The Albanese government has announced a significant adjustment to its proposed pollution caps for new utes and large SUVs.

Key highlights:

– Government Revises Vehicle Emissions Standards: The Albanese government adjusts pollution caps for new utes and large SUVs following criticism.

– Reduced Targets for Utes and SUVs: Light commercial vehicles will face less stringent emission reduction targets, down from 60% to 50% by 2029.

– Reclassification of SUVs: High-emitting large SUVs meeting specific criteria will be reclassified as LCVs to avoid stricter pollution caps.

Anthony Albanese, Australia’s Prime Minister.

Initially introduced in early February, the proposed fuel efficiency standard faced intense criticism for potentially increasing vehicle prices and limiting consumer choice.

In response, the government has revised the standard to impose fleetwide emission caps for both passenger vehicles (PVs) and light commercial vehicles (LCVs), aligning Australia with other developed economies with similar regulations.

Under the revised rules, new LCVs will face less stringent emission reduction targets compared to passenger vehicles.

While the original proposal aimed for a 60% reduction in emissions by 2029, the updated standard requires only a 50% reduction for LCVs.

Meanwhile, passenger vehicles will maintain the original 60% emissions reduction requirement.

New classification

Additionally, certain large SUVs initially categorized as passenger vehicles will now be reclassified as LCVs if they possess a towing capacity exceeding 3 tonnes and share a similar chassis with utes.

This reclassification includes models like the Nissan Patrol, Toyota Prado and Landcruiser, Ford Everest, Mitsubishi Pajero, and Isuzu MUX.

The adjustment aims to prevent the premature phasing out of high-emission models before low-emission alternatives are readily available.

By lowering the emissions cap annually, the standard effectively functions as a carbon price, incentivizing car manufacturers to prioritize zero and low-emission vehicles or face fines for exceeding pollution limits.

The commencement of the standard has also been postponed by six months to July 2025, with penalties for non-compliance to be determined by legislation.

A review of the scheme’s effectiveness is scheduled to begin in 2026.