Suppliers and manufacturers are now required to meet emissions targets under the New Vehicle Efficiency Standard.
From 1 July 2025, car manufacturers and suppliers (also known as regulated entities) must comply with the New Vehicle Efficiency Standard Act 2024 (NVES Act), which sets out carbon dioxide (CO2) emissions targets they must meet for new vehicles supplied to Australia.
The NVES Act will see Australians save money at the fuel bowser, bring new and efficient cars to Australia and provide more choice of vehicles.
Enforced by the NVES Regulator over set performance periods, the emissions targets apply to new light passenger vehicles (sport utility vehicles and sedans) and light commercial vehicles (utes and vans) supplied to Australia from 1 July 2025:
Over time, these vehicles will become available in the second-hand market, where 70% of Australians buy their cars. This means a growing number of Australians will have access to cheaper-to-run cars and savings at the petrol pump.
Each year the emissions target will be lowered, meaning manufacturers and suppliers are encouraged to supply more fuel-efficient or low emissions vehicles, so less CO2 is emitted overall. This will help reduce Australia’s emissions, with the transport sector one of the largest emitters.
Utes and four-wheel drives (4WDs) capable of towing trailers and boats will still be available to purchase and, as technology improves, these types of vehicles will become more fuel-efficient and environmentally friendly. Utes and 4WDs in many other countries with similar efficiency standards remain popular and widely available.
The current performance period ends on 31 December 2025. Regulated entities are required to submit data to the NVES Regulator, enabling it to issue the first interim emissions values and associated units in February 2026.
For more information visit the NVES Regulator’s website. You can also sign up to the NVES Regulator newsletter.