Car companies want certainty, but the complex fuel efficiency standard discussion has become politically heated

All new light vehicles sold in Australia including passenger cars, 4WDs, light commercial vehicles and SUVs would be affected by the new standard.

The Department of Transport released its consultation paper in late April, noting that Australia and Russia were the only developed nations without a fuel efficiency standard. The two best-selling vehicles in Australia last month, the Toyota Hilux turbo-diesel dual cab and the Ford Ranger turbo-diesel, are two of the highest emitters.

Meanwhile the two best-selling car in the ACT are zero emission: the Tesla Model Y and the Tesla Model 3.

Federal transport minister Catherine King has flagged the introduction of legislation by the end of the current sitting year.

The federal transport overview stated that in the absence of a standard, on average, passenger cars in Australia emit 40 per cent more carbon than those of European Union, 20 per cent more than in the US and 15 per cent more than in New Zealand.

It requires global vehicle manufacturers to improve their average fuel efficiency over time which the federal government says would "deliver more advanced and affordable vehicles into Australia" and "drive down emissions".

Transport emissions in Australia represent close to one fifth of our overall emissions and are regarded as a stumbling block on the path to net zero by 2050.

More than 500 submissions on a proposed standard were received from 200 organisations, and a further 1500 from individuals.

Efficiency and emissions are hand-in-glove issues. It's a complex discussion because vehicle weight affects efficiency and, while popular, high-emitting diesel 4WDs are heavy so, too, are low-emitting battery electric vehicles.

The car companies have much to lose should an aggressive, fast-track European-style policy on tougher emissions and fuel efficiency be adopted.

The Canberra-based Federal Chamber of Automotive Industries, which lobbies on behalf of the car importers, is urging the federal government to adopt a standard modelled on its own in-house voluntary standard which it says was "was developed after extensively researching international vehicle efficiency standards and the availability of vehicle technologies able to improve vehicle efficiency".

It is urging a cautionary approach and will be watching carefully to see how the discussion develops, button-holing those it can within the federal department to gain any insight and has a war chest of millions of dollars to, if necessary, mount a major publicity and advertising campaign to support its cause.

With so much at stake, the chamber's board, which just elected Mazda boss Vinesh Bhindi as its new chairman after a succession of Toyota-chaired boards, will be sweating on the Canberra executive and policy team to produce a low business risk, long-timeline outcome.

In the car game where new model cycles vary between five to eight years for passenger cars and SUVs, and even longer for 4WDs, uncertainty creates business risks and raises costs

However, time is running out. The government has already flagged in its consultation that "because Australia is starting late, our rate of improvement would need to be relatively aggressive to catch up to our international peers".

The US government has already flagged an aggressive policy on emissions and late last year the Environmental Protection Agency set more stringent standards for model year 2027, and even tougher standards from 2028 through 2032.

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