Slow uptake of electric cars in the domestic market means Australia’s carbon emissions from passenger vehicles are likely to continue to increase until 2029, shifting more of the burden for meeting Paris emissions reduction targets to other sectors, Bloomberg New Energy Finance has warned.
Ali Asghar, BNEF’s head of EV research in Australia, said on Monday that although electric vehicles would start to undercut internal combustion engine (ICE) vehicles in some parts of the local market in 2021-23, they were still expected to reach only about 4 per cent of new-car sales by 2023.
Last year, sales of EVs in Australia declined, comprising 0.2 per cent of the annual total new-car sales.
That compares with almost 5 per cent of China’s annual car sales already being EVs, a figure expected to reach almost 15 per cent by 2023 and almost 70 per cent by 2040. Even New Zealand’s EV sales have overtaken Australia’s, according to the firm.
An expected longer life for ICE vehicles as they are driven for fewer kilometres means EVs will still make up only 7 per cent of Australia’s total fleet by 2030, rising to 26 per cent 10 years later, according to BNEF figures.
“Relying purely on economics-only-driven uptake of EVs will not be enough to curb emissions to a level to meet our Paris commitments, and policy essentially will be required to do that,” Mr Asghar said.
He warned the electricity sector and industry should be prepared to have to do more heavy-lifting to meet Australia’s target under the Paris accord to reduce carbon emissions by 26-28 per cent of 2005 levels by 2030.
“Businesses ought to plan ahead to be ready to be called upon to do that,” he said.
Labor went into the April federal election with a policy targeting 50 per cent EV sales by 2030, while the Coalition has promised to develop a national EV strategy.
BNEF expects Australia’s sales of EVs to pick up over the next five years, driven by an increase in available models, government purchase commitments and expected corporate targets for EV use. As at the December quarter, only 27 EV models were available in Australia, compared with 216 in China and 90 in the European Union.
Even so, the adherence to ICE vehicles means the country’s liquid fuel consumption will continue to rise until 2029, requiring an increasing reliance on imported fuel just as security of supply in oil and fuels has been highlighted.
BNEF said the lax requirement on vehicle emissions standards in Australia was one reason the country lagged other developed markets on EV uptake.
Light cars sold in Australia last year emitted about 170 grams of carbon dioxide per kilometre travelled, compared to about 140g CO2/km in China and the US, and less than 120g CO2/km in Europe.
“Without emissions regulations in place, Australia … could be a dumping ground for high-emissions-intensity vehicles,” Mr Asghar warned.
Extracted from AFR