Fuel Efficiency Standards For Australia Finally?

Vehicle fuel efficiency standards in Australia

The Albanese Government is taking a crack at implementing vehicle fuel efficiency standards, which could help boost EV availability, affordability and uptake in Australia.

Fuel efficiency standards have been introduced in a bunch of countries. Australia is one the few developed nations to not have or not be officially undertaking development of such standards at this point in time.

How Can Fuel Efficiency Standards Improve EV Availability?

There is growing demand for electric vehicles in Australia. But even if you want an electric car and have the cash ready to go, you’ll likely be in for a long wait. Auto manufacturers aren’t exactly rushing to get EVs into Australia and our lack of fuel efficiency standards is some of the reason behind it.

These standards are generally based on  average emissions of what manufacturers sell across their fleets within a country that has them in place. Petrol guzzlers can still be sold, but the manufacturer needs to offset their impact with very low or zero emissions vehicles. Failure to meet local benchmarks results in hefty financial penalties.

There is greater incentive for auto makers to ship their electric cars to countries with fuel efficiency standards in place, and to send more of their inefficient vehicles to countries that don’t – such as Australia. This not only increases Australia’s transport emissions, but we pay for this practice at the petrol pump. Added to that, the resulting limited availability of electric cars here keeps prices higher than they would otherwise be.

“Up until now, Australian households and businesses have had very little choice regarding low-emissions and fuel-efficient vehicles, and they have been paying for it,” said Climate Change and Energy Minister (and Tesla owner) Chris Bowen.

As some indication of what a difference standards could make to EV availability here, Volkswagen Group Australia’s Managing Director reportedly said last week:

“Implementation – if we had standards today – we could bring cars here tomorrow, we really could, it’s a game-changer, not just for VW but for everyone. It will open the doors for more affordable EVs in our market.”

You can learn more about the pros (many) and cons (zero) of well-designed fuel-efficiency standards here.

What The Albanese Government Is Doing

On Friday, the Albanese Government announced a discussion paper for its National Electric Vehicle Strategy will be released shortly. As part of that,  the Federal Government believes now is the time to have an “orderly and sensible discussion” concerning the role vehicle fuel efficiency standards could have in improving supply of electric vehicles into the Australian market.

That type of discussion really should have been had a long time ago, but better late than never.

Labor intended introducing fuel efficiency standards if it won the 2019 election, but after giving a heads-up of its intentions – as SQ’s Ronald put it in the article linked to above – “some people completely lost their shit”. This shit-losing was in part the result of a Liberal scare campaign distorting what fuel efficiency standards are and how they work.

Labor obviously learned from that experience and fuel efficiency standards didn’t feature in its election campaign this time around. And this time, we’re all going to have a good chat about it first – meaning more valuable time lost. But perhaps approaching it this way will improve chances of standards actually happening without any serious shit-losing; such as an alternative-fact-fuelled violent rebellion involving misinformed petrol-heads.

Federal Transport, Regional Development and Local Government Minister Catherine King said:

“We want to hear your views on how best to design fuel efficiency standards in Australia to meet industry and consumer needs now and for generations to come, so I encourage people to have their say.”

Solar energy and clean transport advocacy group Solar Citizens welcomed the news and will certainly be contributing its two-bob’s worth. It was only last month Solar Citizens again called for fuel efficiency standards in Australia – and the group isn’t Robinson Crusoe in this regard.

“Today, the Government is saying “we hear you” and putting us firmly in the queue to secure a reliable supply of affordable EVs,” said Solar Citizens’ Ajaya Haikerwal.

But while the other mob have been kicked out of office, implementing effective vehicle fuel efficiency standards won’t be a cakewalk. Solar Citizens warns:

“Already, vested interests like the Federal Chamber for Automotive Industries (FCAI) are proposing watered-down versions of this scheme.

Last week, the Climate Council called on the FCAI to “stop blocking the road” on standards.

Just to close out, an interesting related snippet – Bank Australia announced on Friday it is ceasing loans for new fossil fuel vehicles from 2025.

About Michael Bloch

Michael caught the solar power bug after purchasing components to cobble together a small off-grid PV system in 2008. He's been reporting on Australian and international solar energy news ever since.


  1. Hi,

    I don’t understand this statement:

    “Implementation – if we had standards today – we could bring cars here tomorrow, we really could, it’s a game-changer, not just for VW but for everyone. It will open the doors for more affordable EVs in our market.”

    They could bring these “affordable EVs” here any time. Nobody is stopping them. If they’re so “affordable”, they’ll be able to sell a ship load of them easily. Now.

    Also makes me laugh that someone from VW is going on about “Standards”!


  2. I fail to see how having a fuel efficiency standard will affect availability or affordability of EV’s
    There is already demand for EV’s the fact that you have to get into a waiting line to own one is evidence of this.
    If anything, forcing people to buy more efficient cars will increase demand further and push already high prices higher.
    You can not honestly beleave VW have stacks of EV’s they could send here tomorrow BUT they refuse to do it unless we implement efficiency laws.
    The truth would be more along the lines of their EV’s cannot compete with the EV’s from Hyundai or Tesla, and its not until the government start forcing us to buy them that they can move enough product to make it worth while.
    And changing efficiency laws are not going to magically make more Teslas available for purchase. I am sure they are pumping out every car they can already, Its going to take time for production to catch up to demand and increasing demand further will only allow them to charge more.

    • George Kaplan says

      James, I believe the EU approach is for ICEV sales to subsidise the cost of EVs. Thus for a company like Toyota they’d say raise the price of their ‘entry level’ ICEVs by 20%, and drop the price of their mid-high end EVs by 10%.

      Aside from the poor subsidising the rich, I’m not seeing major benefits – assuming reverse Robin Hood even counts as a benefit.

  3. George Kaplan says

    Will the discussion be a proper investigation, or do they already have a conclusion they want to arrive at?

    For instance, how are PHEVs to be handled? If charged, they operate like less efficient EVs on short runs, but on long journeys they function like less efficient ICEVs. Their official stats however are derived from emptying both battery and fuel tank. In the real world they won’t be operate like that so their performance will be radically different.

    According to a 2019 article (https://www.carsguide.com.au/car-advice/the-most-efficient-cars-detailed-city-small-family-sports-suv-and-luxury-30253) city cars can manage as little as 4.4L/100km, family cars 4.6L/100km, and sports cars a horrible 6.2L/100km. There are other vehicles listed with greater efficiency, but they’re all hybrids with the inherent problems\benefits of that type.

    SUVs tend to have the similarly performance to sports cars – significantly higher fuel usage than a regular car. Given how popular they are in the cities though what are the odds Labor will find against them?

    Assuming the discussion paper doesn’t find against SUVs with their 50% higher fuel usage, what options are there? And don’t suggest E10. That’s bad for cars – according to mechanics, and depending how you weight different thing e.g. higher NOx emissions or land being converted to ‘growing fuel’, worse for the environment.

  4. Geoff Miell says

    Michael Bloch,
    That type of discussion really should have been had a long time ago, but better late than never.

    Indeed, it should have happened a long time ago, but what’s done is done.

    IMO, introducing fuel efficiency standards now for new ICEVs sold in Australia (probably by 2025 at the earliest?) would be of little (if any) benefit. I think most people simply don’t appreciate how quickly the global petroleum fuel supply and prices situation will likely change in this decade, and how long it will take to replace Australia’s legacy ICEV fleet with new vehicles with the better standards.

    Accumulating evidence/data I see indicates the era of cheap and abundant crude oil and petroleum fuels has ended forever. See my slides 33-47 in the pdf file (10.4 MB) at: https://www.ipcn.nsw.gov.au/resources/pac/media/files/pac/project-submissions/2022/05/mt-pleasant-optimisation-project-ssd-10418/20220708t144208/theclimateenergycrisis20220708.pdf

    Tom Quinn tweeted a thread on Jun 28 about scenarios on how long it could take Australia to transition its vehicle fleet away from petroleum fuel dependency.

    At 99% EV sales by 2030, even at this pace, it’s suggested 80% of Australia’s vehicle fleet would still run on fossil fuels. What will the price of fuel be then in 2030 to operate them? $5/litre? $10? $20? Would there be fuel rationing?

    Australian fuel prices will likely rise again soon:
    1. Australia’s fuel excise tax cut will end on Sep 28, with a subsequent increase of 22.1 cents per litre on petrol and diesel;
    2. The US SPR release of 1 Mb/d (1% of global liquid fuel supply pre-COVID) will end Sep 27.

    IMO, Australia needs to rapidly reduce its petroleum dependency ASAP. We should leave oil before oil leaves us. That means a rapid uptake of BEVs should be occurring as fast as possible.

  5. Liz Harris says

    Better fuel efficiency standards would have multiple benefits other than encouraging more availability of EVs. More fuel efficient vehicles overall would mean cleaner air for everyone, cheaper running costs for those driving petrol/diesel vehicles, and even flow-through savings as commercial vehicles have reduced running costs. So many wins, and not just for EV drivers or would-be drivers.

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