My latest piece in The Conversation, looking at Australia’s belated move to adopt fuel efficiency standards for light vehicles
Australia looks set to adopt fuel-efficiency standards after the Albanese government on Sunday revealed options for the long-awaited policy. The government says the reform would lead to more cars that are cheaper to run, eventually saving Australians about A$1,000 per vehicle each year.
The announcement comes a decade after the Climate Change Authority first proposed such a standard for Australia. The United States has had such a policy since the 1970s and the European Union implemented mandatory standards in 2009.
The Coalition has already sought to stoke fears among tradies and regional voters by claiming Labor’s policy threatens to take utes off the road. Labor’s policy is designed to address this concern – but the opposition looks likely to continue this scare campaign.
More generally, history tells us the road to fuel-efficiency reform in Australia is a bumpy one. The Albanese government has hazards to negotiate before its proposal becomes law.
Make better decisions – find out what the experts think.
A carbon price, by another name
Labor has outlined three options for a fuel-efficiency target, ranging from weak to aggressive. It describes its preferred middle-ground option as the sensible compromise.
The policy design for each of the options would set a national limit, averaged across all new cars sold, stipulating grams of CO₂ that can be emitted for each kilometre driven. This measure depends on fuel efficiency: that is, the amount of fuel burnt per kilometre. The designs differ in the stringency of the targets, the speed of the changes and the treatment of different vehicle classes.
The limit would not apply to individual cars. Instead, each supplier of new light vehicles to Australia would have to make sure the mix of vehicles does not exceed the limit. Low-efficiency vehicles could still be sold, but car dealers would have to balance this out by selling enough high-efficiency vehicles, such as electric vehicles.
Car suppliers that outperform the targets would earn credits that could be sold to those falling short. This system is similar to Australia’s renewable energy target for electricity and the safeguard mechanism for industry pollution.
All three are effectively a carbon price (though the political toxicity of that term means the government would never characterise them as such). Nonetheless, should the fuel-efficiency standards be implemented, Australia would end up with three carbon prices, one for each major energy use.
The government says the preferred option would lead to a saving of 369 million tonnes of CO₂ by 2050.
What about utes?
One tricky path the policy must navigate is allowing for the supply of both small and large vehicles without further exacerbating the trend towards oversized vehicles on our roads.
The government’s preferred option achieves this by allowing higher – but still limited – emissions for heavier vehicles such as utes, vans and SUVs, to account for their natural tendency to use more fuel.
Heavier vehicles are a sticking point in forming vehicle emissions policy in Australia. Who could forget then-prime minister Scott Morrison’s 2019 claim Labor’s electric vehicle policy would “end the weekend” by banning larger cars used to tow boats and the like.
Following Labor’s policy announcement on Sunday, Nationals leader David Littleproud picked up where Morrison left off, saying:
If you take away particularly utes, they’re tools of trade, particularly for people, not just tradies in the cities, but also people in the bush. And if you put a tonne on the back of an electric ute at the moment, you don’t get far.
Anticipating the Coalition scare campaign, the Labor government’s preferred option has been designed with the aim of ensuring a wide range of conventional utes remain on the market.
In the medium term, we can also expect the trend towards larger vehicles to be weakened by measures in Labor’s last federal budget to roll back vehicle tax breaks for small and medium businesses. But that change doesn’t come into effect until mid-year, which means there may be a rush on larger vehicle purchases until then.
Read more: Electric utes can now power the weekend – and the work week
Ghosts from the past
Labor’s preferred policy option is broadly similar to that put forward by the Climate Change Authority in 2014. Then, the Coalition government appeared to consider the proposal for a time. But it eventually dropped the idea – in part, presumably, due to lobbying by interest groups including the car industry.
There are signs those same groups are gearing up again. The Federated Chamber of Automotive Industries, for example, said on Sunday the government’s targets will “be a challenge” to meet and may lead to more expensive vehicles, or gaps in the supply of utes and SUVs.
But the proposed policy has been welcomed by climate change advocates, the electric vehicle industry and motoring groups. The NRMA described them as “responsible and achievable”, saying “a business-as-usual approach meant that Australian families and businesses were not benefiting from the best technology designed to reduce fuel consumption”.
Progress, at last
The government intends to consult on its preferred model before introducing the legislation, with a view to enacting the policy in January 2025.
Assuming the policy is adopted, Australia would finally shed its unenviable status as the only developed country without such such standards. But we will still be at the back of pack, far behind the EU and only catching up to the US in 2028.
Despite the difficulties, it seems likely Australia will have fuel-efficiency standards in the near future. As with most measures to reduce emissions, the best time to introduce the policy was ten or more years ago. But the second-best time is now.
John Quiggin 
The longer-term trends for petroleum fuel (i.e. diesel, jet fuel, petrol/gasoline, liquified natural gas) are only going upwards. I’d suggest fuel efficiency standards are now very likely too little, too late
Fuel efficiency standards are only applicable for those people who buy those new vehicles complying with the new fuel efficiency standards. Those Australians who continue to operate existing legacy vehicles will not have any effect (with savings or emissions). Retiring those less fuel efficient legacy vehicles may take DECADES. We don’t have DECADES!
I think most people are assuming that petroleum fuels will remain ABUNDANT and AFFORDABLE for many years to come. Compelling evidence/data I see suggests that’s likely to be an ill-founded assumption. Diesel shortages are already being observed in some parts of the world, especially in Latin America. Kerosene production has apparently also peaked globally. I’d suggest it’s only a matter of time before diesel shortages, followed by kerosene/jet fuel shortages, spread worldwide.
Chris Martenson at Peak Prosperity published on 7 Feb 2024 a podcast of a discussion with Adam Rozencwajg, CFA, Managing Partner at Goehring & Rozencwajg (G&R).
G&R projects that the one final and last mega oil basin in the US – the Permian – is set to hit peak output in 2025. And if it does, it could set off alarm bells within the US and across the world, resulting in vastly higher oil prices.
Ideally, we should be banning further sales of new ICEVs ASAP, to shrink Australia’s legacy ICEV fleet as fast as possible and rapidly reduce Australia’s petroleum fuel dependency. Politically, it seems to me that’s currently unthinkable, but I’d suggest we are now living in unprecedented times!
CORRECTION: (i.e. diesel, jet fuel, petrol/gasoline, liquified natural gas) should be (i.e. diesel, jet fuel, petrol/gasoline, liquified petroleum gas).
Does anyone know why, if electric cars are supposedly so much simpler and have fewer parts, there is no way currently to affordably convert an old car to be electric? Here, you can do it but it is very expensive.
I’d be willing to sacrifice some speed, if I had to. Though I expect, it must be not feasible for some reason I can’t think of.
Does it seem wasteful to anyone else that we are going to just junk all these cars?
On a different topic – it seems to me that one reason that SUVs (you-all call them “utes?”) are popular here is that it is so hard to see around them - so people feel a need for a larger car for safety, because other people already bought them. Perhaps you can avoid this in your cities? We were too stoopid.
The designs of ICE (internal combustion engine) cars and electric cars are almost completely incompatible. All that you might keep of an ICE car is the chassis and body. Engine, gearbox, drive-train and axles have to be stripped out. In fact, you can’t even keep the chassis. Electric cars need a different kind of chassis to support the huge, heavy, not so flat battery pack that sits under all the passengers. In turn, the ICE car body, compartments, bulkheads, panels and partitions are all wrong too. The electrics, electronics, wiring and wiring conduits are wrong also. It’s easier to build electric cars from scratch.
I am not a big fan of electric cars. Neither ICE cars nor electric cars will save us if we keep building 80 or 90 million cars a year globally. Electric cars have a large lifecycle carbon footprint too. Not as bad as ICE cars though.
“… on the basis of recent studies, fossil-fueled cars generally emit more than electric cars in all phases of a life cycle. The total life cycle emissions from a fossil-fueled car and an electric car in Australia were 333 g of CO2 per km and 273 g of CO2 per km, respectively. That is, using average grid electricity, EVs come out about 18% better in terms of their carbon footprint.
Likewise, electric cars in New Zealand work out a lot better than fossil-fuelled cars in terms of emissions, with life-cycle emissions at about 333 g of CO2 per km for fossil-fuelled cars and 128 g of CO2 per km for electric cars. In New Zealand, EVs perform about 62% better than fossil cars in carbon footprint terms.” – Science Learning Hub.
New Zealand has mostly hydro power to the grid.
Clearly, renewable, zero carbon emissions power (at generation), makes electric cars much more viable. But I still think making 80 to 90 million electric cars a year and running a world fleet approaching of 1.5 billion vehicles is not going is not going to be compatible with saving the planet.
Footnote:
Large, high center-of-gravity cars, SUVs, 4WDs, call them what you will, are not safe. They roll all the time and smash up smaller cars badly.
https://theconversation.com/ive-always-wondered-are-suvs-and-4wds-safer-than-other-cars-98559#:~:text=This%20is%20because%20these%20vehicles,shift%20to%20these%20vehicle%20types.
Reuters published a commentary by John Kemp headlined Diesel prices primed to rise sharply in 2024. The piece began with:
It seems there’s potential for a sharp rise in diesel fuel prices in 2024.
Why anyone would now be buying a new vehicle with an ICE in it, particularly diesel-fueled, that’s now at high risk of depreciating rapidly, is beyond me.
Thank you, Ike - that was very interesting and informative. I gather that we are all hoping for technological improvements to these car batteries - however, even if they get smaller, I guess it makes sense that the same chassis won’t work well. Perhaps a lot of these old engine parts can be recycled into something else. I’ve never much cared for SUVs and would be happy to see them all gone.
Yet, to me it would be a very negative change to not have a car, as there is no practical transit option for the distances I travel. (This doesn’t mean it won’t occur, of course.) And paying to get everything delivered would be very expensive, too. So I hope that we can find some way forward while reducing and then eliminating ghgs. (I’ve already tried the obvious things, like cutting down on trips.)
It took a long time to get into this situation, and I guess it will take a while to fix it, too. (We still have a few gas appliances. I would love to have solar panels but it is a ways off. It also doesn’t help that our manufacturing culture has declined so precipitously.)
Having said all this, humans are pretty good at fixing technical problems, so I think we can beat CC. Whereas, we should be doing a lot better at conflict management! I’ll bet wars cause a lot of emissions - that is one habit we should really change.
N: – “Having said all this, humans are pretty good at fixing technical problems, so I think we can beat CC.“
Per Prof Eliot Jacobson tweet, for Copernicus ERA data (to Feb 9), the latest global mean daily SAT was +2.03 °C above the 1850-1900 pre-industrial baseline. So far, this is the fourth day above +2.0 °C in the instrumental record.
Global atmospheric CO₂ levels are at record highs. Per NOAA, 420.15 ppm (Nov 2023).
Global atmospheric CH₄ levels are at record highs. Per NOAA, 1933.46 ppb (Oct 2023).
Global atmospheric N₂O levels are at record highs. Per NOAA, 336.97 ppb (Oct 2023).
Meanwhile, US petroleum geologist Art Berman tweeted on Feb 17:
Also Art Berman tweeted:
Human ingenuity needs to get going fast…
The problem is that human ingenuity is mainly used for cheating, free riding and profiteering while shoveling the burden of negative externality consequences onto the poor, powerless and environment (ecology and earth systems) and thus onto present and future humans and ecosystems. There is little to nothing in neoliberal capitalism to ensure that aforesaid cheating etc. etc. does not happen.
The system is basically open slather. The rich corporations and individuals can do what they damn well like with little to hinder their exploitations and depredations. We see examples all the time There is a lack of regulation and little effort at enforcing compliance where regulation exists. The rich can buy politicians, capture regulation and lawfare their way out of any consequences in the great majority of cases.
I think we are in a terminally corrupt, society destroying and environment destroying system which is completely incapable of reforming itself. Those in power and with a lot of capital (capital and power are really the same thing now in many ways) rule the system and are not the least interested in reforming anything. Ig anything neoliberal capitalism continues to intensify its power. The system won’t end until natural forces destroy it, which they inevitably will.
I wish I could see hope but I can see none. The nature of humans (general animal nature and the evopsych nature of our species) is antithetical to the requirements of a high application of intelligence, morality and wisdom. Our species is not fit to run a planet. It’s tragic but there it is. The planet will deal with us: not with intention but simply with the playing out of natural forces. So be it. Individually, one should try to live without damaging society and environment further, though the attempt to live modestly is very difficult. We are all dragooned into the unsustanbale system and living otherwide borders on the impossible
Too bad the rich and the powerful won’t do anything to change and that the majority of the rest are deluded by the consumerist mythology of endless growth and a technology cornucopia.
Ikonoclast: – “Too bad the rich and the powerful won’t do anything to change and that the majority of the rest are deluded by the consumerist mythology of endless growth and a technology cornucopia.“
It seems to me the day of reckoning is fast approaching.
US petroleum geologist Art Berman was in conversation with Johan Landgren, host of the EVolution Show, per the YouTube video titled Art Berman: The Perfect Energy Storm -World Oil Production Decline, published 22 Feb 2024, duration 0:33:36. On when US shale oil production is likely to begin declining, Art Berman said from time interval 0:15:12:
“So that’s as you know, that’s a very difficult question to answer, but my sense is that, um, we, we… I, I fully expect that we will see, ah, declining shale oil production; certainly in this decade, ah, and probably quite a bit sooner. I would say, ah realistically, within 2 to 3 years, I think the world will be, ah, very aware of, of, of the problem that it doesn’t think we have right now. So, you know, 2026; 2025; 2027 – I don’t know exactly when it will be. Ah, as you said, we can throw some money at it, ah, and maybe postpone the inevitable, but, um, it’s going to be a factor sooner than later, and it will be this decade; I’m quite certain of that.”
Just a few per cent (or even a fraction of a per cent) of a shortfall in petroleum fuel supplies can make a tremendous difference in price for the average person.
Society has no choice but to deal with imminent declining petroleum fuel supplies, likely first with diesel, followed by kerosene/jet fuel. Diesel is currently the ‘haemoglobin’ of the global economy.
Yet most commentators seem to be oblivious. Here’s an example from Radio 2GB Afternoon host Michael McLaren on-air on Friday, Feb 23, from time interval 0:53:42 (bold text my emphasis):
“Well, look, you may be right. I’m not in a position to talk about the, ah, abundance of fossil fuels, or indeed, petroleum. I just don’t have that data at hand. You may do, Geoff, but if you’ve got that, and you can send it to me I’d be more than interested in reading it, but I suspect we still have a very strong supply of this stuff. Ah, part of the issue is probably we’ve not been searching for it with as much veracity as we used to because of some of these standards that are coming in, but I think we’ve still got, you know, many, many years ahead of us of, of abundant fuel supply. Ah, I haven’t seen headlines suggesting otherwise. Ah, we have had reports of ‘peak oil’ in the past, and, you know sort of, the death of petroleum has been somewhat exaggerated, to borrow that phrase. But look, at some point these are finite resources, ah, and that does mean that they do come to an end. Certainly, the financial viability of extracting them comes to an end. So, you know, at some point, change is going to have to happen. But I think the point Phil Coorey made, which is the most valid point is, change or not, the change has to be phased in over a timeframe, in such a way that is actually, ah, acceptable to the public, er, and practical to those involved in the space.”
Fuel shortages and much more expensive fuel prices are going to be a big shock for many WHEN (NOT if) it arrives!