The Times Australia
The Times World News

.
The Times Real Estate

.

Labor’s fuel-efficiency standards may settle the ute dispute – but there are still hazards on the road

  • Written by John Quiggin, Professor, School of Economics, The University of Queensland
hand on steering wheel with outback scene

Australia looks set to adopt fuel-efficiency standards after the Albanese government on Sunday revealed[1] options for the long-awaited policy. The government says the reform would lead to more cars that are cheaper to run, eventually saving Australians about A$1,000 per vehicle each year.

The announcement comes a decade after the Climate Change Authority first proposed[2] such a standard for Australia. The United States has had such a policy since the 1970s[3] and the European Union implemented mandatory standards in 2009.

The Coalition has already sought to stoke fears among tradies and regional voters by claiming Labor’s policy threatens to take utes off the road. Labor’s policy is designed to address this concern – but the opposition looks likely to continue this scare campaign.

More generally, history tells us the road to fuel-efficiency reform in Australia is a bumpy one. The Albanese government has hazards to negotiate before its proposal becomes law.

cars in traffic jam
Australia looks set to adopt fuel-efficiency standards. SERGIO DIONISIO/AAP

A carbon price, by another name

Labor has outlined three options for a fuel-efficiency target, ranging from weak to aggressive. It describes its preferred middle-ground option as the sensible compromise.

The policy design for each of the options would set a national limit, averaged across all new cars sold, stipulating grams of CO₂ that can be emitted for each kilometre driven. This measure depends on fuel efficiency: that is, the amount of fuel burnt per kilometre. The designs differ in the stringency of the targets, the speed of the changes and the treatment of different vehicle classes.

The limit would not apply to individual cars. Instead, each supplier of new light vehicles to Australia would have to make sure the mix of vehicles does not exceed the limit. Low-efficiency vehicles could still be sold, but car dealers would have to balance this out by selling enough high-efficiency vehicles, such as electric vehicles.

Car suppliers that outperform the targets would earn credits that could be sold to those falling short. This system is similar to Australia’s renewable energy target for electricity and the safeguard mechanism for industry pollution.

All three are effectively a carbon price (though the political toxicity of that term means the government would never characterise them as such). Nonetheless, should the fuel-efficiency standards be implemented, Australia would end up with three carbon prices, one for each major energy use.

The government says the preferred option would lead to a saving of 369 million tonnes of CO₂ by 2050.

Read more: Who's holding back electric cars in Australia? We've long known the answer – and it's time to clear the road[4]

man in suit stands next to electric vehicle
The Albanese government hopes the policy will lead to more electric vehicle sales. Lukas Coch/AAP

What about utes?

One tricky path the policy must navigate is allowing for the supply of both small and large vehicles without further exacerbating the trend[5] towards oversized vehicles on our roads.

The government’s preferred option achieves this by allowing higher – but still limited – emissions for heavier vehicles such as utes, vans and SUVs, to account for their natural tendency to use more fuel.

Heavier vehicles are a sticking point in forming vehicle emissions policy in Australia. Who could forget then-prime minister Scott Morrison’s 2019 claim[6] Labor’s electric vehicle policy would “end the weekend” by banning larger cars used to tow boats and the like.

Following Labor’s policy announcement on Sunday, Nationals leader David Littleproud picked up where Morrison left off, saying[7]:

If you take away particularly utes, they’re tools of trade, particularly for people, not just tradies in the cities, but also people in the bush. And if you put a tonne on the back of an electric ute at the moment, you don’t get far.

Anticipating the Coalition scare campaign, the Labor government’s preferred option has been designed with the aim of ensuring a wide range of conventional utes remain on the market.

In the medium term, we can also expect the trend towards larger vehicles to be weakened by measures in Labor’s last federal budget to roll back[8] vehicle tax breaks for small and medium businesses. But that change doesn’t come into effect until mid-year, which means there may be a rush on larger vehicle purchases until then.

hand on steering wheel with outback scene
The Coalition has previously claimed Labor’s vehicle policies would ‘end the weekend’. Shutterstock

Read more: Electric utes can now power the weekend – and the work week[9]

Ghosts from the past

Labor’s preferred policy option is broadly similar to that put forward by the Climate Change Authority in 2014. Then, the Coalition government appeared to consider the proposal for a time. But it eventually dropped the idea – in part, presumably, due to lobbying by interest groups including the car industry[10].

There are signs those same groups are gearing up again. The Federated Chamber of Automotive Industries, for example, said on Sunday[11] the government’s targets will “be a challenge” to meet and may lead to more expensive vehicles, or gaps in the supply of utes and SUVs.

But the proposed policy has been welcomed by climate change advocates, the electric vehicle industry and motoring groups. The NRMA described them as “responsible and achievable”, saying “a business-as-usual approach meant that Australian families and businesses were not benefiting from the best technology designed to reduce fuel consumption”.

Progress, at last

The government intends to consult on its preferred model before introducing the legislation, with a view to enacting the policy in January 2025.

Assuming the policy is adopted, Australia would finally shed its unenviable status as the only developed country without such such standards. But we will still be at the back of pack, far behind the EU and only catching up to the US in 2028.

Despite the difficulties, it seems likely Australia will have fuel-efficiency standards in the near future. As with most measures to reduce emissions, the best time to introduce the policy was ten or more years ago. But the second-best time is now.

References

  1. ^ revealed (www.infrastructure.gov.au)
  2. ^ first proposed (www.climatechangeauthority.gov.au)
  3. ^ the 1970s (www.climatechangeauthority.gov.au)
  4. ^ Who's holding back electric cars in Australia? We've long known the answer – and it's time to clear the road (theconversation.com)
  5. ^ the trend (www.theguardian.com)
  6. ^ 2019 claim (www.theguardian.com)
  7. ^ saying (www.theguardian.com)
  8. ^ roll back (www.whichcar.com.au)
  9. ^ Electric utes can now power the weekend – and the work week (theconversation.com)
  10. ^ car industry (www.smh.com.au)
  11. ^ said on Sunday (www.abc.net.au)

Read more https://theconversation.com/labors-fuel-efficiency-standards-may-settle-the-ute-dispute-but-there-are-still-hazards-on-the-road-222875

The Times Features

Why You Need an Expert Electrician for Your Business’s Electrical Upgrades and Repairs

When it comes to maintaining and upgrading your business’s electrical systems, it’s essential to call in a professional. Electrical work in any commercial setting requires the ex...

Why Is It Crucial to Have a Building Inspection Done Before Buying a New Home?

Purchasing a new property is a big financial decision that can impact your future for years. Whether you are a first-time buyer or an investor, good or bad, it is essential to en...

Online Application for Sick Leave Certificate: Understanding When and How to Secure One

A sick leave certificate is an official document issued by a healthcare professional to verify an individual's inability to attend work due to illness. It typically includes the ...

Digital mental health programs are inexpensive and innovative. But do they work?

Almost half of Australians will experience[1] mental health problems in their lifetime. Recent floods, droughts, cyclones, bushfires and the COVID pandemic have increased dis...

A No-Fuss Guide to an Effective Beauty Routine

Taking care of the skin and appearance need not be complicated; it need not even consume your hours of time. Smart and simple approaches can give one that glow and fresh look witho...

Safe & Effective Tattoo Removal in Auckland – What You Need to Know

If you're looking for tattoo removal in Auckland, modern laser technology offers the safest and most effective way to fade or completely remove unwanted ink. Whether it's an outd...

Times Magazine

The Ultimate Guide to Apple Watch Faces & Trending Wallpapers

In today’s digital world, personalization is everything. Your smartwatch isn’t just a timepiece—it’s an extension of your style. Thanks to innovative third-party developers, customizing your Apple Watch has reached new heights with stunning designs...

The Power of Digital Signage in Modern Marketing

In a fast-paced digital world, businesses must find innovative ways to capture consumer attention. Digital signage has emerged as a powerful solution, offering dynamic and engaging content that attracts and retains customers. From retail stores to ...

Why Cloud Computing Is the Future of IT Infrastructure for Enterprises

Globally, cloud computing is changing the way business organizations manage their IT infrastructure. It offers cheap, flexible and scalable solutions. Cloud technologies are applied in organizations to facilitate procedures and optimize operation...

First Nations Writers Festival

The First Nations Writers Festival (FNWF) is back for its highly anticipated 2025 edition, continuing its mission to celebrate the voices, cultures and traditions of First Nations communities through literature, art and storytelling. Set to take ...

Improving Website Performance with a Cloud VPS

Websites represent the new mantra of success. One slow website may make escape for visitors along with income too. Therefore it's an extra offer to businesses seeking better performance with more scalability and, thus represents an added attracti...

Why You Should Choose Digital Printing for Your Next Project

In the rapidly evolving world of print media, digital printing has emerged as a cornerstone technology that revolutionises how businesses and creative professionals produce printed materials. Offering unparalleled flexibility, speed, and quality, d...

LayBy Shopping