‘Car park for clunkers’: Government urged to act on $5.9 billion petrol opportunity

The government is facing calls to enact stricter fuel efficiency standards as new figures show motorists are missing out.

The government is facing calls to enact stricter fuel efficiency standards as new figures show motorists are missing out. Photo: TND

The Albanese government is being urged to transform Australia from a “car park for clunkers” into a destination for the latest electric and low-emissions vehicles, with new data revealing motorists are missing out at the petrol pump.

Research published by progressive think tank The Australia Institute on Monday revealed that Australians have missed out on $5.9 billion over the past seven years after the last federal government failed to adopt tougher fuel efficiency rules – equal to a year’s worth of domestic flights.

Nine million tonnes of carbon dioxide emissions would also have been prevented, they found.

Australia Institute climate and energy program director Richie Merzian said Australia’s standards are weak and lag behind larger markets like Europe, meaning car manufacturers sell Australians their dirtiest petrol-guzzling vehicles and not the cutting-edge low-emissions cars.

“We’re a car park for clunkers,” he said.

“We’re paying top dollar for oil on global markets and using it inefficiently.”

The new Labor government is coming under renewed pressure to bring Australia’s efficiency standards in line with other markets like Europe, both to reduce household petrol bills and to encourage manufacturers to export more electric vehicles Down Under.

Proponents argue such a move would deliver on Treasurer Jim Chalmers’ pledge to tackle the cost of living with supply-side reforms, while also assisting with emissions reduction targets.

Petrol car dumping ground

Over the past decade major markets such as Europe and the United States have adopted tighter fuel efficiency standards for vehicles to reduce emissions and how much petrol cars use.

But Australia, unlike 80 per cent of the global vehicle market, opted to maintain 2005-era rules that are far less stringent than most places where global manufacturers sell their cars.

As a result, 2018 data shows the average carbon dioxide intensity for new passenger vehicles in Australia was 26.6 per cent higher than the US and about 34 per cent higher than in Europe.

Europe is even preparing to go further than its current standards, designing even tougher rules under its Green New Deal policies that would put Australia even further behind other markets.

This is important, because the difference in fuel efficiency standards provides an incentive for manufacturers to reserve their latest low emissions technologies for markets like Europe, while selling older and far less efficient vehicles to Australia where there aren’t such stringent rules.

It means motorists are forced to buy cars that are worse for the environment and household budgets.

Electric Vehicle Council chief Behyad Jafari said tighter standards would also drive greater volumes of electric vehicle exports to Australia, helping to reduce sky-high headline prices.

“There is no path to net zero by 2050 unless Australia stops selling emitting vehicles by 2035,” he said.

“Cars in Australia have a 15-year average lifespan. If we’re still selling a significant quantity of combustion engine vehicles in 2036 we fail on net zero – it’s that simple.”

Government facing pressure

Advocates aren’t calling for Labor to do something it hasn’t promised before. In fact, tougher fuel emissions standards were a plank of the party’s failed 2019 election campaign.

The policy was dumped in 2021 after the Coalition succeeded with a scare campaign that Labor was trying to “ruin the weekend”.

Climate Change Minister Chris Bowen has raised the prospect of bringing back the policy, telling the National Press Club in June that the government will “consider all viable options” to build on the promises it took to the election.

A spokesperson for the Minister for Infrastructure, Transport, Regional Development and Local Government said the government is “continuing to consult with stakeholders on the introduction of improved noxious emission standards in Australia, including Euro VI for heavy vehicles”.

“The Department of Infrastructure, Transport, Regional Development, Communications and the Arts has already been tasked with establishing a unit to drive our domestic transport sector towards net zero emissions,” the spokesperson said.

Mr Merzian said there are no technical barriers to Australia adopting tougher fuel standards today.

“This is the time to finally commit to making sure we get this right,” he said.

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