Govt backs down on fuel efficiency standard for LCVs

Bowing to pressure from Australia’s biggest car-makers and industry lobby groups, the federal government has made crucial concessions with its proposed New Vehicle Efficiency Standard (NVES). The key concession will see large SUVs held to the same emission targets as LCVs.

Transport minister Catherine King and climate change minister Chris Bowen jointly announced today that legislation will enter parliament tomorrow, March 26, ahead of the January 1, 2025, start date for the long-awaited new vehicle emissions-reduction scheme.

NVES has attracted widespread criticism from large sections of the car industry, including threats of higher prices and the prospect of some leading brands even closing their operations in Australia. The flak was in a large part based on the government’s preferred option that was tough on light commercial vehicles and held large tow-friendly 4x4 SUVs to the lower emission levels of passenger cars.

In what is seen as a victory for auto lobbyists, the government has made four key modifications to its favoured NVES proposal after “constructive collaboration” with industry. These are:

Despite the concessions, NVES remains a tough new standard for which all car-makers must now prepare, with the government claiming it “will reduce emissions from new passenger vehicles by more than 60 per cent by 2030, and roughly halve the emissions of new light commercial vehicles over the same period”.

Even with the concessions it should still have the desired aim of forcing car companies to introduce “a wider range of more efficient, modern vehicles”.

“The New Vehicle Efficiency Standard targets for passenger vehicles catch up to comparable economies by the end of the decade,” the ministers said.

“The Albanese government has closely consulted with a broad range of stakeholders over the past year and engaged with the more than 9000 submissions made throughout the latest consultation period.

“The standard will give car-makers an incentive to send us their most efficient vehicles, while ensuring Australians have access to the range of vehicles they need for work and leisure.

“This constructive collaboration is delivering what’s right for Australia, by making improvements to the consultation option to deliver more choice of cheaper-to-run cars for motorists, while ensuring a sustainable and effective standard,” the minister's’ press statement said.