CLIMATE SPECTATOR: Australia's frozen CO2 standards

Europe's new plan to improve fuel economy standards makes Australian proposals look like a joke – and given our glacial speed in adopting new regulations, don't expect improvements to come quickly.

Climate Spectator

Last week the European Commission announced that by 2020, the average emissions from new cars in the European Union will have to be no more than 95 grams of carbon dioxide per kilometre driven and commercial vans will need to achieve an average of 147 grams. This builds on the 2015 requirement that passenger cars achieve an average of 130 grams CO2 per kilometre. To give you a feel what this means, a Toyota Yaris emits more than 130 grams and a Toyota Prius only just sneaks in under the 95g standard, with 90g CO2/km.

By comparison Australia’s proposed emissions and fuel economy standard, as outlined in the 2010 election, is a joke. The current proposal is for 190g by 2015 and 155g by 2024 as a "starting point for further consultation.”  

This standard is also substantially weaker than US requirements, which will ensure all vehicles, including SUVs, achieve an average of around 102g CO2/km by 2025 (although based on a different drive cycle emissions test standard).

The chart below illustrates that a number of major car suppliers including Honda, Volkswagen, Hyundai, Suzuki and Peugeot would not need to change a thing from what they achieved in 2009 in order to meet the Australian 2015 requirement. Also, 2010 sales data has both BMW and Audi beating the standard. In addition Mazda and Kia (not shown in chart) would only need to achieve marginal improvement by 2015. Interestingly, every single supplier’s European model mix, even Mercedes (Daimler), already comfortably surpass Australia’s proposed 190g standard. 

Corporate Average CO2 Emissions for Passenger Cars (2009) in Australia and the European Union


Source: Australian Department of Infrastructure and Transport (2011)

What is so frustrating is that in spite of the weakness of the proposed standards, their progress has been glacial.

Back in 2002 and 2003, when I worked in the Howard government’s Greenhouse Office, I was partly involved in what could only be described as an elaborate charade to a set a voluntary fuel economy target for Australian cars (which directly translates to a CO2 standard). Everyone involved from both government and industry knew that industry had no intention of doing anything to achieve the voluntary standard. And why should they – they are engaged in competition with others to make a profit, not meet goals that government would like but doesn’t require.

But in spite of this, government officials worked earnestly to set a target that might actually represent improvement, and the Federal Chamber of Automotive Industries did its darndest to make the target weaker than what would be achieved under business as usual.

ACIL Tasman was engaged to study technological options and costs. Studies were even undertaken to adjust from one drive cycle emissions test standard (American) to another (European). So we’ve already had plenty of practice at this whole game.

In 2008, the government finally decided to end the charade and published a discussion paper signalling the intention to move to a regulated CO2 emissions standard.

What’s happened since?

The government issued another discussion paper three years later in November 2011 and is still to indicate whether the emissions level of 190g CO2/km put forward as a "starting point” will be the one adopted. It hasn’t even detailed a preferred model for implementing the standard. I suspect hell is likely to freeze over before we see any mandatory regulations enacted.

Interestingly Greg Hunt, shadow minister for climate change, is on the record several times suggesting the government should adopt regulated motor vehicle fuel economy and CO2 standards. Will he put his words into direct action or backtrack yet again on views he has expressed in the past?

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles