Aussie ICE ban agenda

AUSTRALIA needs a carrot and stick approach to accelerate the uptake of zero-emission vehicles, with the ultimate target being a ban on new petrol and diesel light vehicles by 2035, according to the Grattan Institute.

The think tank’s latest report outlines a roadmap for federal transport emissions policy that falls broadly into line with corresponding components of the European Union’s recently announced Green Deal proposal (see separate story).

In addition to the proposed zero-emissions deadline, Grattan recommended national measures to reduce the up-front cost of purchasing zero-emission vehicles will be required to help electric and hydrogen fuel cell models achieve price parity with internal combustion equivalents.

The Federal Chamber of Automotive Industries (FCAI) has thrown its support behind the report’s recommendations to reduce the up-front cost of electric and hydrogen fuel cell vehicles, but it was more cautious about the phase-out of petrol and diesel.

“Many of the policy directions outlined in the report align with policies FCAI has maintained for years, including a reduction in car import charges and the scrapping of the luxury car tax,” FCAI chief executive Tony Weber said.

Mr Weber also pointed out that the Australian automotive sector had set its own carbon dioxide emissions reduction target of more than 50 per cent by 2030, calling out Grattan’s petrol and diesel ban proposal for not being technology agnostic.

“Governments should pick targets, not technologies,” he said. “The aim should be to reduce CO2 rather than give preference to one technology over another.”

But Grattan warned that while Australian state and territory governments have set a goal of net-zero carbon dioxide emissions by the middle of this decade and that prime minister Scott Morrison has indicated – but not yet committed to – the same, “relying on technology and market forces alone won’t be enough to get on track for net zero by 2050”.

“Cutting emissions in the light vehicle fleet would ease the pressure to find emissions reductions in other modes of transport, such as aviation and long-distance trucking, where affordable alternatives to fossil fuels are harder to identify,” the report says.

Introducing mandatory fleet emissions standards for new light vehicles would be the first step toward a zero-emissions deadline of 2035, with action on this required sooner rather than later, according to Grattan.

“Action today is crucial to avoid locking in emissions for decades to come,” the report warns.

In addition to the mandated targets, measures to reduce the up-front cost of purchasing zero-emission vehicles will be required to help electric and hydrogen fuel cell vehicles achieve price parity with internal combustion equivalents.

Among these would be the zero import and stamp duties on eligible vehicles and to exempt them from luxury car tax for the rest of this decade.

Grattan says eliminating stamp duty alone would reduce the cost of an EV by up to 6.5 per cent, removing import duty would save 5.0 per cent on some models and a luxury car tax exemption would make a price difference to the majority of electric and fuel-cell vehicles on sale today.

It points to studies that show ongoing benefits such as registration and parking discounts or access to special traffic lanes are less of an incentive than reduced up-front costs and that “governments should not hesitate to introduce road-user charging for zero-emissions vehicles”.

“Emissions are not the only cost that cars impose on society; a per-kilometre road-user charge helps to ensure that drivers pay for their access to roads, which are an expensive public resource.”

The report defines zero-emission vehicles as powered by batteries are charged from an external power source or fuel cells that make electricity by extracting the energy of a zero-carbon fuel, such as hydrogen, without burning it.

It acknowledges that these energy sources “can have upstream emissions depending on how the electricity or hydrogen is made”.

“These emissions will be counted in Australia’s electricity or industrial sectors, rather than transport. They should fall over time as all sectors decarbonise.”

Unlike the EU Green Deal proposal, the Grattan report contains less of an ambitious supporting infrastructure component.

It mainly focuses on improving EV charging access for renters and those without off-street parking, including planning for the installation of chargers for “convenient, local vehicle charging” for those that rely on street parking by 2030.

Under the proposal, the provision of sufficient cabling for the installation of off-street chargers in new builds would be mandated under the National Construction Code and all rental properties would have to include electrical outlets near off-street parking spaces by 2030.

For public rapid chargers typically used on long journeys, Grattan says this infrastructure “will need to respond to and support emerging consumer preferences”.

The report notes that federal, state and territory governments have already invested in charging networks but states a preference for the long-distance part of the charging infrastructure to “be provided under a commercial business model”.

“However, it is also likely that some early barriers will not be able to be removed without government support.”

Grattan says this support “should focus on areas where the private sector is unlikely to supply charging infrastructure, such as less-populated regional and rural areas, and lower socio-economic areas”.

For heavier vehicles, shipping and aviation, the think tank recommends that “governments should make small bets on all the alternatives, and plan scenarios for each should it become the clear winner”.

This includes “targeted trials of zero-emissions trucks, particularly hydrogen trucks, to assess their performance under Australian conditions and practices”.

Grattan also calls for an increase in truck width limits from 2.5 to 2.6 metres, which would “ensure any zero-emissions heavy vehicles made for the EU or US can be used in Australia without expensive modifications”.

Alternative fuels like ‘renewable hydrocarbons’ such as biodiesel, ethanol and synthetic methane require national standards and certification so blends of up to 100 per cent can be used without engine modifications, as well as targets for increasing in the proportions of renewable hydrocarbons to be blended into aviation and shipping fuel.