Industry continues push for CO2 targets

THE Australian automotive industry is continuing to push the federal government to introduce mandatory CO2 emissions targets that will pave the way for more advanced cars, despite prime minister Scott Morrison ruling out the long-anticipated reform during the recent election campaign.

The Federal Chamber of Automotive Industries (FCAI) must now work through the government’s revised agenda which sees it honouring its pledge to develop a national strategy on electric vehicles and, starting this week, opening up a dialogue with industry about potentially increasing the uptake of low-emissions vehicles using subsidies, direct financial incentives and other means.

But in an interview with GoAuto, FCAI chief executive Tony Weber said the move towards mandatory Australian CO2 targets and related regulatory reform in areas such as fuel quality, adoption of the Euro 6 emissions standard as well as real-world fuel consumption were still high priorities.

“There’s no doubt it’s a disappointment (the government’s change of tack) because the industry has had a public position for a number of years now that we want a CO2 target,” he said.

“We want certainty, and we want to work with the government so that we can have something that is realistic and achievable as a CO2 target, and is long-term in nature, so that we can bring the products to the Australian market that will meet that CO2 target and play our role within the broader discussion about emissions across the economy.

“We are continuing discussions with the government about a CO2 target and a CO2 strategy. Governments change their position regularly on a raft of things and I think that CO2 could certainly be in that category in the future.”

As GoAuto has reported, Australia’s average carbon dioxide emissions from new light vehicles has stagnated, coming in at a relatively high 180.9 grams of CO2 per kilometre in 2018 which marks a 0.4 per cent improvement over the previous year and brings the cumulative reduction over the past four years to just 3.3g/km.

Mr Weber said any substantial reductions were made more difficult by consumers’ purchasing behaviour – favouring SUVs and utilities over passenger cars, for example – and a raft of other factors including poor fuel quality based on relatively high sulphur content levels.

Any mandatory CO2 target would likely be made in conjunction with regulations requiring a move to the Euro 6 standard that most major car manufacturers are now using with their new and forthcoming powertrains/models and which generally requires a higher quality fuel.

Diesel sold in Australia has no more than 10 parts per million of sulphur, but petrol can be as high as 150ppm in regular unleaded and 50ppm in premium – and the current plan is to wait until 2027 before mandating 10pp.

“We are in a difficult situation, locked in by fuel quality in this country to what engines we can bring in,” Mr Weber said.

“The R&D around the world is being done for the major markets – advanced and developing nations – and they are, for the most part, looking at quality fuel: 10 parts per million, 95 RON.

“We need to be there so we can take that technology, bring it to Australia, along with all the other technologies that goes into the suite of those vehicles – which includes improved safety technology – so we can be at the forefront of vehicles in this country.”

Mr Weber said that continuing with high sulphur content will only serve to push any mandatory CO2 target higher.

“You can always have a target – with poor quality fuel, the question is how ambitious that target can be,” he said. “And that is the anchor that we have in this debate.

“You cannot just divorce these matters; the quality of fuel is a direct input into what sort of emissions output you will get in the future.”

Real-world emissions and fuel-consumption testing is another area that should come on stream with the move to Euro 6, according to Mr Weber.

“When we go to Euro 6, we should harmonise with international standards and we should have real-world testing,” he said.

“But once again, these things are linked. There are people out there who want their cake and eat it too – you can’t have that. You have got to have fuel quality to go to Euro 6 and real-world driving (tests).”

Mr Weber said consumers also had a role to play in driving demand for improved fuel standards, not just government, and suggested that a move to a higher quality might not necessarily mean a higher price at the bowser.

“(Don’t) make the assumption that fuel in international markets is more expensive. Is that correct?” he asked, based on what each country pays on the international market within Asia.

“Is the higher quality fuel coming out of the Asian region more expensive than the product the Australian fuel industry buy and bring into Australia?”

The dialogue opening up with government is expected to see a broad range of related topics placed on the table, including road-user charges as a replacement of sorts for a diminishing fuel excise to be collected with the move towards electrified vehicles.

“I think this is an opportunity, in a mature debate, to bring all the parties together so that we can get the best policy structure for this, and I think we need to think about the technologies of the future and how they will play a part in potentially having user charging applied,” Mr Weber said.

“It’s about working on what is the best framework for the Australian environment, and that’s something we need to talk to all levels of government about.

“There is a question mark still out there what the vehicle fleet of the future looks like. All we’re saying is we believe that electrification – including fuel cells – will play a part in that. The internal-combustion engine will also play a part in our market for many, many years to come.

“Cars in Australia, the average age is 10.6 years, so therefore a car purchased today, on average, will be on the road for at least 20 years. So we need to have policies in place to address all those issues.”