Car-makers call for streamlined road-user charges

The Federal Chamber of Automotive Industries (FCAI) has proposed scrapping existing government taxes and levies in favour of a road-user charge based on vehicle types and distances travelled.

If implemented, the radical idea would put an end to state government registration and stamp duty and federal government fuel excise, luxury car tax and possibly even GST.

“The future of mobility is transforming rapidly,” FCAI chief executive Tony Weber said of the proposal today.

“Against this revolution, now is the time to look ahead in the areas of regulation and funding and for governments to have the courage to overhaul outdated practices.

“Governments can develop new and certain revenue streams to pay for roads and infrastructure while vehicle owners will be relieved of a myriad of outdated, confusing and inefficient charges.”

The FCAI proposal acknowledges that such a system would take years to fully implement, and would be reliant on new on-board connected technology to measure each vehicle's travel times and distances.

“An efficient road user charging scheme can address all vehicle users regardless of the type of vehicle they drive, how often it is driven and the purpose of the travel. For example, it could be based on vehicle mass, distance travelled, time of travel or a combination of factors,” Weber suggested.

“Comprehensive reform of this kind may take some years to fully implement. However, we should engage on this topic just as other countries are beginning to do now. The key outcome will be a national approach for all Australians.”

It's a novel approach canvassed in a discussion paper drafted by the FCAI, just days after the Victorian government announced it would offer a $3000 subsidy to buyers of new EVs priced under $68,740 from May 2.

But the Victorian government is also aiming to push through legislation that would tax EVs at a rate of 2.5 cents per kilometre (and plug-in hybrids at 2.0c/km), effectively negating the running-cost benefits of owning an EV.

The FCAI has been previously dismissive of Victoria's bill to impose road-user charging for EVs and PHEVs, but this latest proposal brings with it an apparent change of heart. That is a consequence of the state government's EV subsidy initiative announced last week.

“On balance, the incentives being offered supporting the purchase of electric vehicles do offset the revenue that will be raised through the charge,” Weber confirmed.

“We support the Victorian government’s plan to take the initial steps to introduce a road user charge. Over the longer term we believe a comprehensive approach to road user charging that remains technology neutral will result in a greater benefit to motorists and to governments.”

Andrew Constance, transport minister for the Berejiklian government, has proposed a range of incentives to boost sales of electric vehicles in New South Wales, according to a report in the Sydney Morning Herald today.

Those incentives include transit-lane access, waiving stamp duty on the vehicle purchase and subsidising parking fees for EV owners.

More importantly, however, the minister told the SMH that he prefers to delay taxes applied to EVs until the zero-emissions vehicles account for at least 40 per cent of new-car sales.

The minister's remarks have been welcomed by EV Council chief executive, Behyad Jafari, who states that now is an “historic opportunity” for NSW.

“There's a great opportunity for New South Wales to have it all here. Well-targeted subsidies now, as seen elsewhere across the globe, would create a boom in EV sales,” Jafari said.

“Then, once the state starts capturing the benefits from fleet electrification, that would be the perfect time to start introducing smart road user charges.”

In what was very likely a swipe at the Victorian government, Jafari declared that stronger EV sales would be of greater benefit to the broader community than the imposition of a road users charge specifically targeting the relatively small fleet of EVs presently on the road.

“At this point in time the public interest is going to be much better served by rapid electric vehicle uptake than by skimming a little extra tax from the few EVs that are already registered,” Jafari said.

“The transition to electric cars will clean our streets of exhaust and noise, lowering health costs, reducing carbon emissions, and helping break the state's dependence on foreign oil. This will represent billions of dollars in economic benefit.”

While governments bicker over the taxation of electric vehicles, a new project in Western Australia brings the country a little closer to large-scale green hydrogen production for an emissions-free society.

Named the Clean Energy Innovation Park (CEIP), the new facility is expected to produce up to four tonnes of hydrogen per day from a 10MW electrolyser.

The CEIP is a joint-venture between ATCO and Australian Gas Infrastructure Group (AGIG), funded by ARENA (the Australian Renewable Energy Agency) to the tune of $28.7 million.

“We’ve been investing in hydrogen since 2017 and are strong believers in its value as we strive towards a cleaner energy future,” said ATCO MD and COO, Patrick Creaghan.

“The development of the CEIP has the dual benefit of not only contributing to the decarbonisation of the gas distribution network, it also allows us to generate the economies of scale required to expand the demand and use of renewable hydrogen as a commercially viable fuel.”

The CEIP will supply hydrogen for commercial power generation, which is currently one of the most carbon-intensive industries in Australia, and the two companies involved are already deeply involved in delivering gas from fossil-fuel reserves.

“ATCO and AGIG are already significant players in the Western Australia gas market, providing distribution and transmission services respectively, and the CEIP joint venture brings together our strengths to establish a commercial hydrogen sector in the state.

“We look forward to working with ATCO who bring with them extensive energy and hydrogen industry experience locally and internationally,” said AGIG CEO Ben Wilson.

Hydrogen production on an industrial scale also represents new export opportunities for Australia, says ARENA CEO, Darren Miller.

“We’re excited to have chosen three projects we believe will help kickstart renewable hydrogen production in Australia at a large scale. One of the projects will see clean hydrogen used to make ammonia for export and the other two will blend clean hydrogen into our gas pipelines to help decarbonise our natural gas networks,” Miller said.

“Our hydrogen industry in Australia is in its infancy, so the lessons learned from these three projects – and the entire funding round – will be important in driving our future hydrogen economy.”

The CEIP will be built alongside the 180MW Warradarge wind farm, which will supply sustainable electricity to run the CEIP's electrolyser. From the CEIP, the hydrogen will be transported by truck to gas network injection points.

None of the stakeholders involved indicated the hydrogen produced would be supplied through a retail chain to operators of fuel-cell vehicles. The impact of the CEIP is more likely to be felt in clean, base-load power generation for EVs.

In other EV news this week, BMW Group Australia has announced it will throw in a free NCM e-bike valued at $2199 for small and medium businesses that purchase an EV or PHEV from BMW or MINI before June 30.

BMW and MINI have a range of PHEVs, such as the BMW 330e, X5 xDrive45e and MINI Countryman Hybrid, and EVs including the BMW i3 and MINI Electric.

BMW Australia will release the all-electric iX and iX3 in the fourth quarter of this year, followed by the i4 in early 2022.

The German car-maker is promising 12 EVs worldwide by 2023 and MINI will be the first BMW Group brand to go exclusively fully electric by 2030.