Exciting news! After years of promises and reports recommending swift action, Australia’s national electric vehicle policy … remains a plan to eventually have a policy.
That’s not entirely fair. The Albanese government has committed to introduce a vehicle fuel-efficiency standard – an important step that could belatedly put the country on a path to dealing with runaway carbon dioxide emissions from transport. It should significantly boost the lacklustre range of affordable EVs on the market.
The former Coalition government couldn’t bring itself to do this despite advice in 2016 that the net benefit of a fuel-efficiency standard could be about $14bn by 2040. Josh Frydenberg was a supporter, comparing the inevitable rise of EVs to the iPhone, but that language was famously dropped in favour of an aggressively dishonest “end the weekend” campaign. It means the country is still barely out of the starting gate.
Wednesday’s announcement does push us forward but not far. We already knew this was where Labor was headed. The climate change minister, Chris Bowen, told an EV summit in August that the government had invited the states and territories to work together on a plan and suggested it was likely to include a fuel-efficiency standard. Eight months later we have a strategy that confirms that position and promises more consultation.
The policy development will be led from here by the transport minister, Catherine King, who has not been as publicly forward-leaning on the issue as Bowen. It does not include a preferred design or commit to a timeframe, though King says her preference is to have legislation passed this year. There are no new financial incentives beyond the cuts to fringe benefits tax introduced last year, and there is no target for how quickly EVs will be adopted.
Unlike dozens of other countries, the government has not set a date by which new petrol and diesel cars will no longer be able to be sold. The ministers instead emphasised the need to give drivers greater choice.
The end point for new fossil fuel vehicles should become clearer once the fuel-efficiency standard has been designed. A standard sets an emissions target for manufacturers, averaged across all new cars sold and measured in grams of CO2 released per kilometre. The idea is the target would be gradually reduced to zero.
It is an understatement to say fuel-efficiency standards are not a novel idea. They are applied across more than 80% of the global light vehicle market. As the ministers pointed out, Australia sits alongside Russia as one of only two developed countries that do not have them.
One thing the strategy does make clear is that a fuel-efficiency standard will not, on its own, reduce Australia’s emissions by much in the medium term. The government forecasts that the policy could lead to a 3m tonne annual cut in emissions by 2030, and 10m tonnes by 2035.
In purely numerical terms, this is barely skipping a pebble on the surface of the problem. It means the EV strategy is expected to cut national emissions by just 0.6% in what scientists describe as “the critical decade”, and 2% over the next 12 years.
There would be greater benefits in the longer term. But transport emissions have been surging in the other direction, rising by 20% since 2005 to about 100m tonnes.
Turning them around will be challenging for a range of reasons, not least that people are attached to their cars and don’t change them all that frequently. What the government is proposing – including support for charging points no further than 150km apart across the continent and 75% of commonwealth vehicle fleets being low-emissions cars by 2025 – is part of a worthwhile response. But the strategy lacks a sense of urgency and, well, anything new and specific.
Just 2% of new cars sold in Australia in 2021 were EVs. It rose to 3.8% last year, still miles behind comparable countries. It will need to hit 100% by about 2035 to keep reaching net zero emissions by mid-century within reach.
The transition is complicated by the society-wide shift to driving bigger cars. SUVs now make up more than 50% of new car sales and the price gap between petrol and electric SUVs is greater than for smaller cars. But this doesn’t mean significant change is not possible in a short space of time.
An assessment by the Environmental Protection Agency in the US – a roughly equivalent country in terms of attitude to cars and vehicle size – found a proposed emissions standard in that country would lead to about 60% of new sales being EVs by 2030. There is no reason a similar trajectory is not possible here, especially given the range of state and territory-based policies and targets in place.
Whether Australia can make this sort of shift will turn on where the government lands after a six-week consultation period with industry and other interested parties. Consumer advocates are warning it not to be swayed by auto companies that have a history of arguing for loopholes that can obscure real emissions levels.
While this will be closely watched, federal and state governments should also be broadening their horizons beyond EVs. There is a weight of evidence that, as the population continues to grow, a shift to an ever-growing number of clean cars won’t get us where we need to be. At some point we will need a holistic rethink about how we live and move around our cities.
It means a bigger focus on mass public transport, which is now a non-option for millions of Australians, including in metro areas. A serious plan to deal with the climate crisis can’t ignore that forever.
