Drivers may soon have to spend thousands of extra dollars for their cars under new energy emissions rules proposed by the Albanese government.
Energy Minister Chris Bowen announced the new plan in early February, but it has since been criticized by senior executives in the car industry.
It involves imposing carbon ‘penalties’ on certain models under the recently proposed 2025 CO2 targets.
Owners of Australia’s best-selling car in 2023, the Ford Ranger, will potentially have to pay an extra $6,150 due to the tax, according to estimates compiled by the Federal Chamber of Automotive Industries (FCAI).
Only estimates exist at this time because Bowen has not yet released the government’s own modeling of how the changes will affect prices.
FCAI estimates also suggest that the Toyota LandCruiser would be the car model most affected by the changes, incurring additional fines of $13,350.
Energy Minister Chris Bowen (R) announced the new emissions plan for cars in early February.
The carbon cap has been criticized by auto industry experts for its potential to increase the cost of
Tony Weber, executive director of the FCAI told the Herald Sun who does not understand why the government does not publish its own figures.
“Good public policies are created when there is transparency about the objectives and the assumptions that support those objectives,” he said.
‘Obviously we hope that there will be changes to the proposed rules. If carried out as formulated, the impact on consumers will be enormous, particularly in two senses: the increase in the cost of purchasing the vehicle and the availability of the product in the market segments.’
Carbon penalties would affect 18 of the 20 most popular cars in 2023, excluding only Tesla models that receive carbon credits.
The Toyota HiLux, Isuzu Ute D-Max, Toyota RAV4 and MG ZS would face bills of $2,690, $2,030, $2,720 and $3,880 respectively.
However, green car options would see the opposite effect on prices: Tesla Model Y owners would receive a $15,390 credit and those with the Model 3 would receive $15,940.
The FCAI figures assume that sanctions would be awarded based on the variant with higher CO2 emissions of each car.
Webber said the plan will likely push the market toward more electric vehicles in the future.
No cars will be banned under the proposed plan, but penalties will vary between models depending on their average emissions and whether or not they exceed the government limit.
This limit will decrease each year until the end of the decade, when needs are expected to be 60 percent lower than when the reductions began.
Experts have speculated that these changes will limit the availability of traditional SUV and ute models, as manufacturers seek to avoid fines for violating pollution limits.
The Toyota HiLux (pictured), Isuzu Ute D-Max, Toyota RAV4 and MG ZS, would face bills of $2,690, $2,030, $2,720 and $3,880 respectively under the new emissions standards.
Bowen was accompanied at a press conference by Infrastructure Minister Catherine King, who insisted that the availability of the models will not be affected by the change.
“It’s not a restriction on what Australians can buy,” Mr Bowen said.
‘You can still buy a ute, an SUV, whatever you want… In countries with vehicle efficiency standards (like the United States and New Zealand), utes and SUVs are often the best-selling cars. “That’s up to Australians, but we would like Australians to have more choice in that.”
The minister said if Australia reached US standards by 2028, the cost of cars would be reduced by about $1,000 a year.
Mrs King also stressed that the cost of cars would not increase.
“The good thing is that there have been years and years of real experience in countries around the world,” he said.
‘And therefore the international evidence is that it does not have an impact on the price. I have no doubt that we are going to hear all sorts of nonsense about this from the opposition and other interested parties. We’re going to hear that the Utes are banned.
‘That’s not true… Let’s hear about the price. Again, not true. No evidence; There is just no evidence to say it will affect the price at all, be it SUVs or utes or any other vehicle.
Weber was skeptical about the optimism shown at the press conference and asked if the plan was a win-win, why wouldn’t they publish the figures themselves.
TO Ms King’s spokeswoman said the government was working with manufacturers throughout the consultation phase on the New Vehicle Efficiency Standard.
Infrastructure Minister Catherine King insisted the new plan will not affect the price or availability of combustion vehicles, but experts still disagree.
However, National Senator Matt Canavan is not so optimistic and believes the new plan will increase the cost of many popular cars by $9,000.
‘“Some simple calculations show what the impacts of the Australian government’s plans will be,” he wrote for the Courier Mail.
‘The most popular car sold in Australia last year was the Ford Ranger. According to government figures, it produces 182 grams of carbon dioxide per kilometer traveled. In 2029, the government’s emissions limit for light commercial vehicles (which is the Ford Ranger type of car) will be 81 grams of carbon dioxide. So the current Ford Ranger would be 101 grams over the limit and with a tax rate of $100 per gram, Ford would face a tax of $10,000, which would be passed on to you.’
Canavan’s estimates were backed by CarExpert.com.au founder Paul Maric, who told the Herald Sun there is currently a shortage of electric vehicles compared to those powered by combustion engines.
Maric said mass adoption of electric vehicles would cost Australians more money due to their complex technology while providing drivers with less power than traditional ones.
He also noted that manufacturers such as Ford or Toyota have limited electric vehicle options and, therefore, would be greatly affected by the new sanctions.
Australian Automobile Dealers Association (AADA) chief executive James Voortman added it was inevitable these costs “could end up leading to more expensive vehicles”.