FCAI slams Climate Change Authority report

Automotive industry's peak body challenges recommendations in new study

A report issued by the beleaguered Climate Change Authority has drawn fire from the Federal Chamber of Automotive Industries for recommending a tough new standard for fuel consumption and CO2 emissions.

In a nutshell, the Climate Change Authority – the same agency the Abbott Government plans to abolish – has released a report recommending the imposition of a sliding CO2 emissions standard for light vehicles, reducing to 105g/km by 2025. The Authority recommends imposing the new standard from 2018, after local manufacturing has ceased.

This new standard would align with America's CAFE standard by 2025 and the 105g/km target would be an average figure, not a lower limit. In other words, car importers (by 2025) would have to market a range of vehicles capable of certified CO2 emissions figures well below the 105g/km target – simply to compensate for other vehicles in the range that won't come anywhere near that.

FCAI Chief Executive Tony Weber was immediately on the front foot, attacking the Climate Change Authority's findings. He was quoted in a press release issued yesterday expressing his disapproval of the key points in the report.

"Last month's National Transport Commission information paper on Carbon Dioxide Emissions from New Australian Vehicles shows that, on average, new motor vehicles in Australia have recorded 2.4 per cent year-on-year CO2 reductions over the last decade," he observed.

"This is significantly greater than the reductions seen in most other sectors of the economy.

"In addition, the road transport sector accounts for eight per cent of all CO2 emissions in Australia, and of that eight per cent, new motor vehicles account for just one sixteenth of the emissions, or around half of one per cent of total CO2 emissions."

Weber intimated that the government agency was imposing an ideologically-driven standard on consumers in a free market economy.

"The Climate Change Authority doesn't appear to give appropriate recognition to the fact that consumer preference in Australia contributes heavily to motor vehicle emission levels.

"The reality is that Australians have the capacity to buy the vehicles the report alludes to; however, they elect not to. New car sales data shows that Australian consumers have a greater preference for heavier vehicles with larger and more powerful engines than consumers in the United Kingdom. They also have a preference for a lower proportion of diesel powered engines and a higher proportion of automatic transmissions—all of which contribute to higher emissions. Other governments around the world also provide significant incentives for the purchase of low-emission vehicles."

The FCAI boss made no mention of the USA, however, where much the same points apply – and with America's aversion to diesel in passenger cars the market there the market is arguably even more unsettled by its own CAFE standard. Weber also noted that Climate Change Authority had not sought guidance or feedback from the industry during the preparation of the report.

"Any consideration to reduce transport CO2 emissions needs to be comprehensive. It needs to consider how to reduce traffic congestion, the choice of transport mode, and a taxation system that is also geared to achieve these outcomes. The FCAI would be cautious about relying on any one policy mechanism to deliver further reductions," he concluded.

While Weber was delivering the official view of the FCAI, there are those within the Chamber's inner sanctum who hold different views. One industry insider has told motoring.com.au that he would like to see a sliding scale of taxation to reduce CO2 emissions sooner, much as Mercedes-Benz Australia proposed at the height of debate surrounding changes to the Luxury Car Tax by the Rudd Labor government in 2008.

According to our source, such a scheme need not be bogged down in the current political battle waging over climate change and CO2's impact. It could be based on fuel consumption – which is tied to CO2 emissions of course.

"After all," he said, "We've reached 'Peak Oil' in Australia anyway."

It would be a new system of tax to succeed the unloved Luxury Car Tax, which is not only inequitable, but also easily avoided, the insider remarked.

And so reducing CO2 emissions would be a by-product of reducing our reliance on imported petroleum products, rather than an end in itself. It's one (economic) argument that might meet the approval of climate change sceptics.

To put the Climate Change Authority's 105g/km target in some perspective, the current national average of 192g/km – calculated by the National Transport Commission – equates to about 8.3L/100km for petrol-engined vehicles. The figure of 105g/km proposed by the Climate Change Authority equates to 4.5L/100km. With present technology available, only hybrids and plug-in hybrids can consistently achieve anywhere near that figure.

Presumably the Climate Change Authority has been inspired by the NTC's report, which shows that over the period of 12 years since reporting began, the national figure for automotive CO2 emissions has declined by 2.4 per cent a year on average. If that decline continues at the same rate, by 2025 the national figure would be roughly 143g/km. No wonder the FCAI is alarmed by the stretch goal proposed by the Climate Change Authority.

But the FCAI may be needlessly concerned. While the average has been 2.4 per cent a year, the rate of reduction has been hastening in recent years – exceeding three per cent and closing on four in the years 2012 and 2013. It will further hasten once Ford and Holden stop building six-cylinder sedans and wagons here, and it will hasten again with the broader adoption of mild-hybrid technology, amongst other fuel-conserving measures.

The problem basically boils down to who can better foresee the development of technology between now and 2025 – the FCAI or the Climate Change Authority?

The press release issued by the Climate Change Authority is available online for a summary of the report.

FCAI slams Climate Change Authority report

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