BE SEO. Australia is turning into a car park for dirty vehicles (AFR 15.7.2019)
Jul 23, 2019Australia’s most popular cars emit between 8 and 42 per cent more carbon dioxide than their UK counterparts, raising concerns that the country has become a parking lot for dirty vehicles.
The Department of Industry compared each country’s best variants for models like Toyota Corolla and Hyundai Tucson, and found that Australian cars were “about 27 per cent worse on average”.
“Australian consumers will not be offered some of the most efficient variants available to consumers in other markets with fuel efficiency standards,” the department warned.
The disparity might be evidence of a “leakage” in global fuel efficiency gains, whereby manufacturers sell high-emitting vehicles in countries with less rigorous standards. Academics have previously observed the phenomenon at a national level in the United States.
Emissions standards mandate that the average of all new cars sold pollute less carbon or noxious particles than a set target. Such regulations for carbon dioxide are already in place in 80 per cent of the global light vehicle market, but not in Australia.
The Coalition canvassed for enforceable maximum standards for carbon dioxide and noxious emissions as recently as 2017, but disowned them as a “carbon tax” after Labor adopted them into its federal election platform.
The Business Council of Australia came out in support of the policy in 2017, warning that delays to implementation would reduce carbon abatement and “entrench less fuel-efficient passenger car fleets on Australian roads”.
Meanwhile, carmakers have long protested a different barrier to making our vehicle fleet more green: tax regimes.
The 33 per cent federal luxury tax applies to the value of fuel-efficient cars above the threshold of $75,526, which electric vehicles like the Tesla S exceed.
Proposed stamp duty hikes in NSW and Victoria have been criticised by carmakers, respectively, for raising the cost of electric and fuel-efficient vehicles.
Former Nissan Australia chief executive Richard Emery said the combination of high manufacturing costs for fuel-efficient cars and the small size of the Australian market made it expensive enough to import advanced vehicles.
“Taxation and duties structure absolutely hold back the advancement of new technologies,” he said.
Fuel quality claims are ‘specious’
Carmakers have maintained that emissions standards must wait for improvements in fuel quality because Australia’s low-quality, high-sulphur petrol cannot power highly advanced engines.
According to the Federal Chamber of Automotive Industries (FCAI), the use of petrol containing more than 10 parts per million (ppm) of sulphur will increase “wear and degradation of engine and emissions systems”.
But this claim has been steadily refuted since 2014 by two government departments and the petrol industry.
Local regulations impose a maximum sulphur limit of 150ppm for unleaded and 50ppm for premium unleaded petrol.
But the Australian Institute of Petroleum said that average levels of sulfur in 2014-15 were about 28-60ppm for unleaded and 16-28ppm for premium unleaded in Sydney and Melbourne, and that these levels were maintained in the past five years.
The Department of Industry said in 2016 that only fuel with 50ppm sulphur or higher would cause problems for emissions control systems.
“While 10ppm sulfur or less is ideal, Australian petrol with a sulfur content of less than 30ppm is unlikely to affect the ability of vehicles to meet Euro 6 requirements,” they said.
Carmakers seized on the finding in the underlying study that the use of 30-50ppm fuel would mean that a car’s noxious emissions would likely exceed Euro-6 levels.
But Monash University’s ClimateWorks Australia called this argument “specious” for conflating noxious and carbon emissions, and said fuel quality posed no impediment to imposing targets for the latter.
Reform areas floated
The government’s Climate Change Authority separately found in 2014 that there was “no compelling evidence” that a high sulphur limit was a “barrier to Australia implementing carbon dioxide emissions standards”.
The government’s own estimates say the policy could save motorists $500 a year in fuel costs, and $28 billion by 2040, which is short of double the $16.2 billion it could cost in added costs.
A spokeswoman for shadow energy minister Mark Butler has criticised the Coalition for having “no policies to reduce transport emissions or save motorists money on their fuel bills”, but stopped short of pledging support for emissions standards.
In a 2017 article arguing in favour of efficiency standards, then energy minister Josh Frydenberg outlined three areas of reform: fuel quality, and targets for carbon and noxious emissions.
Mr Frydenberg said fuel efficiency standards would reduce both fuel costs and carbon emissions. And he said on fuel quality that “studies have shown that were Australia to move to lower-sulphur and higher-octane standards, the noxious emissions would be reduced substantially”.
The government has delayed any changes to the regulation of sulphur in petrol until 2027, which was the year nominated by the petrol industry.
The remaining reforms – carbon and noxious emissions – have been indefinitely postponed.
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