Coalition proposes scrapping NVES penalties in wider climate policy overhaul

Coalition sets out an eight-point rollback

The Coalition has set out an eight-point energy and climate plan that would reverse or unwind several federal policies if it won government. The package, as described by The Nightly, ABC News and MacroBusiness, includes scrapping the Climate Change Act 2022, removing the safeguard mechanism, repealing the New Vehicle Efficiency Standard Act 2024, revoking offshore wind zones, and lifting the federal prohibition on nuclear energy. The reports describe these as proposals rather than changes already in force. ¹²³

What the plan would change for vehicle emissions

AAP reported that the Coalition would scrap financial penalties under Australia’s New Vehicle Efficiency Standard, with opposition leader Peter Dutton saying the fines would add to the cost of living and the price of new vehicles. AAP said the law came into effect in January, but penalties and credits were not due until July this year. ABC News said the Coalition would remove laws requiring car makers to provide more efficient vehicles to Australia, including electric vehicles, and that would sit alongside the broader proposal to unpick vehicle emissions rules. ⁴²

AAP also reported that the proposal would remove potential fines for car companies that exceed annual emission limits for their new car fleets. The article said those limits are tied to the scheme’s enforcement mechanism, so the Coalition’s change is not just about the size of penalties but about removing the consequences for missing the annual fleet targets. ⁴

Energy and climate measures beyond vehicles

The Nightly said the plan would make emissions reductions voluntary and scrap the safeguard mechanism entirely, while ABC News said the Coalition would remove laws requiring Australia’s biggest polluters to cut emissions or face penalties. The same reporting says four offshore wind zones would be cancelled: the Hunter, Illawarra, Southern Ocean and Bunbury. ABC News also reported the Coalition would seek to lift the nuclear ban, but that any change would still need Senate approval and there would be no chance of passage unless Labor or the Greens changed their position. ¹²³

ABC News further reported the Coalition would let the Capacity Investment Scheme underwrite coal, gas and nuclear power, rather than limiting it to renewables-related projects. MacroBusiness separately listed the same package elements, including a renewable energy code of conduct, Commonwealth funding conditioned on affordability and reliability, and a direction for the Australian Energy Regulator to place primary regard on those priorities. ²

Industry reaction and policy context

AAP reported divided reaction inside the automotive sector. Electric vehicle advocates said removing fines would make the standard ineffective, with the Electric Vehicle Council comparing it to road rules without enforcement, while the Australian Electric Vehicle Association said the change would remove the reward for doing the right thing. On the other side, the Federal Chamber of Automotive Industries said the standard should be overhauled and emission limits renegotiated to be more achievable, arguing fines would ultimately add cost pressure for consumers. ⁴

The Nightly said the Coalition’s approach went further than the Australian Chamber of Commerce and Industry, which supported keeping the safeguard mechanism if it was not expanded. The Nightly also reported the safeguard mechanism was introduced in 2016 under the previous Coalition government and later amended by Labor in 2022, while AAP noted Australia had been one of just four major countries without a fuel-efficiency standard before the law was introduced this year. ¹⁴