Major car brands accused of trying to write 'loopholes' into Australia's looming fuel efficiency laws
Fears are growing that Australia will continue to be a dumping ground for dirty and inefficient vehicles, as the federal government designs laws to limit the carbon emissions of new cars sold.
Australia is one of the only industrialised markets that doesn't have these sorts of standards already, even though they were first flagged here about 15 years ago.
The federal government has been meeting with environmental groups through to car manufacturers about what its final policy should look like.
It will have to decide on how soon it should phase out petrol and diesel-powered cars, penalties for companies that don't comply, and incentives for manufacturers.
And the debate is getting divisive, with Elon Musk's Tesla and the Climate Council even accusing Australia's biggest car lobby of pushing a "loophole" policy that could slow the transition.
"There will be some winners and there will be some losers once the scheme is announced," Griffith University Professor Matthew Burke says.
The specialist transport expert describes Australia as a "world laggard".
"We're really behind other nations [and] it's putting us at the end of the queue to get those fuel-efficient vehicles into Australia," Professor Burke said.
The sale of electric cars has been rising without fuel efficiency standards but they still only make up about 6 per cent of new car sales, with Tesla's sedan Model Y among the most popular models.
Other top-selling cars on the Australian market include high-emitting petrol-powered utes, 4WDs and SUVs sold by Toyota and Ford.
Electric vehicles are generally more expensive in Australia than petrol and diesel powered cars, and there are long waitlists to get them.
The federal government argues that the standards will get more electric cars into the Australia market, which will also help drop prices. It is doing this as part of its pledge to tackle climate change.
About 10 per cent of Australia's greenhouse footprint comes from the passenger cars on our roads.
How could this fuel efficiency standard work?
The Australian government's recent public consultation on the looming standards received about 2,700 submissions.
The vast majority supported the general premise of the standards, including submissions by Tesla, the Climate Council, Toyota, Hyundai, and Australia's biggest car manufacturer lobby group, the Federal Chamber of Automotive Industries (FCAI).
Europe, the United Kingdom and the United States already have such standards.
Other markets typically give manufacturers an overall emissions target on all the new cars they sell.
Manufacturers can still sell high-emission vehicles, as long as they also sell lower-emission models that drag their average down under the cap.
Brands that don't get under these caps can face penalties.
"Fuel efficiency standards force manufacturers to bring into Australia more efficient vehicles that will produce less carbon," Professor Burke explains.
The annual caps go down over time, eventually aiming for a day when petrol and diesel cars are history.
In Europe, this target is 2035, whereas in the UK it is currently even sooner at 2030.
In its submission, the National Roads and Motorists Association (NRMA) pushed for a target of 2035.
"As we see more and more EVs hit the market, we may well achieve that even earlier," its spokesperson Peter Khoury told ABC News.
The Climate Council is pushing for targets to be as hard and fast as possible, so Australia catches up to other markets.
"The Australian Government needs to put the pedal to the metal on delivering fuel efficiency standards," its head of advocacy Jennifer Rayner says.
"This has been a really long running conversation in Australia."
Division emerges over 'multiplier credits' policy
The FCAI and Toyota didn't give set deadlines.
Hyundai noted that it would be "unable" to make a net zero target by 2035 and "maintain our current sales rate".
It noted that it is aiming for its entire fleet to go fully electric by 2040.
All three entities are also suggesting the use of a policy called "multiplier credits" which has raised the ire of Tesla and the Climate Council.
Professor Burke says the "multiplier credits" being pushed could let manufacturers count the sale of a low-emissions vehicle more than once.
This could ultimately drag down their average emissions, he said.
The NRMA also said it is "not opposed" to it when used "strategically".
In its submission, it said credits may be "highly beneficial" for manufacturers investing in battery-run light commercial vehicles and 4WDs.
"This segment is of critical importance to Australia given that utilities represent approximately 25 per cent of new vehicle sales," it said.
NRMA's Mr Khoury reiterated this argument to ABC News.
"Australia's buying is quite unique," he said.
"We want to make sure that we hit our goals of reducing and ultimately removing carbon and noxious emissions out of our fleet, while also giving Australians choice."
But some argue the multiplier credits are counterintuitive to the goal of reducing the damaging impacts of carbon dioxide on the planet.
In its submission, Tesla described them as a "loophole" that could artificially reduce a manufacturer's real world emissions count.
"Imagine that modern cricketers were allowed to count their half centuries twice and their centuries three times toward their average," it wrote.
"Many would appear on paper to be better than Bradman."
The company is so against the policy that it also broke ranks to criticise the FCAI for supporting it.
Tesla, which only makes electric cars, has been promoting its own low-emissions ute.
It's unclear when the futuristic Cybertruck will actually come out in Australia. It has long waitlists and is rumoured to retail anywhere up to $100,000.
Professor Burke points out that Tesla has a "financial interest" to keep the credits out of any fuel efficiency standards.
However, he agrees with the conglomerate's argument that they allow "double dipping".
"It's highly advantageous to the petrol and diesel engine makers to have a scheme that includes these multiplier credits," he said.
"Listening to some of those old, rusty conventional car manufacturers who've been stagnant and laggard (is) pretty backward."
The Climate Council is also against this policy, and is urging the federal government to reject it.
Its head of advocacy, Ms Rayner, says it is not Australia's job to incentivise companies who've made "bad bets" on low-emissions technology.
"Car manufacturers love free credits, because it means they can keep selling the dirtier, higher polluting vehicles that they're selling today."
Car lobby group facing allegations that it pushes weak policy
The allegations by Tesla that the FCAI is pushing "diluted" policy come after separate allegations against it by a global think thank, InfluenceMap.
InfluenceMap's program manager Ben Youriev told ABC News that the FCAI has led a "strategic" and "negative" campaign against climate policy.
InfluenceMap got internal documents under freedom of information that it believes show the FCAI is pushing its agenda on policymakers.
The federal government confirmed to ABC News that it has met with at least 40 organisations while developing its looming fuel efficiency laws.
This includes the FCAI, Hyundai, Toyota, the Climate Council and Tesla.
"We're focusing on getting the design of the fuel efficiency standards right," the Minister for Climate Change and Energy Chris Bowen recently told the ABC's Q+A program.
"And that is a complicated exercise."
Toyota, Hyundai and the FCAI all declined interviews.
However, all three rejected suggestions that they are trying stall Australia's energy transition and reiterated their support for fuel efficiency standards.
"Any policy that does not bring consumers along the path of reform will, by definition, fail," FCAI chief executive Tony Weber said in a statement.
"Key to the transition for consumers is the availability of product that they want or need at an affordable price."
The federal government's expected to announce a clearer policy position on its looming fuel efficiency laws by the end of the year.
It will then have to pass these laws too.