Australia New Vehicle Efficiency Standard (NVES): Late and Better than Nothing

Australia has finally joined the rest of the developed world in implementing mandatory vehicle efficiency standards - but the new policy reflects political timidity rather than climate urgency.

While any progress is welcome after decades of inaction, the New Vehicle Efficiency Standard (NVES) falls short of what's needed to meaningfully tackle transport emissions.

Ant Day (Secretary and Chair of AEVA WA) discussed NVES with me and commented:

"Every single other major country apart from Russia has fuel efficiency standards. Australia is no longer aligned with Russia in not having them".

"For those who say leave it to the market and customers to decide whether to buy EV or ICE vehicles, fuel efficiency standards work ... they just do".

"Synthetic fuels and hydrogen are useless attempts by dinosaur manufacturers to stay relevant."

"EVs will eat their lunch, they already are."

"Unfortunately the government has watered the NVES down to please the dinosaurs and monster trucks like the RAM F250+ , Silverado are unaffected by it because they are over 3.5 tonnes TARE. This loophole will be exploited"

"It's a start, a halting one."

"But will need an overhaul if we get a government where a Teal/ Green cross bench can effect meaningful change"

The stark reality is that Australian vehicles currently emit 50% more CO₂ than the global average, with emissions trending upward rather than down.

This embarrassing position stems from years of voluntary industry "standards" that utterly failed to curb our appetite for fuel-guzzling vehicles.

Against this backdrop, the NVES represents progress - but progress deliberately weakened to avoid political friction.

The government's retreat from more ambitious options is particularly telling.

After initial consultation proposed three pathways, they chose the middle-ground Option B - then proceeded to water it down further.

Large SUVs were conveniently shifted to less stringent commercial vehicle standards, while those standards themselves were relaxed.

This political choreography prioritised appeasing industry over maximizing emissions reductions.

Perhaps most concerning is the standard's reliance on the outdated NEDC testing protocol from the 1980s, which significantly understates real-world fuel consumption.

Research shows actual SUV emissions can be 16-65% higher than NEDC figures suggest. While the government promises to update to the more accurate standard like WLTP, this won't happen until at least mid-2028 - another unnecessary delay.

The NVES standard's design may actually accelerate Australia's troubling shift toward larger vehicles.

By linking emissions targets to fleet weight, it creates a perverse incentive: manufacturers can meet their requirements more easily by selling heavier vehicles with higher emissions allowances. It's a loophole that could undermine the policy's environmental goals.

The inclusion of emissions credit trading adds further complexity. While potentially providing flexibility, it risks allowing manufacturers to paper over continued high emissions rather than genuinely transitioning their fleets.

These compromises reflect a defensive political strategy that prioritizes avoiding attacks over achieving meaningful climate action.

The government repeatedly emphasizes that the standard won't limit access to large vehicles - treating this as a feature rather than a flaw.

This capitulation to the car industry's marketing-driven push toward ever-larger vehicles ignores the real costs: deadlier streets, higher fuel bills, and worse climate impacts.

While the NVES is better than Australia's previous void of policy, it exemplifies a broader pattern of climate action designed primarily to minimize political resistance rather than maximize emissions reductions.

As our transport emissions continue to rise and global climate impacts accelerate, this cautious approach looks increasingly inadequate.

The standard needs strengthening: unified requirements for all passenger vehicles including SUVs, testing protocols that reflect real-world conditions, and complementary policies to reduce car dependence.

Until then, it remains a missed opportunity - a policy that speaks more to political fear than climate leadership.