Information for Industry

Australia is establishing a New Vehicle Efficiency Standard to incentivise the development and supply of more efficient cars.

What is a New Vehicle Efficiency Standard?

Under a New Vehicle Efficiency Standard (a Standard), each car supplier has a set average CO2 target for all new cars they produce, which they must meet or beat. Over time, the CO2 target is lowered and in order to continue to meet or beat the target, suppliers must supply more fuel-efficient, low or zero emissions vehicles into the Australian market.

The target is applied nationally on average. Suppliers can still sell any vehicle type they choose but they’ll need to sell more fuel-efficient models to offset any less efficient models they sell.

How will a Standard be regulated?

A Standard will require new legislation, and Government will need to establish a new regulator in the department as well as develop an IT system to support its operation. The department will work closely with industry in developing the regulator and IT system to ensure implementation is effective and efficient.

The targets for car manufacturers to meet or beat under a Standard will reviewed and on a 5-yearly basis.

Our key functions as a regulator would be to assess car manufacturer performance against the targets, and ensure compliance by:

  • Calculating the sales weighted average mass of all vehicles sold be each car manufacturer
  • Calculating the sales weighted average CO2 emissions of all vehicles sold be each car manufacturer
  • Comparing the mass and CO2 level to the limit curve.

If the results are below the curve, the car manufacturer has met the target for that year and will accrue tradeable credits. If the results are above the limit curve, the car manufacturer has not met the target for that year and they will have two years to offset their emissions result with credits before a financial penalty becomes payable. We would alert the relevant supplier (and would make publicly available) information about results at specified times.

Contact

For more information, please contact the Cleaner Cars team