The Australian Government announced earlier today it would make key changes to its proposed emissions regulations after consultation with lobby groups and carmakers.
The New Vehicle Efficiency Standard (NVES), for which legislation will be introduced tomorrow, is designed to give carmakers targets for average CO2 emissions per kilometre across their fleets.
Over time these targets will move, forcing companies to provide vehicles with lower or zero emissions to meet stricter targets and face penalties if they exceed them.
The scheme is intended to come into effect on January 1, 2025, with penalties coming into effect on July 1, 2025.
The Government has made several concessions, including moving large four-wheel drives to the light commercial vehicle (LCV) category, as well as a “smoother” emissions trajectory for LCVs and adjustments to weight-based relative emissions limits known as break points.
“Not everybody here has gotten what they’ve asked for,” said Climate Change and Energy Minister Chris Bowen, as he stood on stage next to representatives of the Electric Vehicle Council, the Australian Automotive Dealer Association and the Motor Trades Association of Australia.
“Some wanted us to go harder and faster, some had concerns and wanted us to slow, but everybody here has had a say, everybody here has had genuine concerns taken on board, and everyone today recognises that Australia can now move on, implement these standards, and Australian motorists can get access to these standards.”
Below, we’ve included what key lobby and industry groups have said about the revised NVES.
Federal Chamber of Automotive Industries (FCAI)
The peak body for car brands in Australia didn’t have a representative at today’s announcement, though FCAI member Toyota Australia was represented by CEO Matthew Callachor.
“The Federal Chamber of Automotive Industries (FCAI) welcomes today’s changes by the Albanese Government on the New Vehicle Efficiency Standards (NVES) and recognises it as a step in the right direction,” the organisation said in a statement.
“However, we continue to have concerns about the impending challenges facing industry and motorists.
“The FCAI will review the draft legislation in detail to understand the impact to the industry and to consumers.
“We call on the Government to release the full legislation and modelling that forms the basis for their policy.”
Australian Automobile Association (AAA)
The AAA, the peak body for motorists in Australia, says it has long supported an efficiency standard, but is calling for transparency.
It says it encourages the Government “to provide the detail and clarity needed to deliver broad community and political support”, and is calling on it to “clearly explain whether its revised proposal now aligns Australian regulation with the US Government’s approach, including the Biden Administration’s significant changes of last week”.
“The AAA is pleased the Government has settled upon its preferred proposal, and we encourage both sides of politics to pass legislation containing targets that are ambitious and achievable,” said AAA managing director Michael Bradley.
“The introduction of a fuel efficiency standard would represent a significant economic reform after years of unhelpful politicking about EVs and climate policy in general.
“Investors need political parties to work together in the national interest, and policy settings that can live beyond changes of Government.”
“Settling on a preferred model is an important first part of the job, but now the Government should seek robust bipartisan political support and, more importantly, support among motorists.
“Transparency and openness on impacts will be critical if the Government is to succeed in delivering durable change that can provide long-term certainty.”
Australian Automotive Dealer Association (AADA)
The AADA, which represents franchised new car dealers in Australia, says it acknowledges the progress the Government is making but remains conscious of the challenges facing its members.
“This is not the Vehicle Emissions Standard the industry has asked for, but we recognise that the Government has listened to industry and made significant changes to its original policy and is seeking to strike a balance between the needs of competing interests,” said AADA CEO James Voortman.
“We welcome the revision of the LCV headline targets, the re-categorisation of body-on-frame SUVs into the LCV category, and the commitment to provide $60 million to boost EV charging at Australian dealerships.
“We are now committed to working with the Government on a range of key issues affecting Dealers including – ensuring that the compliance for this policy is at the point of sale, not the point of importation; implementing meaningful automotive franchising reform; and addressing the enormous investment task facing Dealers in this transition.
“These are critically important issues for automotive retailers and if left unaddressed, the NVES could have dire consequences for Dealers – we welcome the Government’s commitment to work with us on these matters.
“Make no mistake, this is a major regulatory intervention into the automotive industry and while we understand and accept the Government’s objectives, we would also urge them to work with industry to identify any unintended consequences arising from this policy.
“As this policy is implemented over the next five years, we will need the Government to keep an open mind on these standards and to constantly review developments within the market and make sensible changes if required.
“The first review will commence in 2026 and this will be an opportunity to assess the first two years of the NVES, but also determine whether the settings are appropriate for the incredibly challenging outer years of the policy.
“This is a contentious issue in our industry and there is a great deal of anxiety among Dealers. We urge the Government to consider the needs of these businesses which employ more than 60,000 people, invest in cities and towns across the nation and which provide so much support and sponsorship to their communities.”
Climate Council
The environmental group called the NVES “a win for bills, climate and health”, welcoming the “simple and transparent final settings that will lock in these benefits for Australians”.
“The final policy settings respond to industry feedback while keeping the focus firmly on delivering benefits for Australians,” said Dr Jennifer Rayner, Climate Council’s head of policy and advocacy.
“Having landed their final settings on the New Vehicle Efficiency Standard, the Federal Government now needs to come up with other transport policies to keep Australia on track to hit our national emission reduction target.
“Enabling people in our big cities to use shared and active transport more often is the best way to cut climate pollution quickly this decade. This shift to shared and active transport should be at the centre of the Federal Government’s upcoming Transport and Infrastructure Net Zero Roadmap.”
Electric Vehicle Council
The lobby group for electric vehicles in Australia celebrated the NVES getting closer to being passed.
“For many years now, we’ve campaigned for Australia to join the US and Europe by introducing vehicle efficiency standards so car makers are incentivised to offer their best and most affordable electric options to Australians,” said Electric Vehicle Council chief executive Behyad Jafari, who was present at the announcement.
“The government’s NVES model represents strong, ambitious standards that will send a clear signal to the global automotive industry: Australia now demands the same options in electric cars, vans and utes that you offer to the US and Europe.
“We know most Australian drivers are now interested in considering electric options, so more choice on the market will naturally drive greater take-up of EVs. Ultimately, these standards will mean all Australian consumers are paying lower fuel bills, breathe cleaner air and enjoying a greater choice of the latest and greatest in new cars.
“Thanks to these standards Australia will no longer be considered the global dumping ground for the world’s most inefficient vehicles.
“Importantly, these standards are robust and transparent, giving us a solid foundation from which to build in future years.
“I’m proud of the influential and constructive role EVC members have played in delivering today’s result.
“I congratulate the federal government for having the mettle to take this step forward after several of their predecessors promised but failed to introduce this important reform in the national interest.”
Motor Trades Association of Australia (MTAA)
The MTAA, which represents over 15,000 automotive retailers in Australia, says it has consistently advocated for “reasonable adjustments” to the scheme, such as moving light commercial vehicle targets closer to the US standard.
It says it’s pleased the Government has noted its advice and says the changes should benefit Australian consumers while placing the country on a “CO2 trajectory similar to other comparable nations”.
It says the review of the scheme in 2026 will be critical, and will work with the Government on the NVES’ implementation and its operation for the five-year term of the program.
“MTAA commends the Australian Government for their approach and appreciates the seat at the table throughout these critical discussions,” said MTAA CEO Matt Hobbs.
“Working side-by-side with the Government has provided MTAA members with a leading voice into this policy – the result being a program that better reflects the country’s love of utes and SUVs while preparing for an EV future.
“The next few years, however, are critical for the automotive industry, and we all intend to do our part in decarbonising the country’s transport sector. But consumers must come first, and we believe the adjustments to the policy strikes this delicate balance.
“The proposed standard is still very stringent in 2029, amongst the hardest in the world. It will still be very challenging for the majority of car brands in the Australian market to meet these targets.
“In the last six weeks the Australian Government has acknowledged the retail automotive industry’s concerns, looked at the additional evidence and considered the weakening of the US Standard to come up with a revised, and what we consider, sensible plan.”
Mr Hobbs praised the Government’s foreshadowing of further action to support the whole of the automotive industry with the transition to EVs.
“This whole-of-industry approach is critical – consumers need more than just the cars, they need access to charging, properly trained repairers – the recyclers need to be ready as well. We look forward to further detail in relation to these policies,” he said.
“The new car dealership network got on board with the MTAA’s strategy and moved swiftly to provide the Australian Government with compelling arguments as to why the change was required.
“This included reaching into their pockets to bring experts over from the US. We needed to make Australia’s first ever fuel efficiency standard workable.
“The retail automotive industry will need to continue to provide clear and compelling information over the coming years to ensure that future governments get the settings right, for the industry and Australian consumers.”
MORE: All our coverage on the New Vehicle Efficiency Standard (NVES)
