The New Vehicle Emissions Standards will mean Australia goes from having a wild-west, rule-free car market, to reaching similar pollution limits as the US within 4 years, and it will mean a 50% reduction in new car emissions by 2029. The scheme is loophole-free, with bonus credits ruled out. And it is designed to be future proof, with targets that can only be made stronger.

This important climate decision will make all the difference when it comes to urgently bringing more affordable electric vehicles into Australia and is crucial if Australia is to meet its climate targets.

Strong vehicle efficiency standards will bring about real cuts to pollution and cleaner, quieter cities for us all to enjoy. This will mean less toxic, harmful pollution from the petrol and diesel burnt in our cars: a great outcome for Australian communities and our planet.

There is some bad news: in the final days of negotiation, the Government sadly caved to pressure from multinational car makers on a few details. Luxury petrol-guzzling SUVs like the Lexus LX were reclassified as “light commercial vehicles,” allowing them an easier ride on emissions standards. And the targets for light commercial vehicles were also weakened in the first years of the scheme.

Make no mistake – these concessions mean the standards will be 20% less effective at curbing pollution in the short-term. But we can take heart that the gap will shrink over time, and Australia will still be in a position to move to 100% zero emission vehicle sales by 2035.

The NVES is an important step towards achieving Australia’s climate targets, laying the groundwork for more action on transport emissions. By working closely with the states to make major and necessary investments in active transport, the Government can continue to accelerate its climate ambitions.

The good, the bad, the ugly

The Good:

• Australia will catch up to other major markets by 2030
• Legislation rules out ‘supercredits’ and loopholes 

The Bad

• By weakening the targets for Light Commercial Vehicles, the Bill will only achieve 80% of the pollution reduction that was in the model proposed in February 2024
• Using the ‘ladder frame chassis’ and ‘braked towing capacity’ as the criteria for classification as a ‘light commercial vehicle’ is a sensible approach, however it will unfortunately still result in an easier ride for luxury SUVs that are more consumer choice than business necessity.

The Ugly:

• The Government has held its IT systems responsible for not being able to commence the scheme in January 2025. Surely, the Government can find a way to track vehicle sales and apply the penalties and credits after the system is fully set up.
• Low-income earners stand to benefit the most from electric vehicles. The Government should be looking at measures to reduce upfront costs and increase charging accessibility for all Australians.
• The petrol and diesel car lobby group, the Federal Chamber of Automotive Industries, are still fighting to keep Australian cars as toxic and polluting as possible, while asking motorists to keep paying high prices for imported petrol. 

Meanwhile, demand for electric vehicles in Australia has skyrocketed. While every Australian state and territory government has now introduced some form of incentive for the purchase of electric vehicles, the lack of fuel efficiency standards in Australia is putting the brakes on the electric vehicle market, holding Australians back from cleaner, more affordable electric transport.

This important climate decision will make all the difference when it comes to urgently bringing more affordable electric vehicles into Australia is crucial if Australia is to meet its climate targets. 

Due to the absence of strong, legislated fuel efficiency standards, Australia’s domestic vehicle fleet is one of the most polluting and least efficient in the world. Meanwhile, at least 80% of the global car market already have vehicle emissions standards and are seeing more electric vehicles on their roads, leaving Australia behind.

Greenpeace Australia Pacific has today welcomed the Federal Government’s commitment to legislating a New Fuel Efficiency Standard.

A fuel efficiency standard is the first step to opening up the Australian market to more EVs and ensuring that demand for them can be met.

Had the Government introduced standards in 2015 when the idea was initially put forward, Australians would have saved almost 6 billion dollars in fuel costs since.

Today’s announcement: the NVES reaches the Lower House

Onwards from today’s announcement, when it comes to accelerating Australia’s electric transport options, the gap between ‘strong’ and ‘weak’ fuel efficiency standards makes all the difference. 

While weaker and delayed targets for the Light Commercial Vehicle segment will mean that around 35% of cars sold in Australia will face laxer rules over the next 4 years under the Government’s Bill, car makers are making rapid progress on designing new electric and plug-in hybrid utes. We expect those targets can be revisited and strengthened in 2026 as they come to market.

“The Government has committed to a 43% reduction in carbon emissions (from 2005 levels) across the economy by 2030. Their pre-election modeling assumed 89 per cent of new car sales would need to be fully electric to meet that goal. 

Clearly the NVES as drafted will not achieve that level of EV market share, so it will be up to the Government to identify other policy measures which will achieve commensurate reductions in the transport sector to make up for the shortfall, for example investing in public transport, cycling and the electrification of freight.

Media Briefing – Australian Automobile Association

Greenpeace Australia Pacific has today called on Australia’s largest motoring clubs to condemn the Australian Automobile Association (AAA) for its repeated efforts, including with the fossil fuel car and petroleum lobbies, to water down limits on car pollution and slow the uptake of electric vehicles in Australia.

Documents released under Freedom of Information (FOI) reveal that the AAA has a long history of working alongside the fossil fuel car and petroleum lobby to push Federal Ministers to weaken vehicle emissions standards, and run scare campaigns against electric vehicles. 

Comments attributable to Greenpeace Australia Pacific campaigner Joe Rafalowicz:

“Greenpeace Australia Pacific believes that the AAA’s well-established lobbying for weakened new vehicle efficiency standards over a number of years, positions the organisation as a threat to the introduction of strong vehicle pollution caps. 

“The Australian Automobile Association (AAA) claims to represent the interests of Australian motorists, as the peak body for state-based motoring organisations including the NRMA, RACV, RACQ, RAA, RAC, RACT and the AANT. 

“Yet the AAA’s lobbying appears to be in direct conflict with the interests of Australian motorists who would have saved nearly six billion dollars had fuel efficiency standards been introduced in 2016.

“It also conflicts with the positions of its motoring club members who have made submissions in support of the Government’s proposal for an NVES, commitments on climate change,  and their support of the uptake of electric vehicles.

“It’s time for Australia’s largest motoring organisation to make clear if they stand for climate action or for the destructive fossil fuel industry. 

“Pitching for more petrol-fuelled cars in 2024 is akin to the tobacco industry lobbying for weakened smoking laws or the asbestos industry lobbying for relaxed building standards. Greenpeace Australia Pacific urges policymakers to be informed and wary of the AAA and friends in their continued lobbying efforts. 

“If Australia’s motoring organisations want to be on the right side of history, they should actively condemn their peak body, the AAA for their negative lobbying and scare campaigns against electric vehicles.

“If the AAA don’t clean up their act, their motoring organisation members should be prepared to quit their membership,” Mr Rafalowicz added.

It comes as Greenpeace called on pro-climate car makers to resign membership of the petrol-pushing Federal Chamber of Automotive Industries (FCAI) – an “irrelevant lobby group” that we believe should be renamed the ‘Full-Throttle Carbon Addicts Institute.

—ENDS—

An extensive media briefing in relation to these FOI documents is below. For more information or to arrange an interview please contact Lisa Wills on 0456 206 021

In response to comments reported in the media today attributed to Toyota Australia’s sales chief, Sean Hanley, Greenpeace Australia Pacific campaigner Joe Rafalowicz said:

“The world is moving rapidly to more efficient vehicles, with targets in place in New Zealand, the EU and the US. The claim that the Australian Government’s proposed limits on car pollution are ‘moving too fast’ is the self-interested whining of a car company which has only just unveiled a fully electric vehicle for sale in this country. Toyota are losing the race to electric vehicles and instead of accelerating, they want to slash everyone else’s tyres along the way. 

“The threat from Toyota executives that they will ‘pass on any price increases to consumers’ instead of trading credits shows absolute contempt for Australians doing it tough in a cost of living crisis. 

“Refusing to trade credits would mean effectively doubling the cost of going over the pollution limit, a decision seemingly made out of spite rather than good business sense.

“In the US, Toyota has not only met all of the pollution limits in place but have surplus credits – so why does the U.S. get efficient vehicles, but Australians are not good enough for them?

“Toyota’s strategy around the world has been exactly the same when it comes to rules limiting car pollution: delay, delay, delay. 

“Australians are right to be skeptical of a company which just last month was raided by Japanese police following allegations that they were cheating emissions tests.”

Additional information

Toyota’s comments follow a damning report released yesterday from the U.S.-based Public Citizen, alleging the company greenwashes and misconstrues data in its latest report on climate policies globally.

Greenpeace’s ‘Toyota Files: The dirty secret behind Australia’s most trusted carmaker’ report steps out the car importer’s history of anti-climate lobbying in Australia and across the globe.

—ENDS—

For more information or to arrange an interview please contact Lisa Wills on 0456 206 021 and/or lwills@greenpeace.org

Greenpeace has been fighting for these pollution limits on cars for years, and we are almost there. But the proposal is not law yet – the Government needs to finalise the design of the standards and take them to Parliament. They are asking for your feedback until 4 March – we need everyone to make a submission calling for strong standards.

Making a submission is quick and easy. Here is a response guide for the form, with some points you might want to raise with the Government to make their proposal better. The answers below are a serving suggestion only – feel free to cook up a response as you see fit!

Step 1: Follow this link for an individual or an organisation

Step 2: Fill out the questions with your name and email

Question Response Guide

Question 3: Please rank the proposed options in order of preference

Answer:

Question 4: Briefly, what are your reasons for your choice? (optional, 3000 character limit)

Copy and paste into the open text box:

The climate crisis should determine target strength

The NVES should set emission targets over a timeframe that reflects the urgency of the climate crisis. This requires a transition to all new car sales being zero emission vehicles (ZEVs) by 2035 at the latest. Option C and B are both acceptable as they would make that goal achievable, but option C is preferable as it ramps up faster, and has stronger targets. 

Moving faster will result in lower emissions and fuel savings for Australia over a longer period, compounding the benefits of the policy. The impact analysis estimates that by 2050, option C will reduce CO2 emissions by an additional 74 million tonnes, which will help the Government meet its climate targets in a context where other sectors face even greater challenges to reduce emissions.

Targets are sufficiently distant for supply to catch up

Option C and B have the same starting target in 2025, which gives car companies two years to prepare for the stricter targets under option C (which only kick in from 2026 onwards). Two years is sufficient time for car makers to adjust their supply, given the number of ZEVs already on the global market and more under development.  Car companies have known of the Government’s intention to introduce some form of NVES since 2022, and 85% of the world is already covered by emissions standards, making this change foreseeable.

If there is a short period where a number of the most polluting vehicles in Australia increase in price due to penalties under Option C, that can be managed through car companies buying credits from 100% ZEV car makers, further subsidising their price, and encouraging the overall shift.

SUVs should be considered passenger vehicles

Option C and B rightly include SUVs in the passenger vehicle category. There is no justification for a higher CO2 limit for a vehicle that is larger due to consumer preference, rather than for a genuine utility or commercial reason (which is covered by the LCV category).

The NVES should encourage lighter vehicles

The Government should consider lowering the break point for vehicles to 1800 kg or less, or better yet, eliminating the weight based adjustment altogether, to encourage the purchase of smaller, lighter vehicles.

Penalties should be substantial

The EU has a penalty of $197 per g/km (AUD equivalent) for exceeding their CO2/km target – to get close to that, the penalty proposed under option C should be adopted in Australia.

Loopholes should be ruled out

Ruling out supercredits and loopholes are an excellent feature of both B and C. Banking and trading of credits is acceptable if limited in scope – these should not be expanded beyond the 2 years suggested by Option C.

Emissions should be tested in real time

The Government should also implement real-world testing of vehicle emissions ( onboard fuel consumption monitoring)  to prevent manufacturers from producing laboratory testing which is inaccurate, as they have done in the past.

Question 5: Do you support the Government’s preferred option (Option B)? (optional)

Select ‘yes’

Now hit submit! You are done – now send this page to a friend and ask them to make a submission too.

Given transport is one third of Australia’s carbon emissions, pollution from petrol cars is a health hazard and petrol prices keep going up during a cost of living crisis, that is great news for most people!

But car companies, like Toyota, who have failed to keep up with EV technology and are still making a profit from selling their petrol cars are arguing for a bunch of loopholes in the fuel efficiency standards. And that is bad news! A fuel efficiency standard riddled with holes will undermine emissions reductions, cost savings, and mean less electric vehicles for sale.

Here’s how the fuel efficiency standards should work. 

Standards set a target for how much pollution each brand of car can emit on average.

Each car company tries to reduce the average emissions of the cars they sell to get below the target. If they’re below the target, they get credits. If they’re above the target, they have to pay penalties or buy credits from another company.

This means car companies have a reason to bring their most efficient petrol cars, and their electric models, to Australia.  Fuel efficiency standards have been used to successfully get more EVs on the road in the US, EU and New Zealand.

So how does the ghost car loophole work?

Car companies say they should get extra credit for selling electric and hybrid cars – these are called ‘super credits’ or ‘multiplier credits’ – but we call them Ghost Cars.  So when the companies add up their average, they want to count their really polluting cars once…. and count their really clean cars two, three or four times.

So for every actual electric car they sell, they also get to count free Ghost electric cars. Imagine that!

It’s great for car companies because all these ghost electric cars make their average look much better. But it means that whatever the pollution cap the Government introduces, these petrol car companies will get so many credits that they will barely have to change the vehicles  they sell to us. That’s not good news for Australians who desperately want to get their hands on cleaner transport options.

So why is the Government considering using ghost cars?

Australia isn’t the first country to legislate a fuel efficiency standard. In fact 85% of the global car market already has these standards.

When other countries like the USA and EU were creating their fuel standards, electric and hybrid cars were really new technology. So car companies argued it would be easier for them to meet pollution targets by just making petrol engines more efficient than building entirely new types of vehicles, so they should get extra credits for the new types of vehicles.

But now electric vehicles aren’t new, and hybrids certainty aren’t. So the USA and EU are phasing out these credits.

Which means to meet their targets in the USA and Europe, car companies need to sell efficient vehicles and electric vehicles. Real, actual ones.

But in Australia, car companies are arguing that they should be able to keep meeting their targets with ghost cars for years and years to come.

If only our petrol bills and climate-related bushfires were imaginary too.

Ministers Catherine King and Chris Bowen, need to stand up to the petrol car companies and rule out including ‘ghost car’ multiplier credits in their proposed scheme.

This week Electrify performed a public service to help out our elected representatives:  we distributed hundreds of flyers warning of the danger posed by petrol car lobbyists who roam the halls of Parliament.

While our flyer was a joke, there is nothing funny about the misinformation peddled by petrol car lobbyists. We know that the last time Australia considered a cap on pollution from new cars, the automotive industry did its best to sow confusion and doubt to protect their petro-profits. We can’t let that happen again. 

Car companies like Toyota, and the industry group called the Federal Chamber of Automotive Industries (FCAI) that represents them, have a history of calling for weak standards that are riddled with loopholes that benefit  the automotive industry.  The most intensive lobbying comes from those companies who have been overtaken in the shift to electric cars. Toyota in particular has been fighting against effective climate policy all over the world.

The petrol car lobby plays on the fears of politicians that any attempt to cut transport emissions will mean that everyday Australians will suffer financially. But that could not be further from the truth! A cap on pollution from new cars (known as a fuel efficiency standard) will mean:

• Australian motorists would save $11.2 billion in fuel costs over the next five years if we introduced a standard similar to the EU
• Car manufacturers will bring in a wider range of more affordable electric vehicles to the Australian market, and they will make petrol vehicles more efficient in the short term
• The average price of vehicles will stay the same, with EVs decreasing in price over time 
• Australia will have a chance to reach net zero by 2050 – which will be impossible without phasing out new petrol cars by 2030 or 2035 at the latest.

This time we won’t let the lobbyists get away with their fear mongering – we are getting on the front foot, warning our politicians about their tactics, and helping them see the compelling reasons a pollution cap on cars makes sense.

Support the campaign to Electrify cars? Sign up to support the campaign here.

The flyer we distributed in Parliament:

(Catch-up on what a fuel efficiency standard)

Thousands of Greenpeace supporters helped make this happen by lending their voice to our campaign: writing to the Transport Minister, making calls to politicians and even visiting the offices of their local MPs.

But now the tricky bit: the design of the fuel efficiency standard is crucial – if it is too weak or has too many loopholes, it won’t have a meaningful impact on pollution from cars.

We know that is a real risk because the petrol car lobby suggested Australia adopt their voluntary standard a few years ago, which modelling shows would have resulted in no change to business as usual!

The petrol-car lobby is going to keep pushing for weak standards with loopholes you can drive a Hilux through.

But Greenpeace is on the case – you can read our submission to the design process below, where we make the case for a strong fuel efficiency standard which gets Australians into electric vehicles sooner – so we can all enjoy cleaner air, cheaper transport and the transcendent joy of eliminating fossil fuels from our weekly budget.

Executive Summary:

Strong fuel efficiency standards will deliver cost savings for Australian households, healthier communities, quieter streets, new economic opportunities, reduced dependency on foreign oil, and a critical reduction in harmful carbon emissions.  

As such Greenpeace Australia Pacific warmly welcomes the government’s commitment to introduce this critical and much overdue policy measure.

In designing these standards Australia can and should benefit from the experience of the many other jurisdictions who have introduced similar standards and have seen the benefits (and pitfalls) realised. This submission identifies the key features which have made those schemes successful – both in reducing emissions from transport and increasing consumer choice and value – and what features should be avoided.

The most important task facing the Government is setting targets and a timeframe for emission reduction which are commensurate with the scale of the climate change challenge, and doing Australia’s fair share. Greenpeace urges the Government to remain steadfast in its commitment to reaching net zero emissions by 2050, which necessitates a shift to all vehicle sales being electric by 2030, or 2035 at the latest. We have no time to lose, and no reason to delay further.

If there is a single principle that defines our submission it is this: simplicity. Design a standard with strong targets, linked to climate science, which catches up to other countries in the short/medium term. Avoid anything which unnecessarily complicates the scheme. Introducing a myriad of flexibilities, credits, technology-specific bonuses etc, only serves to undermine transparency and effectiveness. They are unnecessary given the elegance of a well designed fuel efficiency standard with strong targets.

Finally, consider the needs of everyday Australians – many of whom are struggling with the cost of living –  when designing the scheme. That means looking at the full picture of complementary policies and tax incentives which affect vehicle purchasing decisions. It means ensuring the policies are in place which makes the decision to purchase a zero emission vehicle a genuine option for those who are doing it tough – because the cost savings on fuel and maintenance will be even more impactful for those families. 

And most importantly it means prioritising the interests of ordinary Australians above car industry demands for weak standards that maintain the status quo.

A strong fuel efficiency standard will deliver myriad benefits to Australian consumers and communities, and on the urgent imperative to reduce emissions. 

Let’s get moving.

Greenpeace provides the following recommendations on the design and implementation of a fuel efficiency standard:

• Recommendation 1: Adopt annual targets which catch-up (approximately) to the projected targets of the US, EU and New Zealand by 2027.  
• Recommendation 2: Create a trajectory of emissions reductions which trends towards zero by 2030, or 2035 at the latest, to ensure Australia meets its climate targets.
• Recommendation 3: Avoid leaving the biggest cuts in emissions to the 2030s and set ambitious initial targets for a ‘fast-start’ to ensure sufficient allocation of ZEVs by automotive importers.
• Recommendation 4: If dual targets are adopted, ensure the rate of improvement for both targets occurs in tandem to prevent category shifting, and both trend towards zero by 2030 or 2035 at the latest.  
• Recommendation 5:  Allow credit-banking over a single year, trading of credits between manufacturers and pooling of credits. 
• Recommendation 6: Ensure transparent reporting on how each importer has reached their target, including whether it utilised traded or banked credits.
• Recommendation 7: Set a penalty of $200 per g/km of target exceedance.
• Recommendation 8: Create non-financial penalties for car importers who miss their targets.
• Recommendation 9: Adopt a design approach for the FES which explicitly seeks to reduce the market share of inefficient, heavy and overly large vehicles.
• Recommendation 10: Super credits should not be used in the FES
• Recommendation 11:  In the case that they are, they must be capped (in terms of emissions reduction able to be claimed), phased out rapidly (ideally by the second year of the scheme operation), and only apply to zero emissions vehicles.
• Recommendation 12: If super credits are used, they must be fully and transparently reported on – it should be clear to what extent each car importer has used credits to reach their FES target.
• Recommendation 13: Off-cycle and similar vehicle enhancement credits should not be used. 
• Recommendation 14: All data pertaining to a fuel efficiency standard should be under the purview of regulatory bodies – and should be made publicly available.
• Recommendation 15: The FES should be legislated in the 2023 calendar year, to come into effect from 1 January 2024.
• Recommendation 16: Annual targets should be set for each year from 2024 to 2030 inclusive. Targets should be reviewed every 3 years. Targets can be increased but not decreased.
• Recommendation 17: Introduce targeted rebates and no interest loans to support access for lower income families. Consider other additional measures.
• Recommendation 18: Adopt Recommendation 13 of the Harper Review and remove restrictions on the importation of second-hand cars.
• Recommendation 19: Update the Vehicle Type Approval requirements in Australia to allow direct acceptance of type-approved electric vehicles from global major markets.
• Recommendation 20: Review and remove or reset all policies which incentivise a shift to heavier, higher polluting vehicles.

As Australia increases its reliance on renewable energy, and electrified machines, demand for batteries will increase.

The electrification of everything is a net good: if managed carefully it will reduce our overall greenhouse gas emissions, reduce other kinds of harmful pollution and increase the uptake of clean technologies like rooftop solar.

However the battery manufacturing process contains inherent risks which must be managed to avoid environmental and human harm.

The rare-earth minerals used in the construction of batteries have been tied to serious environmental harms as well as labour and community rights violations.

The solution for Australia is to focus on minimising those harms as much as possible.

Greenpeace recommends a three-part approach to managing the externalities involved in a scale-up of battery production and use.

1. Regulate: Government regulated, transparent and verified supply chains for domestically produced and internationally sourced batteries, with clear rules for which products are unacceptable due to ethical and/or environmental factors.

2. Reduce: Support (through public investment) research and development and commercialisation of new kinds of batteries which rely on abundantly available resources, or which significantly reduce mineral inputs.

3. Reuse: Incentive the recycling of batteries through rebates, penalties and regulations to achieve resource recovery rates of: 95 % for cobalt, 95% for copper, 95% for lead, 95% for nickel, and 70% for lithium by 2030.

Download Submission

As part of their commitment, Teachers Mutual Bank Ltd will:

• Invest $2 million in the electric vehicle transition over 4 years, which more than doubles their climate investments of the past 6 years
• Purchase 31 Kia Niro cars and 2 electric utes to replace their current fleet vehicles by 2027
• Install 10 charging stations at their offices across Australia, which will be powered by renewable energy

Teachers Mutual Bank Limited (TMBL) said they chose vehicles with more than 400km of range, as the vehicles will be used to visit members in regional areas. 

Transport is the fastest growing source of climate pollution in Australia, accounting for nearly 20% of emissions. Companies have a responsibility to drive down these emissions, as 4.5 million vehicles in Australia belong to businesses. 

A key part of doing this means transitioning fleets to electric, and powering them with renewables. 

Electric fleet commitments not only reduce companies’ transport emissions, but also help make getting an electric car a lot easier for everyday Australians.

That’s because passenger fleet vehicles – like the cars TMBL operate – are typically only used for 3-5 years before being sold onto the second-hand car market.

And because over 40% of new car sales each year are for fleets, electric fleet commitments have an outsized impact on getting more electric vehicles on Australian roads. 

Corin Millais, Head of Socially Responsible Banking at TMBL has said that he wants this commitment to push other banks and businesses in Australia to go electric by 2030. 

And we couldn’t agree more! As part of our Electrify Fleets campaign, we’ve ranked leading Australian companies – including the big banks –  based on their electric fleet commitments.

Which Aussie bank will be next to electrify its cars and utes? Check out the rankings to see which are in the fast lane, and which are stalling on climate action.