New internal combustion engine cars, light trucks will be banned in ACT from 2035 as part of electric transition

The ban will apply to new light vehicles - which include passenger cars, motorcycles and small commercial trucks - and will be backed up by sales targets for electric vehicles.

The ACT government wants between 80 and 90 per cent of new vehicle sales in 2030 to be zero-emission models.

Energy and Emissions Reduction Minister Shane Rattenbury said setting targets and the fossil fuel phase-out date early gave the community and industry certainty.

"I think right now, people would find this perhaps a surprising position but what it's about is being very clear at the long-term direction: being up front about where we're going and giving people plenty of time so that we can move through this in an orderly way," Mr Rattenbury said.

"We can't afford to get to 2034 and suddenly make an announcement like this.

"The average car age in the ACT is 9.5 years, so cars have a long life and so we need to start that action now, and also help people as they're thinking about their future vehicle purchases."

Mr Rattenbury said the precise legal mechanism to ban new internal combustion engine vehicles would still need to be worked through, and it would likely involve consultation with the federal government.

"Our intent is for no new emission vehicles to come into the market from 2035," he told The Canberra Times.

"I want to be very clear that the intent is not to take people's cars off the road at 2035 if they're still driving an internal combustion engine, but simply to make sure no new vehicles come into the market. That's the way of really, I guess, driving that transition."

The lead-up period to the phase-out date would also require the ACT to work closely with the other states and territories, with a particular focus on Victoria and NSW, Mr Rattenbury said.

"Having achieved 100 per cent renewable electricity in the ACT, more than 60 per cent of our emissions now come from transport so we desperately need to reduce those emissions and to do that we need to decarbonise our transport fleet," he said.

"In the ACT, 95 per cent of our fleet are light vehicles, and this target is about light vehicles."

Mr Rattenbury said he was more optimistic following the change of federal government the territory could reach its electric vehicle sales targets by 2030.

"Some of the Labor Party modelling for their emissions reduction target had extremely high penetration of electric vehicles in the market, and so we think that both in terms of the fact that the ACT already leads the nation in zero emission vehicle uptake and ambitious new federal policies, that this target is achievable," he said.

The European Union in June agreed to ban the sale of new internal combustion engine vehicles from 2035, and a slew of automotive manufacturers have declared they would halt production of fossil fuel engines about the same time.

Mr Rattenbury said global manufacturers would supply vehicles to places that had ambitious targets, which meant the ACT needed to signal to the world it was ready to transition away from fossil fuel powered transport.

"They see the market opportunity and so this is about sending a very clear signal to manufacturers and to business and the community that we need to work together to meet these targets," he said.

The ACT government will this week release a 2022 to 2030 zero-emission vehicles strategy, which will include new programs and incentives to speed the take up of the new technology.

Mr Rattenbury told The Canberra Times he expected to have the locations for 50 government-funded electric vehicle charging points finalised in the coming weeks, a program which it committed $1.9 million to.

The government believes it will need more than 500 publicly accessible electric vehicle charging stations to support the take up of the vehicles before the end of the decade, and there could be up to 42,000 electric vehicles on ACT roads by 2030.

The Grattan Institute, a public policy think tank, has argued light vehicle emission standards should be cut to zero by 2035 across Australia to effectively ban the sale of new internal combustion engine vehicles, aiding efforts to reach net-zero emissions targets.

"Cutting emissions in the light vehicle fleet would ease the pressure to find emissions reductions in other modes of transport, such as aviation and long-distance trucking, where affordable alternatives to fossil fuels are harder to identify," the institute's 2021 report said.

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Chief Minister Andrew Barr in February said he hoped the number of electric vehicles registered in the ACT would continue to double, or even triple, every year.

The number of electric cars registered in Canberra doubled in the space of a year, with more than 750 added to the territory's roads between January and December 2021.

Figures from the Electric Vehicle Council, released in January, showed the ACT led the nation in the uptake of electric vehicles, while the sale of the EVs tripled in 2021.

Canberra drivers purchased 825 electric vehicles in 2021, making up 5 per cent of all cars purchased in the ACT in 2021.

Nationally, 2 per cent of vehicles sold were electric, with Tesla miles in front as the most popular maker.

Sales of electric vehicles across Australia have risen by over 400 per cent in the first five months of this year with the ACT experiencing a 350 per cent electric vehicle growth as one of the leading jurisdictions in the zero-emissions surge.

Labor made a $200 million election commitment earlier this year to exempt electric vehicles from import tariffs and fringe benefits taxes in a bid to make the vehicles more affordable.

The ACT offers up to $15,000 in an interest-free loan for people who purchase an electric vehicle, along with incentives including a period of free registration.

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