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Revving up savings: Key insights on Australia’s New Vehicle Efficiency Standard

Revving up savings: Key insights on Australia's New Vehicle Efficiency Standard
Revving up savings: Key insights on Australia's New Vehicle Efficiency Standard

Over 85% of the global car market has already adopted a New Vehicle Efficiency Standard (NVES), but Australia is far behind. 

“As a result of the slow transition, Australia has become a dumping ground for some of the world’s most inefficient and polluting vehicles. Australia is the only OECD (Organisation for Economic Co-operation and Development) nation without energy efficiency standards for new vehicles other than Russia,” says EV Stealth Solutions.

Earlier this year, the Australian government announced a new plan to catch up and set a “simple and transparent standard for new cars.”

The new regulation is expected to kick off at the beginning of next year. “The Australian Standard will bring the country in line with global emissions reduction efforts by approximately 2028,” according to the government

The standards only apply to new vehicles and won’t affect the current fleet. 

Why should reducing carbon emissions from vehicles be a priority?

  • Climate change: Vehicle emissions are a major contributor to global warming.
  • Health: Emissions degrade air quality, causing respiratory and cardiovascular issues.
  • Environmental impact: High emissions harm ecosystems and biodiversity.
  • Economic costs: Pollution-related health care and damage from extreme weather are costly.
  • Energy security: Reducing emissions decreases reliance on fossil fuels.
  • Sustainability: Lower emissions ensure a livable planet for future generations.
  • Compliance: Stricter regulations require emission reductions to avoid penalties.
  • Innovation: Concerns drive advancements in cleaner technologies.
  • Community well-being: Improved air quality and reduced noise pollution enhance livability.
  • Ethical responsibility: Reducing emissions is a moral obligation to protect the planet.

Australia on a sustainability mission 

Businesses in Australia are taking note of doing business the ‘greener’ way. In November, Grace Removals, one of Australia’s largest furniture removal companies, introduced the country’s first fully electric removal truck. 

Managing director Craig Page said with this initiative, Grace Removals is at the forefront of the transition to environmentally friendly operations. “Our new electric truck represents a significant milestone in our ongoing journey towards sustainable operations. It’s more than just a new vehicle; it’s our commitment to our clients and the planet.” 

What is NVES? 

Australia has a New Vehicle Efficiency Standard (NVES), but what is it, and why should business owners and fleet managers take note? 

The emphasis is on standardization to bring the same quality that car manufacturers use on exported vehicles to Australia. That means new cars will use less fuel per kilometer. It saves the user, in this case, your company, money, and the environment. 

Car manufacturers have an average CO2 target for the vehicles they produce. The government says that over time, the CO2 target will be lowered. “In order to continue to meet or beat the target, companies must provide more choices of fuel-efficient, low or zero-emissions vehicles.”

How is the NVES target calculated?

It’s based on the average of the entire country. The government explains that car manufacturers must sell a specific number of fuel-efficient models to “offset any less efficient models they sell.” 

To keep the process fair, car manufacturers can get “credits” if they sell more than their target. However, if they sell more polluting products, they will have two years to either trade credits with a different supplier or generate credits themselves before a penalty becomes payable. 

NVES impact on business

Currently, there is no indication that the NVES will negatively impact vehicle prices. The government argues that it forces suppliers to “import more fuel-efficient vehicles,” regardless of what it uses to move. 

In the long run, money will be saved on fuel, and second-hand low and zero-emission vehicles will become more accessible. 

Reducing fuel consumption directly translates into cost savings for businesses. This is crucial for companies operating large fleets, where fuel expenses are a significant part of operational costs. Lower fuel costs mean improved profitability and more funds available for other business investments.

NOW READ: Sustainability trends 2024: From greenwashing to transparency

About the author

Sharl is a qualified journalist. He has over 10 years’ experience in the media industry, including positions as an editor of a magazine and Business Editor of a daily newspaper. Sharl also has experience in logistics specifically operations, where he worked with global food aid organisations distributing food into Africa. Sharl enjoys writing business stories and human interest pieces.

Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.

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