Australia Weakens Vehicle Emissions Laws, Industry Applauds

The federal government has revised its proposed carbon emissions regulations for vehicles to address concerns raised by auto manufacturers. The stricter emissions limit for passenger vehicles will now be applied to a smaller number of car models, while a more lenient standard will be implemented for "light commercial" vehicles. This change will exempt vehicles like the Isuzu MU-X and Ford Everest from the most stringent fuel economy requirements.

To further appease the industry, the government has raised the emissions limit ceiling for all light commercial vehicles. This move aims to counter claims that the regulations constitute a "ute tax."

The revised regulations have garnered support from the motor industry, with representatives from Toyota, Hyundai, and Tesla expressing their approval. Toyota Australia's chief executive acknowledged the challenges posed by the standard but emphasized the need for change. Tesla Australia's representative described the policy as a "solid compromise" that positions Australia among the middle-tier countries in terms of emissions transition.

The government's compromise stems from the motor industry's long-standing advocacy for emissions regulations. Australia and Russia were the only major economies without such standards, which made it difficult for car manufacturers to prioritize efficient vehicles and EVs for the Australian market.

Despite the revisions, the government estimates that the new regulations will still result in a significant reduction in emissions, albeit slightly less than the initially projected 60%. The government aims to align with the United States vehicle emissions scheme by 2028, without relying on bonus credits.

The New Vehicle Efficiency Standard requires car manufacturers to meet a carbon emissions limit that becomes stricter each year. Failure to comply incurs penalties or the purchase of credits from other manufacturers who have exceeded the limit. The scheme encourages manufacturers to prioritize efficient vehicles and EVs to avoid penalties.

The government is still seeking parliamentary support for the proposed laws, with the Greens demanding changes to separate legislation on gas project approvals before offering their support. The legislation is expected to be introduced to parliament soon.