Cleaning up Australia's vehicle emissions standards

Walk into an Australian car dealership right now and pick out the most fuel-efficient vehicle, and it will probably be better for the environment than any car you have ever owned.

Yet it is also possible that the same vehicle might be banned from sale at a dealership in Europe.

Of the 20 most popular cars sold in Australia in 2021, only one offered a variant that would meet Europe’s CO2 emissions standard of 95g per kilometre as measured at the tailpipe.

Emissions of noxious gases such as particulate matter (PM), oxides of nitrogen (NOx), and carbon monoxide (CO) are also heavily regulated outside Europe.

The countries which produce 80 per cent of the world’s light vehicles, including the US, Canada, Japan, China, South Korea and India, have adopted Euro 6 or equivalent noxious emissions standards. These countries also require manufacturers to meet fuel efficiency standards for new cars sold.

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Countries from Germany to India to England are also planning bans on the sale of new vehicles with internal combustion engines. Norway expects its ban to start as soon as 2025, and Ireland from 2030. In Australia, the Australian Capital Territory has announced its plans to cease registering new light petrol and diesel vehicles by 2035.

But while the rest of the globe is moving on vehicle emissions, seeking to reduce both the environmental and health impact of gaseous pollutants from vehicle sources, most of Australia lags a long way behind.

We know road transport is responsible for about 16 per cent of Australia’s total greenhouse gas emissions and about 23 per cent of total CO2 emissions.

Many other nations have a standard limiting CO2 emissions from new cars sold, but despite numerous calls from the community and various industry groups, it’s still not the case here in Australia.

Australia’s Federal Government requires cars to meet the Australian Design Rules and from 2016 have imposed some regulations on the type and quality of fuels used by vehicles.

They also set some limits on noxious emissions like oxides of sulfur and particulates, which are contributed to by high sulfur content in fuels.

In Australian fuels, the maximum allowable level of sulfur in our fuels is significantly higher than in Europe and many other countries.

Our 91 RON fuel has the highest allowable sulfur content, at 150 parts per million (ppm). This fuel also has a relatively low octane rating of 91, and because of this lower octane, some vehicles have to be modified by the manufacturer before being sold in Australia.

Premium fuels (95 and 98 RON) in Australia are also allowed to contain more sulfur than in in the USA, Europe and South Korea (50ppm as opposed to 10ppm, respectively).

In 2019, a commitment was made by the Federal Government that lower sulfur fuel would be mandatory by 2027.

Then, in 2022 the government updated the Fuel Quality Standards Act 2000 to bring forward the implementation of 10ppm sulfur. The new fuel quality standard will now apply from 15 December 2025 for all grades of petrol.

Savings remain out of reach

According to a report by the Department of Infrastructure and Regional Development in 2016, if Australia had begun aligning with the EU’s current fuel efficiency standards in 2020, having them fully implemented by 2025 meant the Australian economy could have experienced around $27.5 billion in fuel savings by 2040. Now, the EU has tightened their standards even further.

The report also found that at the time, the most economical models of cars sold in Australia were, on average, 27 per cent more polluting than the UK’s most economical models.

A 2021 survey of RAC members found nearly four in five believe government should be doing more to reduce vehicle emissions.

According to our members, the top three actions that government should take to reduce vehicle emissions were proving incentives for purchasing low emissions vehicles; regulating emissions through national standards for new vehicles; and increasing the number of low emissions vehicles in the government fleet.

Our survey found the majority of people are concerned about climate change and want to take some personal responsibility, with 90 per cent believing the climate is changing, and 78 per cent saying it’s caused by human activity.

The benefits for the environment and savings on fuel are substantial, but the additional benefit from better emissions standards is human health.

The Australian Burden of Disease Study estimates that in 2018, 3,236 Australian deaths in were attributable to air pollution - almost three times the number of road fatalities in 2021 - exacerbated by noxious emissions like nitrous oxide and high sulfur content in Australian fuel.

Sulfur irritates the airways, it can cause coughing, wheezing, shortness of breath and tightness in the chest, and if you inhale particulates it can cause serious health problems.

In Australia we have up to 150 parts per million allowable sulfur content in Australian unleaded petrol, which is up to 15 times the international standard. Fortunately, the intended standards limiting allowable sulfur to 10ppm has been brought forward from 2027 to 2025.

No quick fix without regulation

Improvements in vehicle efficiency is only a part of the solution.

The National Transport Commission found that if everyone who purchased a new vehicle in 2020 had chosen the best-in-class for emissions performance, Australia’s average carbon emissions intensity would have dropped by 93 per cent for passenger cars and light SUVs, and by 50 per cent for heavy SUVs and light commercial vehicles.

In 2020/21, total road travel in Australia fell to 249 billion kilometres from 256 billion in 2016/17 – a 2.7 per cent decrease. CO2 emissions from road transport decreased 2 per cent over a similar five year period (2016-2020).

RAC will continue to push for an impactful CO2 emissions standard for new light vehicles as part of a broader change to make clean vehicles more readily available in Australia.

It will also protect against the risk that vehicle manufacturers see Australia as a place to push less-environmentally friendly models unable to be sold elsewhere.

In the case of CO2 emissions, by not having a national standard, vehicle manufacturers can send any vehicle they like here, and it immediately complies.

There is still a long way to go in tightening standards to help meet Australia’s global commitments to emissions reduction targets.

Other countries have been successful in implementing standards that have had a big impact in terms of reducing greenhouse gas emissions and cleaning up the air their citizens breathe.

The New Vehicle Efficiency Standard came into effect in Australia in January 2025 and sets an average CO2 target for all new vehicles that car suppliers must meet by supplying more fuel-efficient, low or zero emissions vehicles. Find out more here.