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ACT leads fossil fuel vehicle phase-out

Electric new cars only in Canberra by 2035; ambitious new EV sales targets announced

20 Jul 2022

THE Australian Capital Territory (ACT) has declared its intention to become the first Australian state or territory to ban the sale of internal combustion engine (ICE) vehicles.


The ban is being flagged for 2035 by Greens MP, Shane Rattenbury, the territory’s minister for energy and emissions reduction.


Mr Rattenbury said the ACT government’s ambitions are for 80 to 90 per cent of new light vehicles sold by 2030 to be zero-emission models, with a stricter ban expected to come into force five years later.


To emphasise their commitment, the ACT government also announced updated electric vehicle (EV) sales targets and planned new recharge stations.

Mr Rattenbury said: “The phase-out of internal combustion engine cars would first apply to new light vehicles, including passenger cars, motorcycles and small trucks.


The ACT’s transport decarbonisation strategy will form a key part of the territory’s goal to reach net-zero emissions by 2045.


However, legislation relating to how the proposed ban will come into effect is yet to be drafted.


Of contention are finer details about enforcing such a ban including whether it will apply to cars being purchased interstate (just over the border in Queanbeyan, NSW), and domiciled in the ACT.


Mr Rattenbury cited similar plans in the UK which wants to ban the sale of new petrol and diesel vehicles from 2030 and hybrids five years later.


The ACT Government is in the process of tendering for 50 government-funded electric vehicle charging points but estimates up to 1000 will be needed.


Sales of EVs in Canberra, one of Australia’s most advantaged socio-economic areas, are underpinned by limited free registration and interest free loans of up to $15,000 towards the purchase of an EV.


The Federal Government made a $200 million election commitment to exempt EVs from import tariffs and fringe benefits taxes to make them more affordable.


However, according to Tony Weber, CEO of the Federal Chamber of Automotive Industries (FCAI), the ACT’s plans fail to take into account vehicle availability, in particular of one-tonne utilities which account for a major proportion of new vehicle sales in Australia.


“These vehicles come largely from Thailand and the manufacturers there are not in a position to produce electric one-tonne utes nor will they be in 2035. They simply don’t have the technology to build them nor the resources and capacity,” said Mr Weber.


“Thailand makes most of the Australian market’s one tonners and they represent a small percentage of the total volume produced. Thai-built utes and SUVs are sold domestically and across the region in the millions each year and there is little appetite for change.


“The FCAI fully supports Australia’s transition to EVs and wants government to adopt a CO2 zero target which would be more achievable.


“You also have to take into account the fact that all those tradies and families out there (in Australia) may not be able to afford EVs, even as far out as 2035. Research we have commissioned from S&P Global tells us that there will still be an affordability gap of between $8500 - $17,000 between an ICE powered vehicle and an EV in 2033,” he concluded.


Speaking on behalf of new car dealers, CEO of the Australian Automotive Dealer Association (AADA) James Voortman said, “We have serious concerns that this policy will have adverse consequences for the automotive industry, the people it employs and consumers in the ACT.


“This is another example of why the transition to low emissions vehicles should be led by the Federal Government, which controls the importation of new vehicles into the Australian market.”


For its part, the Electric Vehicle Council (EVC), which represents the electric vehicle industry in Australia  says : “The ACT government’s new zero-emission vehicles (ZEVs) strategy is a green light to carmakers and charging station companies to invest and will deliver Canberrans cleaner, cheaper roads.


Behyad Jafari, chief executive of the EVC, said the ACT was leading the nation in a smooth, affordable transition to zero emissions.


“The ACT Government is making the tough reform decisions now to ease an inevitable transition that’s only a decade away,” said Mr Jafari. 


“By setting long term targets in line with climate science, Canberrans will benefit from cheaper electric vehicles that cost a fraction to run.


“Nearly a majority (42%) of the world’s car market have incoming bans on light combustion engines, while 16 car makers are phasing out petrol and diesel cars. Five years ago, both those numbers were zero.


“We need the federal government to adopt fuel efficiency standards in line with those in Europe, the USA, and NZ. As a country coming from behind, we now need them urgently.


“Taking action to price registration by emissions sets a clear expectation that lower and zero emissions vehicles should be better off compared to more heavily polluting vehicles under any future reform."

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