With more than 18 million registered motor vehicles on the road and almost 1.2 million new vehicles sold each year, the family car is for most people their principal mode of transport.
Of course, the purchase and running of a car has a big impact on household budgets — and vehicle emissions impact on our health and the environment.
Noxious emissions from vehicles — such as carbon monoxide, nitrogen oxide, sulphur dioxide and particulate matter — can lead to respiratory and cardiovascular problems.
Vehicles also emit greenhouse gases such as carbon dioxide.
In 2015, the federal government established a ministerial forum on vehicle emissions, to consider possible reforms in three areas: fuel efficiency standards, fuel quality standards and noxious emissions standards.
As ministers responsible for environmental and energy policy on the one hand, and motor vehicle regulation on the other, we are jointly leading this work.
Fuel efficiency standards are about reducing fuel costs and carbon emissions at the same time. Eighty per cent of the global vehicle passenger fleet is subject to fuel efficiency standards, but Australia has none.
In Australia in 2016 the average amount of CO2 emitted per kilometre was 182 grams, while the EU is moving to 100 grams/km by 2021 and in the US the target is 105 grams/km by 2025.
If Australia had fuel efficiency standards in line with comparable nations, estimates of the fuel saving per passenger vehicle could be above $500 per year, or nearly $28 billion in total by 2040.
Given the long distances travelled in regional Australia, the savings could be even greater for people living outside the main cities.
Consumers could also benefit from accessing better vehicles as manufacturers are currently holding back some of their latest fuel efficient stock from Australia.
With European versions of the top selling Toyota Corolla, Mazda 3 and Mazda CX5 all more efficient than the models sold in Australia, the fleet average for new passenger vehicles in Australia is at least 20 per cent less efficient than that offered today in Europe.
As well as cost savings for motorists, fuel efficiency standards also lower emissions. Transport is responsible for 93 million tonnes of CO2 or 17 per cent of Australia total emissions — and on a per capita basis is 50 per cent above the OECD average. It is also the fastest growing sector and emissions are expected to increase in the transport sector by 20 per cent by 2030.
Light transport vehicles make up more than half of the transport emissions, and new standards, depending on where they are set, could reduce greenhouse gas emissions by 25-65 million tonnes by 2030.
A second area of reform is around fuel quality.
With a maximum sulphur limit of 150 parts per million (ppm) and a minimum octane requirement of 91 (research octane number or RON), Australia’s petrol quality is the lowest in the OECD or 70th in the world.
The maximum sulphur limit in Europe, China, Japan and South Korea is already 10ppm with Canada and the US moving to a 10ppm average this year. With nearly two thirds of Australians already living in big cities and our population both increasing in size and ageing, the negative health impacts of lower quality petrol is real.
Studies have shown that were Australia to move to lower sulphur and higher octane standards, the noxious emissions would be reduced substantially.
Like all changes in this area, the timing of such a transition is important as the capital cost to refiners of new standards could be significant. Sudden changes could impact on those Australian workers employed in our refineries.
With only four major refiners left in Australia (two in Victoria, one in Queensland and one in Western Australia), it is important to the stability of our market that we maintain their presence and continue to work co-operatively with them.
The third area of reform is noxious emissions standards. Since the 1970s Australia has had standards to reduce such emissions which are regulated through the Australian Design Rules. Since 2013 Australia has required new light vehicles to meet a global standard for noxious emissions known as Euro 5.
But we are behind Europe and the US. Europe moved to the tighter Euro 6 standard in 2014 and the US is moving this year to new standards equivalent to Euro 6.
Euro 6 has stricter limits on particle emissions and requires more comprehensive on-board diagnostic systems.
It is important to note that there is an interaction between Euro standards and tightened fuel standards. A key reason is that high sulphur content fuel reduces the effectiveness of catalytic converters — devices in vehicles which reduce noxious emissions.
We are continuing to consult with industry and experts on all vehicle efficiency related issues. It is important to get the balance right and fully understand the implications of any changes before deciding on a timetable for reform.
Making reforms to Australia’s fuel efficiency, fuel quality and noxious emissions standards has the potential to deliver real benefits.
Our friends in Canada, Europe, the United States and Asia have already moved forward, delivering for their community better health, environmental and economic outcomes.
By consulting widely with key stakeholders as we have done and continue to do, we can ensure a balanced, evidence-based approach to this important area of public policy.
Josh Frydenberg is the federal Minister for Energy and the Environment. Paul Fletcher is Minister for Urban Infrastructure.
Together they are leading the ministerial forum on vehicle emissions.