Federal Opposition to scrap emissions fines for new cars in Australia if elected – report
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Car companies may no longer be fined for selling too many high-emissions vehicles in Australia if the Federal Opposition wins May 3’s election, a report claims.
The Federal Opposition is tipped to pull the handbrake on emissions rules for new cars in Australia – with reported plans to scrap hefty fines for car makers that fail to meet the rules – should it win May 3's election.
The Australian – citing party sources – reports the Opposition and its leader Peter Dutton do not plan to drop the New Vehicle Efficiency Standard (NVES), but the axing of penalties is poised to neutralise the policy.
It has been forecast that the fines will cost car companies as much as $2.8 billion based on their projected sales until the end of the decade.
Electric-car lobby groups have warned the Federal Opposition’s move is akin to “a speed limit with the speed cameras turned off,” and would remove the incentive for car brands to bring more efficient models to local showrooms.
MORE: Car brands to pay $2.8 billion in fines by 2029 under new emissions rules, claims study
The Federal Opposition has opposed the NVES since it was first proposed last year, and has dubbed it a “ute tax”, claiming it will increase the prices of new cars – something the Federal Government refutes.
The plan to scrap penalties “has the backing of the [automotive] sector”, according to The Australian, and will be announced “during the campaign”.
The New Vehicle Efficiency Standard – in effect from January 1, 2025, but set to begin tracking vehicle sales from July 1 – imposes CO2 emissions targets for new vehicles based on their type and mass.
Car companies can continue to sell high-emissions vehicles which do not meet the targets, but they must sell enough low- or zero-emissions cars – or purchase ‘credits’ from brands that overperform – to offset them.
MORE: NVES explained – everything you need to know about Australia's new vehicle emissions rules
If they are unable to bring the average emissions across their range beneath the targets, which become more stringent every year, they will be fined by the Federal Government – though the first bill isn’t payable until later this decade.
Car makers are not required to pass fines they rack up to consumers, but some have already indicated part or all of the penalties will need to be passed onto customers in the form of price rises on new vehicles in showrooms.
While many popular utes and 4WDs meet the targets in the first year of the policy, some models will be in the red to the equivalent of a $10,000 fine come 2029.
MORE: Loophole in Australian new-car emissions rules to be plugged
The Federal Government has refuted claims by the Opposition and top industry groups that the NVES will push up car prices, saying it has not happened under similar policies “anywhere else in the world”.
Tony Weber, chief executive of the peak body for new-car makers, the Federal Chamber of Automotive Industries (FCAI), told The Australian “we can't see a scenario where prices won't increase under the NVES”.
“There will be penalties in the system come July 1 if we don't make the targets. It doesn't look like we will at the moment.”
MORE: Car industry body accused of "misleading" on cost of new-car emissions targets to buyers
However, the FCAI – which represents brands such as Toyota, Ford, Nissan and Mitsubishi, which sell little to no electric cars – has been criticised for making “misleading” claims in relation to the NVES.
Electric-car specialist Polestar – which is not an FCAI member – last month accused the industry body of “ignorant” comments that “all but condemned it [the NVES] to failure”.
Minister for Climate Change and Energy, Chris Bowen, said in remarks published by The Australian that the “Liberal Party and National Party need to work out whether they believe in choice of Australian motorists or they're against it.
MORE: Car industry body accused of 'undermining' Australian new-vehicle emissions rules
“The new vehicle efficiency standard puts Australian motorists in the driving seat when it comes to choice and I'm proud of the fact we have tripled the number of EV models valuable since we came to office.
“When we came to office there were no models available under $45,000; now there's eight. That is our policy starting to work with a lot more to do.”
In contrast, Opposition Treasury spokesman Angus Taylor said Minister Bowen’s claims that prices will not rise are “a lie”.
“We know that the most popular cars in Australia … we know this will drive up the price,” he said, as quoted by The Australian.
MORE: Ford Everest, Isuzu MU-X variants the first victims of Australia's new vehicle emissions rules
In a media statement today, Electric Vehicle Council chief executive Julie Delvecchio said “the NVES doesn't work without a carrot and stick approach.”
“The ability to earn credits for bringing in fuel-efficient cars is an incentive for car manufacturers to deliver modern, cheaper-to-run models to Australians, while fines ensure compliance with standards.”
The executive said: “Removing penalties in the efficiency standard will mean one thing: Australians will be locked out of the savings that come from switching to an EV … simply because the most fuel-efficient vehicles will never reach our shores.”
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