New Vehicle Efficiency Standard—Cleaner, Cheaper to run Cars for Australia

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On 4 February 2024, the Australian Government sought feedback from the community on the final design of a New Vehicle Efficiency Standard (also known as a fuel efficiency standard) that will catch us up with other countries, reduce emissions, save Australians money at the fuel bowser and see cleaner cars on the road.

Why we asked for your input

It was important to design the right Standard for Australia, that will help us to reach net zero by 2050, and ensure Australian motorists can access the types of cars they need as well as more choice of fuel efficient, low and zero emissions cars.

How you voiced your opinion

We consulted widely with industry and the community between 4 February and 4 March 2024. Consultation participants could choose to respond to an online questionnaire and could also upload a longer submission if preferred. Around 9,000 submissions were lodged and a summary analysis about the consultation is available in our Impact Analysis .

How your opinion informed the Standard

Your input helped to inform the design of a New Vehicle Efficiency Standard that will provide global vehicle manufacturers with the right incentives to send cleaner, cheaper to run vehicles to Australia – giving Australians more choice and savings at the bowser.

The Issue

The transport sector makes up 21% of Australia's emissions, and is projected to be the largest source of emissions by 2030 if we do nothing. On average, passenger cars in Australia emit 20% more than cars in the United States.

Australia is one of few remining advanced economies without a New Vehicle Efficiency Standard. Australians are getting left behind as the world moves to cleaner, modern cars and are paying more at the bowser as a result. Over 85% of cars sold worldwide are covered by a form of New Vehicle Efficiency Standard.

Relevant documentation

Cleaner, Cheaper-to-Run Cars: An Australian New Vehicle Efficiency Standard Consultation Impact Analysis

Outcome

On 26 March 2024, the Government released the Cleaner, Cheaper to Run Cars: The Australian New Vehicle Efficiency Standard Impact Analysis (Impact Analysis) which sets out the best model for an Australian Fuel Efficiency Standard. Based on consultation feedback, a range of targeted adjustments were made to the model we proposed in our February consultation.

The targeted modifications include:

Recategorising a limited number of 4WDs from passenger car to light commercial vehicle. This acknowledges that some off-road wagons use similar ladder-frame chassis, and need comparable towing capacity above 3 tonnes, to dual cab utes. This includes models such as the Toyota Landcruiser and Nissan Patrol.
Smoothing the emissions trajectory for light commercial vehicles. This reflects adjustments announced by the US EPA to its vehicle Standard and smooths the transition for utes, vans and 4x4s.
Adjusting the weight-based relative emissions limits (known as the break point), recognising that heavier vehicles emit more.
Staging implementation to enable preparation and testing of essential data reporting capabilities. To ensure we get the implementation right in partnership with industry, the scheme will commence on 1 January 2025 but manufacturers will not begin earning credits or penalties until 1 July 2025.

The Standard will deliver: