Driving ambition and the road to Net Zero

2023 was the hottest year on record and, alarmingly, 2024 is shaping up to hit new records. There is a small but definite window available to pivot, and upscale our emissions reductions to reach Net Zero as soon as possible and ensure a safer future for our kids and generations to come. For that, we need a clear national target to drive investment and technology. 

Under the Paris Agreement, in 2025, all nations will need to nominate their 2035 emissions reduction ambition. It is important for Australia to have a strong 2035 target to stay in the race to achieve net zero. We need a floor of 75% emissions reduction by 2035 and strong sectoral targets to ensure emissions reduction across the board. Every industry and sector will need to pull its weight to get us there. 

Everyday use of electricity and transport, as well as manufacturing, commercial and building use, generates the bulk of Australia’s emissions. 

Transport emissions currently account for over 18 per cent of Australia’s carbon emissions and are increasing as our population increases. Of this, cars and light commercial vehicles are responsible for two-thirds of those emissions. That’s why we need a roadmap for the transport sector: invest in clean public transport solutions, set a minimum new vehicle sales target of 90% electric by 2035 and increase investment in charging infrastructure. 

In the meantime, we urgently need fuel emissions standards and I strongly support the Government’s recent proposal to introduce New Vehicle Efficiency Standards in 2025. This is a no brainer. Amidst a cost-of-living crisis, it ensures Australians have access to fuel efficient vehicles and the latest in safety and technology. 

Similar standards cover 85 per cent of the global market and have been used for decades to cut transport pollution and improve the efficiency of new cars. Australia and Russia are the only laggards in the developed world without fuel efficiency standards.

Let’s be clear, fuel efficiency standards are not a tax. The scheme functions more like an annual emissions budget allocated to car importers for the vehicles they intend to sell in Australia. The budget is not applied to cars individually, but rather the overall fleet so there’s an incentive for importers to bring in a mix of cars, including EVs, Hybrids and internal combustion models that, on balance, are more fuel efficient. 

But what about cost? Real world evidence has not shown any increase in cost to the car consumer, but it will encourage importers to offer Australian motorists more choice.  

Let’s look at the example of a Ford F150 ute. In America, where there are fuel efficiency standards, the customer has the choice of either an electric model and the traditional petrol or diesel model. Australian customers are only offered petrol and diesel options, as there is currently no incentive to bring cleaner models to our shores. 

Having fuel efficiency standards will discourage manufacturers from importing ‘dirty’ cars while providing Australians with cleaner and cheaper to run cars. When every dollar counts, it pays to have choice.

The need for climate action has never been greater. While there are challenges ahead, adopting fuel efficiency standards is a simple step to assist the transport sector do its bit in the race to Net Zero.