Australia’s transport sector accounts for the largest share of the total final energy consumption, 41% as of 2019, and growing. Consequently, annual carbon emissions from the sector increased by around 1.6% per year during this time. As of 2019, oil accounts for 97% of transport’s energy use.
Recent analysis has highlighted the inefficiency of Australian vehicles. Today, Australia is the only OECD country without mandatory fuel efficiency standards. A previous government assessment found that raising transport fuel efficiency standards was Australia’s most cost-effective emissions abatement opportunity., Estimates of marginal abatement costs for Australia have confirmed that setting such would see a net financial gain, rather than imposing a cost on the economy.
The Labor government has announced a suite of new transport policy, including investment in electric vehicle charging infrastructure, hydrogen vehicle refuelling stations, and an on-road emissions and fuel usage testing programme. A tax exemption for electric cars has also been introduced. Fuel efficiency standards, however, remain conspicuously absent. The government has recently sought consultation on a National Electric Vehicle Strategy, including on the introduction of fuel efficiency standards.
The 1.5°C compatible pathways assessed here give a range of carbon emissions reduction for the transport sector of 29-69% from 2019 levels by 2030. The large range is in part due to varying forecasts for future energy demand in the sector.