Auto industry to face tougher emissions targets

Australia is lagging miles behind the rest of the West on emissions regulations. But if the federal government has its way, the next decade will see us begin to reel in other developed nations.

The government is currently in discussions aimed at dramatically tightening up greenhouse gas (GHG) emissions regulations between now and 2024. Dramatically by our standards, anyway. The legislation, most likely to find ratification around the end of 2013, is expected to impose on the local auto industry – manufacturers and importers – fleet average targets of 190g/km by 2015 and 155g/km by 2024.

Those targets are designed to help bring down national GHG emissions 25 per cent by 2020 — based on 2000 levels. However, the targets are conditional on other economies, developed and emerging, agreeing to match or exceed Australian levels of restraint. An unconditional figure of five per cent by 2020, set during the Rudd prime ministership, has attracted considerable derision from the green lobby. Long term targets extend to an 80 per cent reduction from 2000 levels by 2050.

Automotively speaking, we have a way to go. Through 2011, the National Transport Commission recorded a drop in average CO2 emissions across the Australian new car and LCV fleet from 212.6 to 206.6g/km. The locally made element within the fleet dropped nearly seven per cent to 230g/km.

This took new passenger car emissions down to an average 198g/km, putting Australia nearly 50 per cent over the European average of 136.1g/km. And we benefit from advances among the European brands to the tune of about 13 per cent of local sales.

As a pointer to where Australia sits, relative to the EU, Suzuki came in as Australia’s ‘greenest’ marque with a fleet average of 161g/km. In Europe, that title went to Fiat with an average 118.2g/km. As the NTC mentioned in its third annual report on the issue (Carbon Dioxide Emissions from New Australian Light Vehicles 2011) earlier this year, our cleanest brand ranks well down the Euro list. By comparison Audi ranks 20th on that sheet with 146g/km – a full 15 grams better than our best.

Cabinet hopes at least to have begun on a draft bill by late this year. It’s waiting on an impact assessment, due for delivery this month, to help determine what’s viable in the way of emissions standards over the next decade or so. This follows a discussion paper compiled through 2011 and released early this year, suggesting considerable improvements

The paper quoted the Co-operative Research Centre for Advanced Automotive Technology’s (Auto CRC) Automotive Australia 2020 project in identifying the emissions reduction technologies crucial to keeping the Aussie auto industry globally relevant: weight reduction, gaseous fuels (LPG, CNG) and vehicle electrification.

AutoCRC concluded the fuel efficiency improvements needed to meet the standards mooted here can be generally made without impinging on other virtues like decent performance and comprehensive safety features.

The federal government hasn’t yet made explicit what kind of sanctions it might impose on makers failing to comply with the regulations. The FCAI, currently in talks with Canberra officials on the issue, is known to be looking at several sanction regimes, inspired by the EU approach. These would likely involve both carrots and sticks – incentives and grants to help implement new technologies on one hand, financial penalties linked for those falling outside emissions targets on the other.

Those mooted fleet average figures (190g/km by 2015; 155g/km by 2024) appear modest by comparison across the globe. More so considering the benefits we gain on the back of more stringent regulations overseas, particularly in Europe.

The Global Fuel Economy Initiative group advocates a 50 per cent reduction in fuel consumption by the global light vehicle fleet by 2050. The group, comprising representatives from UK-based charity the FIA Foundation, the International Transport Forum, the International Energy Agency and the UN Environmental Program, claims that cuts in average new vehicle fuel consumption in the order of 30 per cent are entirely achievable by 2020, and 50 per cent by 2030. Much or all of the cost, it says, would be absorbed in fuel savings.

Today’s car emits about a twentieth of the muck belched out by a similar sized vehicle 40 years ago. But makers are not off the hook yet, with standards tightening every few years across the world. Particularly the West, more particularly Europe. While carcinogenic particulates and other toxins have long been subject to regulation there, carbon dioxide wasn’t until recently.

The European Automobile Manufacturers Association (ACEA) signed an agreement to start limiting CO2 emissions back in 1998, but it only extended to legal regulation when the EU parliament passed legislation in 2009 setting a manufacturers’ new vehicle fleet average emissions cap of 130g/km to be achieved by 2015. That translates into an average 5.4L/100km for petrol engines and 4.8L/100km for diesels.

To keep them on track, the regime imposes phase-in targets over three years, demanding compliance rates of 65 per cent this year, 75 per in 2013 and 80 per in 2014 before the 100 per cent culmination in 2015. And as of this year, manufacturers face a penalty for each car exceeding those targets on registration. The impost amounts to €5 for the first g/km over the limit, €15 for the second, €25 for the third and €95 for each gram thereafter (current exchange rates place the Euro at about AUD$1.20). From 2019, penalties will tighten to a straight €95 for every excess gram in every vehicle registered.

The EU’s expressed aim is to pull fleet averages down to 95g/km by 2020.

And the US? In 2009, the Obama administration substantially tightened Corporate Average Fuel Economy (CAFÉ) standards for MY2012-2016. From now until then, Federal regulations demand makers head for an average fuel economy standard of 35.5mpg (6.6L/100km) by 2016, dramatically upping the ask from the superseded CAFE law passed by Congress in 2007 requiring a fleet average 35mpg (6.7L/100km) by 2020.

That’s equivalent to 159g/km CO2 for petrol engines, demanding improvement averaging more than five per cent per year.

All of which leaves our use of words like ‘stringent’ and ‘tightening’ looking rather loose indeed.

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