EFS Consulting

Australia’s New Vehicle Efficiency Standard

The Department of Infrastructure and Transport is consulting on a new standard for light passenger and commercial vehicles from 2025.

The Australian Government Department of Infrastructure, Transport, Regional Development, Communications, and the Arts is currently seeking input on a proposed ‘New Vehicle Efficiency Standard’ applicable to light passenger and commercial vehicles imported to Australia by manufacturers starting in 2025. This standard aims to establish a sales-weighted average CO2 target for vehicle manufacturers, aligning with standards embraced by the United States, European Union, and New Zealand. The Impact Analysis, recently released for consultation, assesses the costs and benefits associated with three potential approaches, each differing in stringency.

While over 85% of cars sold worldwide adhere to a new vehicle efficiency standard, the one million new cars sold annually in Australia currently lack any mandate for fuel efficiency. Consequently, Australian new cars consume noticeably more fuel compared to their counterparts on U.S. roads. On average, passenger cars in Australia use 20% more fuel than their equivalents in the United States. The implementation of a new vehicle efficiency standard (NVES) would necessitate global car manufacturers to provide Australia with the same advanced emissions technology they already supply to other advanced economies.

Currently, stakeholders may make comments on the consultation Impact Analysis, available HERE. An addendum notification will be issued in the near future to provide further detail on the proposed legislation to implement this measure, once it is introduced in the Australian Parliament.

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