New fuel-efficiency standard to be introduced in 2025

The federal government is set to introduce fuel efficiency standards from 2025, which could save motorists $1000 a year.

The New Vehicle Efficiency Standard (NVES) means car companies will need to supply more fuel-efficient vehicles to Australia, with the standard providing targets for average emissions per kilometre from new vehicles sold.

Australia, along with Russia, is one of the only OECD countries to not have a fuel-efficiency standard, meaning Australia often receives inefficient vehicles.

Chris Bowen, Minister for Climate Change and Energy, said the NVES is about ensuring Australian families and businesses can choose the latest and most efficient cars and utes, whether they’re petrol and diesel engines, hybrids, or electric.

“Because of a lack of action on an Efficiency Standard, Australian families are paying around $1000 a year more than they need to be for their annual fuel bill – the Albanese Government is delivering long-term cost-of-living relief to fix that for new vehicles and put money back in people’s pockets.”

If Australia catches up with the US, which has had a similar policy in place for fifty years, by 2028, drivers could save up to $1000 per vehicle per year.

It also means that by 2050, there will be a reduction of 369 million tonnes of carbon emissions resulting in $5 billion in health benefits from reduction in air pollution.

Catherine King, Minister for Transport, Regional Development and Local Government, said the standard increases choice.

“The Albanese government favours a model which ensures achievable change, which will bring Australia in line with US standards by 2028 and provide the optimal cost benefit outcomes for Australian car buyers.

“It doesn’t dictate what sort of car or ute people can buy, but will mean you have a wider range of modern and cheaper to run vehicles.”

The NVES will deliver more vehicles to Australia with the latest engine and design technologies to ensure lower fuel bills and will only apply to new passenger and light commercial vehicles, not used or existing vehicles.

The Albanese Government will consult on the preferred model for a month and introduce the legislation as soon as possible, with the new cost-saving rules to come into effect by 1 January 2025.

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