350 Canberra is vitally interested in policies to encourage low-emission vehicles in the ACT, in the context of the Government’s strategy to achieve Zero Net Emissions.
The ACT Government has identified that, after it achieves 100% renewable electricity in 2020, the transport sector will be the largest contributor to the Territory’s greenhouse emissions. Most of these emissions will be generated by private passenger vehicles. In our view, this implies the need for determined action to encourage ACT residents to replace petrol and diesel vehicles with electric vehicles or with low-emission hybrid vehicles.
Many other countries, and sub-national jurisdictions, are taking such action. We have gathered information on these actions, and have summarised key actions in the table below. They include:
● introduction and progressive strengthening of fuel efficiency standards;
● rebates and other concessions for purchase and registration of electric vehicles (EVs);
● roadmaps and targets for the take-up of EVs; and
● sunset dates for petrol and diesel vehicles.
The ACT has already implemented limited stamp duty and registration concessions for green vehicles, but in our view stronger measures are needed to encourage the purchase of EVs, and to encourage manufacturers of EVs to sell their products in Canberra. There are several EV models, including the Hyundai Ioniq and Renault Zoe, which can be purchased in many countries overseas, but not in Australia, and one reason for this is the absence of purchase rebates in Australia.
In our view, an effective strategy must involve policies at both levels of Government (Territory and Federal) working together. The ACT Government is responsible for stamp duty and registration concessions, and potentially for purchase rebates; while the Federal Government is responsible for fuel efficiency standards (under consideration by the Ministerial Forum on Vehicle Emissions) and any future measures to emulate France, the United Kingdom, Norway, the Netherlands and other countries by announcing a sunset date for petrol and diesel vehicles.
We note that there is a relationship between any Territory measures and the Federal Government’s Luxury Car Tax. We realise that governments may be reluctant to provide incentives to purchasers of luxury or expensive vehicles, but the Luxury Car Tax currently penalises such purchasers. It imposes a lower tax burden on the purchasers of fuel efficient vehicles, but the tax threshold for fuel efficient vehicles, which was 31% higher than for other vehicles in 2009, and is now only 16% higher, thus diminishing whatever encouragement there be to prefer a luxury EV to a luxury petrol or diesel vehicle.
Chelsea Sexton has written this thoughtful piece on the US incentive system, in which she argues for point of sale rebates (as opposed to tax credits), a cap on the retail vehicle price for rebate eligibility, increased battery size requirements, and the pooling of credits among manufacturers.
It seems to us that an effective strategy in this area would involve cooperation between the states and territory governments on the one hand, and the Federal Government on the other, to undertake measures such as the following:
* proceed with the fuel efficiency standard of 105g/km currently under consideration by the Ministerial Forum on Vehicle Emissions (although an earlier timeframe than 2025 would better align Australia with the standards already adopted in the EU, North America and South Korea);
* make adjustments to the Luxury Car Tax to widen the gap between the thresholds for fuel-efficient and other vehicles (at the least, restoring the 31% gap which prevailed in 2009);
* introduce a rebate (of say, $5000, limited to the first cohort of say, 5000 EVs purchased in the ACT for vehicles priced below the Luxury Car Tax threshold; and
* create a roadmap, similar to that already introduced in New Zealand, for the uptake of EVs.
SUMMARY OF KEY INTERNATIONAL POLICIES
[i] European Commission: climate action. Reducing CO2 emissions from passenger cars.
[ii] International Council on Clean Transportation. United States Light Duty Vehicle Efficiency Standards. Factsheet, November 2014.
[iii] South Korea fuel economy and greenhouse gas standards for new light-duty vehicles (2016-2020). PDF downloaded from within
[iv] Government incentives for plug-in electric vehicles (Wikipedia article)..
[v] Beyond Zero Emissions. Electric Vehicles report (page 14). http://bze.org.au/electric-vehicles-report/
[vi] Fuel efficient vehicles are defined as those using under 7 litres per 100 km, corresponding to 162 g/km of CO2
[vii] Thus, a car with a comparison price of $96,000 would attract a LCT of $6800 if fuel-efficient, and $10,300 otherwise.
[viii] New Zealand Ministry of Transport. Electric vehicles. http://www.transport.govt.nz/ourwork/climatechange/electric-vehicles/
[ix] City of Adelaide. Electric vehicles. http://www.cityofadelaide.com.au/explore-the-city/city-travelling-transport/green-travel/electric-vehicle-charging-points
[x] France to ban sales of petrol and diesel cars by 2040. The Guardian, 6 July 2017. https://www.theguardian.com/business/2017/jul/06/france-ban-petrol-diesel-cars-2040-emmanuel-macron-volvo
[xi] Britain to ban sale of all diesel and petrol cars and vans from 2040. The Guardian, 26 July 2017. https://www.theguardian.com/politics/2017/jul/25/britain-to-ban-sale-of-all-diesel-and-petrol-cars-and-vans-from-2040
[xii] Scotland wants to phase out petrol and diesel cars by 2032. World Economic Forum, 11 September 2017. https://www.weforum.org/agenda/2017/09/scotland-wants-to-phase-out-petrol-and-diesel-cars-by-2032/
[xiii] Netherlands wants to ban non-electric car sales by 2025. International Business Times, 15 August 2016. http://www.ibtimes.co.uk/netherlands-wants-ban-non-electric-car-sales-by-2025-1576071
[xiv] China to ban production of petrol and diesel cars in the near future. The Guardian, 11 September 2017. https://www.theguardian.com/world/2017/sep/11/china-to-ban-production-of-petrol-and-diesel-cars-in-the-near-future
[xv] China gives automakers more time in world’s biggest EV plan. Bloomberg, 28 September 2017. https://www.bloomberg.com/news/articles/2017-09-28/china-to-start-new-energy-vehicle-production-quota-from-2019