Australia finally sets light-duty vehicle CO2 emission standard, supported by GFEI partner work
The Australian Parliament has passed a bill, the New Vehicle Efficiency Standard (NVES), the country's first-ever CO2 emission standard for light-duty vehicles.
The adoption of the NVES marks a critical step towards Australia meeting its decarbonisation goals following more than a decade of advocacy from GFEI and its partners, particularly the International Council on Clean Transportation (ICCT).
The standard sets annual gCO2/km emission targets from 2025 to 2029 for passenger cars, SUVs, utility vehicles (known locally as ‘utes’), and vans. The standard will reduce average CO2 emissions from passenger cars (including most SUVs) by about 17% per year and light-commercial vehicles by about 12% from 2024 to 2029.
Overall, this new standard is expected to lead to a cumulative emissions reduction of 20 million tons by 2030 and 321 million tons by 2050. This translates to more than AU$95 billion in fuel cost savings for consumers by 2050, and health benefits valued at AU$5 billion by the same point.
In 2022, GFEI partner the ICCT, undertook analysis to understand the potential impact of different standards in support of the Australian Government's public consultation on standards. This work – funded by the FIA Foundation - represents a continuation of a longstanding process of engagement that GFEI partners have had with Australia for over a decade, including a high-level seminar and consultation process and policy submission on the country's emission standards discussion paper in 2011 and a 2017 ICCT briefing paper.
The standards follow Australia's first National Electric Vehicle Strategy, which emphasised the adoption of CO2 standards as a key strategy to promote electric vehicle uptake. Further, the NVES is expected to increase the electric vehicle (EV) share of new light-duty sales, including battery-electric and plug-in hybrid electric vehicles. In 2023, approximately 8% of light-duty vehicles sold in Australia were EVs, compared to about 21% in Europe and 33% in China.
"As the tenth biggest vehicle market in the world, this final efficiency standard is a clear signal to industry, and an important step for Australia to catch up with the pace of decarbonisation in other major markets." said Zifei Yang, Global Passenger Vehicle Lead at the International Council on Clean Transportation.
Sheila Watson, FIA Foundation Deputy Director, said: "It is fantastic that the Australian Government has finally made commitments that will help them reach their decarbonisation goals, following many years of technical knowledge and support from GFEI and its partners. The NVES looks set to be well worth the wait."
