Australia needs strong Fuel Efficiency Standard to increase supply of electric cars

Embarrassingly Australia currently ranks alongside Russia as one of the only big developed economies without fuel efficiency standards, which require car manufacturers to limit climate pollution from the cars they produce.

As explained by the Climate Council, fuel efficiency standards aim to limit the greenhouse gas emissions that Australia’s fleet of cars releases by creating a maximum average level of carbon emissions across a manufacturer’s overall car sales.

In short, they provide incentives for car makers to supply low and zero emissions vehicles to a country – and penalise them for failing to do so. Over time, as the fuel efficiency standard is tightened (meaning the maximum amount of CO₂ that can be emitted is reduced), car markers must offer more zero emissions electric vehicles in order to avoid penalties.

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Recent research from late 2022 by the Australia Institute shows that Aussies could have saved $5.9 billion in fuel costs if robust Australian fuel efficiency standards had been adopted in 2015.

More recently an analysis of submissions to the federal government National Electric Vehicle Strategy by Greenpeace Australia Pacific has revealed overwhelming support for a legislated Fuel Efficiency Standard for light vehicles in Australia.

Greenpeace Australia Pacific campaigner Joe Rafalowicz said:

“The test for the government will be ensuring new standards have ambition, integrity and equity. To be effective at reducing emissions from transport, the standard cannot be riddled with loopholes, so-called ‘super credits’ or other special favours to big car companies.”

“Strong fuel efficiency standards – like those in New Zealand and Europe – lower the cost of transport for the average Australian and will increase the availability of electric vehicles”

The analysis, released by Greenpeace Australia Pacific, reviewed 212 submissions from organisations – including motoring associations, NGOs and big businesses – to the consultation, and found an overwhelming majority (73%) supported the introduction of a fuel efficiency standard.

Here are some quotes from the submissions:


“A lack of Australian fuel efficiency standards has considerably slowed growth in our domestic EV market. Only a small proportion of EV models available globally are being supplied to Australia since we do not have a mandatory fuel efficiency standard. AGL supports the introduction of fuel efficiency standards to encourage a growth in supply of EV models to Australians.”


“A mandated CO2 standard is the obvious missing link that can help supply moving forward and further strengthen market signals. The lack of a fuel efficiency standard in Australia has been highlighted by manufacturers of EVs as one of the key barriers to importation.”


“Currently, manufacturers are penalised if they do not meet certain hurdles in other jurisdictions – particularly in Europe but also New Zealand, where the market is transitioning in accordance with the ‘Clean Car Standard’ which puts penalties on importers of vehicles into NZ if they don’t meet certain CO2 hurdles”.

“The consequence of this is, until Australia has similar standards, Australia’s EV supply will be constrained until such time as production levels are starting to meet demand in other countries. Until that demand is met, manufacturers will continue to prioritise EV supply to other markets.”


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