New Vehicle Efficiency Standard watered-down for utes, vans and off-road SUVs

Australia’s proposed fuel efficiency standards will be weakened for light-commercial vehicles – including utes, vans and off-road SUVs.

The Federal Government has announced some elements of the New Vehicle Efficiency Standard have been amended ahead of its introduction to Parliament tomorrow.

This includes the start date for credits and penalties, which has been pushed back six months from January 1, 2025, to July 1, 2025.

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Larger off-road SUVs based on a ladder-frame chassis, such as the Toyota LandCruiser, Nissan Patrol, Ford Everest, Isuzu MU-X and Mitsubishi Pajero Sport, will now be classified as light-commercial vehicles – instead of passenger – with less-stringent emissions targets.

This change will only apply to body-on-frame SUVs with a braked towing capacity above 3000 kilograms, meaning some ladder-frame models – such as the GWM Tank 300 and Suzuki Jimny – will remain in the passenger vehicle category.

The emissions target for light-commercial vehicles – which include top-selling utes like the Ford Ranger and Toyota HiLux – has been raised to reflect recent adjustments made to United States Environmental Protection Agency model, which the NVES is based on.

The ABC [↗] reports the less-stringent target for light-commercial vehicles would result in a 50 per cent reduction in emissions by 2029, down from the previously announced 60 per cent reduction.

Other changes include an amended weight-based relative emissions limit – known as the break point – to recognise that heavier vehicles emit more.

The Federal Government has also announced it will provide a further $60 million in funding to the Australian Renewable Energy Agency’s ‘Driving the Nation’ program to boost electric vehicle charging infrastructure at Australian new-car dealerships.

As detailed here, the New Vehicle Efficiency Standard aims to improve the level of efficient vehicles sold in Australia to bring the nation in line with the United States and Europe.

The Government’s emission-limit scenario – known as ‘Option B’ during the consultation period – intends to catch up to the United States by the end of the decade.

“The Albanese Government has closely consulted with a broad range of stakeholders over the past year and engaged with the more than 9000 submissions made throughout the latest consultation period,” said Transport Minister Catherine King and Climate Change and Energy Minister Chris Bowen.

Toyota Australia said it welcomes the Federal Government’s decision to make “positive” changes to the proposed policy.

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“Toyota has long supported the introduction of an ambitious fuel-efficiency standard that is calibrated to the unique requirements of the Australian market and leaves no-one behind,” said Toyota Australia president and CEO Matthew Callachor.

“We welcome the willingness of the Federal Government to consult on this important public policy and to make changes that represent a positive step forward.”

Hyundai Australia said it continues to support the New Vehicle Efficiency Standard, which will allow it to introduce more efficient vehicles available elsewhere.

“The NVES framework seems to strike the right balance between ambition and practicality,” said Hyundai Australia chief operating officer John Kett.

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"With this Standard in place, Hyundai dealers will have great vehicles to sell, customers will have great vehicles to drive, and the automotive industry will be playing its part to reduce emissions in line with Australia’s commitment to decarbonise.

“It is our intention to bring many more EVs to the Australian market, while substantially reducing the emissions profile of our entire range.

“The New Vehicle Efficiency Standard will help us to do that, and now we can look forward to getting on and selling some cars.”