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By Bruce Newton, carsales.com.au
The Australian government is inching closer to outlawing the sale of new petrol and diesel-powered vehicles.
The new federal Labor government’s Minster for Climate Change and Energy, Chris Bowen, announced at the first national Electric Vehicle (EV) Summit in Canberra in August that it would launch a discussion paper in September on the potential introduction of fuel efficiency standards that would effectively strangle the long-term viability of combustion engines and promote a greater uptake of electric vehicles.
The federal government has pledged to reduce carbon output by 43 percent by 2030 and committed a pathway towards net zero by 2050.
The EV Summit was organised by the Electric Vehicle Council, the Smart Energy Council, the Australia Institute and Boundless, the not-for profit organisation established by high-profile eco-billionaire Mike Cannon-Brookes.
Notably absent from the invite list for the summit was the peak body representing most auto brands sold in Australia, the Federal Chamber of Automotive Industries (FCAI).
While representatives from individual car makers were invited, and Volkswagen, Polestar and Tesla executives had speaking roles, the decision not to invite the FCAI emphasises the conflicts it faces internally and externally.
The EV Council and other environmental action groups are coalescing around a 2035 end-date for the sale of new internal combustion engine (ICE) vehicles in Australia.
The ACT government has already adopted that 2035 target, and New South Wales is discussing a similar time target. This would line-up with the expected ban on sales of ICE vehicles in Europe.
The 2035 date is important because the International Energy Agency says that it is the last gateway to hit net zero CO2 emissions by 2050.
But the FCAI is urging a slower transition that allows car makers to continue selling ultra-efficient and hybrid vehicles alongside zero-emissions EVs.
To back its argument, the FCAI commissioned a report by the financial forecaster S&P Global that argues a 2035 transition to EVs in Australia would be too soon.
The report finds EVs would still be more expensive than equivalent ICE vehicles and key market segments such as light commercial vehicles would still be dominated by diesel engine demand.
The report – and the slower EV transition it argues for – has its detractors (as well as supporters) within the car industry, let alone the environmental lobby.
The Australian Financial Review reported ahead of the EV Summit that the S&P report was leaked to the media by FCAI members that are unhappy with its content.
Subsequently, Nine Newspapers reported the FCAI is developing “a wide-ranging secret campaign that would delay Australia’s transition to electric vehicles and hamper a key part of the nation’s climate change plan”.
The Guardian followed up with an article that quoted climate lead at the Australasian centre for corporate responsibility, Harriet Kater, urging car manufacturers to break with the FCAI over the report.
The FCAI has undoubtedly frustrated the likes of the EV Council for its arguments in favour of a slower transition. It is seen to be supporting its biggest member Toyota, which provides double the financial funding to the chamber compared to any other brand because of its huge sales volumes. The Japanese giant is yet to sell a fully electric vehicle in Australia and earns big profits on diesel-powered SUV and utes.
“The FCAI is known as the Toyota Canberra office to some of us,” an auto industry insider said.
The FCAI’s voluntary emissions scheme for its members, which was introduced in 2020 in the absence of mandatory CO2 limits, awards credits in its structure to hybrids, in which Toyota is the market leader.
No other such emissions scheme globally credits conventional hybrids.
The FCAI is putting forward this scheme as a potential model for the federal government’s mandatory emissions framework, but opponents see it as being too lax in its CO2 limits.
In a recent interview with carsales, EV Council CEO Behyad Jafari was scathing about the FCAI’s position.
“This has been an organisation that has historically done everything they can to block and then water down emission reductions or the transition to electric vehicles,” he said.
“It is 2022 and this [S&P report] is the first time they’ve had anything addressing electric vehicles.”
“For them it’s reading the tea leaves that there is a federal government that is very bullish on this issue and their first entrance into is ‘we can’t move as fast as the rest of the world can’.”
“None of that is surprising.”
But FCAI CEO Tony Weber said Australia’s transition had to be framed around the country’s unique local circumstances.
“It needs to be done in the Australian context,” he said.
“I am absolutely fed up with people quoting what happens in Norway, what happens in the UK and what happens in the US.”
“Australia is not Norway. We can’t subsidise it by North Sea oil and it’s a very different population and a much smaller country; we are 32 times the size of the land mass of the UK and that creates charging infrastructure challenges, and we are bigger than continental USA but we don’t have 332 million people here.”
Norway has been a pioneer in promoting electric vehicles through subsidies and incentives and has already announced plans to ban sales of ICE vehicles from 2025. The UK is set to follow suit in 2030 while some states in the USA have confirmed ICE bans from 2035. It is expected that the European Union will also commit to outlawing combustion engines from 2035.
The Australian government’s discussion paper is expected to outline the importance of phasing out petrol and diesel sales by 2030 too as a key part of its pledge to reduce carbon emissions by 43 percent on the way to net zero by 2050.
Disclaimer: Images supplied by Hyundai, BMW and Volvo.
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