Treasurer Josh Frydenberg confirmed on Sunday that reforming fuel emissions standards is an "area of focus" for the federal government. As petrol prices soar and global instability in the oil markets deepens, this sensible adjustment - that would encourage the electric vehicle market and mean savings for households and industries - is a good priority for the government and should be fast tracked.
Current legislation categorises a car as high efficiency at 8L/100km while our major trading partners require 4L/100km to be considered efficient. This means less efficient cars can be sold more cheaply in Australia. Consequently, global auto manufacturers have no incentive to sell EVs into the Australian market, and indeed they are offloading older, less efficient petrol models in Australia.
This has led to a situation where Australia has fallen well behind comparable economies when it comes to EV sales. While globally EVs make up 10.3 per cent of new car sales, in Australia that figure is only 1.95 per cent. Major markets such as the UK, US and European Union have implemented strong policies to make EVs more accessible. Australia needs to do the same.
In addition to emissions standards, Australia's dependence on imported oil has long been a key risk to our economy and national security. The conflict between Russia and Ukraine has heightened this risk as western allies boycott Russian oil, causing international supply shortfalls and record high prices.
Attempts to solve our fuel security issues without reducing our reliance on oil, while necessary, have been expensive and short-term. A wide-scale transition to EVs for personal use, transport and freight would prove a long-term solution that would reduce costs for households and industry while also cutting carbon emissions.
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Whilst the federal government currently supports the roll out of EV charging infrastructure both through the Australian Renewable Energy Agency (ARENA) and the Future Fuel Strategy Fund, the biggest factor holding back the EV market in Australia is fuel emissions standards.
Not only would improved fuel efficiency standards reduce the average Australians' fuel bills by $666 per year and provide an economic benefit to Australia of $27.5 billion, the Parliamentary Budget office found this legislative correction would save $1.58 billion. These savings can go directly into policy initiatives to support EVs such as a "Workplace Charging Scheme" to support business electric vehicle charger installations, on-street residential charging stations and transitioning all government owned vehicles to EVs by 2030.
It's not just families and drivers who would benefit from efficient, low emissions vehicles. Following the AdBlue shortage, the Australian trucking industry has called for policies to accelerate the transition to electric trucks. The industry warns that if Australia is left behind, we face the risk of high, globally uncompetitive freight costs.
It's important to acknowledge that governments are already implementing policies that will support the supply of EVs. Last month we saw a strong commitment from the Morrison government with $240 million to support critical minerals mining. These minerals are required to manufacture EVs and the renewable energy to power them. Producing these minerals at home, rather than relying on China as we have, will safeguard our sovereignty. Meanwhile, the Queensland government announced a $3000 subsidy for EVs with a purchase price under $58,000, bringing the state into line with Victoria, NSW and SA. However, without the adjustment to fuel emission standards global manufacturers will continue to avoid selling into the Australian market.
Australia relies on imports for 90 per cent of our transport fuel needs. In a world of geopolitical instability and a global oil industry tied up in conflict, we are vulnerable. To strengthen our security position, we must be more self-reliant and EVs give all Australians the opportunity to be part of a clean energy, national security solution.
- Cristina Talacko is chair of Coalition for Conservation.