EV adoption: A bumpy ride for Australia
By Ming En Liew
Countries around the world are looking to electric vehicles in a bid to reduce carbon emissions, but Australia seems to be lagging behind. GovInsider speaks with the nation’s transport department and a transport planner to understand why, and what the government plans to do about it.
In the past, Australia has lagged behind on driving EV adoption. But the country is now looking to change that with increased funding and policy amendments in the hopes of reducing carbon emissions in its transport sector. Image: Canva
In August, Australia introduced a Bill which outlines plans to reduce greenhouse gas emissions by 43 per cent from 2005 levels by 2030, and achieve net zero by 2050.
But achieving this goal will require Australia to make concerted action to drive emissions lower across the transport sector, said a spokesperson from the nation’s Department of Infrastructure, Transport, Regional Development, Communications and the Arts in a written statement to GovInsider. Today, transport is the second largest contributor of greenhouse gas emissions in the country, after energy production.
One main area Australia needs to address to lower transport emissions will be the adoption of electric vehicles (EVs). Over 99 per cent of vehicles on Australian roads are internal combustion engine (ICE) vehicles that “pollute every time they travel”, says transport planner Dr Elliot Fishman. Fishman is also the Director of the Institute for Sensible Transport, which helps organisations plan, implement, and evaluate sustainability transport initiatives and innovations.
“In 2021, only 2 per cent of new vehicle sales were EVs,” said the departmental spokesperson. This is nearly five times lower than the global average of 9 per cent globally.
The culprit? A real lack of political leadership, according to Fishman. “We’ve had a very divisive political debate that EVs and green transport have been a victim of.” For instance, former Prime Minister Scott Morrison said during the 2019 federal election that pushing for more EVs would “end the weekend”. He had asserted that EVs would be unable to support the outdoor weekend activities that Australians traditionally partook in, such astowing trailers or boats.
“That has made it difficult for people to have a diverse range of different transport options…without the associated carbon emissions,” Fishman says.
But Australia is hoping to change that, setting out a National Electric Vehicle Strategy which includes goals like making EVs more affordable, expanding adoption and reducing transport emissions.
As a first step, the Australian Government is working with states and territory governments, as well as industry stakeholders, unions and consumers to boost EV adoption. This involves providing better access to EVs and ensuring that infrastructure and industries are ready to support the transition, said the departmental spokesperson.
To change this, the Federal Government’s 2022-23 Budget sets aside AU$275 million to add to the AU$500 million Driving the Nation Fund. The fund aims to reduce emissions in transport by building a national electric vehicle charging network zero-emission vehicles for highways, fleets and freight hubs, the spokesperson explained.
Through the Fund, Australia aims to build charging stations at average intervals of 150km on major roads across the country, covering 117 highway sites. The Fund will also be used to install a hydrogen refuelling network across major highways in the country.
The Australian Government is also looking to address one of the key hindrances of EV adoption: cost. “Policy settings are denying Australians real choice of good, affordable, no emissions cars,” said Minister for Climate Change and Energy Chris Bowen at the nation’s inaugural EV Summit in August. He cited examples of how consumers in countries like the United Kingdom has 26 options for low-emissions vehicles under AU$60,000. Meanwhile, Australia only has eight options.
As such, the country’s Driving the Nation Fund will subsidise EV adoption through the Electric Car Discount. The Discount will exempt low- and zero-emission cars from fringe benefits tax (a tax paid on benefits as opposed to financial compensation) and the 5 per cent import tariffs, allowing individuals looking to purchase an EV to enjoy savings of up to AU$4,700 annually.
Pay as you drive
Making EVs more accessible is all well and good, but having a larger proportion of EVs on the road will mean less taxes for the government to invest in land transport projects. At the moment, Australia charges a fee of 46 cents per litre for petrol and diesel purchased at a bowser (a trailer fitted with a tank that can carry liquids like petrol or diesel).
But people who drive EVs do not contribute to the fee, Fishman says. “That means that over time, we will end up with lower and lower amounts of revenue from the fuel fees.”
To address this, Fishman suggests implementing a road user charge, where drivers pay a fee based on the distance driven. “If somebody owns a car, but they only use it once a week, they shouldn’t have to pay the same amount of registration as somebody that drives 300 kilometres a week and uses their car every day,” he explains.
“We need to start using…policy levers to try and encourage the things we want to see more of, and try and discourage the things we want to see less of,” he says. Such charges are already commonplace in other sectors, he adds. For instance, water and electricity bills are charged based on the amount of usage, as is parking.
“This helps to provide the pricing signal to help people make better choices and…to recover the cost of providing the road infrastructure [needed for EVs],” Fishman adds.
“We know from overseas experience, that with the right policy settings, EV penetration can increase quickly,” Bowen said in his speech. He cited the example of Sweden, which had managed to increase its proportion of EV sales from 18 per cent to over 60 per cent in just two years.
Policy can, for instance, help to drive up EV supply. At the time of writing, there are just over 40 models of EVs available in Australia as compared to about 150 models in Europe.
Fishman suggests for the Federal Government to introduce national vehicle emissions standards that will ensure importers of motor vehicles cannot exceed a threshold of carbon emissions for imported vehicles.
“This means that if a car company imports diesel powered units, or large trucks that are very polluting, they then need to sell a lot of electric vehicles in order to bring the average to the maximum allowable amount for that brand,” he explains.
“If every company had to adhere to that just as they do in Europe, then you will start to see electric vehicle companies bring in a lot more models into Australia than they do now,” he adds.
Australia had also committed to an EV target of 75 per cent of new leases and purchases in the Commonwealth fleet by 2025, shared the department spokesperson. The hope is that this will help to “encourage the growth of a second-hand market and improve choices when it comes to low-emissions and fuel-efficient vehicles,” they said.
Getting ICE vehicles off the roads
But Fishman points out that even if every single car sold in Australia from today were EVs, the country still would not be able to meet the emissions reduction target of 43 per cent, simply because of the many ICE vehicles currently on the roads.
To this point, he recommends introducing what is known as a ‘Cash for Clunkers’ programme, where old and polluting vehicles can be surrendered to the government in exchange for a small amount of money. “That helps the government to meet their emissions reduction targets by getting these cars off the road,” he explains.
Alternatively, he suggests that the government can also look into providing vouchers instead of cash, to incentivise commuters to purchase more environmentally-friendly travel options like an electric bike. This is similar to a programme introduced by France last year, Reuters reported.
“E-bikes are used about twice as much as a regular bike, travel about twice the distance, and are more often used as a replacement for motor vehicles,” Fishman says.
“Serious action on climate involves serious action on transport emissions,” Bowen had declared during his speech. To this, it seems like Australia has finally taken a long-awaited first step, but much more will need to be done.
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