Interview with Ali Moore, ABC Melbourne Drive

ALI MOORE: Well, what do you think of the government's new vehicle efficiency standards? They're coming in from the beginning of next year and they mandate that all categories of new cars are going to have to reduce emissions by more than 60 per cent by the end of the decade. Chris Bowen is the Minister for Climate Change and Energy. Chris Bowen, welcome to Drive.

CHRIS BOWEN: Thanks, Ali. Good to talk to you.

ALI MOORE: Can you just give us a broad-brush view, to start with, of exactly how this is going to work? It's collective, isn't it? It's not individual. It will be down to the manufacturers to manage.

CHRIS BOWEN: That's 100 per cent correct. And these sorts of standards are pretty common practice around the rest of the world. In fact, 85 per cent of the cars sold around the world are sold under an efficiency regime, an efficiency standards regime. And Australia and Russia are really the only two major economies without these sorts of standards. The United States has had this rule, for example, since the early 1970s. So, we've got a lot of catching up to do. And what that means, Ali, is that those countries that require efficient vehicles as a matter of law get sent them. And those countries like Australia, that doesn't, we tend to miss out. And so there are a whole bunch of really more efficient vehicles that Australians just aren't getting access to. That's partly about electric vehicles and hybrids. Partly. For example, there's 150, more than 150 models of EVs or plug-in hybrids available in the United States and New Zealand, but fewer than 100 here in Australia. But not just about EVs. There's a big difference in the efficiency of within one model. Take the Mazda CX 30, for example. The model available in the United Kingdom uses 25 per cent less fuel than the model available here in Australia. So, that's money at the bowsers that Australians are paying, that they shouldn't need to pay. And, of course, it's higher emissions than we should need to have, so we need to fix this. It's way overdue. Governments have talked about fixing it for the best part of 20 years, but we've actually decided to get on and fix it.

ALI MOORE: So, how do you think it's going to change the cars that are sold here? And we were hearing earlier on the program from the Motor Trades Association, that made the point that in the US, where they have had, and you just raised it yourself, they've had incentives and they've had this program for a long time, you get some of the manufacturers who simply are prepared to pay the fines and buy credits off Tesla, as opposed to not selling gas guzzling cars.

CHRIS BOWEN: Well, also, though, companies do tend to want to avoid the opprobrium of not complying with the efficiency standards, in most countries. There will be trading amongst companies. So, that is standard practise. Again, if you don't meet the standards, you'll need to buy credits off a company that has exceeded the standards. That's, again, how this sort of scheme works around the world. But it does drive behaviour, and in terms of how it will work, Ali, what we do provide the manufacturers with, as you said, the flexibility as to how they meet it. They can bring in more efficient models, or they can bring in the more efficient versions of the same model. Take that Mazda example I just used just then. There's other examples. There are models that are available in Australia only petrol vehicles that are available as plug-in hybrids in other markets, like the Ford Focus and others. But the Toyota Prado, for example, is available as a hybrid in some other markets, but not in Australia. So, these are all options that would be available to the companies. We would require them, though, to gradually reduce or improve, I should say, the efficiency of their fleet across the board that they make available in Australia. And this really comes down to freedom of choice for Australians. I think Australians should have the chance to buy more efficient vehicles that they're currently being denied.

ALI MOORE: Sure. One of the concerns, though, that's been expressed is whether or not it moves too fast. So, for example, you've got your utes and your vans and your large pickups, and they're going to have to reduce emissions by more than 60 per cent between 25 and the end of the decade. The risk that they get phased out before there's a cleaner alternative. And if you need that usual, that pickup or whatever, for the work that you do, that it might be hard to find a replacement. That's something you obviously don't know what's going to happen. Are you going to review this in a couple of years to see how it is working and whether supply is keeping up with the reduction in emissions?

CHRIS BOWEN: Yes, we have built in a proposed review for 2026. Yes, but let me just deal up front with this question, though. Again, there are some legitimate questions and concerns that people may have, and then there's mischief-making on behalf of political players, and we saw a lot of that a few years ago with the suggestion that we're going to end the weekend, for example. But on utes, let me make a couple of points, and larger commercial vehicles. Firstly, as I said, the rest of the world has had efficiency standards like this in many cases, for the best part of 50 years. Take the United States. They are not short of utes in the United States. They call them pickup trucks. But you know and I know there's plenty of them in the United States, and that's with the fuel efficiency standards that have existed. And indeed, we are proposing to match the United States fuel efficiency standard by 2028. In addition, in what we proposed yesterday, we have in effect two efficiency standards, one for passenger vehicles. So, we are proposing to start that 141 grams a kilometre and a separate one for commercial vehicles. So, your utes and your bigger vans at 199. So, we are recognising the difference and recognising the need for utes. This is a very sensible proposal that we are making. It is based in reality and in common sense approach, but also recognising that we must reduce emissions and that Australians are entitled, should be entitled to much greater choices. And I fail to understand how somebody could argue that Australians shouldn't have the same sort of freedom of range of choices that other countries in the United Kingdom, United States, New Zealand, Japan, China, all get that we don't get.

ALI MOORE: Just a couple of quick questions, Minister, if I may. We also heard from the Motor Trades Association that by 2029, half of the cars on the market will have to be EVs. Is that about right? 

CHRIS BOWEN: No. And it is entirely up to the, as I said, the individual companies as to how they comply.

ALI MOORE: So, you wouldn't expect it to be the case that we might.

CHRIS BOWEN: Companies can. We all know the world is on a journey, and Australia is on a journey to more EVs, and that's no bad thing. Many manufacturers have announced they are phasing out internal combustion engine manufacturing at different timelines. And that is the reality. What we want is Australians on that journey to get access to more efficient cars. Now, some companies will decide to import more EVs. I don't think that's a bad thing. I think that's a good thing. Other companies will decide to give us access to the more efficient versions of the petrol car. I accept we're all on a journey here. Not everybody is ready to buy an EV tomorrow. Plenty of people do want to buy an EV, but would like more choices, particularly at the more affordable end. I want to see more of those more affordable models brought into Australia. That's a good thing. But we're not banning any model. We're not making any model compulsory or any choice compulsory. We are saying, though, to the car manufacturers, it is time your Australian operations caught up with the rest of the world and you delivered more efficient vehicles, whether they be EVs, plug-in hybrids, or more efficient versions of the petrol vehicles to Australia.

ALI MOORE: And just on the EVs of course, being in Victoria, we're acutely aware of the fact that EV drivers and owners used to pay a road tax, essentially, but that was challenged in the courts and we no longer have that tax. In fact, people have been getting their money back. But when will we see a national road user charge for electric vehicles?

CHRIS BOWEN: We've made it very clear that is a conversation the country will need to have. But nor is it a conversation we should rush. It's a conversation that treasurers need to have across the board, Commonwealth and states. I think people understand that as petrol vehicles become a lot less common, we need to have that conversation. But we also need to ensure strong take-up and incentives for EVs. We have that nationally with our electric vehicle tax cut, that has really driven behaviour. It's no small part of the reason why EV sales were 2 per cent when we came to office 18 months or so ago, and then now at 8 per cent, that's largely been driven by our tax cut. Yes, the conversation about national road user charging is an important one, but it is not one that we are proceeding with as a matter of huge urgency. It's a conversation we've got to get right and over a period of time.

ALI MOORE: Chris Bowen, many thanks for talking to us.

CHRIS BOWEN: Nice to talk to you again, Ali.