Motor Vehicle Standards (Cheaper Transport)
Bill 2014
1.1
On 20 August 2015, the Senate, on the recommendation of the
Selection of Bills Committee, referred the Motor Vehicle Standards (Cheaper
Transport) Bill 2014 (the bill) to the Environment and Communications
Legislation Committee for inquiry and report by 28 October 2015.[1]
However, on 23 October 2015 the Senate granted an extension of time to
report until 25 November 2015.
1.2
The bill is a private senator's bill introduced by former Senator Milne on
10 July 2014. The bill proposes to set carbon emissions standards for new
passenger vehicles and light commercial vehicles purchased in Australia from
2017.
Conduct of the inquiry
1.3
In accordance with its usual practice, the committee advertised the inquiry
on its website and wrote to relevant individuals and organisations inviting
submissions by 18 September 2015.
1.4
The committee received 14 submissions, which are listed at
Appendix 1.
The submissions may be accessed through the committee's website: www.aph.gov.au/senate_ec.
Acknowledgement
1.5
The committee thanks all the organisations and individuals who assisted
the committee with the inquiry.
Overview of the bill
1.6
At the present time, there are no mandatory fuel efficiency or carbon
dioxide standards in place in Australia.[2]
Under the Motor Vehicles Standards Act 1989 and the Motor Vehicles
Standards Regulations 1989, the Australian Government, through the Department
of Infrastructure and Regional Development (the department), maintains the Australian
Design Rules (ADRs). The ADRs require manufacturers to meet national design and
performance standards before vehicles can be supplied to the Australian market.[3]
1.7
The bill intends to improve the fuel efficiency of new cars purchased in
Australia by establishing legally binding vehicle carbon emissions efficiency
standards, which a seller or vehicle importer is required to meet. The vehicle
carbon emissions efficiency standards will be applied as an average across a
seller's fleet of new passenger and light commercial vehicles when more than
1000 cars are sold in a year.[4]
Definitions of passenger and light
commercial vehicles
1.8
The bill defines passenger vehicles as 'having the meaning given by the
regulations', however, if the regulations do not provide a definition then a
road motor vehicle is categorised by the ADRs as LA, LB, LC, LD, LE, MA, MB or
MC.[5]
Similarly, if the regulations do not provide a definition of light commercial
vehicles then it is categorised by the ADRs as NA.[6]
1.9
Passenger and light commercial vehicles would be required to meet a vehicle
carbon emissions target of 130 grams of carbon dioxide emitted per kilometre by
2020, and 95 grams of carbon dioxide emitted per kilometre by 2023.[7]
Compliance with the vehicle carbon emissions targets would be phased in from
2017 when 70 per cent of a seller's fleet has to meet the 2020
target, which increases by 10 per cent each year until 2020.
Similarly, in 2021 it is expected that 80 per cent of a seller's fleet
would be required to meet the standard of 95 grams of carbon dioxide emitted
per kilometre, which also increases by 10 per cent each year until
2023.[8]
1.10
Senator Milne stated that the targets would align Australia with the
European Union's 2020 standard of 95 grams of carbon dioxide emitted per
kilometre by 2023.[9]
Penalty charges
1.11
The bill would provide for penalty charges to be applied when a seller's
fleet emissions average exceeds the vehicle carbon emissions standard. The formulas
contained in the bill are to be used to determine the penalty amount to be
charged to sellers or vehicle importers. The formulas are:
(1) The amount of the
charge the person must pay for the year is the amount worked out using the
following formula multiplied by the number of chargeable vehicles the person
sells in the year, if the mean specific emissions of the CO2 of the vehicles
exceeds the standard by more than three grams of carbon dioxide per kilometre:
$62 + ((excess − 3gCO2/km)
× $135 per gCO2/km)
(2) The amount of the
charge the person must pay for the year is the amount worked out using the
following formula multiplied by the number of chargeable vehicles the person
sells in the year, if the mean specific emissions of the CO2 of the
vehicle exceeds the standard by more than two grams per kilometre but less than
three grams per kilometre:
$27 + ((excess − 2gCO2/km)
× $35 per gCO2/km)
(3) The amount of the
charge the person must pay for the year is the amount worked out using the
following formula multiplied by the number of chargeable vehicles the person
sells in the year, if the mean specific emissions of the CO2 of the
vehicle exceeds the standard by more than one gram per kilometre but less than
two grams per kilometre:
$7 + ((excess − 1gCO2/km)
× $20 per gCO2/km)
(4) The amount of the
charge the person must pay for the year is the amount worked out using the
following formula multiplied by the number of chargeable vehicles the person
sells in the year, if the mean specific emissions of the CO2 of the
vehicle exceeds the standard by less than one gram per kilometre:
Excess × $7 per gCO2/km[10]
1.12
Payment of the penalty amount by sellers or vehicle importers would be in
accordance with the regulations. Failure to pay the charge would result in a
late fee of up to 1.5 per cent of the unpaid charge being added per
month or part of a month that it remains outstanding.[11]
1.13
The bill also proposes to authorise officers of the Clean Energy
Regulator to seek further information on relevant matters from sellers and
vehicle importers. This information may be accompanied by a statutory
declaration to guarantee its accuracy. Failure to provide this information would
result in the person committing a strict liability offence. The Explanatory
Memorandum explained that a strict liability approach is necessary as it is relatively
easy for vehicle manufacturers and sellers to comply with the requirement to
provide information to the regulator, and the difficulty the regulator would
have in proving intention.[12]
In addition, the penalty imposed for failing to provide the information would
be a financial penalty, rather than imprisonment.
Administration of the standards
1.14
The bill proposes that the Clean Energy Regulator would be the
Commonwealth agency responsible for administering the standards. This
responsibility includes processing annual returns from sellers and vehicle
importers regarding the average emissions performance of cars sold, the number
of cars sold and publishing the data on its website. The Clean Energy Regulator
already fulfils a similar requirement to publish data on its website regarding
other clean energy programs, such as the National Greenhouse and Energy
Reporting Scheme.
1.15
Furthermore, it is proposed that the Climate Change Authority review the
effectiveness of the scheme and recommend future mandatory standards beyond
2021. The Climate Change Authority's review would be undertaken in 2021 and be tabled
in Parliament on its completion.[13]
Consideration by other committees
1.16
When examining a bill or draft bill, the committee takes into account
any relevant comments published by the Senate Standing Committee for the
Scrutiny of Bills. The Scrutiny of Bills Committee assesses legislative
proposals against a set of accountability standards that focus on the effect of
proposed legislation on individual rights, liberties and obligations. The Scrutiny
of Bills Committee considered this bill in its Alert Digest No. 9 of
2014 and made a number of comments relating to the definitions of passenger
and light commercial vehicles, the reasonable excuse defence, privilege against
self-incrimination, and the reversal of onus.[14]
1.17
The Scrutiny of Bills Committee questioned whether the definitions of
light commercial vehicles and passenger vehicles contained in clause 3 of the
bill were appropriate. Light commercial vehicle and passenger vehicle are
defined as 'having the meaning given by the regulations'.[15]
However, the bill stated that if the regulations do not provide a definition then
the meanings specified in the ADRs are to be applied. The Scrutiny of Bills
Committee explained the importance of the definitions in determining the scope
of the scheme and expressed its regret that the explanatory memorandum 'does
not state the reasons for them to be altered by delegated legislation'.[16]
It therefore sought advice from Senator Milne to justify the proposed approach.[17]
1.18
The Scrutiny of Bills Committee also questioned whether the offences in
relation to returns contained in clause 15 of the bill were appropriate. As
noted at paragraph 1.11, subclause 15(1) makes it an offence if a person fails
to give information or submit a return that is required under this bill. This
offence is a strict liability offence. The explanatory memorandum stated that the
use of the strict liability approach 'is warranted in these circumstances' due to
'the difficulty of the regulator proving intention and the ease of complying
with the provision to provide information to the regulator justifies the
application of strict liability'.[18]
Furthermore, the penalty for not complying with the provisions in the bill invokes
financial consequences, not imprisonment.[19]
1.19
However, the Scrutiny of Bills Committee noted in response that:
...the Guide to Framing Commonwealth Offences recommends
against framing defences in terms of 'reasonable excuses' given the
uncertainties associated with what may constitute such an excuse and, thus, the
associated difficulties that defendants may face in adducing relevant evidence.
It may also be noted that the appropriateness of placing an evidential burden
on the defendant in relation to the reasonable excuse defence is not
specifically addressed.[20]
1.20
The bill also contains subclause 15(4) which provides that a person is
not excused from providing a return or information on the ground that the
information, or return, may incriminate the person. However, there is no
information contained in the explanatory memorandum as to why this approach is
required. The Scrutiny of Bills Committee also sought Senator Milne's advice to
justify this approach.[21]
1.21
Finally, the Scrutiny of Bills Committee expressed its concern regarding
subclauses 16(2) and 16(4) of the bill. Subclause 16(2) appears to place the
legal burden of proof on the body corporate unless it proves that it exercised
due diligence to prevent the relevant conduct from occurring.[22]
Similarly, subclause 16(4) appears to place the burden of proof on individuals
unless they can prove that they exercised due diligence to prevent the relevant
conduct from occurring.[23]
Accordingly, the Scrutiny of Bills Committee sought Senator Milne's advice with
particular interest in whether consideration had been given to imposing a lower
legal burden of proof.[24]
1.22
The Scrutiny of Bills Committee wrote to Senator Milne seeking her
advice on the matters of concern raised in its Alert Digest No. 9 of
2014. However, a response was not received before Senator Milne resigned
from the Senate on 24 June 2015.
1.23
The committee notes the concern expressed by the Scrutiny of Bills
Committee in its Alert Digest regarding the bill.
Key issues
1.24
Evidence provided to the inquiry revealed significant opposition to the
bill from some submitters in the automotive industry. For example, the Australian
Automotive Dealers Association (AADA) and the Federal Chamber of Automotive Industries
remarked that there was a lack of consultation with the automotive industry
regarding the preparation of the bill.
1.25
The bill received support from environmental organisations and the Royal
Automobile Club of WA. The Clean Energy Regulator gave in-principle support for
the bill; however, it recognised that additional funding would be required from
the Government to adapt its systems to accommodate the proposed functions.[25]
The Climate Change Authority also provided in-principle support for the bill,
as it stated 'mandatory standards would complement existing arrangements in the
transport sector'.[26]
It further stated that 'in the Authority's view, they represent a feasible and
desirable addition to Australia's climate policy toolbox'.[27]
1.26
This section discusses the following key issues raised in submissions:
-
the scope of the bill;
-
Australian fuel quality; and
-
the requirement for vehicle emissions standards.
Scope of the bill
1.27
A number of submitters argued that the bill contains a noticeable error.
The bill will apply to the ADR categories: LA, LB, LC, LD, and LE, which relate
to motorcycles and mopeds.[28]
The Federal Chamber of Automotive Industries stated that 'motorcycles are not
currently included in measuring CO2 emissions from passenger
vehicles in Europe, Japan or the United States'.[29] It concluded that the passage
of this bill 'will require the development of a unique CO2 emissions
test for motorcycles, adding further cost and complexity to industry with
negligible consumer benefit'.[30]
1.28
The department also noted that the inclusion of motorcycles in the bill
'is relatively uncommon internationally'.[31]
It further stated that:
...there is currently no ADR that requires motorcycle manufacturers
to test and report on their CO2 emissions. If motorcycles were
included in the scope of this Bill, a new test procedure would need to be
specified in the regulations. Further while there is an international standard
for measuring motorcycle fuel efficiency and CO2 emissions; the
Department understands that China is the only country to date that has included
motorcycles in vehicle efficiency standards. As such manufacturers may be
reluctant to invest resources into improving the efficiency of motorcycles for
a relatively small Australian market restricting choice for consumers.[32]
1.29
Several submitters commented on the scope of the bill and the limitation
of focusing on improving fuel efficiency standards of new passenger and light
commercial vehicles purchased in Australia. The Federal Chamber of Automotive
Industries commented that the bill has 'a single target for passenger cars and
light commercial vehicles'.[33]
The AADA also advised that the new car market in Australia is 'sub-optimal by
global standards' as approximately 1.1 million sales of new vehicles were
recorded in Australia in 2014. This represents 1.4 per cent of global
sales of passenger and commercial vehicles.[34]
The AADA commented that the bill overlooks the 17.2 million used vehicles
registered in Australia, which are on average approximately 10 years' old.[35]
The average lifespan of a light vehicle in Australia is approximately 20 years
with four per cent of the fleet retired each year.[36]
1.30
The Federal Chamber of Automotive Industries advised that carbon emissions
from new vehicles have decreased by 25 per cent since 2002. It was also
noted that carbon dioxide emissions from new vehicles have decreased over that
time.[37]
The National Transport Commission (NTC) also reports on the carbon dioxide emissions
intensity of new cars and light commercial vehicles. In its Carbon Emissions
from New Australian Vehicles 2013 information paper, the NTC found
that in 2013 the industry average of carbon emissions from new passenger and
light commercial vehicles was 192 grams of carbon dioxide emitted per
kilometre.[38]
This is a reduction of 3.4 per cent from 2012 and represented the
third largest annual reduction since records started in 2002.[39]
Figure 1.1 illustrates the reduction in the average carbon emissions from new
passenger cars and light commercial vehicles since 2002.
Figure 1.1: National
average of carbon dioxide emissions from new passenger and light commercial
vehicles 2002 to 2013
Source:
National Transport Commission, Carbon Dioxide Emissions from New Australian
Vehicles 2013, information paper, May 2014, p. 16.
1.31
The department also noted the single target for 'all manufacturers and
importers, regardless of the composition of the vehicles they sell' differs
from the approach of the European Union (EU) or the United States.[40]
The EU and the United States use an approach where each manufacturer has a
'sales weighted average basis' set. In the EU it is adjusted for each
manufacturer based on vehicle weight. In comparison, the target for
manufacturers in the United States is determined 'on the basis of footprint
(length of wheelbase multiplied by track width)'.[41]
The department noted the benefit of the approaches of the EU and the United
States:
...standards in the EU and US provide for various allowances or
'credits', which enable manufacturers to further reduce their reported average
emissions. These credits are intended to encourage investment in technologies
that have benefits not captured in a standardised test cycle (such as air
conditioning refrigerants with a lower global warming potential) or high cost,
high abatement technologies such as electric vehicles.[42]
1.32
Further, the department stated that without the provision of a credit
system it 'may make it harder for manufacturers and importers to meet the
proposed standards in Australia as compared to the EU'.[43]
1.33
Dr Anna Mortimore, a lecturer in taxation at Griffith University, also recognised
the importance of combining mandatory emissions standards with incentives and
economic instruments. She submitted that:
To support innovation and alternative fuelled vehicles being
imported into Australia, regulatory emission standards should provide for super
credits or incentives to dealers of car manufacturers to encourage the
technological development and sales of low emissions standards.[44]
1.34
Dr Mortimore further submitted that:
Australia will need to reduce the average CO2 emissions for
new passenger vehicles by around 28 percent (from an average CO2 emissions
of 182g/km in 2014 to the regulatory CO2 emissions target of 130g/km) by 2020.
This reduction in average emissions intensity for new passenger vehicles cannot
be met by just introducing regulatory CO2 emission standards for new light
vehicles.
European Union Member States achieved an average emission for
new passenger vehicles of 127g/km in 2013, earlier than the CO2 emission target
of 130g/km by 2015. The target was achieved by combining regulatory emission
standards with additional economic instruments, such as reforming vehicle
purchase taxes and the company car tax regime.[45]
Consumer vehicle preference
1.35
A number of submitters raised the issue that Australia's vehicle fleet
differs significantly from the European vehicle fleet. Since 2000, the
automotive industry has witnessed a change in the new vehicle mix as there has
been an increase in the sale of all-terrain wagon and sport utility vehicles (SUVs)
and a decrease in passenger vehicles. The department advised that 'between 2000
and 2015, passenger cars have decreased their market share from 70 to
48 per cent while SUVs have increased from 14 to
34 per cent'.[46]
1.36
The Australian Automobile Association noted that the European emissions
targets were determined from modelling of the European fleet. The Association
submitted:
The Australian vehicle fleet differs significantly from the
European vehicle fleet, both in type of vehicles sold and the proportions in
which each of these types of vehicles are sold. As a result, a different fleet
carbon emissions target could be expected for Australia.[47]
1.37
The NTC conducted a case study on consumer preference for vehicles in
Australia and the United Kingdom. In its case study, the NTC found that Australians
purchased a 'significantly greater proportion of SUVs compared with buyers in
the United Kingdom (37 per cent versus 11 per cent)'.[48] In
comparison, 65 per cent of vehicles purchased in the United Kingdom
were from the light and small vehicle segments, which are 'the two segments
with the lowest average carbon dioxide emissions'.[49]
1.38
The Federal Chamber of Automotive Industries also indicated that the
'Australian car market is different to other major automotive (especially
European) markets'. Australian consumers prefer large cars, sport utility
vehicles and light commercial vehicles that have larger engines and automatic
transmissions compared to Europeans who prefer smaller cars with less powerful
engines and manual transmissions.[50]
Australia's fuel quality
1.39
Submitters also raised the issue of whether Australia's fuel quality is
a barrier to the introduction of vehicle emissions standards. For example,
Future Climate Australia (FCA) stated that assertions have been made in the
debate regarding vehicle emissions standards regarding 'the lack of low sulphur
fuel' as 'an impediment to meeting new vehicle CO2 standards'.[51]
However, the FCA pointed to correspondence from the International Council on
Clean Transportation which acknowledged that:
...vehicle and fuel should be treated as a system, but the
present quality of fuel available for road transport across Australia does not
present any impediment to reduce vehicle CO2 emissions at rates
comparable to the other regions of the world.[52]
1.40
The Climate Change Authority also remarked that 'some stakeholders have
suggested that this is a barrier to Australia implementing CO2
emissions standards but there is no compelling evidence to suggest this is the
case'.[53]
The Authority identified that 'switching from conventional fuels with higher
emissions to alternative fuels with potentially lower emissions' could reduce
transport emissions.[54]
1.41
Similarly, the Royal Automobile Club of WA recognised that fuels of the
future including shale oil, hydrogen and synthetic fuels have 'the potential to
contribute to Australia's future transport fuel mix' but they are unlikely to
be competitive until 'successfully integrated into the broader fuels market'.[55]
1.42
To assist the development of such technologies, the department stated that
it:
...encourages performance
based approaches to the ADRs that allow for innovation in vehicle design,
including alternative power sources, rather than prescribe a particular
alternative. If the vehicle meets the ADRs, powered by electricity or
otherwise, there is no impediment to it being used in Australia.[56]
1.43
The department also acknowledged that 'the minimum octane level for
petrol sold in Australia is 91 RON (Research Octane Number), which is
lower than Europe's minimum of 95 RON' and has a sulphur limit that is
'15 times higher than permitted in Europe'.[57]
Moreover, the department advised that industry is concerned that vehicles
optimised for European fuel specifications 'may not operate as effectively on
fuels that only meet the minimum Australian fuel specifications'.[58]
The department, on advice from vehicle manufacturers, also stated that any
changes to more efficient vehicle technologies would require vehicle
manufacturers to test the technology and adapt it 'to ensure they are fit for
purpose in Australian conditions'.[59]
1.44
The Federal Chamber of Automotive Industries acknowledged that
Australia's fuel quality standards are lower than the World Wide Fuel Charter
recommendations. However, its long-held position is that:
...fuel quality standards, Green House Gas (GHG) emission
standards
(i.e. CO2 standards) and pollutant emission standards (i.e. ADR
79/0x or Euro 5/6) all need to be considered together, as they are all
interrelated...It is shared by the global automotive industry, regulators and
research organisations alike.[60]
1.45
Similarly, the AADA remarked that:
...vehicle pollutant emissions standards and fuel quality
standards are interrelated and the setting of Australian emissions standards
without consideration of Australia's poor fuel quality limit the ability of
manufacturers to introduce innovative motor vehicle emissions technology into
Australia.[61]
1.46
The AADA commented on the statement made by Senator Milne in her second
reading speech that 'Australian motorists will save around $850 a year on
petrol under this scheme'.[62]
It asserted that the statement:
...ignored the need for motorists to purchase premium unleaded
petrol (PULP) to achieve the in-service fuel consumption and performance (and
subsequent fuel savings) of many overseas (especially European) markets.
Currently, PULP is around 10c per litre more expensive than unleaded petrol.[63]
Compliance reporting and penalties
1.47
A further matter raised by submitters was the penalties and formulas
contained in clause 6 of the bill. The department advised that it 'understands
that the formula is intended to be based on the European formula, but considers
that this should be clarified'.[64]
1.48
The department also noted that 'care would need to be taken' in relation
to subclause 4(2) of the bill, as it imposes the responsibility to comply on
'persons selling the vehicles, which appears to cover both manufacturers and
importers'.[65]
This differs to the requirements under the Motor Vehicle Standards Act 1989
in which 'it is generally the overseas-based manufacturer, rather than the
importer, that obtains and holds the approval to supply vehicles to the
Australia market and associated responsibilities for ensuring conformity of
production'.[66]
1.49
The AADA also commented that it is unclear from the bill whether
penalties for non-compliance will be applied to the authorised dealer network
in Australia rather than the vehicle manufacturer, as currently required under
the Motor Vehicle Standards Act 1989.[67]
1.50
However, the EDOs of Australia suggested that, in light of the global
Volkswagen diesel emissions 'scandal' (see paragraph 1.58), the committee
should 'consider increasing the level of penalties and the range of remedies
available under the relevant instrument to deal with large-scale corporate
incidents'.[68]
It also suggested the committee consider introducing a 'cost recovery' option
to the bill in which 'regulatory costs are built into the system, consistent
with a polluter pays approach'.[69]
Administration of the bill
1.51
The bill proposes that the Clean Energy Regulator be made responsible
for the administration of the standards. However, the Clean Energy Regulator suggested
that 'there may be greater synergy with the functions of an agency other than
the Clean Energy Regulator', which would enable 'the outcomes to be achieved at
a lower cost'.[70]
The department advised that, since vehicle manufacturers are required under the
Motor Vehicle Standards Act 1989 to submit information to the department
'there may be scope to streamline reporting arrangements for manufacturers
under both the Act and the proposed bill'.[71]
It also recommended that further clarity be provided on compliance and
reporting responsibilities as the distribution rights for vehicle brands can
also change for time to time.[72]
1.52
The department stated that manufacturers, particularly manufacturers of
light commercial vehicles, may 'find it challenging to meet proposed targets'
within the bill's stipulated timeframes. This is due to previous advice the
department received from vehicle manufacturers and importers that 'product
plans are largely locked in with international partners at least three to four
years in advance thus limiting the scope for changes beyond that point'.[73]
Consequently, vehicle manufacturers and importers 'may need to adopt more
expensive technologies or restrict the availability of certain vehicle models
(and therefore consumer choice)', which would increase the cost to both
manufacturers and consumers.[74]
This could potentially discourage consumers from purchasing a new and more
efficient vehicle.
1.53
The AADA and the Federal Chamber of Automotive Industries, in opposing
the bill, suggested that a whole-of-government approach is required. This
approach should address all associated issues including fuel quality standards
and incorporating all sectors of the economy such as agriculture, mining,
electricity generation and transport.[75]
Vehicle emissions standards
1.54
A number of submitters commented that Australia is one of six countries
within the Organisation for Economic Co-operation and Development that does not
have mandatory vehicle fuel emissions.[76]
Despite not having mandatory vehicle emissions standards, the department
advised that 'annual CO2 emissions reductions continued to be
delivered in the new vehicle fleet, from 247g/km in 2004 to 188g/km in 2014'.[77]
1.55
However, the EDOs of Australia stated:
While Australia may benefit from improved standards overseas
given it already imports almost all of its lights vehicles, without mandatory
standards it is likely that manufacturers will continue to allocate their most
efficient model variants to markets with emissions standards. New Australian
standards would avert this.[78]
1.56
Similarly, Future Climate Australia also observed that Australia
receives
'low-tech vehicles that are cheaper to produce, and use substantially more
fuel' as a consequence of not having fuel emission regulations.[79]
The Australian Conservation Foundation also stated that 'three-quarters of the
light vehicles sold globally are subject to a carbon emission standard'.[80]
Without a similar regulation, it suggested that Australia is at risk of being
'used as a dumping ground for foreign-made vehicles that are too inefficient for
other markets'.[81]
1.57
The department clarified the current ADRs regarding light vehicle
emissions and stated that:
The principal ADRs currently regulating light vehicle
emissions are ADRs 79/02, 79/03 and 79/04 (Emission Control for Light
Vehicles)...ADR 79/02 currently mandates compliance with Euro 4 emissions
requirements for light vehicles. The subsequent ADRs put in place transitional
arrangements to require that all newly approved light vehicle models
manufactured from 1 November 2013 and all light vehicles manufactured
from 1 November 2016 comply with Euro 5 emission requirements.[82]
1.58
The department indicated that the ADRs 'provide a precedent for the
introduction of other emission standards in Australia', as they are 'based on standards
adopted through the United Nations World Forum on the Harmonisation of Vehicle
Regulations'.[83]
Nevertheless, it cautioned that:
The adoption of standards may have an impact on costs to
manufacturers and consumers due to the need for new technologies and design
features but these could be offset by fuel savings over the life of the
vehicle. Further modelling work is needed to better understand the current cost
benefits of adopting specific standards.[84]
1.59
The department further stated that the proposed bill:
...could potentially apply a disproportionate regulatory burden
on manufacturers and importers selling vehicles in Australia who rely on a
higher proportion of sales from larger, heavier or higher powered vehicles.[85]
Volkswagen emissions scandal
1.60
During the inquiry, the committee noted the revelations from the
United States that certain cars with diesel engines manufactured by the
Volkswagen Group had emissions defeating devices installed.
1.61
The committee also notes that the Government has closely monitored this
matter.[86]
On 2 October 2015, the Minister for Territories, Local Government and Major
Projects, the Hon Paul Fletcher MP, met with representatives of Volkswagen and
Audi and discussed whether any Australian vehicles had been installed with
devices to defeat emissions tests.[87]
The Government has since announced that 91,177 vehicles from the
Volkswagen Group have emissions defeating devices installed.[88]
1.62
In light of the revelations about Volkswagen, CHOICE expressed its
concern at the largely self-regulatory approach to emissions and efficiency and
the claims that certain tests have been manipulated and 'gamed' by
manufacturers. CHOICE went on to note that, beyond Volkswagen, it was not aware
of evidence that manufacturers of vehicles sold in Australia were engaging in
these practices. However, it stated that there is evidence of a growing gap
between the fuel efficiency claims of manufacturers based on laboratory testing
and the performance of vehicles in real world conditions.[89]
Other reviews
1.63
Issues related to the regulation of vehicle emissions are currently
being considered by other reviews.
1.64
Over the past 12 months, the Government has been undertaking a review
into the Motor Vehicle Standards Act 1989 in consultation with community
and industry stakeholders. The review is focused on 'strengthening the safety
and environmental performance of Australia's vehicle fleet while removing
unnecessary restrictions and regulatory burdens on Australian businesses and
individuals'.[90]
1.65
In addition, on 31 October 2015, the Government announced the creation
of a Ministerial Forum that will coordinate a whole-of-government review of the
approach to vehicle emissions. The working group supporting the Ministerial
Forum will examine a wide range of issues including fuel efficiency measures,
fuel quality standards and emission testing arrangements. The Government will
also consider incentives and standards to encourage the purchase of more
fuel-efficient vehicles.[91]
Committee view
1.66
The committee commends the Government for establishing a
whole-of-government review of the approach to vehicle emissions. Importantly,
the Ministerial Forum process that was initiated during this inquiry will allow
for proposals such as emissions standards to be carefully examined and
developed in consultation with industry and other key stakeholders. The
committee notes that the Ministerial Forum process is also able to examine
other related matters, such as fuel quality standards and emissions testing
arrangements.
1.67
The committee appreciates that the bill seeks to ensure that new
vehicles sold in Australia meet best practice emissions standards. However, as
this report has outlined, stakeholders have various concerns about the
development and proposed operation of the bill. Given that the Ministerial
Forum will be undertaking intensive consideration of the matters and other
related issues, the committee considers that the bill should not be passed.
Recommendation 1
1.68
The committee recommends that the Senate not pass the Motor Vehicle
Standards (Cheaper Transport) Bill 2014.
Senator
Linda Reynolds CSC
Chair
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