New Zealand poised to introduce clean car standards and incentives to cut emissions



Australia and Russia could soon be the last remaining developed nations without fuel efficiency standards, with New Zealand proposing new rules and financial incentives to get more people driving cleaner cars.
http://www.shutterstock.com, CC BY-ND

Robert McLachlan, Massey University

The New Zealand government has proposed new fuel standards to cut greenhouse emissions, along with consumer rebates for cleaner cars – paid for by fees on high-polluting cars.

The long-awaited proposed changes would bring New Zealand in line with most other developed countries; apart from New Zealand, Russia and Australia are the last remaining OECD nations without fuel efficiency standards.

New Zealand’s long tradition of not regulating its car market, combined with substantial indirect subsidies for private cars, makes addressing emissions from the transport sector both challenging and highly significant.




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New Zealand’s second-rate car fleet

Land transport emissions – the single largest source of fossil carbon dioxide in New Zealand – grew 93% between 1990 and 2017. There are multiple causes. The population grew 44% during this period, mostly through immigration. The car ownership rate also grew rapidly, partly due to economic growth and deficiencies in public transport in the main cities. Car ownership in New Zealand is now the highest in the OECD and there are more motor vehicles than adults.

Fuel efficiency improved only slowly over this period, before stalling in recent years: at 180g CO₂/km, the emissions of newly imported vehicles in New Zealand are 50% higher than in Europe. Because of the lack of a fuel efficiency standard, importers provide less efficient versions of their bestsellers to the New Zealand market. Of the ten bestselling new vehicles, five are utes (which also benefit from a fringe benefit tax exemption, four are SUVs and one is a regular car.

In addition, half of all vehicles are imported secondhand, mostly from Japan. They are cheap, but less efficient than newer models. Emissions, and congestion, are likely to continue rising as the national vehicle fleet is increasing by 110,000 vehicles a year.

One bright spot in the present situation is the emergence of an electric vehicle segment, mostly driven by the availability of cheap second-hand Nissan Leafs from Japan and the construction of a fast-charging network by a private company. Although sales have stalled in the past year at a market share of 2%, there are now 15,000 electric vehicles in New Zealand. (Australia has around 10,000 electric vehicles.)

New Zealand’s history of fuel taxes

New Zealand does not have a strong record of taxing “bads”. The only goods subject to excise taxes are tobacco, alcohol and fuel. The fuel tax is moderate by international standards. Over the past decade, the fuel tax has been fully allocated to road construction and maintenance.

New Zealand has an emissions trading scheme. The current carbon price of NZ$25/tonne of carbon dioxide adds five cents per litre to the price of fuel. Clearly, any likely increases in the carbon price are not going to be enough to change car buying decisions. Research shows that consumers tend to focus on upfront costs, while underestimating future fuel and maintenance costs.

Despite that, a special Auckland fuel tax of 10 cents per litre that co-funds public transport investment provoked a brief but intense backlash from the public. Plans to extend the scheme to other centres were canned.

A two-pronged plan

The proposed fuel efficiency standard would require car importers to either meet it or pay a fine. The suggested standard is 150gCO₂/km in 2021, falling to 105gCO₂/km in 2025, with further falls thereafter. There are more than 3000 car importers in New Zealand, so this could prompt a major shakeup, including possible price adjustments.

The standards are similar to those proposed by the Australian Coalition government in 2016, which have not yet been taken any further. Internationally, fuel efficiency standards cover 80% of the light vehicle market.




Read more:
Australians could have saved over $1 billion in fuel if car emissions standards were introduced 3 years ago


But the second component of the proposal, the clean car discount, has attracted more attention. Cars emitting less than the current threshold would received a discount, initially up to NZ$1800 for an efficient petrol car, up to NZ$4800 for a hybrid and up to NZ$8000 for a battery electric car. Cars costing more than NZ$80,000 would not receive a discount.

Known as a “feebate scheme”, those rebates would be paid for by increased fees for high-polluting cars, of up to NZ$3000. The amounts are designed so that the entire scheme would be revenue neutral to the government. Modelling suggests that the proposed standard and discount combined would save motorists NZ$12,000 over the life of a vehicle.

International clean car schemes and testing

There is international experience with similar schemes, and they have been broadly effective. France has been operating a “feebate” scheme since 2008 with periodic adjustments. New Zealand’s proposed scheme is similar to the French and Swedish schemes.

But there is also room to get it wrong. Tinkering with electric vehicle incentives has led to wild sales fluctuations in the Netherlands and Denmark.

The spread between tested and real-world fuel use has widened, up from 9% in 2001 to 42%. The new Worldwide Harmonised Light Vehicle Test Procedure testing cycle, currently being adopted by Japanese and European manufacturers, is believed to be more representative of real-world fuel use, as is the test already in use in the United States.

But overall, the New Zealand proposal has been received positively by car makers and across political parties.

One possible weakness is that it is entirely based on carbon dioxide. Other pollutants, including nitrous and sulphur oxides and particulate matter (soot), that are responsible for most of the immediate health impacts of vehicle pollution and are worse in diesel than in petrol vehicles, are not targeted. Nor are the underlying subsidies to the car-based transport system, which make a transition to active and public transport more difficult.

Any decisions made now will have impacts for decades to come. Switching the fleet to electric is different from just switching to more fuel-efficient cars. It involves new charging infrastructure and some behavioural changes from the public, and these challenges (rather than simply cost) are stumbling blocks worldwide to more rapid adoption.

These arguments have persuaded many countries to bring in electric vehicle incentives beyond simply targeting carbon dioxide. Norway is a famous example, where electric vehicles avoid purchase taxes and market share is already 60%. The UK has recently exempted electric company cars from fringe benefit tax.

As the global market share of electric vehicles still stands at only 2%, eight years after they became widely available, and the number of fossil-fueled vehicles is increasing by 48 million a year, stronger action on vehicle emissions is clearly needed worldwide.The Conversation

Robert McLachlan, Professor in Applied Mathematics, Massey University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Australians could have saved over $1 billion in fuel if car emissions standards were introduced 3 years ago



Legislative action regarding vehicle emissions is overdue, and needs urgent attention by the federal government.
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Robin Smit, The University of Queensland; Jake Whitehead, The University of Queensland, and Nic Surawski, University of Technology Sydney

When it comes to road transport, Australia is at risk of becoming a climate villain as we lag behind international best practice on fuel efficiency.

Road transport is one of the main sources of greenhouse gas emissions and represented 16% of Australia’s total carbon dioxide emissions in 2000, growing to 21% in 2016. Total CO₂ emissions from road transport increased by almost 30% in the period 2000-16.

Fuel efficiency (CO₂ emission) standards have been adopted in around 80% of the global light vehicle market to cap the growth of transport emissions. This includes the United States, the European Union, Canada, Japan, China, South Korea and India – but not Australia.




Read more:
Emissions standards on cars will save Australians billions of dollars, and help meet our climate targets


If Australia had introduced internationally harmonised emissions legislation three years ago, households could have made savings on fuel costs to the tune of A$1 billion.

This shocking figure comes from our preliminary calculations looking at the effect of requiring more efficient vehicles to be sold in Australia.

A report, published yesterday by Transport Energy/Emission Research, looked at what Australia has achieved in vehicle fuel efficiency and CO₂ standards over the past 20 years. While Australia has considered and tried to impose standards a number of times, sadly these attempts were unsuccessful.

Legislative action on vehicle CO₂ emissions is long overdue and demands urgent attention by the Australian government.

Australian consumers are increasingly buying heavier vehicles with bigger emissions.
Shuterstock

How did Australia get here?

The most efficient versions of vehicle models offered in Australia are considerably less efficient than similar vehicles in other markets.

Australia could increasingly become a dumping ground for the world’s least efficient vehicles with sub-par emissions performance, given our lack of fuel efficiency standards. This leaves us on a dangerous path towards not only higher vehicle emissions, but also higher fuel costs for passenger travel and freight.

Australia has attempted to impose CO₂ or fuel efficiency standards on light vehicles several times over the past 20 years, but without success. While the federal government was committed to addressing this issue in 2015, four years later we are still yet to hear when – or even if – mandatory fuel efficiency standards will ever be introduced.

The general expectation appears to be that average CO₂ emission rates of new cars in Australia will reduce over time as technology advances overseas. In the absence of CO₂ standards locally, it is more likely that consumers will continue to not be offered more efficient cars, and pay higher fuel costs as a consequence.

Estimating the fuel savings

Available evidence suggests Australian motorists are paying on average almost 30% more for fuel than they should because of the lack of fuel efficiency standards.

The Australian vehicle fleet uses about 32 billion litres of fuel per year.

Using an Australian fleet model described in the TER report, we can make a conservative estimate that the passenger vehicle fleet uses about half of this fuel: 16 billion litres per year. New cars entering the fleet each year would represent about 5% of this: 800 million litres per year.

So assuming that mandatory CO₂ standards improve fuel efficiency by 27%, fuel savings would be 216 million litres per year.

In the last three years, the average fuel price across Australia’s five major cities is A$1.33 per litre. This equates to a total savings of A$287 million per year, although this would be about half the first year as new cars are purchased throughout the year and travel less, and would reduce as vehicles travel less when they age.

The savings are accumulative because a car purchased in a particular year continues to save fuel over the following years.

The table below shows a rough calculation of savings over the three year period (2016-2018), for new cars sold in the same period (Model Years 2016, 2017 and 2018).

As a result, over a period of three years, A$1.3 billion in potential savings for car owners would have accumulated.

Policy has come close, but what are we waiting for?

The Australian government is not progressing any measures to introduce a fuel efficiency target. In fact, it recently labelled Labor’s proposed fuel efficiency standard as a “car tax”.

But Australia has come close to adopting mandatory vehicle CO₂ emission standards in the past.

In late 2007, the Labor government committed to cutting emissions to achieve Australia’s obligations under the Kyoto Protocol. The then prime minister, Kevin Rudd, instructed the Vehicle Efficiency Working Group to:

… develop jointly a package of vehicle fuel efficiency measures designed to move Australia towards international best practice.

Then, in 2010, the Labor government decided mandatory CO₂ emissions standards would apply to new light vehicles from 2015. But a change in government in 2013 meant these standards did not see the light of day.

The amount of fuel that could have been saved is A$287 million per year.
Shutterstock

Things looked promising again when the Coalition government released a Vehicle Emissions Discussion Paper in 2016, followed by a draft Regulation Impact Statement in the same year.

The targets for adopting this policy in 2025, considered in the draft statement, were marked as “strong” (105g of CO₂ per km), “medium” (119g/km) and “mild” (135g/km) standards.

Under all three targets, there would be significant net cost savings. But since 2016, the federal government has taken no further action.

It begs the question: what exactly are we waiting for?

The technical state of play

Transport Energy/Emission Research conducted preliminary modelling of Australian real-world CO₂ emissions.

This research suggests average CO₂ emission rates of the on-road car fleet in Australia are actually increasing over time and are, in reality, higher than what is officially reported in laboratory emissions tests.

In fact, the gap between mean real-world emissions and the official laboratory tests is expected to grow from 20% in 2010 to 65% in 2025.

This gap is particularly concerning when we look at the lack of support for low-emissions vehicles like electric cars.




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Given that fleet turnover is slow, the benefits of fuel efficiency standards would only begin to have a significant effect several years into the future.

With continuing population growth, road travel will only increase further. This will put even more pressure on the need to reduce average real-world CO₂ emission rates, given the increasing environmental and health impacts of the vehicle fleet.

Even if the need to reduce emissions doesn’t convince you, the cost benefits of emissions standards should. The sale of less efficient vehicles in Australia means higher weekly fuel costs for car owners, which could be avoided with the introduction of internationally harmonised emissions legislation.The Conversation

Robin Smit, Adjunct professor, The University of Queensland; Jake Whitehead, Research Fellow, The University of Queensland, and Nic Surawski, Lecturer in Environmental Engineering, University of Technology Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Emissions standards on cars will save Australians billions of dollars, and help meet our climate targets



Image 20170316 20811 1b5h42i
An emissions cap could save Australians up to A$500 each year in fuel costs.
Petrol image from http://www.shutterstock.com

Scott Ferraro, Monash University and Claire Painter, Monash University

The cheapest way for Australia to cut greenhouse gas emissions is to put a cap on car emissions. It would be so cheap, in fact, that it will save drivers money. The Conversation

According to analysis from ClimateWorks, the toughest proposed standard would help Australia achieve about 6% of its 2030 emission reduction target, and save drivers up to A$500 each year on fuel.

The federal government is looking at policy options to meet Australia’s 2030 emissions target of 26-28% below 2005 levels. Last year it established a ministerial forum to look at vehicle emissions and released a draft Regulation Impact Statement for light vehicles (cars, SUVs, vans and utilities) in December.

There is no reason for the government to delay putting the most stringent emissions standard on cars.

Cars getting cleaner, but not in Australia

Australia currently does not have carbon dioxide emission standards on light vehicles. CO₂ standards work by improving the overall efficiency of the vehicle (the amount of CO₂ emitted per kilometre). These are different from fuel quality standards, which regulate the quality of fuels used by vehicles, and noxious emissions standards, which monitor a car’s emissions of noxious gases and particulates.

Currently, CO₂ emission standards cover over 80% of the global light automotive market. The lack of standards here means that Australia’s cars are less efficient than in many other countries, and this gap is set to widen.

In 2015, the average efficiency of new cars sold in Australia (in grams of CO₂ emitted per km) was 184g per km. In the European Union, the average efficiency of new cars was 120g per km for passenger vehicles and 168g per km for light commercial vehicles (such as vans used as couriers). In the United States – the spiritual home of the gas-guzzler – it is 183g per km and set to improve to 105g per km in 2025.

Australia’s cars account for about 10% of Australia’s greenhouse gas emissions, which are set to grow to 2030 if the market is left to its own devices.

Helping meet Australia’s climate target

In our submission to the draft Regulation Impact Statement, we confirmed that if the most stringent proposed target (105g per km) were introduced as proposed from 2020 to 2025, it would deliver 6% of Australia’s 2030 emissions reduction target. This would save A$49 per tonne of CO₂. Although there would be some costs in introducing the scheme, it would save A$13.9 billion by 2040 overall.

This saves an extra additional 41 million tonnes of CO₂ by 2030, 140 million tonnes by 2040, and an extra A$8.1 billion overall by 2040 compared with the least stringent proposed target (135g per km by 2025).

However, we found that a two-year delay would add an extra 18 million tonnes of CO₂ to the atmosphere, or 2% of the government’s 2030 carbon budget.

Any reductions not achieved in vehicle emissions will need to be made up in other sectors, or purchased through international carbon permits, most likely at a higher cost.

Savings on fuel and health

The most stringent target delivers A$27.5 billion in total fuel savings by 2040, A$16.7 billion more than the least stringent standard.

The draft regulations show that for an average car this is equal to a saving of A$197-295 a year for a driver doing 15,000km per year, and A$328-493 for a driver doing 25,000km per year.

To put this in context, based on 2012 household energy costs data, this would cut household energy costs by up to 10%, with even greater savings for low-income households.

But a two-year delay of the most stringent standard would also result in new car owners paying an extra A$4.9 billion in fuel costs by 2030, and an extra A$8.3 billion to 2040.

The reduction in fuel use will also potentially reduce air pollution, resulting in better health outcomes.

The most stringent standard will save deliver 2.6 times as much fuel as the least stringent standard, so should reduce health costs by a similar proportion. However, the introduction of emissions standards would need to occur in a way that does not increase noxious emissions such as nitrogen oxides.

No reason to delay

Given the enormous benefit of a more stringent standard, the government should also investigate an even more ambitious target.

Our research shows a standard of 95g per km by 2025 will deliver even greater benefits and is technically feasible based on achievements in other markets. The EU is aiming for this level by 2020.

While we also support improving fuel quality to reduce noxious emissions, research by the International Council on Clean Transportation (ICCT) shows that we do not need to improve Australia’s fuel quality standards before the introduction of standards to improve the overall efficiency of the vehicle.

Similarly, despite discrepancies between on-road and in-lab performance of vehicles as seen in the Volkswagen emissions scandal, a standard will still provide significant savings to consumers and the environment.

Standards alone are not the silver bullet. We’ll need a range of other measures to support emissions standards on cars to help improve efficiency and build consumer awareness of fuel-efficient vehicles.

With Australian car manufacturing due to cease by the end of 2017, it is an ideal time to ensure that new cars bought into Australia are the most efficient available. This will set us on the path towards lower vehicle emissions while reducing costs for motorists and improving health.

Scott Ferraro, Head of Implementation, ClimateWorks Australia, Monash University and Claire Painter, Project manager, ClimateWorks Australia, Monash University

This article was originally published on The Conversation. Read the original article.