The incoming adoption of a new vehicle efficiency standard in Australia could be the start of a major change to what our roads look like. And not just by 2050 – as soon as next year.
Revealed in a joint announcement by federal transport minister Catherine King and federal climate change and energy minister Chris Bowen in early February, the federal government will introduce a nationwide vehicle efficiency standard, commencing on January 1, 2025.
While the currently proposed legislation is focused primarily on cars and motorists, it is a move that can’t be ignored across the wider transport industry.
Under these standards, manufacturers and distributors will be required to supply vehicles that meet emissions and fuel efficiency targets.
This will apply to all passenger vehicles, i.e. cars and utes, and light commercial vehicles including vans and small rigid trucks and articulated semis.
In technical terms, grams of carbon emitted per kilometre will be required to drop to 141 grams per kilometre by the start of 2025, and then again to 58 grams by 2029.
It may seem like a drastic change to have to make within a year, but experts say that the transport industry is already on the way to meeting the new regulations.
RMIT University academic and associate director at the Institute for Sensible Transport Liam Davies believes that the new standards will act as the guidelines that vehicle manufacturers need to make the necessary changes by the end of the decade.
“I think it’s a positive step forward that we’re actually adopting a fuel efficiency standard, and standards that are broadly in line with other developed nations,” he says.
“It’s also good that the government has set an interim target to 2029. The industry knows what they’ll be expected to provide the Australian market in the next year, but also in the next five years.
“That should give certainty to manufacturers that they will be able to make investment decisions and market decisions.
“If you look at the National Transport Commission reports, those standards are effectively what the industry is already selling.
“The government have set the start point as the status quo. That’s a sensible and pragmatic decision by government.
“That means for the next 11 months, the industry’s not thinking about what they’re doing next year, but about what they’re doing in the next three years.”
While there are light electric vehicles becoming available or already available in Australia for purchase, there may not be enough choice yet.
The Hyundai Mighty launched in Australia in October 2023, while the Fuso eCanter has been leading the way since its release on Australian shores in 2021.
Fuso’s Next Generation model earned the 2024 Trucksales Innovation Award, and has already been added to a number of fleets across the country.
Isuzu, meanwhile, is also building up to the release of its ELF series of light electric trucks this year after its debut in Japan.
Along with the recent introduction of Euro 6d emissions standards in December last year, Davies believes that the light vehicle sector of the transport industry is in a good place when it comes to meeting both sets of standards.
Making these same moves for heavy vehicles may be where the problem arises.
“I think we need to be having this discussion about road freight and heavy vehicles, but in a way, we’ve already been doing that for a bit longer,” Davies explains.
“Australia has adopted Euro emissions for heavy vehicles for many years now, so it may be an easier challenge to adopt.
“What I think is going to be most difficult for trucking in Australia is that our interstate trucks travel very long distances with very high payloads. This is a challenge that other nations don’t quite have.
“We know that battery electric variants of lights vehicles are already coming out, so we know that we can support this transition quite quickly. The real challenge is going to be in getting the B doubles and B triples converted.
“These may not be the largest section of the freight fleet, but they are the largest contributor in freight kilometrage. They’re also a significant driver of our economy.
“That’s the one that we’re going to have to be really careful about how we manage, and we’re going to have to think about a diversity of options in that.”
The challenge in part also lies in the availability of electric models, with the Australian market holding significant differences to that of other nations.
This is a concern for both cars and trucks.
“In the United States and even New Zealand, you can get more than 150 models of EV or plug in hybrids. In Australia, less than 100,” climate minister Chris Bowen said at the government media conference in February.
“There are certain models that are available as hybrids… overseas, but not available as hybrids in Australia.”
Davies says that making these models available will make the transition significantly easier, giving consumers and businesses alike more options and keeping prices competitive.
“The range of vehicles available makes a really big difference when we talk about the commercial viability of introducing a fuel efficiency standard or a mandate efficiency standard,” he says.
“It’s not there yet for trucks. It doesn’t mean we won’t be, but at the moment, we’re not there. We can still set emissions standards.
“Trucks have to be fuel efficient, we just might not be able to use those standards to drive down to net zero as quickly as possible.
“There’s a really key thing to remember with fuel efficiency standards – it doesn’t have to go to zero.
“I think that these standards need to go to zero by 2035, but we could just use it as incremental change to force technological improvement onto heavy vehicles, but they maintain being internal combustion several years into the future.”
Across the industry, opinions are mixed on what the fuel efficiency standards will achieve.
There are questions around why an efficiency standard has taken as long as it has to be put into place, with talks being had for more than a decade now.
Others question the strain that it may place on businesses and households to make the transition within such a short timeframe.
Federal Chamber of Automotive Industries CEO Tony Weber believes that it will take a collaborative effort from all parties to meet the new standards.
“There is a shared commitment from industry and government to combat climate change by ensuring zero and low-emission vehicles are accessible and affordable to all Australian consumers,” he says in a statement.
“Most important is that Australian families and businesses can continue to access the style of vehicle that suits their needs for work and recreation.
“On the surface, the targets seeking a 60 per cent improvement in emissions are very ambitious, and it will be a challenge to see if they are achievable taking into account the total cost of ownership.
“There is a great deal of further analysis to do and we look forward to continuing to work with the government on the development of a standard that is right for Australia and supports Australian consumers.”
Davies says that the standards will certainly be a major step in Australia reaching its net zero goals, but not the only one required.
There is a critical timeframe for both the transport industry and general road users to get their emissions down to zero by in order to make for cleaner roads.
“I think the fuel efficiency standards help the prospect of reaching net zero goals, but I don’t think they’re the only solution,” Davies says.
“It’s critical that we start getting as close to zero for fuel efficiency standards by 2035. The reason for that is that vehicles generally stay on Australian roads for 20, maybe up to 25 years.
“We need the last internal combustion engine vehicle to be sold about 20 years before we want to meet net zero. So to hit that by 2035, we need to be quite aggressive.
“But EVs aren’t going to get us there alone. We need a lot of manufacturing capacity to be able to do that, which we currently don’t have.
“I think that what we need to do is think of a diverse sweep of policy options.
“This means not just supporting an EV transition and fuel efficiency standards, but encouraging more walking, cycling, and improving our public transport access.”