 auto: 173g/km
Honda CR-V: 174g/km
Mazda CX-5: 161g/km

Utes, vans and heavy duty 4WDs (2030 CO2 target 145g/km)
Toyota HiLux 2.8 diesel auto double cab: 207g/km
Ford Ranger PXIII 2.0 diesel auto double cab: 195g/km
Ford Ranger PXIII 3.2 diesel auto double cab: 234g/km
Nissan Patrol V8 petrol: 334g/km
Toyota LandCruiser V8 diesel: 250g/km
Toyota Hiace SWB diesel: 214g/km