Federal Government releases draft bill for new vehicle efficiency standards

28 March 2024

The Federal Government released on 26 March 2024 a draft Bill to legislate the New Vehicle Efficiency Standards (NVES). The draft Bill contains changes to the emission standards that were proposed in the Consultation Impact Analysis released by the Government in February 2024. The changes were made in response to submissions it received in response to its Consultation Impact Analysis.

Proposed amendments

The Government still intends to introduce legislation this year with the NVES commencing from 1 January 2025. However, in order to further assist manufacturers and the regulator in making the transition to the new fuel standards, the penalties and credits mechanisms are now intended to commence on 1 July 2025.

The headline figure that was proposed in the Consultation Impact Analysis for Light Commercial Vehicles will be amended as set out below. The headline figure for Passenger Vehicles will remain unchanged.

                        Year                         Original Target: Light Commercial Vehicle CO2 (g/km) Amended Target: Light Commercial Vehicle CO2 (g/km)
2025 199 210
2026 164 180
2027 129 150
2028 94 122
2029 81 110

The Government has also amended the mass limits for the upper breakpoints for both Passenger Vehicles and Light Commercial Vehicles. The breakpoint mechanism operates to adjust the headline figure based on the weight of the vehicle to set the emissions target, with heavier vehicles to have a higher emissions target. Under the previous proposal, the emissions target would reach a peak at 2,000kg for Passenger Vehicles and 2,200kg for Light Commercial Vehicles, with vehicles above this mass having the same emissions target.

The Government proposes to increase the upper breakpoint by 200kg for both Passenger Vehicles and Light Commercial Vehicles which will result in Passenger Vehicles above 2,000kg and Light Commercial Vehicles above 2,200kg now having a higher emission target.

Finally, the Government has amended the classification of some four-wheel drive vehicles. Four-wheel drive vehicles that have a:

  1. rated towing capacity of 3 tonnes or more; and
  2. body-on-frame chassis,

will now be considered to be Light Commercial Vehicles and will have higher emissions targets.

The Bill and the Explanatory Memorandum are available, please click here to view.

This article was written by Evan Stents, Lead Partner – Automotive Industry Group and Matthew Carlei, Law Graduate.

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