Toyota Wants Australia’s Proposed Emissions Standard to be Watered Down

Toyota has asked the Australian government to water down its proposed new laws aimed at disincentivizing the purchase of the worst polluting cars and hastening the importation of cleaner vehicles. The Japanese automaker has voiced concerns the scheme will harm rural and regional drivers.

In its submission to the government in response to the announcement of its preferred model for the National Vehicle Efficiency Standard (NVES) in early February, Toyota stated that, while it was generally in favor of the program, it would “revisit (the) stringency” of targets outlined in its preferred “option B” model, among other recommendations.

Australia’s proposed fuel standard will place a cap on the emissions from new cars to incentivize carmakers to supply low- and zero-emissions vehicles. The cap will be further lowered over time. Companies whose emissions averages come in below the cap will gain credits, which can be used by other companies that will be penalized for exceeding the cap. The government plans to introduce legislation before July 2024 that will take effect from January 2025.

According to the preferred model of the Australian government, 369 million tons of CO2 will be avoided by 2050, which is equal to the emissions from light vehicles in Australia during the previous 6 years.

Toyota noted how the proposed NVES is loosely based on targets under the scheme in place in the US, and pointed to media reports from recent weeks citing unnamed sources that Joe Biden was considering softening certain tailpipe emissions reduction targets to 2030 in part due to pressure during an election year. Toyota’s submission said:

“Reports indicate that the USA intends to decelerate the implementation of its annual emissions requirements and review the applicable timeframes. Evidence from the USA market shows that there has been a ‘slower than anticipated demand for electric vehicles’.”

Toyota of late, had come under criticism for taking until last week to introduce its first electric vehicle, the bZ4X to the Australian market – also called for the introduction of penalties outlined in the proposed NVES model to be staggered. While the government has proposed a $100 per g/km CO2 rate of penalty when the scheme comes into effect as planned for January 2025, Toyota said this was “too severe” and would risk costing consumers.

Instead, it wants there to be no financial penalties for manufacturers exceeding their caps in the first two years of the scheme. It then wants the penalty amount to increase in yearly phases, staggered to reach a penalty rate of $100 per g/km by 2029. Toyota also asked for the government to tweak the credit scheme in its preferred model by incorporating different types of credits carmakers can earn.

Currently, “super credits” for the cleanest of vehicles, “off-cycle credits” for specific green technologies used in cars that are not measured in tailpipe emissions, and “air conditioning credits” for using greener refrigerants, the only feature in the least ambitious NVES model being considered, but not preferred, by the government.

Echoing concerns made by the federal opposition, Toyota also warned of potential specific downsides for regional and rural Australians requiring specific higher polluting car types for their road conditions as opposed to others who could choose cleaner alternatives. The automaker said:

“Given Australia’s unique conditions, vehicles need to be developed to a higher severity rating which requires ladder frame chassis to navigate Australian roads which inherently increases vehicle mass (adding up to 300kg). The target setting of Option B unfairly penalizes the vehicles that everyday regional and rural Australian conditions require. Across the industry, Option B as presented will negatively impact the consumers who need rather than want these products.”

Toyota also backed the position of the Federal Chamber of Automotive Industries (FCAI), the industry body whose campaigning against the government’s preferred NVES model has seen Tesla and Polestar quit the group in protest with accusations it was not representing them and was making unsubstantiated claims the scheme would increase the cost of cars. Meanwhile, the Grattan Institute submission on the proposed NVES model estimated the policy would on average increase prices by about 1%, but that consumers would quickly be financially better off due to significant savings on fuel and maintenance costs.

Australia remains one of the few major economies without standards. Industry analysts have routinely warned that manufacturers are treating Australia as a dumping ground for heavily polluting vehicles due to a lack of penalties. A new car sold in Australia uses, on average, 6.9 liters of fuel for each 100km compared with new cars in Europe and the US that use 3.5 liters and 4.2 liters, respectively.

Source: The Guardian