Farmers Call for Exception to New Emissions ‘Tax’ on Vehicles

A freshly cut tree is seen on the back of a ute in Luddenham, Australia, on Dec. 3, 2016. Mark Kolbe/Getty Images

Australian farmers are worried that the New Vehicle Efficiency Standard (NVES) to be introduced by the federal Labor government will technically impose a “ute tax” on the sector.

This comes after the government announced plans to bring in the new standard for all new vehicles sold in Australia from Jan. 1, 2025.

Under the proposal, the government will limit the carbon emissions (measured in grams per kilometre or CO2 g/km) produced each year by the fleet of vehicles that dealers can import into Australia.

The limit is reduced for each subsequent year, making the standard more stringent over time and forcing suppliers to sell more “clean” cars to meet the requirements.

Suppliers who exceed the limit will need to buy credits from other suppliers or pay penalties, with the proposed fine flagged at $100 (US$65) for every gram of CO2 over the target.

Some car manufacturers, such as Toyota, have said that they would have to pass on such penalties to consumers as it was unlikely for them to meet the new efficiency standards in the short timeframe.

In a statement on March 6, the National Farmers Federation (NFF) urged the Labor government to amend the NVES to exclude internal combustion utes from the penalty regime.

NFF President David Jochinke was concerned that farmers could be penalised under the new efficiency standards as there were no low-emissions options available for farm utes.

“We’re working hard as a sector to lower our emissions, and we’re all for more efficient low-emissions vehicles,” he said.

“The fact is there is currently no substitute for the internal combustion utes we currently rely on—not when you consider demands like towing capacity and all-day range.

“There is no point trying to tax us into choosing lower emissions vehicles when those alternatives don’t exist.”

Mr. Jochinke also noted that the government needed to slow down its push for new efficiency standards until the market matured and could meet government expectations environmentally and economically.

“Otherwise, this is nothing but a tax on the tools farmers need to do their job,” he said.

Toyota Says Government Too Quick to Roll Out Emissions Caps

While the government said the NVES would bring about significant cost savings for motorists and carbon emissions reduction, car manufacturers have warned that consumers would be impacted under the new policy.

Toyota Australia’s vice president of sales and marketing, Sean Hanley, recently said that the timing of the transition proposed by the government was “too quick.”

People sit in the back of a ute in Luddenham, Australia, on Dec. 3, 2016. Mark Kolbe/Getty Images

The vice president added that the NVES did not take into account “the technical hurdles, the lengthy time, and the substantial cost that will be required to deliver commercial [EVs] that are practical, that are capable and, above all, that are affordable.”

Mr. Hanley estimated that it would take at least three years for car companies to deliver efficient vehicles in Australia.

As such, Toyota said it would have to increase the prices of large vehicles with low fuel efficiency, such as the LandCruiser and the HiLux, to cope with massive fines.

According to government analysis, the NVES could help each motorist save around $1,000 each year in fuel by 2028 while reducing 369 million tonnes of CO2 by 2050.

Nina Nguyen contributed to this article.