Australian fuel efficiency standards could have saved motorists $5.9bn, research shows

Australia Institute report makes a case for fuel standards as a means to cut emissions and decrease reliance on foreign oil

Motorists could have saved $5.9bn in fuel costs over the last six years if Australia had adopted fuel efficiency standards in 2015, according to a new report.

That is the conclusion of progressive thinktank the Australia Institute’s Fuelling Efficiency report, to be released on Monday as part of a push for Labor to adopt standards as a means to cut emissions and decrease reliance on foreign oil.

The report finds that the release of 9m tonnes of carbon dioxide would have been prevented, similar to a year’s worth of emissions from domestic aviation, and that Australia would have needed to import 4,000 megalitres less fuel.

In 2014, the Climate Change Authority recommended Australia adopt standards to reduce emissions intensity of cars. It failed to do so, and became an outlier, with countries representing 80% of the global market opting to impose such standards.

In 2018, the average emissions intensity for new passenger vehicles in Australia was 169.8 grams of carbon dioxide per kilometre, compared to 129.9 in the United States, 120.4 in Europe and 114.6 in Japan.

Labor proposed fuel efficiency standards ahead of the 2019 election, but Anthony Albanese dumped the pledge late in 2021, after a Coalition scare campaign had falsely labelled the policy a “war on the weekend”.

Before the 2022 election Labor promised to remove import tariffs and the fringe benefits tax from electric cars below the luxury car tax threshold, to drive consumer take-up of electric vehicles.

The Australia Institute is holding an electric vehicle summit on 19 August, at which tech billionaire Mike Cannon Brookes is expected to push the Albanese government for further changes to transport policy to cut emissions.

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In June the climate change minister, Chris Bowen, fuelled speculation the policy could make a comeback by not ruling out stricter vehicle performance standards in response to a question at the National Press Club.

Bowen said the new government would “consider all viable options to build on the policy announcements we’ve already made and are implemented”.

Richie Merzian, climate and energy program director at the Australia Institute, said while Labor’s EV policy is welcome, “we don’t want the government to go slow on simple changes like standards to insist new cars are more efficient”.

“Australians are being left behind simply because, as a nation, we are still accepting gas-guzzling cars with no emissions standards,” he said.

In the March budget, the Morrison government halved the fuel excise tax for six months, at a cost of $3bn, to combat dramatic price rises caused by Russia’s invasion of Ukraine. Despite political pressure to extend the measure beyond its expiry in September, treasurer Jim Chalmers has repeatedly warned it can’t continue.

“I’ve been really upfront with people for some time now – before the election, during the election and after the election – and pointed out that extending that would cost some billions of dollars and the budget can’t afford that,” he said on Tuesday.

Merzian said as the excise cut comes to an end, efficiency standards are “an opportunity to save motorists money at the petrol pump”.

“The Albanese government has a golden opportunity to implement robust fuel efficiency standards in line with Europe. The policy is popular, helps Australians with cost-of-living, and will help drive the uptake of cleaner vehicles.”


Paul Karp

The GuardianTramp

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