National Electric Vehicle Strategy: consultation paper

ACT Government Submission
National Electric Vehicle Strategy
Consultation Paper
October 2022

ACT Government
Introduction
The Australian Capital Territory (ACT) Government welcomes the Australian Government’s engagement on this critical policy issue and appreciates the opportunity to make the following submission to the
National Electric Vehicle Strategy consultation paper. In 2020-21, transport emissions accounted for 64% of total greenhouse gas emissions in the ACT, making it the single largest contributor to emissions in the
Territory. Of these transport emissions, 70% originated from passenger vehicles. To achieve our legislated target of net zero emissions by 2045, it is necessary for the ACT to significantly reduce its transport emissions.

To address this challenge the ACT Government has sought to improve our public transport system, encourage more active travel, and rapidly expand the uptake of Zero Emission Vehicles (ZEVs) in the
Territory. As a result of our policy initiatives, the ACT has the highest rate of ZEV ownership per capita in the country and ZEV sales continue to grow strongly. Despite these achievements, we know that the decarbonisation of the total fleet will take decades as older vehicles remain on the roads and the supply of
ZEVs continues to be constrained to the domestic market. Not only are Australians being sold some of the least fuel-efficient and highest emitting vehicles in the world, but they are also being denied access to the most affordable zero emission vehicles on the global market.

Without national leadership, Australia could be left behind in the transition. If other countries outpace us in the transition to ZEVs, we will miss out on the opportunities for industry development and emissions reduction. As older vehicles remain on the road, a slow transition to ZEVs will lock in emissions in the future and could imperil Australian and ACT Government emissions reduction targets. Without supportive policy,
Australia could risk becoming a dumping ground for low quality internal combustion engine vehicles.

Stronger action must be taken to address these issues and reduce transport emissions. To date, state and territory governments have led the way but now is the time for the Australian Government to demonstrate its leadership and deliver the transition to a zero-emissions transport future.

ACT Government Policy Settings
In July 2022, the ACT Government released the ACT Zero Emissions Vehicle Strategy 2022-2030 which outlines the Territory’s strategic vision and approach to increasing ZEV uptake. By 2030 the ACT will be a leading jurisdiction in the adoption of ZEV technologies and will have achieved a ZEV sales target of 80-90% of new light vehicle sales.

To achieve this goal, the ACT will:

• Seek to phase-out the purchase of new light internal combustion engine vehicles from 2035.
• Expand the ACT public charging network to at least 180 chargers by 2025.
• Prohibit the onboarding of new internal combustion engine vehicles into taxi and ride-share fleets
by 2030.
• Provide financial incentives for the installation of EV charging infrastructure in multi-unit buildings.
• Enact regulation to require EV charging infrastructure for new multi-unit residential and
commercial buildings.
• Streamline application processes for the deployment of EV chargers on public land.
• Ensure that 100% of all newly leased ACT Government vehicles are ZEVs, where fit for purpose.

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• Continue to offer financial incentives, including stamp duty exemptions for new and used ZEV
purchases, two years free registration, and zero interest loans of up to $15,000 to reduce the
upfront cost of ZEVs and private charging infrastructure; and
• Investigate the reforms necessary to make owning a ZEV an affordable and accessible option for all
Canberrans.

These actions will build on the Government’s efforts to reduce transport emissions through the
Zero-Emission Transition Plan for Transport Canberra, which outlines the initiatives the Territory is implementing to achieve a zero-emissions public transport system by 2040. Under this framework, the
Territory’s light rail system runs on 100% renewable electricity and Canberra’s first 12 zero emission buses will be in operation by the end of 2022, with an additional 90 zero emission buses to be procured. These actions will see the transition of around a quarter of the ACT’s public transport fleet within the next two years.

Key recommendations for the National Electric Vehicle Strategy
Ambitious fuel efficiency standards are required

Australia’s current vehicle emissions standards only restrict exhausted emissions and apply no restrictions to carbon dioxide (CO2) emissions. The current fuel efficiency standard for new passenger cars and light commercial vehicles in Europe is 95g CO2/km. This standard was set in 2019 and came into effect from
2020. It repealed the prior standard of 130g CO2/km which was set in 2009.

As a result of Australia’s relative inaction on fuel efficiency standards, the intensity of CO2 emissions of vehicles sold in Australia is significantly higher than those sold in Europe. According to the National
Transport Commission, in 2021 the average emissions intensity for passenger vehicles sold in Australia was
160g CO2/km. By contrast, in the same the year the average overall emissions intensity for 29 European countries was 115g CO2/km. For new light commercial vehicle sales in Australia, approximately 14 per cent of sales in 2021 had an emissions intensity of 200g CO2/km or less. By contrast, approximately 57 per cent of new European light commercial vehicles were at or below this emissions intensity 1.

This regulatory environment means that Australia is a comparatively less advantageous environment for manufacturers to supply EVs over fossil fuelled vehicles. Major manufacturers like Volvo and Ford Europe are planning to offer only electric cars from 2030, General Motors has committed to only offering electric vehicles from 2035 and Volkswagen is aiming to have 70% of European sales be electric vehicles by 2030. 2
While these companies are ramping up production of zero emission vehicles, they must make choices about which markets to service around the world.

Without more ambitious and stringent fuel efficiency standards, vehicle manufacturers have no incentive to prioritise the export of the most modern and affordable vehicles to the Australian market. If the status quo persists, Australia will continue to experience constraints in the supply of zero emission vehicles – reducing their accessibility and affordability, and manufacturers will continue to dispose of their highest polluting vehicles in our market. Supply limitations have presented the biggest barrier to electric vehicle

1
National Transport Commission, Carbon Dioxide Emissions Intensity for New Australian Light Vehicles 2021, viewed at Carbon Dioxide Emissions Intensity for New Australian Light Vehicles 2021.pdf (ntc.gov.au)
2
Electric Vehicle Council 2021, State of Electric Vehicles August 2021,

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and Territory Governments on the development of nationally consistent standards governing the deployment, installation, and interoperability of public charging infrastructure.

Whilst significant investment has already been made by Government, at all levels, and industry to propel the rollout of public charging infrastructure nationally, charging blackspots remain. The paucity of rapid or ultra-rapid chargers on regional routes is a significant contributor to ‘range anxiety,’ and a major barrier to
EV uptake in Australia. Without continued Government support, the high cost, technical complexity, and low-utilisation rates of regional charging networks (at least in the short to medium term as EV uptake grows) can make investment in regional charging a loss-leading proposal for industry. The Australian
Government should therefore continue to expand its support for the rollout of public charging infrastructure in regional areas, ensuring the viability of electric vehicle travel throughout the country.

To track progress in the development of Australia’s national public charging network, it is suggested that the Australian Government monitor and report on the following indicators:

• Proportion of major national highways with multi-bay EV fast charging stations at 100km intervals.
• Percentage of households within 10km of public fast charging infrastructure.

For those who choose to live in multi-unit developments, home chargers can be difficult and expensive to retrofit. This presents a barrier to EV adoption, especially in our cities. The ACT Government welcomes the changes to the National Construction Code requiring new apartments to be EV ready, which will substantially reduce the barriers to charger installation in multi-unit developments built in the future. We are supplementing this locally with appropriate changes to the Territory Plan. However, these regulatory changes do not assist those who live in existing buildings, for whom the infrastructure upgrades required to support home charging can be prohibitively expensive.

Supporting public chargers in zones of high-density living can help to ease range anxiety among multi-unit development residents, but the costs of public charging may make these poor substitutes for home chargers. The ACT is helping our residents to retrofit chargers through our commitment to provide incentives to support their installation. However, this problem will be faced nationwide, and the Australian
Government should consider what support might be appropriate to help those who live in multi-unit developments to retrofit home chargers so that they too can be a part of the electric vehicle transition.

Support the development and commercial viability of vehicle-to-grid technologies in Australia

The Australian Government also has a significant role to play in the development of innovative charging solutions. The transition to electric vehicles will increase demand on electricity grids and potentially destabilise existing infrastructure if new technologies are not adopted. Vehicle‐to‐grid technology, whilst still in its infancy, especially in Australia, has the potential to stabilise the electricity grid and effectively manage demand. The ACT Government is working with ARENA, ActewAGL and researchers at the
Australian National University on the Realising Electric Vehicle‐to‐grid Services (REVS) project. This project, using ACT Government fleet vehicles to test and provide vehicle‐to‐grid services, aims to further expand knowledge of vehicle‐to‐grid technology in the Australian context and smooth the transition to more widespread applications. This will enable the ACT Government to build a more comprehensive picture of the issues and opportunities posed by vehicle‐to‐grid in the both the ACT and national contexts.

Whilst vehicle‐to‐grid technology offers significant opportunities, its development is also being hampered by several challenges. Chargers capable of vehicle‐to‐grid operation are not yet commercially available in

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Australia. In addition, Australia’s current safety standards preclude chargers currently being used overseas from being deployed here. The high cost of chargers capable of vehicle‐to‐grid operation is also a major impediment. Early adoption of consistent EV charging standards across Australia will ensure that subsequent retrofitting of vehicle-to-grid technology will be easier to implement and at a lower cost to the public and private sectors.

A review and update of AS/NZS4777.1 and AS/NZS4777.2, the standards covering vehicle to grid implementation, is currently underway. The Australian Government should engage in this process, to ensure that the outcome of the review is such that the early-stage uptake of this nascent but critical technology is not held back by requirements to conform to unique Australian standards. A related requirement is for the CEC approved inverter framework to be updated, once the review and update of AS4777 is complete.

The current state of play is that vehicle-to-grid (V2G) inverters require unique hardware and software modifications to be deployed in the Australian market and need to be individually qualified with each DNSP in order to be deployed. If this remains the case, it will mean that once V2G capable vehicles start coming into Australia at scale, it will be very difficult for Australians to take advantage of this technology due to the absence of a robust market offering suitable inverters.

The ACT Government recommends that the Australian Government continue supporting policies and initiatives aimed at integrating electric vehicles and vehicle-to-grid technology into the nation’s energy infrastructure.

Battery recycling

The proliferation of electric vehicles in Australia is projected to increase battery usage. Without a plan to support the development of a domestic recycling industry, this growth could give rise to issues in end-of- life waste management and see Australia forego the significant value that could be derived from the recycling of valuable battery materials to the Australian economy. Plans should also be considered to support the safe reuse of EV batteries in other applications once they reach the end of their EV life. Such measures would not only deliver greater value from EV batteries but also allow extra time to develop
Australia’s domestic battery recycling capability.

Anticipated EV adoption rates suggest a projected Lithium-ion battery waste generation of between
137,000 to 180,000 tonnes by 2036 in Australia 7. Compared to a 50% collection rate in Europe, only around
6% of Lithium-ion batteries, in 2017-18, were collected in Australia and then exported overseas (South
Korea, Singapore, Canada and Belgium) for offshore recycling 8.

Australia has the opportunity to develop its capacity to collect and process valuable Lithium-ion battery waste, so that environmental risks from the landfilling of battery waste can be mitigated and the economic value from recycling batteries can be retained within the Australian economy.

The ACT Government supports the work of the Battery Stewardship Council’s battery stewardship scheme,
B‐cycle. This national voluntary scheme will facilitate a national battery collection network for hand‐held batteries. This includes button batteries like those found in watches, car keys and remotes, as well as batteries that can be replaced by consumers, including AA or AAA batteries. The scheme operates through imposing a levy on imported batteries, and the levy will be used to fund rebates for scheme

7
King, S. and N.J. Boxall, Lithium battery recycling in Australia: defining the status and identifying opportunities for the development of a new industry. Journal of Cleaner Production, 2019. 215: p. 1279-1287.
8
Australian battery market analysis, Battery Stewardship Council, 22 June 2020

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accredited collectors, processors, and recyclers of used batteries.

The Battery Stewardship Council are considering options and consulting industry on their plans to include electric vehicle and energy storage batteries in the scheme. The ACT Government supports the scope of the product stewardship scheme being expanded to include electric vehicle, household, and large batteries as soon as possible.

While battery recycling will be an important consideration, as demand for batteries grows there will still be a requirement for the federal government to ensure that the sourcing of materials required for new EV battery production is sustainable into the future.

Federal taxation reform

The ACT Government supports the actions taken by the Australia Government to introduce legislation, exempting eligible electric vehicles from fringe benefits tax and the 5% import duty. These important measures, part of the Australian Government’s Electric Car Discount, will reduce the up-front costs of electric vehicles in the Australian market increasing their affordability and accessibility for the community.
Exempting electric vehicles from fringe benefits tax will support the electrification of business fleets and empower employees, that can access salary sacrifice/novated lease arrangements, to promote the uptake of electric vehicles. Current fringe benefit tax arrangements favour heavy payload, heavier emitting vehicles that are petrol powered over lighter vehicles. Under current provisions, where a vehicle is designed to carry one tonne or more, that vehicle may be eligible for an exemption from fringe benefits tax. Such tax settings were established before electric vehicles were a commercial and readily available vehicle option. The ACT
Government considers that legislation should be updated to reflect fleet developments and government policy priorities to reduce emissions.

The ACT Government further proposes that there should be reforms to the luxury car tax threshold.
Currently, vehicles above the luxury car tax threshold attract a luxury car tax rate of 33%. This threshold is set separately for fuel efficient vehicles and for other vehicles. For the 2022‐23 financial year, the threshold for fuel efficient vehicles is $84,916, and for other vehicles it is $71,849.

To qualify as a fuel-efficient vehicle, a vehicle must have a fuel consumption that does not exceed
7L/100km as a combined rating under the national road vehicle standards in force under section 12 of the
Road Vehicle Standards Act 2018. For petrol fuelled vehicles, the 7L/100km fuel consumption level equates to approximately 160gCO2/km.

It is proposed that the fuel-efficient luxury car tax limit be changed from the current threshold of 7L/100km fuel consumption level to an emissions-based threshold of 50g CO2/km. This reform would effectively exclude all pure petrol vehicles from the higher fuel-efficient luxury car tax threshold ($84,916) – meaning that more luxury petrol vehicles would be subject to the 33% luxury car tax. This would help to make electric vehicles more competitive in this segment of the market.

Road User Charges

As more motorists transition to electric vehicles, a number of jurisdictions in Australia have announced a road user charge policy, including New South Wales, Victoria, Western Australia, and Tasmania. The ACT is actively monitoring developments in this space and is considering what options can be pursued to reform registration systems such that road-related fees and charges are informed by transport emission reduction objectives, such as an emissions-based registration scheme.

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In the ACT, the current fixed registration system is weight based and penalises heavier, battery electric vehicles despite their lower emissions. Any registration reform in the ACT would necessarily consider both emissions and distance-based charging and be based on the principle of low fees for lower emissions and higher fees for higher emissions.

Better reporting of light vehicle sales and emissions data

The Australian Government has a key role to play in the collection of data, and the dissemination of trusted information on electric vehicle technology and uptake. At present there is no independent collection of data regarding new vehicle sales, including electric vehicles. Consequently, there is uncertainty regarding the true emission rates of Australia’s existing vehicle fleet.

It is recommended that the Australian Government develop an independent mechanism for the collection and reporting of vehicle sales data, to ensure effective enforcement of a robust fuel efficiency standard and so that progress on electric vehicle uptake can be monitored. This mechanism should include the number of sales by motive power, the average emissions of vehicles sold, tracked over time, and disaggregated by state and territory. Government reporting of this information will help to track progress against targets and provide certainty to the community.

The ACT Government also supports improved data and reporting on vehicle emissions.
The ACT Government welcomes the announcement by the Australian Government to fund the
Australian Automobile Association (AAA) to conduct real-world testing of vehicle emissions. We believe that this data is important in increasing the transparency and accountability of OEMs regarding their claimed emissions for vehicles sold in Australia. We believe that the development and enhancement of such a scheme could support the introduction of vehicle emission standards and fuel efficiency standards.

A fair transition

For many ACT residents, the purchase price of a new ZEV is a substantial barrier. Second hand vehicles may be more appropriate for their needs, but this market is still developing in Australia with limited numbers of vehicles available. Supporting government, business, and community fleets to transition will help build the second-hand EV market, as these vehicles will be sold on at the conclusion of lease periods. Other support to expand the used ZEV market could also be considered.

The ACT is committed to a fair transition to net zero emissions that supports low-income households and the most vulnerable in our community, as set out in the ACT Climate Change Strategy 2019-25. A National
Electric Vehicle Strategy should consider how to support low-income households to transition to a ZEV.

As more of the community transition to ZEVs, we know that the price of fuel and other maintenance costs for ICE vehicles is likely to increase. The ACT Government would also welcome the consideration of mechanisms to support those household who are unable to transition to ZEV due to economic barriers. One mechanism to ensure the long-term affordability and accessibility of ZEVs in Australia is the implementation of ambitious and robust fuel efficiency standards as soon as possible.

Beyond light vehicles

Light vehicles are the most advanced segment of the electric vehicle market, and so offer the strongest short-term possibilities for emissions reduction. However, the National Electric Vehicle strategy should also consider other types of vehicles and electric mobility options and what types of actions might best support their uptake.

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The ACT Government is at the leading edge of the electric transition, adopting electric vans, mowers, buses, and e-bikes into our fleet. We have plans to expand this to garbage trucks, fire engines and other commercial vehicles. Government has an important role as a first adopter of these new technologies to build local industry and confidence.

The Australian government should continue to support emerging zero emissions vehicle technologies for other applications through ARENA. Where policies support light electric vehicle adoption, consideration should be made as to whether they could equally apply to other types of electric vehicles. The ACT recently expanded eligibility to stamp duty exemptions to include electric motorbikes, and similar types of adjustments at an Australian Government level would be welcomed. Regulations on e-bikes and electric micro-mobility options should be reviewed to ensure they are fit for purpose and not posing an unnecessary barrier to adoption of these transit modes.

National targets

The ACT has set ambitious targets to achieve 80-90% of new light vehicle sales being ZEVs by 2030, together with an intention to commence the phase-out of new light internal combustion engine vehicles in
2035. Other states and territories have set their own targets, but Australia still lacks a national target for
ZEV sales, nor a committed date at which new light internal combustion engine vehicles will be phased out.
The Australian Government could send a strong signal to both vehicle suppliers and the community if the
National EV Strategy specified an appropriate national target for new vehicle sales and considered options for the long-term phase out of internal combustion engine vehicles. This would also serve as a direct indicator to evaluate progress in the ZEV transition.

Conclusion

The ACT Government welcomes the Australian Government’s commitment to deliver Australia’s first
National Electric Vehicle Strategy. A National Strategy will promote the uptake of electric vehicles domestically and demonstrate to the world that Australia is ready to fully embrace a zero-emissions transport future. The ACT Government is committed to taking substantial action to promote ZEV uptake and ensure that the transition to zero emissions transport is fair and equitable. We will work with the
Australian Government to realise this ambition.

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