New Analysis: $5.9b Fuel Cost Saving to Commuters if Fuel Efficiency Standards Introduced

Australia Institute

New research by the Australia Institute shows that $5.9 billion in fuel costs would have been saved and emissions equivalent to a year’s worth of domestic flights would have been avoided, if robust fuel efficiency standards were adopted in 2015.

As the fuel excise cut nears an end, Australia has an opportunity to save commuters money at the fuel bowser by introducing an average efficiency standard for new cars in Australia. Such a measure would save motorists money on fuel, reduce transport emissions, increase the availability of electric vehicle models, and reduce Australia’s reliance on foreign oil.

Key Findings:

  • $5.9 billion in fuel costs would have been saved and emissions equivalent to a year’s worth of domestic flights would have been avoided, if robust fuel efficiency standards were adopted in 2015
  • Fuel efficiency standards have been adopted in around 80% of the global car market, but not in Australia
  • Almost two in three Australians (65%) support the introduction of national fuel efficiency standards in line with those in Europe
  • The current industry-led voluntary standard is weak and opaque, will leave Australia behind, and the Australian government should instead model standards off best practise in Europe
  • Fuel efficiency standards establish an average level of efficiency for new cars, which can be communicated as an efficiency level (litres/100km) or carbon dioxide intensity (CO2/km);
  • In 2018, the average carbon dioxide intensity for new passenger vehicles in Australia was 169.8gCO2/km compared to 129.9gCO2/km in the United States, 120.4gCO2/km in Europe and 114.6gCO2/km in Japan
  • Over the last decade fuel efficiency standards have been committed to by multiple Australian governments and recommended by multiple inquiries and reports

“Australians are being left behind simply because, as a nation, we are still accepting gas guzzling cars with no emissions standards. This is costing commuters money at the petrol pump and holding Australia back from reducing our emissions,” said Richie Merzian, Climate & Energy Program Director at The Australian Institute.

“As the fuel excise cut nears an end, policymakers have an opportunity to save motorists money at the petrol pump by introducing an average efficiency standard for new cars in Australia.

“Australian motorists are the victims of having one of the world’s least efficient and most polluting car fleets, and it’s costing us every time we fill up at the petrol pump.

“Fuel efficiency standards are a widespread and modest policy mechanism used by policymakers globally to ensure new cars are more efficient and less polluting. These standards exist across 80% of the vehicle market but not in Australia despite numerous reports, inquiries and government commitments saying we need them.

“Previous attempts to introduce fuel efficiency standards in Australia have been marred by disinformation and outright lies. Unfortunately it is everyday Australians bearing the cost. Australian motorists have paid billions more for expensive foreign oil to fuel gas guzzling cars which have been rejected by the rest of the world.

“The Albanese Government has a golden opportunity to implement robust fuel efficiency standards in line with Europe. The policy is popular, helps Australians with cost-of-living, and will help drive the uptake of cleaner vehicles.”

Australia’s inaugural National EV Summit headlined by the Hon. Chris Bowen, Minister for Climate Change and Energy; Robyn Denholm, Chair of Tesla, will be held in Canberra, 19 August 2022.

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