Australian Automobile Association argues government plan will cost consumers more but government says petrol savings will offset any rise

This article is more than 3 years old

This article is more than 3 years old

The Australian car industry has tried to kill any government move to cut greenhouse gas emissions from cars, arguing it would increase the cost to consumers and contradicting comprehensive government modelling.

The government plans to introduce emissions standards for new cars, releasing a series of proposed targets in discussion papers and seeking input from industry and other stakeholders.

Under the strongest target considered, new cars would have to cut their CO2 emissions by 45% below current levels by 2025 – from 192g of CO2 a kilometre to 105g.

Comprehensive modelling of that target by the government’s Climate Change Authority found the change would save consumers thousands of dollars. Although it would increase the average cost of a car by $1,500 in 2025, that would be offset by $830 in the first year from fuel savings, and by $8,500 over the life of the car.

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The modelling found the strongest target resulted in the biggest savings for consumers.

But the higher sticker price on new cars has spooked the industry, which on Wednesday told some media outlets the emissions standards would increase the price of some cars by “more than $5,000”.

The Daily Telegraph reported that Australian Automobile Association modelling found the standard would push up the price of a Toyota Accent by $3,925. The AAA declined to share the modelling with the Guardian, but the independent government modelling found it would raise the average price of a Toyota by just $1,672 in 2025 – a rise that would be more than offset by fuel savings.

The AAA’s chief executive, Michael Bradley, told the Telegraph the standards would be “one of the most extreme efficiency standards in the world”.

But the European Union has much stronger standards. Its legislation requires the fleet to reduce emissions to just 95g of CO2 a kilometre as soon as 2021. The US also has a stronger target, aiming to reach 101.3g of CO2 a kilometre by 2025.

The AAA opposed taxes aimed at reducing the use of leaded petrol two decades ago, despite the overwhelming public health benefits of doing so.

Because there would be a penalty for manufacturers that did not meet the fuel efficiency standards, the Telegraph labelled it an “emissions tax”.

“Certainly no decisions have been made in that regard at all,” the prime minister, Malcolm Turnbull, said in London.



Speaking on Radio National on Wednesday, the energy and environment minister, Josh Frydenberg, said the story was a “beat up”.

“What we are focused on is how to reduce the fuel costs for families with vehicles and that is something we continue to consult on, but there has been no government decisions in this regard.”