As a business owner, staying ahead of the curve means not just adapting to changes in the market, but also to new regulations that could impact how you operate.
One significant shift on the horizon is the introduction of the National Vehicle Efficiency Standard (NVES), which comes into effect on 1 January 2025.
What’s the NVES?
The NVES sets specific targets for the amount of carbon dioxide (CO2) that new vehicles can emit, measured in grams per kilometre (g/km). The standard categorises vehicles into two types based on their use and size:
- Type 1: Includes passenger cars and light off-road vehicles.
- Type 2: Covers light and medium goods vehicles, plus larger SUVs and utility vehicles.
Each category has its own CO2 emissions targets, which become stricter over a set timeline from 2025 to 2029.
For instance, in 2025, Type 1 vehicles have a target of 141 g/km, reducing to just 58 g/km by 2029.
Meanwhile, Type 2 starts at 210 g/km and tightens to 110 g/km in the same period.
The target is applied nationally on average.
This means that car makers can still sell any vehicle type, but to meet these targets, they must also sell enough fuel-efficient models to balance out any less efficient ones.
They will also be offered credits as an incentive to exceed these targets. These credits can be banked for future use or traded with other manufacturers, providing a flexible way to comply with the regulations while fostering a competitive market.
Why does it matter?
Implementing the NVES is significant because it places Australia alongside other advanced economies with similar standards.
As a result, this move should encourage vehicle manufacturers to innovate, leading to a broader range of cleaner, more advanced vehicles available in Australia, while also helping reduce the country’s greenhouse emissions.
What's in it for you?
More efficient vehicles mean lower fuel costs. So as vehicles increasingly conform to these new standards, you should notice a drop in how much you spend at the pump.
Looking to buy a new vehicle for your business? Call our business finance experts now on 1300 500 254 or email info@the500group.com.au.
