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Government considers mandatory fuel standards -

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Government considers mandatory fuel standards

The World Today - Tuesday, 27 January , 2009 12:26:00

Reporter: Simon Lauder

ELEANOR HALL: The move to new fuel efficiency standards in the United States is putting pressure on
Australian carmakers.

Australia has no mandatory standard for fuel efficiency and relies on a voluntary agreement with
car makers to keep emissions low.

But Simon Lauder reports that a proposal to introduce mandatory standards is now being considered
by the Federal Government.

SIMON LAUDER: While the Obama administration has pledged to ban new cars that get less than about
15 kilometres a litre, there's no law about pollution levels from Australian exhaust pipes.

Monica Richter from the Australian Conservation Foundation.

MONICA RICHTER: Australia's transport sector emissions is I think 14 per cent of our total
emissions and increasing. The largest increase in emissions is coming from the transport sector and
90 per cent of that is coming from our motor vehicles. So we have a long way to go.

SIMON LAUDER: Richard Johns from consultancy Australian Automotive Intelligence, says Australia
relies on voluntary standards and higher fuel prices to keep a lid on exhaust fumes, but there may
be more pressure to change that now.

RICHARD JOHNS: Australia at the present time doesn't have mandatory requirements but there have
been long standing agreements between the Australian Government and the car companies to achieve
reductions in corporate average fuel economy and there have been quite considerable gains here in
that in Australia over the last few decades.

SIMON LAUDER: In terms of whether or not Australia will head towards mandatory standards, do you
think this will put more pressure on Australia?

RICHARD JOHNS: Look, I think it will but I think we also need to remember that our fuel taxes and
therefore our fuel prices are already a lot higher than in the United States. And so in a sense we
have market-driven mechanism to encourage the purchase of more fuel economic cars.

SIMON LAUDER: The voluntary standard negotiated between the Australian Government and the Federal
Chamber of Automotive Industries in 2003 is roughly equivalent to the standard the US
administration will set.

But Monica Richter from the Australian Conservation Foundation argues it's not working.

MONICA RICHTER: Well, if Australia's going to deal with the twin issues of climate change and our
oil vulnerability, we should really be looking at putting mandatory standards in place. Australia
has voluntary standards in place and the Australian manufacturing industry has failed to meet these
non-binding standards over the last 20 years. So, I think it will be much better for us to be
putting mandatory standards in place.

SIMON LAUDER: What evidence have you that the industry has failed to meetits own voluntary

MONICA RICHTER: Well, the voluntary standard that's in place at the moment is an average fuel
consumption efficiency of 6.8 litres for per 100 kilometres by the year 2010. And only one
Australian manufactured car model has an efficiency of less than 10 litres per 100 kilometres. So
Australian manufacturing, car manufacturing industry isn't keeping up with the voluntary standards.

SIMON LAUDER: The call for Australia to regulate fuel usage in new cars has support from
Australia's biggest motoring organisation, the NRMA. Director Alan Evans is also a critic of
voluntary standards.

ALAN EVANS: I mean the reality is we got to improve the standards. Japan has very stringent
standards. They manufacture many of the vehicles which are sold in Australia. And in fact they
despect them to bring them to Australia because they don't have to have the same equipment on them
in Australia as they do in Japan. The emissions are lower, the fuel efficiency's higher and better,
and therefore we should replicate it. I mean California's done it, the US has done it, Europe's
done it. We're dragging the chain.

SIMON LAUDER: Regardless of government regulation in Australia, the new US standards are expected
to have an impact on car manufacturers.

They've all struggled to keep a presence in Australia lately and the automotive partner at KPMG,
David Gelb, says they'll have to consider the US decision.

DAVID GELB: Well I think ultimately you'd expect the rest of the world to react in the sense of
making a commercial decision on whether in a global supply chain one is able to continue as it is
or one is able to effectively put a US decision to one side. History shows in recent years that the
integrated nature of the industry is such that a decision such as that, a market the size of the
US, cannot be ignored by the rest of the world.

SIMON LAUDER: A government discussion paper released last year proposes compulsory fuel efficiency
standards for new cars. The paper also suggests state stamp duty and registration charges could be
increased for higher polluting vehicles.

A spokesman for the Transport Minister Anthony Albanese says the Federal Government is considering
the options and will make a report to Australia's environment ministers later this year.

ELEANOR HALL: Simon Lauder reporting.