Vehicles and fuels

The department is developing a fuel quality standard for renewable diesel. Renewable diesel is an alternative to petroleum-derived diesel that produces lower greenhouse gas emissions.

A discussion paper is available on our consultation hub.

Your feedback on the consultation paper will help us to develop a standard that can:

reduce greenhouse gas emissions
help Australia transition to a net zero economy by 2050.

Transport makes up 19% of Australia’s national emissions. Most transport emissions are from road vehicles. Reducing these emissions will be critical to achieving Australia’s emissions reduction target of 43% on 2005 levels by 2030 and reaching net zero emissions by 2050.

The National Electric Vehicle Strategy

The Australian Government has delivered Australia’s first National Electric Vehicle Strategy which outlines a vision to increase the uptake of electric vehicles (EVs) to reduce our emissions and improve the wellbeing of Australians.

The strategy sets a nationally consistent framework to get Australia’s road transport sector on the path to net zero emissions.

The strategy is part of the government’s Powering Australia plan to improve EV affordability, create jobs and reduce emissions.

The time has come for Australian households and businesses to reap the benefits of cheaper, low emissions transport that is fit for the 21st century. With transport on track to become Australia’s largest emitting sector by 2030, the strategy is an important step in achieving our emissions reduction goals.

Next steps - a Fuel Efficiency Standard for Australia

More than 1,500 individuals and over 200 organisations from across Australia provided their feedback on the development of the Strategy.

Stakeholders were clear in calling for an Australian fuel efficiency standard as a matter of urgency. In response, at the centre of the Strategy is a commitment to introduce Australia’s first vehicle fuel efficiency standard, to make us competitive with other parts of the world for EV supply.

The Fuel Efficiency Standard will set an average carbon emissions limit, that decreases over time, across all new light vehicles sold by each vehicle supplier in our market. A well-designed standard will help reduce fuel costs for Australian motorists and improve the supply and variety of EVs coming into the Australian market.

Other actions and commitments

Driving The Nation

The Department of Climate Change, Energy, the Environment and Water is supporting the uptake of EVs with a $500 million Driving The Nation Fund. The fund supports projects to expand electric vehicle charging and hydrogen refuelling infrastructure across Australia, and support fleets.

The Australian Government doubled the existing investment in 2022 with $250 million in new funding, bringing the Fund to $500 million. There are 3 elements to the new Driving The Nation funding:

National EV charging network $39.3 million to help deliver 117 EV chargers on key highway routes across Australia
Hydrogen Highways up to $80 million co-invested with state and territory governments to help decarbonise heavy transport with a roll out of hydrogen refuelling networks on key freight routes
Australian Renewable Energy Agency (ARENA) over $130 million to co-fund initiatives that will reduce Australia’s road transport emissions.

Electric Car Discount

The Electric Car Discount is making electric cars cheaper by exempting eligible vehicles from fringe benefits tax and import tariffs.

The Green Vehicle Guide

The government provides a range of information and support for people to reduce fuel costs, carbon emissions and pollution from vehicles. This includes the Green Vehicle Guide.

Clean energy finance

The Clean Energy Finance Corporation (CEFC) provides financing to drive uptake of low emissions vehicles.

Emission Reduction Fund

Under the Clean Energy Regulator’s Emissions Reduction Fund (ERF), businesses earn carbon credits by:

changing to lower emissions vehicles
changing fuel sources
improving vehicle fuel efficiency.

These low and zero emission transport initiatives complement other government priorities such as:

the $15 billion National Reconstruction Fund
the National Battery Strategy
Rewiring the Nation
A Future Made in Australia
the broader agenda on critical minerals.

Fuels

Fuel quality

The Australian Government is accelerating the introduction of improved fuel quality.

In July 2022, the minister brought forward a reduction in sulfur levels across all grades of petrol from 2027 to 2024.

This sulfur reduction more closely aligns Australia’s fuel quality with international standards and provides Australians with health, environmental and vehicle benefits. This includes improved air quality, reducing health costs due to exposure to air pollution by an estimated $840 million.

The department is investigating further changes to existing fuel quality standards. In November 2022, we released a draft regulatory impact statement, Better fuels for cleaner vehicles. The proposed changes would pave the way for the introduction of Euro 6d noxious emissions standards for light vehicles.

Together, improved fuel quality and Euro 6d noxious emissions standards could ensure:

better air quality
improved health outcomes
the latest and cleanest vehicle technology works as designed
greater access to more fuel-efficient vehicles.

Fuel Efficiency Standard

The Department of Infrastructure, Transport, Regional Development, Communications and the Arts (DITRDCA) manages policy and standards development for vehicle emissions, vehicle noise and fuel consumption labelling. It administers the Australian Design Rules which are national standards for vehicle safety, anti-theft and emissions.

DITRDCA is leading the consultation on introducing a Fuel Efficiency (CO2) Standard for Australia.

Fuel efficiency standards are common around the world and encourage vehicle suppliers to sell cleaner cars. Fuel efficiency standards help to: