The Council of Australian Governments (COAG) requested the ATC and the EPHC to provide a report on relevant programs and incentives and to provide advice on opportunities for reforms to regulations, standards, codes and labelling requirements to improve vehicle fuel efficiency.

Following consideration of an initial report, COAG requested ATC and EPHC to develop jointly a package of vehicle fuel efficiency measures. In response to that request, the two produced the public discussion paper: Vehicle Fuel Efficiency: Potential measures to encourage the uptake of more fuel efficient, low carbon emission vehicles.

The Australian Vehicle Fleet. Australia has about 15 million motor vehicles on its roads, with passenger vehicles accounting for 77% of that. The fleet growth rate has averaged 2.9% per year since 2003. In 2007, 1.05 million vehicles sold in Australia, 60% of which were passenger cars and 19% of which were SUVs. SUV sales have been gaining steadily over the past 20 years.

Gasoline is the dominant passenger vehicle fuel, while diesel dominates in the heavy vehicle sector. Diesel passenger car sales have risen from 1% in 2005 to more than 4% in 2007. Around 3% of the total vehicle fleet is powered by LPG; annual sales of factory-fitted LPG models rose to 1.6% in 2007.

Average fuel consumption for the gasoline-fueled passenger vehicle fleet is 11.2 L/100km (21 mpg US). Average fuel consumption for diesel-fueled passenger vehicles is higher—12.5 L/100km (18.8 mpg US), reflecting the current situation in which these vehicles tend to be larger SUVs .

The average fuel consumption of all light vehicles has hardly changed over the last decade. Engine technology in terms of fuel consumption per power output has improved substantially and there has been an improvement in fuel efficiency in the new passenger vehicle fleet. However, potential fuel savings across the whole light vehicle fleet have been offset by increases in vehicle power, size and weight, by the strong growth in sales of four wheel drive sports utility vehicles (SUVs), and increases in the fuel consumption of light commercial vehicles.

—“Vehicle Fuel Efficiency”

The transport sector contributed 79.1 Mt CO₂e (13.7%) of Australia’s net greenhouse gas emissions in 2006. Road transport was responsible for 87% of that, or 12.0% of Australia’s total emissions. Greenhouse gas emissions from road transport have been increasing at an average of 1.7% per year since 1990.

Ongoing strong demand growth in all areas of road transportation is expected to lead to ongoing growth in CO₂ emissions within the road transport sector. The Australian Government has committed to cutting total greenhouse gas emissions by 60%, from 2000 levels, by 2050.

The primary mechanism for achieving these cuts will be through the development and implementation of the Carbon Pollution Reduction Scheme (CPRS)—an economy-wide carbon cap program—which begins operation in 2010. The Government is proposing including the transport sector in the CPRS; the carbon price arising from the CPRS will be reflected in the price of transport fuels.

Existing and proposed international greenhouse emission targets for passenger vehicles. All standards are converted to gCO2/km, according to the new European drive cycle (NEDC). The 2012 figure for the EU assumes a 120 g/km achievement. The California line is dotted, pending go-ahead. Click to enlarge.

Fuel consumption targets. Australia does not have a mandatory fuel consumption requirement such as the US CAFE. It does have a voluntary national average fuel consumption (NAFC) target for new passenger cars, negotiated between the Australian Government and the Federal Chamber of Automotive Industries (FCAI).

The target established in 2003 was 6.8 L/100km (34.6 mpg US) for gasoline passenger cars by 2010. Achieving this would represent an estimated 18% improvement in the fuel consumption of new vehicles between 2002 and 2010.

Australia changed the fuel consumption testing procedure that underpinned the NAFC target in 2004. The revised test (in Australian Design Rule (ADR) 81/01) produces higher nominal fuel consumption figures for the same vehicle model than the previous testing procedure. ADR81/01 also expanded the scope of vehicles to include diesel and LPG vehicles, and increased the maximum mass from 2.7 tonnes to 3.5 tonnes.

Australia is converting the NAFC target to a National Carbon Emissions (NACE) target expressed in gCO₂/km, although agreement on a NACE target has yet to be achieved, according to the report.

The FCAI has proposed a NACE target of 222 g CO_2/km for all new light vehicles by 2010. An independent analysis, commissioned by the FCAI and the Australian Government in 2004, recommended a NACE target of 214 g CO₂/km for new light vehicles by 2010. The FCAI proposal represents virtually no improvement over the NACE already achieved in 2007.

—“Vehicle Fuel Efficiency”

Measures. The discussion paper considers a set of possible complementary measures to support the CPRS within the road transport sector. Key measures include:

• Impose sales-weighted average CO₂ emission standards for new light vehicles. The report suggests that to provide adequate time for the vehicle industry to respond, a two-step standard could be considered, with an initial target date of 2015 and a longer term target for 2020.

• Realign existing State and Territory stamp duty and/or registration charges for light motor vehicles on a sliding scale based on greenhouse gas emissions.

• Encourage consumer uptake of low emission vehicles by establishing a balanced set of direct financial incentives and disincentives based on the CO₂ emissions performance of a vehicle—i.e., feebates.

• Develop a voluntary scheme that supports the adoption of best-practice fuel efficiency strategies in government and business light vehicle fleets. The measure could include (1) comprehensive information and advice on greenhouse abatement strategies to government and business fleet operators; and (2) a national fleet accreditation process which supports government and business fleet operators to set and achieve voluntary, enterprise-level fleet greenhouse emission targets.

• Including fuel consumption data in vehicle advertisements.

• Introduce standards or labelling requirements for non-engine components—such as tires, tire pressure monitors and vehicle air conditioning units—which impact on vehicle fuel consumption and CO₂ emissions.

• Establish a heavy-duty vehicle environmental rating scheme to provide guidance for heavy-vehicle buyers in relation to fuel efficiency.

• Establish a scheme aimed at assisting road transport operators to evaluate new low emission transport technologies applicable to light commercial vehicles, heavy trucks and buses. This would provide the transport industry with independent information on options to reduce fuel consumption.

The ATC/EPHC Vehicle Fuel Efficiency Working Group will consider the comments and advice received during the consultation process to inform the preparation of a final report to the ATC and the EPHC. ATC and the EPHC expect to consider the final report in early 2009.

Resources

• Vehicle Fuel Efficiency Public Discussion Paper (ATC 2008)