Australia softens proposed vehicle emission laws

Australia said on Tuesday it would ease the forthcoming carbon emission regulations for some popular pick-up trucks after the country's auto lobby raised concerns the changes could raise car prices and lead to fewer options for consumers.

To boost the uptake of electric vehicles and lower emissions, Australia has proposed vehicle efficiency standards that will penalize automakers that import emissions-intensive models and reward those who bring in cleaner vehicles.

However, this initiative prompted a division within the Federal Chamber of Automotive Industries (FCAI), Australia's automotive body, with EV makers Tesla and Polestar quitting early this month in protest over the group's campaign against tougher emission standards.

Energy Minister Chris Bowen said some popular pick-up trucks, known in Australia as "utes" or utility vehicles and mostly used by builders and farmers, would now be classified as light commercial cars. That means those models would not have to meet tougher fuel economy rules.

"Not everybody has got everything they have asked for. Some people wanted us to go harder and faster, some had concerns and wanted us to slow, but everybody here today has had a say," Bowen said during a press conference, flanked by Australian leaders of top car companies.

The relaxation in rules comes after a similar move by the United States last week. The Biden administration slashed its target for U.S. electric vehicle adoption from 67 percent by 2032 to 35 percent after industry and autoworker backlash in Michigan, which could play a decisive role in the 2024 presidential elections.

The FCAI had criticized the Australian government for trying to impose "extremely aggressive targets and severe penalties to be effective on very short notice.".

Australia is the only developed country apart from Russia to either not have or be developing fuel efficiency standards, and the Anthony Albanese-led center-left government has been looking to implement tougher emission rules since coming to power in 2022.

Though the emissions scheme will begin on January 1, 2025, manufacturers will not face penalties until July. The government plans to introduce the legislation in parliament on Wednesday.