Australia is set to introduce new fuel efficiency standards as part of its National Electric Vehicle Strategy in an effort to increase the adoption of electric vehicles (EVs) and catch up with other developed economies. Last year, only 3.8% of cars sold in Australia were electric, lagging behind countries such as the UK and Europe, where EVs accounted for 15% and 17% of sales, respectively.
Energy Minister Chris Bowen announced the forthcoming fuel efficiency standard, which will stipulate the amount of carbon dioxide produced by a car while in operation. “Fuel-efficient and electric vehicles are cleaner and cheaper to run – today’s announcement is a win-win for motorists,” Bowen said.
Final details of the new standards will be determined in the coming months. Prior to this announcement, Australia and Russia were the only developed nations without fuel efficiency standards, which incentivize manufacturers to produce more electric and zero-emission vehicles.
Transportation is the third-largest source of carbon emissions in Australia, which is among the world’s largest per capita emitters. Bowen stated that the new initiative would help reduce the country’s emissions by at least 3 million tonnes of carbon by 2030 and over 10 million tonnes by 2035.
The Electric Vehicle Council (EVC) applauded the move but warned that Australia must establish strong standards to avoid becoming “the world’s dumping ground for dated, high-emission vehicles,” according to CEO Behyad Jafari. Currently, new vehicles in Australia consume 40% more fuel than those in the European Union and 20% more than those in the United States. Bowen cited studies showing that fuel efficiency standards could save Australian motorists AUD 519 (USD 349) per year.
Greens party leader Adam Bandt argued that the government’s strategy should be more aggressive and include specific electric vehicle targets alongside fuel efficiency standards. Demand for EVs is growing in Australia, but supply has lagged due to the lack of incentives for automakers.
Last year, Australia’s government hinted at plans to implement regulations aimed at increasing electric vehicle sales. Prime Minister Anthony Albanese, who was elected on a platform of climate policy reform, has since cut taxes for electric vehicles and raised Australia’s 2030 carbon emissions reduction target to a 43% decrease from 2005 levels.
Bowen acknowledged the need for improved infrastructure to support EV charging. As of December 2022, Australia had just over 4,900 public chargers at fewer than 2,400 sites. “We’re way behind the rest of the world again,” Bowen admitted in a radio interview, but added that the government is working on a policy to install fast chargers every 150 kilometers on highways, with more information to be released soon.
The new Fuel Efficiency Standard is expected to help Australians gain access to a broader and more affordable range of EVs while assisting the country in achieving its climate goals. Janus Electric Ltd, an Australian EV company, stated: “An ambitious fuel efficiency standard would encourage manufacturers to introduce more fuel-efficient vehicles into the Australian market, including a greater number of electric vehicle models.”
