New-Japan Business Consulting
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Will Australia finally introduce CO2 regulations?

‘Australia doesn’t have CO2 regulations?’

You may be thinking. Yes, among the major countries, Australia and Russia do not have CO2 (or fuel consumption) regulations. They have been proposed, but several times they have stopped being considered and faded out.

The government’s progress has been so slow that a car industry association, fearing that Australia would become a destination for old car stock, introduced voluntary CO2 regulations in 2020.

In February 2024, the Australian government announced proposed CO2 regulations for light duty vehicles benchmarked to US standards, with a target introduction date of 2025. This makes sense, because although Australia is a member of the Commonwealth, its tastes and usage when it comes to cars are closer to the US than to Europe.

However, the government’s recommended proposal is strict, with a relatively short lead time of three years from introduction to catch up with US standards, and no off-cycle credits or other flexible measures to be introduced. As a result, some people have a cold assessment of the feasibility of the proposal.

Nevertheless, as long as there is a shift to EVs, the regulations can be cleared, so there should be fewer obstacles than in car-producing countries; the price of EVs is considered a bottleneck, but this is not such a high hurdle if Australian users are open to new manufacturers.

For legacy brands, how to maintain consumer loyalty in an Australian market that has moved away from manufacturing is an increasingly critical topic.