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The Albanian government has backtracked on proposed emissions regulations for sports utility vehicles and SUVs after facing a furious backlash from car buyers.
Allowances will be made for less stringent CO2 limits for large SUVs and heavy four-wheel drive vehicles, including utes and vans.
After unveiling a proposed fuel efficiency standard in early February, the government has received significant criticism for the policy, which opponents say will result in higher prices for new cars while reducing choice for consumers.
Instead of banning any particular model, the rule will impose fleet-wide emissions limits for passenger vehicles (PV) and light commercial vehicles (LCV), bringing Australia in line with other developed economies that have similar schemes.
On Tuesday, Energy Minister Chris Bowen and Transport Minister Catherine King confirmed the rule would be changed so that new light commercial vehicles would be subject to less stringent emissions reduction targets.
Under updated rules approved by cabinet on Monday night, average emissions from new light commercial vehicles will have to be reduced by 50 percent by 2029 if manufacturers want to avoid penalties.
Previously, the government’s original proposal called for a 60 percent reduction.
New passenger vehicles will still be subject to the original 60 percent emissions reduction.
In addition, a number of large, high-emission SUVs initially classified as PV will be recategorized as light commercial vehicles if they have a towing capacity greater than 3 tonnes and a chassis similar to that of sports utility vehicles.
The change will result in models such as Toyota’s Nissan Patrol, Prado and Landcruiser, Ford Everest, Mitsubishi Pajero and Isuzu MUX being reclassified as light commercial vehicles.
Under the original proposal, these cars would have been subject to much stricter pollution limits, meaning they risked being phased out before a low-emission alternative was available.
With the emissions cap lowered each year, the rule will essentially function as a price on carbon, forcing automakers to sell more zero- and low-emission vehicles, or cut sales of high-emission models such as utes and SUV, to avoid being hit with fines.
The start of the credit trading scheme, which will allow manufacturers to buy or sell credits if they respectively meet or fail to meet the standard, was also changed and will be delayed by six months to July 1.
Penalties for violating the plan will be established by law and the review of the operation of the plan will begin in 2026.
After Prime Minister Anthony Albanese hosted business leaders at a dinner in late February, his office is understood to have become involved in negotiations over the rule.