Australian auto industry sets its own CO2 targets

The Federal Chamber of Automotive Industries (FCAI) has announced voluntary CO2 emissions targets for Australia’s cars and utes for 2030.

If met, the new CO2 levels – described as “stretch targets” – would see the CO2 emissions of cars and SUVs reduced by an average of four per cent per annum from 2020 to 2030.

A combined cars plus heavy 4x4s and light commercial vehicle target would see a reduction of three per cent per annum during the same period.

The FCAI estimates the targets will see new cars and SUVs sold in Australia average less than 100g/km of CO2 emissions by 2030. Combined cars/SUVs plus heavy 4x4s and light commercials would average under 145g/km.

According to the FCAI, as of December 2019, FCAI members (car-makers) had achieved a 24.9 per cent reduction in emissions from 2005 levels. That said, the proposed 2030 target is still slightly more than the current (2020) European emissions mandate.

The FCAI says its new CO2 Emissions Standard is “a long-term objective which recognises that different brands will follow different paths towards the target depending on their individual model cycles”.

“For this reason, and to contribute to Australia’s commitment to the Paris agreement, the Standard is set across a ten-year period to 2030.

“Significantly, the industry acknowledges the pathway to the new target may not be without impediment and it is fully expected that individual manufacturers may not always record annual improvement,” the Chamber stated.

The initiative is supported by more than 40 major auto brands. All major car brands are signed up to the standard, FCAI chief Tony Weber stated.

The targets are technology neutral and allow for emission credits including generous dispensations for sales of zero-emission vehicles.

The FCAI standard combines aspects of US and European laws but, says the FCAI, also allows for Aussies’ penchant for larger, heavier and more powerful vehicles including off-road focused 4x4s.

The FCAI says the voluntary standard “aims to provide certainty to manufacturers to enable them to confidently plan future product for the Australian market”.

“The FCAI strongly supports a comprehensive approach to addressing motor vehicle emissions that includes fuel quality standards, the introduction of Euro 6 and the introduction of a challenging but realistic, achievable and market relevant CO2 standard,” Weber stated.

“In this context, the FCAI Standard has been based on internationally mandated practices, including those from Europe and the USA, while still recognising the unique characteristics of the Australian market.”

The FCAI says the new standard has been developed following consultation with “brands, industry statistical and analytical experts, and all levels of government”.

It is not, however, lobbying government to adopt the standard as legislation. Nor does the FCAI believe the standard should be used as a basis for CO2-linked taxation.

“Governments should regulate in economies when you do not get a market-based response. But if you do get a market-based response you shouldn’t regulate,” Weber told carsales.

“It’s been our position for some time that we wanted a [government-mandated] CO2 standard; that hasn’t happened. Therefore we put this [voluntary standard] in place. But if we can get there [significant automotive CO2 reduction] without regulation then so be it.”

On the question of auto brands dismissing the voluntary standard, the FCAI head was firm.

“This is not a toothless tiger. We will be reporting on an annual basis on progress to the 2030 target and it’ll be in the public domain.

“Consumers take CO2 and the environment very seriously in this country and I’m sure this [standard] will be part of the equation they will take into consideration when they purchase a new vehicle.”

Weber likened the effect of the FCAI CO2 Emissions Standard to that of ANCAP in highlighting vehicles with better crash performance.

In this case, however, it will be brands and automotive groups (like the Volkswagen Audi Group) that will be measured overall, rather than individual models.

The first report against the standard’s targets will be in early 2021.

There is no requirement for brands or groups to report annually, however, it’s likely that for Year Zero (2020) all 40 FCAI affiliates will set some form of baseline.

How does the FCAI CO2 Emissions Standard work?

“The Standard will calculate industry and brand CO2 targets on a sales-weighted average mass per unit basis against sales recorded in VFACTS, the industry data source,” says the FCAI.

“The results will be divided into separate reporting categories – MA (passenger vehicles) and MC + NA (sports utility and light commercial vehicles) in line with international practice.

“Reporting will be in line with the manufacturers’ CO2 emissions performance reporting undertaken by the European Environment Agency and will allow the inclusion of Carry Forward Credits and/or Debits which are a feature of the USA regulation.

“From 2020 to 2030, credits will be carried forward for up to five years, including those earned from 2020 to 2023. From 2024 to 2030, debits will be recorded and carried forward for up to five years. Prior to 2024, no debits will be carried forward.”