Major auto brands including Mazda, Nissan and Subaru face millions of dollars in fines after failing to meet climate targets for new vehicles in Australia.
Data from the first six months since the Albanian government introduced the new vehicle efficiency standard shows that 40 companies – 68% of the total – exceeded their initial target for the average emissions efficiency of the new cars they sold.
Many of these, including BYD, Toyota, Tesla, Kia, Ford, Volkswagen, BMW and Polestar, were found to sell cars that emitted less carbon dioxide than required per kilometer on average in their company fleet.
But 19 companies missed their targets and will have to buy credits or pay fines if they don’t significantly improve their performance over the next two-and-a-half years. Mazda received potential liability of around $25m, Nissan $10m and Subaru over $7m. The obligations may accrue or decline and are due in 2029.
Other companies such as Hyundai, General Motors, Honda, Porsche, Ferrari and Jaguar missed their initial target.
Federal Transport Minister Catherine King said the average pollution target for new light passenger vehicles across the industry exceeded the target by 21%. “These results are clear [standard] Supporting both lower emissions and consumer affordability,” she said.
Electric vehicles accounted for 12% of new sales in the second half of last year — an increase, but well below what is needed to play its expected role in meeting national climate goals. The remaining 88% are petrol and hybrid vehicles.
Globally, 25% of new cars sold last year were electric cars. Australia consistently lags behind other developed and many developing countries in EV uptake. China is the largest EV market in the world. Our World in Data reports that China accounted for more than 60% of global EV sales last year.
Australia’s Vehicle Efficiency Standard requires car manufacturers to supply new vehicles that meet average emissions per kilometer targets. The target will be reduced over time to encourage cleaner cars. Cars are not banned. More polluting models are still sold and offset by EVs or low emission vehicles.
Companies that beat their target are awarded units, or credits, that can be sold to those that miss their target and must offset the excess pollution from their vehicles.
In the first six months, companies earned 17.2 million credits for exceeding their goals. Those who missed their target faced a combined potential liability of 1.3m tonnes. This leaves a net surplus of 15.9 credits, which can be used to meet targets in future years.
The results of the Electric Vehicle Council show that the standard is a success.
The council’s chief executive Julie Delvecchio said [standard] Critics warned of “supply shortages, rising prices and market disruption”. Emissions are actually falling, the choice of new cars is expanding and EV sales are increasing, she said.
“Instead, the first performance report shows strong industry performance, healthy competition and a clear acceleration in cleaner vehicles coming to Australia,” she said. “The data confirms what we’ve been saying: clear, predictable standards drive innovation and investment. They don’t break markets, they modernize them.”
Delvecchio said the results showed that the upcoming review will lead to strengthening targets. If they are not, she said, there is a risk that the pace of introducing clean cars will slow down as companies accumulate additional credits to meet sufficiently precise targets.
The results from the National Automotive Leasing and Salary Packaging Association are encouraging, but show Australia’s EV uptake and climate targets are likely to be reduced if the controversial fringe benefits tax break on clean cars is removed.
