Dirty cars and dirty fuel – regulated emissions standards needed

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New research from the Australia Institute shows that our car market has become an outlier in global automotive standards, with Australia receiving some of the least efficient models that emit higher levels of carbon dioxide than models available in other countries.

By Harry Mulholland

The average carbon dioxide intensity for new cars in Australia is 169.8 grams of CO2 per kilometre which is higher than the average of 129.9 grams of CO2 per kilometre in the US, 120.4 grams of CO2 per kilometre in Europe and 114.6 grams of CO2 per kilometre in Japan, according to the Australia Institute’s research.

Why have we become the dumping ground for inefficient vehicles and what can we do about it?

The largest reason for this is the Australian Government, unlike many other governments around the world, has no mandatory fuel efficiency standards that regulate vehicle emissions and set fleet average efficiency targets for each manufacturer.

Fuel efficiency standards and fleet average efficiency targets, where manufacturers pay a penalty for exceeding the target or introduce more efficient models to balance out their total emissions, exist in 80 per cent of the global light vehicle market.

The Australia Institute argues that introducing mandatory fuel efficiency standards would be beneficial to the Australian community. By lowering our transport emissions, which account for 18 per cent of Australia’s total emissions, motorists will reduce fuel costs, reduce the need for imported oil and encourage manufacturers to import more efficient and electric models.

Their research shows that if these fuel efficiency standards were introduced in 2016, nine million tonnes of CO2 emissions would have been avoided which is similar to a year’s worth of emissions from domestic aviation. Almost $6 billion in fuel costs would have been saved and 4,000 megalitres of imported fuel would not have been needed.

Currently Australia only has voluntary fuel efficiency standards which were introduced in 2020 by the Federal Chamber of Automotive Industries (FCAI) and are set well below the targets of comparable countries. There are no penalties for not complying with the standards and that disincentivises manufacturers from meeting emissions targets.

Fuel efficiency standards have also been recommended by two separate government inquiries but were never adopted. Progress to introduce emissions standards in Australia has been hampered by the politicisation of electric vehicles, industry lobbying, misinformation about the impacts of emissions standards and inaction from the government.

According to The Australia Institute’s research, there is strong community support for the introduction of fuel efficiency standards. The nation-wide survey, Climate of the Nation 2021, shows 65 per cent of Australians support introducing Euro 6 emissions standards which are recognised in the European Union, UK and the US.

In 2014 the Climate Change Authority recommended introducing emissions standards that would see Australia’s light vehicle CO2 emissions drop from 192 grams per kilometre in 2013 to 105 grams per kilometre in 2025 but that recommendation was never adopted by the federal government.

That same year former Greens Leader, Christine Milne, introduced a bill proposing that passenger and light commercial vehicles would be required to meet a carbon emissions target of 130 grams per kilometre by 2020, and 95 grams per kilometre by 2023, aligning with the European Union’s 2020 standards.

This bill was introduced into parliament in July 2014 and lapsed in April 2017.

In the leadup to the 2019 federal election, Labor announced a commitment to emissions standards in line with the recommended targets from the Climate Change Authority. The campaign commitment faced strong backlash from the automotive industry and was the brunt of disinformation campaigns.

Former Prime Minister, Scott Morrison, called the proposed standards a carbon tax on cars, and the Energy and Emissions Reduction Minister, Angus Taylor, claimed the standards were reckless and would impact our police force.

To combat this issue, Climate Council Australia is urging the new Federal Government to adopt fuel efficiency standards in line with Europe’s and is urging Australia’s car industry to stop standing in the way of this change.

Climate Council Australia’s Head of Advocacy, Dr Jennifer Rayner, said last year some of Australia’s most popular car brands sold hundreds of thousands of less efficient new cars in Australia.

“Last year, FCAI member firms Toyota, Mazda, Mitsubishi, Volkswagen, Honda, Hyundai, Nissan, and Volvo sold over half a million new cars into the Australian market.

“Most of those were dirtier and less efficient than the cars they sell overseas.

“Australians are left paying the price for that dirty transport fleet many times over.

“We pay at the petrol pump because less efficient cars guzzle more fuel and we pay in rising transport pollution, which is fuelling climate change and harming our health.

“The FCAI must arrive at the Electric Vehicle Summit with a stronger plan for fuel efficiency standards that prioritise and protect Australians over their own profits.

“FCAI’s members selling dirty, inefficient cars into Australia well into the 2040s is not an option if we want to achieve the deep emissions cuts needed this decade to avoid the worst effects of climate change.

“The vehicle industry must do its bit towards Australia’s new target of cutting emissions by at least 43 per cent by 2030 otherwise which other parts of our economy and community will have to do more?

“Introducing strong fuel efficiency standards is the best way to cut costs for Australians and cut our emissions for the future.

“The FCAI must not stand in the way of real change. “It needs to stop blocking the road,” Rayner said.

The Australian Electric Car Vehicle Summit was held in Canberra on August 19 this year by the Electric Vehicle Council and Smart Energy Council, The Australia Institute and EV solutions specialist Boundless.

The Summit featured speakers from politics including Federal Climate Change and Energy Minister Chris Bowen, New Zealand’s Minister for Transport, Michael Wood, ACT Chief Minister Andrew Barr, Queensland’s Minister for Transport and Main Roads, Mark Bailey, NSW Treasurer Matt Kean and South Australia’s Minister for Infrastructure and Transport, Tom Koutsantonis.

The car industry was represented by Tesla Chairwoman, Robyn Denholm, Volkswagen Group Managing Director, Paul Sansom and Polestar Australia’s managing director, Samanthan Johnson.

Every year the FCAI releases a vehicle emissions report which ranks brands according to how much they exceed or undercut their self-imposed emissions targets. These reports are split into two sections with the first ranking brands that sell utes, vans and four-wheel drives, while the second catalogues emissions from passenger cars and SUVs.

For the utes, vans, and four-wheel drives category in 2021, Chevrolet was the largest polluter with a CO2 emissions average of 297 grams of CO2 per kilometre sitting nearly 64 grams over the self-imposed target.

The most efficient brand in this category was Peugeot with an average CO2 emission of 150.456 grams per kilometres, undercutting their target by 8.9 grams.

The brand that undercut their own target by the largest margin was Audi which on average emitted 32.117 grams of C02 below their target of 205.799 grams, with their average CO2 emissions at 173.682 grams per kilometre.

In the passenger cars and SUVs category, Lamborghini was the worst offender by far with their cars averaging 328.931 grams of CO2 emitted per kilometre, more than 150 grams over their target of 177.965 grams.

On the opposite side of the spectrum, Toyota had the lowest average CO2 emissions at 96.731 grams per kilometre and putting them just above European maximum standard.

Toyota managed this by offering a hybrid drivetrain on most of their passenger models including the RAV4 which is the third best-selling car in Australia, as well as the Corolla, Camry, Kluger, Yaris, and Yaris Cross models.

Other big polluters for 2021 included Ram, LDV, Great Wall Motors, Jeep, Ferrari, Maserati, Hyundai, Kia, Nissan, Mazda, Subaru, Honda, Mitsubishi, MG, and Suzuki, all of which failed to meet their own emissions targets.

This is also the second year in a row where most manufacturers exceeded their own emissions targets due to Australian consumers choosing to buy larger and less efficient vehicles such as diesel utes and four-wheel drives over smaller more efficient models.

The pandemic also may be to blame for this rise in emissions as many Australians chose to buy a larger vehicle to travel domestically as international borders were closed, and to buy their own car instead of using public transport.

FCAI Chief Executive Tony Weber said the FCAI supports the new Federal Government’s intention to reduce vehicle emissions and increase zero and low emission vehicle options to Australian consumers.

“This is the kind of courageous intent we have been seeking from our Federal Government and it is a major step on our journey to delivering low emissions vehicles to Australian customers.

“We have publicly advocated for a government mandated CO2 target for many years.

“The direction is consistent with the approach outlined by the FCAI on July 24, 2020, when it stated the FCAI strongly supports a comprehensive approach to addressing motor vehicle emissions that include fuel quality standards, the introduction on Euro 6 and the introduction of a challenging but realistic, achievable and market relevant CO2 standard.

“The nationally led cooperative approach, supported by state and territory governments and relevant stakeholders, will help to build a comprehensive strategy that includes the complexities of vehicles, infrastructure, taxation, and incentives that are critical to achieving our climate change ambitions.

“It is also critical to ensure all Australians are included, rather than excluded because of where they live and what they can afford, and ensure ambition is matched with reality,” Weber said.

Speaking with the ABC in October last year, Automotive Industry Analysist at the University of Melbourne, Professor Danny Samson, said local manufacturers once held back emissions standards to stay competitive against more advanced rivals being imported, but with no local auto industry there is little excuse for Australia not to have any emissions standards.

“Some of those excuses might have been partially reasonable when we had a domestic vehicle industry.

“Now that we don’t, why haven’t we accelerated our standards and requirements along the lines of fuel efficiency and emissions that Europe is requiring?

“Ford, General Motors, Mercedes and even Rolls Royce have now announced timetables to go fully electric, but our government is sitting on its hands.

“Until the standards change, Australians will experience higher vehicle operating costs, poorer health outcomes and our transport will continue to drive our emissions up,” Samson said.

Another reason why Australia has become a dumping ground for the auto industry’s less efficient models is our fuel quality, which is some of the worst quality in the OECD and car some manufacturers say they cannot bring their most efficient models into Australia as the poor fuel quality would be harmful to these engines.

To make matters more confusing, some manufacturers are saying their models can run on our poorer quality fuel, and the increased emissions their cars are releasing is purely from the fuel.

The Australian Fuel Quality Standards Act 2000 and Fuel Quality Standards Regulation 2019 outline that diesel fuel has been limited to 10 parts per million (pp) of sulphur, 91 RON petrol must contain no more than 150 ppm of sulphur, and premium fuels such as 95 and 98 RON must not contain more than 50 ppm.

In Europe as part of their Euro 6 emissions standards introduced in 2015, all their fuels must not exceed 10 ppm of sulphur.

The Australian government has a deadline to introduce these better fuel standards by 2027, but experts in the automotive industry believe by then Australia will be playing catch-up with the rest of the world with more strict Euro 7 emissions standards to be introduced in 2025 which the European Automobile Manufacturers’ Association (ACEA) could result in mainstream combustion engines dying out.

In an interview with Autocar, a spokesperson for the ACEA said: “The ACEA believes that the emission limit scenarios presented by the European Commission’s Consortium for Ultra Low Vehicle Emissions, coupled with the suggested new testing conditions, would in practice result in a situation very similar to a ban of vehicles powered by an internal combustion engine (ICE), including hybrid electric vehicles.

“The complexity and costs associated with the new standard, which is part of a wider push to reduce toxic and greenhouse gases would make manufacturing ICE vehicles unviable almost immediately for legacy manufactures,” the spokesperson said.

Currently there are already countries across the globe that are using petrol containing less than 10 ppm of sulphur including China, India, Canada, the US, New Zealand, and most of Europe.

Our fuel has a higher sulphur content than countries such as Brazil, Morocco, and Mexico.

Diesel in Australia is the only outlier with its fuel quality being on par with what is found elsewhere in the world.

A spokesperson for the FCAI said without government intervention to make the nation’s fuel better, Australian buyers will continue having to buy dirty vehicles instead of more efficient options sold elsewhere.

“The relatively small size of the Australian new car market, less than two per cent of the global total, and the estimated $1 billion investment required to update Australia’s remaining refineries, meant there was little chance that manufacturers would continue to find it viable to offer detuned cars in local showrooms.

“Popular small cars including the Mazda 3 and the Toyota Corolla Hybrid are already detuned to operate with Australian fuel standards,” the FCAI spokesperson said.

In an interview with GoAuto, Volkswagen Group Australia’s Managing Director, Michael Bartsch, said most European sourced vehicles require low-sulphur, high octane petrol to operate reliably, and that Australian consumers could soon face diminished options when it comes to buying a new car.

“VGA maintains that for some mass market brands, Australia has long been a dumping ground.

“Australia lags more than a decade behind global best practice, including New Zealand in terms of CO2 and sulphur emissions.

“While all but one Volkswagen vehicle conforms to Euro 6 standards, the outgoing Amarok ute and a few of VW’s top 10 selling rivals continue to import to Australia Euro 5 compliant engines that cannot be sold in Europe where they sell many of the same models with Euro 6 engines.

“Euro 5 development costs have long since been amortised, yet frequently these vehicles are priced in proximity to Volkswagens and Skodas.

“Long overdue action is being undertaken on petrol quality, but unless a hard and fast CO2 reduction target is set, manufacturers will continue to prioritise markets both for zero emissions vehicles and the most efficient conventional engines.

“Australia has had a limit of 10 ppm of sulphur in diesel since 2009, the previous limit being 50 ppm.

“Until at least 2024, however 50 ppm will remain the best sulphur level that can be guaranteed in petrol, and that is only the costly premium unleaded.

“Australians are being forced to pay almost $2 per litre for so called premium petrol, 25 cents per litre over highly sulphurous 91 RON.

“European sourced vehicles cannot reliably run on the latter, so effectively owners of the most efficient conventional vehicles on sale in this country are penalised for emitting less,” Bartsch said.

Also speaking to GoAuto, the Australian Institute of Petroleum CEO, Paul Barrett, said while adopting international standards may seem like a logical step to improving the quality of fuel sold in Australia, the demands of the local market are such that uniform parameters for cleaner fuels are difficult to implement, and not always beneficial to consumers or the environment.

“Australian fuel standards are set for Australia conditions taking account of climate, environment, and market conditions.

“Fuel standards across the world vary for the same reasons… Europe, Japan and the United States all have different standards.

“For example, Australia does not use the oxygenate MTBE as it poses an excessive risk of water contamination, especially groundwater for drinking purposes.

“Fuels supplied to the Australian market are far better than the regulated standards.

“For example, the regular standard for premium unleaded petrol is 50 ppm of sulphur and in 2020 the average level of sulphur was 21 ppm.

“The major environmental benefits of improved fuel quality are realised with the reduction in sulphur levels in petrol and Australia will introduce global best practice standards by 2024,” Barrett said.

Fuel companies around Australia are echoing this sentiment with Ampol, BP and Viva Energy all explaining they are working towards providing higher quality fuel by 2024 and are already well ahead of the 2027 target to bring fuel quality in Australia in line with the rest of the world.


According to the Carbon Reduction Institute the average Australian household produces around 14 tonnes of greenhouse gases every year, and car use represents 34 percent of this figure.

On their website they have some tips on how you can cut car related carbon emissions including taking public transport, walking or riding a bike whenever possible.

When buying a car, they suggest choosing a lower emissions vehicle such as a hybrid which can save $10,000 in fuel costs and can save up to 20 tonnes of greenhouse gases over the car’s lifetime.

They also advise drivers to drive efficiently by accelerating gently, maintaining a steady speed and coasting to decelerate, and to remove unnecessary weight and optional features such as roof racks when not in use as they create air drag that hurt a car’s efficiency.

The Carbon Reduction Institute encourages motorists to carpool whenever possible, getting your car air conditioner serviced regularly and only using it when necessary, checking your tyre pressure regularly to ensure the tyres are not underinflated, and to offset unavoidable CO2 emissions from driving in other ways.

For new car buyers looking to reduce their CO2 emissions the Australian Government has a Green Vehicle guide, which is a database that shows fuel economy and emissions data for most cars sold in Australia, giving buyers a handy tool to see how efficient their potential new car is and how much it will cost on average to run every year.

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