Coalition pledges to repeal the New Vehicle Efficiency Standard within 30 days of taking government

What the Coalition has pledged

The federal opposition has pledged to repeal the New Vehicle Efficiency Standard as part of a wider overhaul of Australia's energy and climate policies. Shadow minister for energy and emissions reduction Dan Tehan says the Coalition would introduce its proposed Scrap Net Zero (Cheaper Energy) Bill within 30 days of taking government, and that the bill would repeal the New Vehicle Efficiency Standard Act 2024, which the Coalition claims has affected vehicle choice and pricing across the automotive sector. AutoTalk reports the proposed repeal is an election commitment and would depend on the Coalition winning government and securing sufficient parliamentary support. ¹

The ABC's senior political correspondent Jake Evans reported that shadow energy minister Dan Tehan told The Australian's energy summit: "We will take a chainsaw to Labor's ideologically driven, energy-restrictive approach to energy." Opposition Leader Angus Taylor told the same event: "Within 30 days of getting into government we will introduce the scrap net zero bill … which will get rid of Labor's egregious taxes across energy in our country, taxes on vehicles, it will get rid of the vehicle emissions standards … it will get rid of the safeguard mechanism, which is sending industry offshore." ²

What the wider bill would change

Beyond the vehicle efficiency standard, AutoTalk reports the proposed bill would also repeal the Climate Change Act 2022, remove the safeguard mechanism applying to major industrial emitters, and revoke offshore wind zones in the Hunter, Illawarra, Southern Ocean and Bunbury regions. It would additionally remove legislative prohibitions on nuclear energy, introduce a renewable energy code of conduct and require federal energy funding for states and territories to prioritise affordability and reliability. ¹

The Nightly's Stephen Johnson reports the safeguard mechanism, originally introduced in 2016 under the previous Coalition government and amended by Labor in 2022, requires big emitters to pay a $250 penalty for every tonne of carbon emissions over an annual cap of 100,000 tonnes. Tehan told The Nightly that under a Coalition government emission reductions would be voluntary: "If you're a big emitter and you want to do your bit to reduce emissions, go for it, but we are not going to tax you and force you to do it and force those jobs offshore." ⁴

The ABC notes the Coalition would attempt to lift the prohibition on nuclear power, though that would require laws to be passed by the Senate, where the Coalition cannot win support without either Labor or the Greens changing positions on nuclear energy. Repealing four of Australia's six offshore wind zones would leave Gippsland in Victoria and the Bass Strait in Tasmania as the only approved coasts for wind farms. ²

How the vehicle efficiency standard works

The standard sets annual emissions targets across manufacturers' new light-vehicle fleets, with suppliers able to earn credits by beating their targets or facing penalties for exceeding them, according to AutoTalk. The Nightly reports the New Vehicle Efficiency Standard requires car makers to reduce new passenger car fleet emissions by 59 per cent by 2029 and equivalent light commercial vehicle emissions by 48 per cent, a policy consistent with the one former Liberal leader Peter Dutton took to the last election. ¹⁴

FemaleFirst reports that opposition leader Angus Taylor has vowed a Coalition government would abolish the standard, which requires manufacturers to meet average emissions targets across the new vehicles they supply, with companies exceeding their targets facing financial penalties while better performers can generate credits. The proposed change has reignited debate over whether emissions rules will influence the types and prices of cars offered to Australian motorists. ³

Context: electric vehicle sales keep growing

FemaleFirst reports the political battle comes as Australia's appetite for electric cars is already growing rapidly. Battery electric vehicles accounted for 24.9 per cent of new vehicle sales in August, according to figures highlighted by the Electric Vehicle Council, while battery and plug-in hybrid vehicles combined captured 36 per cent of the market. Australia has also passed 500,000 battery electric cars on its roads, with motorists able to choose from almost 200 EV models. The Electric Vehicle Council argues that greater choice, falling costs and government policies have all contributed to the expansion. ³

Industry, government and crossbench responses

The car industry has called for policy stability following the pledge, FemaleFirst reports, noting the proposed reversal creates another potential change to the regulatory environment just as manufacturers are bringing unprecedented numbers of electric models to Australian showrooms. The Australian Chamber of Commerce and Industry, meanwhile, supports keeping the safeguard mechanism provided it is not expanded, with chief executive Andrew McKellar saying: "Business supports the safeguard mechanism as part of reducing emissions, but we have made clear that we do not support its threshold being lowered to capture smaller facilities." The Nightly published that response. ³⁴

Energy Minister Chris Bowen told the ABC the Coalition's plan would "take a chainsaw to the economy and household budgets", adding: "It will make Australia poorer, weaker and less secure from global shocks." Independent MP Monique Ryan called the proposal "dumb, dangerous and desperate", saying Australians have embraced clean energy because it works. ²

The Greens, in a release carried by Mirage.News, argued the plan would put upward pressure on household energy and transport costs, with acting leader Senator Mehreen Faruqi saying: "The Liberals' plan to scrap vehicle efficiency standards means Australians will have fewer efficient cars to choose from and will be more exposed to petrol costs." These are the stated positions of the parties and groups quoted, not DriveAgent findings. ⁵

Unresolved questions and conditions

The Nightly reports Tehan conceded the Coalition is yet to work out a replacement climate emissions reduction target, almost a year after former Liberal leader Sussan Ley axed the party's commitment to net zero. "We will detail in a separate policy everything we will do with regards to our focus on emissions reduction," he told the publication. Labor remains committed to net zero by 2050, including a 62-70 per cent reduction by 2035, according to The Nightly's report. ⁴

Both AutoTalk and the ABC frame the pledge as conditional: it would take effect only if the Coalition won government, and parts of the agenda — including the nuclear prohibition repeal, according to the ABC — would require Senate passage where the opposition currently lacks the numbers without Labor or Greens support. The New Vehicle Efficiency Standard Act 2024 remains in force, and no change to vehicle emissions rules can occur unless and until the proposed bill is introduced and passed. ¹²