The FCAI and Australian Climate Policy

The Federal Chamber of Automotive Industries (FCAI) has led a strategic, coordinated campaign to push back against Australian climate policy. This research draws on over 500 pages of previously unseen documents from multiple freedom of information (FOI) requests, covering the FCAI and Australia's 15 largest automakers. It reveals how the FCAI developed its own weak, voluntary CO2 standards and has repeatedly lobbied policymakers to lock in climate rules that are significantly weaker than similar international policies.

New documents uncover the FCAI playbook to weaken fuel efficiency standards. The documents show how the FCAI secured multiple meetings with Australian government departments in 2022 to push for the adoption of weak fuel efficiency standards and downplay the potential of battery electric vehicles. Other documents detail the government analysis of the FCAI’s proposals, finding the voluntary CO2 standards to be significantly weaker than other global markets, including those proposed in the US by the Trump administration.

The research identifies negative advocacy on fuel efficiency standards from Australia’s two top-selling automakers, Toyota, and Hyundai. Both companies occupy leadership positions in the FCAI, with Toyota Australia's CEO currently chair, and Hyundai a board member. An analysis of November 2022 National Electric Vehicle Strategy consultation responses indicates that both automakers appeared to advocate for numerous flexibilities weakening the rule's stringency, alongside appearing to support the adoption of fuel efficiency standards similar to the FCAI's low-ambition proposal.

However, FCAI's negative advocacy appears misaligned with other FCAI members. Tesla advocated for ambitious fuel efficiency standards aligned with New Zealand in its October 2022 NEVS consultation response and opposed flexibilities such as super and off-cycle credits. Despite no direct response to the government’s National Electric Vehicle Strategy (NEVS) consultation, Volkswagen and Volvo Cars (through its subsidiary Polestar) have advocated publicly for higher ambition fuel efficiency standards.

Negative advocacy from the FCAI and key members poses a major risk to national climate targets. Transport accounted for 18.6% of Australian GHG emissions in 2021, 85% of which was generated by road transport. As the only developed country without vehicle fuel efficiency (CO2) standards, except Russia, automakers have increasingly prioritized BEV sales to markets with more stringent climate regulations over Australia. Negative industry lobbying against effective fuel efficiency (CO2) standards, therefore, risks both Australia's supply of electric vehicles and meeting national climate targets.

Firstly, the FCAI set the terms of what climate regulation should look like for the sector. It implemented voluntary and industry-created CO2 standards for vehicles with a weak 2030 target, and promoted them to the government as the key decarbonization solution.

Secondly, the FCAI moved the goalposts on what Australian climate policy could and should achieve. It used its support for its own, weaker CO2 standard to oppose more stringent federal climate regulations in 2021-23, but does not appear to have publicly responded to government modeling on the low ambition of its voluntary standards compared to international policies. Instead, the FCAI has celebrated the industry's performance against the voluntary standards, despite the sector's failure to meet specified improvements for larger vehicles which comprise a growing proportion of Australian sales.

Thirdly, the FCAI predicted failure by downplaying the potential of rapid battery electric vehicle (BEVs) growth in Australia and promoting anti-BEV narratives to the government.

Fourthly, the FCAI promoted alternative technologies to BEVs, that could enable a longer-term role for ICE-powered vehicles to policymakers.

The final step in the FCAI's playbook involved directly lobbying policymakers to lock in weak fuel efficiency standards in line with its voluntary CO2 standards while appearing to run a parallel PR campaign against higher-ambition standards.

Working with the oil industry, create an industry-led, voluntary CO2 standard with no penalties for compliance failures: A February 2020 Department of Industry briefing noted expectations of an upcoming FCAI voluntary CO2 standard for light vehicles in Australia “likely to be consistent with the model jointly proposed by the FCAI, the Australian Automobile Association (AAA) and Australian Institute of Petroleum (AIP) in May 2018”, a proposal still promoted on FCAI’s website. The government briefing noted that “unlike a mandatory standard, manufacturers that do not comply would not face penalties” and that “the voluntary standard would also enable manufacturers to demonstrate that they are ‘doing their part’ to reduce emissions. If successful, this may reduce pressure on the Government to introduce a mandatory standard, which is likely to have intensified in response to the recent bushfires”.

Set a weak emissions reduction target for vehicles that only applies in 2030: In July 2020, the FCAI introduced the voluntary CO2 standard for vehicles in Australia. This includes a 2030 target of 100g/km for passenger cars and light SUVs, and 145g/km for heavy SUVs and light commercial vehicles. Such targets are even less stringent than CO2 standards applying to cars (95 g/km) in the European Union since 2020. A July 2020 FCAI presentation to the Department for Infrastructure promoting the standard noted that “there is one target and that target is in 2030.” This also differs from approaches in other regions that have pursued multiple or yearly reduction targets, like New Zealand, which requires more immediate emissions reductions from the sector.

Introduce loopholes like super credits to promote a longer-term role for combustion engine vehicles: The FCAI incorporated multiple loopholes in its CO2 standard that appear to weaken its stringency. A July 2020 FCAI presentation to the Department for Infrastructure stressed that voluntary CO2 standard is “similar to international CO2 standards but using features relevant to the Australian market” including “Super Credits … Off Cycle Credits … A/C gas credit … Credits/debits allowing for product cycles”. Some measures, such as super credits, which are awarded to manufacturers for the production of "low" emission (as well as zero-emission) vehicle sales, appear to incentivize ICE-powered hybrid sales as well as BEVs, as many hybrids qualify under this broad category and are counted as one and a half or two vehicles in the voluntary standard calculations³, weakening the stringency of the FCAI's CO2 targets. A 2022 CarSales article noted that “no other such emissions scheme globally credits hybrids” with Toyota selling 9 out of 10 hybrids in Australia in 2022. Similarly, the Sydney Morning Herald in 2021 reported that the FCAI awarded Toyota 15 times more “carry-forward credits” than its nearest rival.

Split the automotive sector into passenger cars and light-duty vehicles, with standards potentially promoting larger, more polluting vehicles: July 2020 Department of Infrastructure notes from a meeting with the FCAI reveal that FCAI was planning a split voluntary target of “98g/km for passenger cars, 143g/km for 4x4s and light commercials by 2030”, the same targets previously promoted by the FCAI with the Australian Institute of Petroleum to the government in 2018. By splitting CO2 data into two categories, the FCAI voluntary standard subjects larger cars (like SUVs and utes) to more lenient CO2 targets than smaller cars, a structure which according to the International Council on Clean Transportation may "might promote heavier SUVs and jeopardize the overall effectiveness of the standards” if introduced as a regulation. According to the National Transport Commission, in 2021 half of all new Australian car sales were SUVs, up from a quarter of all sales a decade ago. This creates a risk of what has been referred to as the US “SUV loophole”, in which ambitious standards apply to vehicles classified as "cars", while trucks face weaker climate regulations.

Introduce carry-forward credits that may delay emissions reductions: An email from the Department of Infrastructure to Austroads in August 2020 on the FCAI voluntary standard noted that “from 2020 to 2030, credits will be carried forward for up to five years. From 2024 to 2030, debits will be recorded and carried forward for up to five years. Before 2024, no debits will be carried forward” and “the standard will not carry financial penalties for non-compliance”. Volkswagen was reported by the Sydney Morning Herald to have had public “reservations about the aspect of the voluntary standard that will permit the transfer of credits from comparatively low-emission vehicles to more polluting utes and large SUVs” in August 2021.

Retain industry control of the methodology and data collection: Controlling data collection and use is a key strategy for industry to exert power over climate governance (see InfluenceMap’s Corporate Capture and the UN International Civil Aviation Organization). For example, the government-run National Transport Commission in 2021 criticized FCAI’s CO2 data reporting methodology for limiting its access to accurate automotive emissions data.

Leverage support for a weak CO2 standard to oppose more ambitious climate policies: FCAI has used its support for the government to adopt a weak fuel efficiency standard in line with its CO2 standard in 2021-23 to oppose more stringent climate policies adopted by other regions (e.g. the UK, EU, or NZ). For example, FCAI CEO, Tony Weber, stated opposition to a proposed phase-out of ICE-powered cars in Australia by 2035 while noting support for the voluntary standard in a June 2021 press release. The FCAI was also reported to have used the findings from a 2022 S&P report on EVs it had commissioned to push back on a potential Australia ICE phase-out date. In July 2022, the FCAI and other Australian automotive groups further committed to 25 key decarbonization principles that included “opposing the introduction of bans” and “mandating CO2 targets, not Electric Vehicles (EV) targets”. Similarly, FCAI’s CEO opposed a Queensland zero-emission vehicle (ZEV) sales mandate of 50% by 2030 and 100% by 2036 in a March 2022 press release, advocating for a “vehicle emissions target” instead.

Overlook government modeling finding that FCAI’s voluntary CO2 standard is significantly weaker than international policies: A Department of Industry 2020 document entitled “US and EU standards vs FCAI” includes government modeling that FCAI voluntary standard would be weaker in every modeled year from 2020 to 2030 compared with US and EU CO2 standards for vehicles, even with weakened Trump-era regulations and before the EU increased its 2030 CO2 target for cars and vans⁴. Following this, a July 2020 Department of Infrastructure ministerial note for then Minister of Infrastructure and Deputy PM, Michael McCormack MP, noted in a section entitled “sensitivities”, that “while the national CO2 fleet targets may be difficult for manufacturers to meet for 2020, BITRE of Infrastructure and Transport Research Economics analysis suggests manufacturers should meet the FCAI targets for 2030 with only minor adjustments (such as improved air conditioning systems).” Notes from a February 2021 meeting between Department of Infrastructure officials and the FCAI Director of Policy further state that “the FCAI’s voluntary CO2 standard largely mirrors the design of comparable international schemes, but with more modest targets, consistent with higher baseline emissions In Australia. The FCAI has publicly stated it would welcome government adopting this scheme”. An April 2021 Department of Infrastructure email from a previous FOI request also noted that “we never modelled the FCAI’s proposed approach, but we anticipated it would be similar to business as usual in 2030, as BITRE’s modelling anticipates a strong EV uptake from the mid to late 2020s.” Evidence suggests the FCAI has not publicly responded to such government modelling.

Celebrate the failure to meet voluntary CO2 targets for larger vehicles as a win: In 2020, 2021, and 2022, FCAI automakers failed to meet their collective CO2 standard targets for heavy SUVs and light commercial vehicles. SUVs and light commercial vehicle sales account for the vast majority of Australian automotive sales (76.8% in 2022, up from 45% in 2012), with the International Energy Agency finding that global SUV growth accounted for one-third of global oil demand growth in 2022. While the FCAI also reported that for passenger cars and light SUVs, automakers had met its self-imposed CO2 standard targets in the same years, Australian light-duty emissions were still significantly higher than similar markets like the US during the period. Yet the FCAI still celebrated the failure to meet CO2 targets for most autos sold in Australia as a win for the voluntary standard. Responding to this news in 2022, FCAI CEO, Tony Weber, stated “today’s results are important, but what really matters is our end result in 2030. Regardless of individual outcomes, all brands should be commended for voluntarily signing up to this Standard”.

Downplay the potential of battery electric vehicles (BEVs) in Australia: In 2022, the FCAI commissioned a report from S&P Global, with early findings presented to the Department of Infrastructure in an April 2022 presentation. It forecasted that only 3% of sales would be from BEVs in 2023, and only 18% by 2030, with ICE-powered hybrids forecasted to have the largest market share at 28% in 2030. Yet in the first quarter of 2023, BEVs accounted for 6.5% of total Australian automotive sales and comprised 3.8% of sales in 2022, almost double sales from 2021. The FCAI-commissioned research was published on its website in August 2022, alongside a ‘Three Point Plan’ to decarbonize Australian road transport and presented again in a September 2022 FCAI presentation at the FCAI-organized Vehicle Emissions Forum, where the Minister for Climate Change was a guest speaker. Similarly, an FCAI 2019 webpage, still live on the organisaiton’s website, states that “it will be the mid-late 2020s before sales of vehicles will rise beyond the current level of less than 2.0 per-cent of the national total”. In contrast, the IEA in April 2023 forecast that by 2035, 35% of all cars sold globally would be electric (29.4% BEVs and 5.6% PHEVs).

Spread anti-BEV narratives to the government: An internal email from the Department of Infrastructure from July 2022 summarizing a meeting with the FCAI states that the FCAI claims “the supply of EVs globally will not be sufficient to enable 100% of sales to be EVs by 2035, because: They claim EVs need 3 times as many semiconductor chips and that global chipmakers won’t be able to ramp up in time. Battery minerals supply will also need to ramp up dramatically. They also claim Australia’s rate of charging station installation is insufficient to meet projected EV uptake levels.” The FCAI’s October 2022 consultation response to the National Electric Vehicle Strategy (NEVS) also emphasized limited EV charging infrastructure, higher BEV costs and the dominance of utes to push back against stringent CO2 regulation. “With over 22 per cent of sales in Australia being a ute, there is lack of clarity of supply of an affordable right-hand drive Battery Electric ute. If we do not have a realistic plan, meeting our decarbonisation targets will be even harder than the task already is. … Therefore, FCAI forecasts that electrification (specifically hybrid and PHEV) from Thailand production for the Australian export market will be limited for some time”). October 2022 government preparatory notes for a meeting with Toyota Australia’s CEO and FCAI chair, Matthew Callachor, contrastingly state “FCAI advises electric utes will not be readily available in right hand drive in coming years as the global market for these vehicles will be too small to make them viable. Despite this, some manufacturers have announced plans to manufacture electric utes in Thailand, which is a significant right hand drive market that supplies the majority of utes sold in Australia”.

Advocate for alternative technologies that favor longer-term use of the internal combustion engine: Multiple FOI documents from 2022 suggest that FCAI chair and Toyota Australia CEO, Matthew Callachor, has pushed for alternative solutions to promote a longer-term role for ICE vehicles. An August 2022 letter from Callachor to the Department of Infrastructure noted that in a recent meeting with the department, Toyota had shared details on “explaining short to longer-term options for vehicle electrification as well as other carbon neutral solutions under study including internal combustion engines powered by biofuels and e-fuels.” Similarly, October 2022 Government preparatory notes for an upcoming meeting with Callachor noted that “Toyota and the FCAI consider the Government should be flexible in the policies it adopts to reduce vehicle emissions, as there a number of low emissions fuel sources under development, and not excessively focus on supporting battery electric vehicles”.

Promote internal combustion (ICE) powered vehicles over BEVs: FCAI’s August 2022 ‘Three Point Plan’ to decarbonize Australian road transport claimed that “the ultimate destination is decarbonisation, but to get there a mix of hybrid, plug-in hybrid, battery electric, hydrogen and efficient internal combustion is needed”. Similarly, the FCAI’s November 2022 National Electric Vehicle Strategy consultation response stated that “reflecting Australia’s specific challenges, a technology mix (including all hybrid, plug-in hybrid, battery electric and fuel cell electric vehicles) is the only sensible way ambitious decarbonisation targets can be achieved”. FCAI CEO, Tony Weber, also noted in an April 2022 press release that “the pathway to reducing emissions in the medium term will rely on a range of low emission technologies that include plug-in hybrid, hybrid and even highly efficient internal combustion engines”. In contrast, the IPCC 2022 AP6 WGIII report found that "electric vehicles powered by low emissions electricity offer the largest decarbonisation potential for land-based transport, on a life cycle basis (high confidence)", encouraging many other regions to set more ambitious BEV strategies.

Lobby policymakers to adopt weak fuel efficiency standards in line with FCAI’s voluntary standard: The FCAI met with the Department of Infrastructure in July 2022, with notes from the meeting stating that the FCAI’s “aim is to convince Minister Bowen that legislating the FCAI’s voluntary standard would effectively reduce emissions”. Similarly, an April 2022 FCAI presentation to the Department of Infrastructure advocated to "implement a mandatory new car CO2 regulation in with the FCAI voluntary scheme." October 2022 Government preparatory notes for an upcoming meeting with FCAI Chair and Toyota Australia CEO, Matthew Callachor also stated that “while Toyota and FCAI has been calling for government to implement a mandatory fuel efficiency standard, the level of emissions reduction supported by Toyota and the FCAI may be lower than government is contemplating, and is clearly lower than climate and EV groups consider necessary to support the government’s 2030 and 2050 emissions reduction targets.” In a November 2022 consultation response to Australia’s National EV Strategy (NEVS), FCAI similarly urged the government to adopt a fuel efficiency standard that follow “the structure of the FCAI voluntary CO2 standard”, with numerous exceptions including that “targets need to be ambitious, but achievable, whilst considering global conditions and local realities”, separate targets for passenger and commercial vehicles, and it includes the “ability to accumulate credit for over-achievement in any one calendar year to offset under achievement in a subsequent period”. Evidence from April 2023 however suggests an evolving advocacy position. In an April 2023 ABC News interview with FCAI CEO, Tony Weber stated that “I think we could have more ambition than our target moving forward” regarding the FCAI’s CO2 target for passenger cars and light SUVs, while pushing back on higher targets for larger SUVs and light commercial vehicles. This limited concession follows years of FCAI advocacy to move the goalposts on Australian automotive climate policy to prioritize weak fuel efficiency targets in line with the FCAI’s CO2 standards. Moreover, in another April 2023 ABC News interview, the FCAI CEO advocated against bringing Australian CO2 rules in line with the US and EU.

Run a strategic PR campaign to push back on ambitious fuel efficiency standards: In August 2022, a leaked FCAI strategy briefing document was reported on by the Sydney Morning Herald as part of a campaign to delay Australia’s transition to EVs, which announced plans to “position FCAI as part of the moderate middle” and “as part of the solution, not part of the problem” around EV policy. It also outlined a public relations strategy up until October 2022 with targeted briefings, a government green paper, a “thought leadership roadshow” of roundtables, keynote speeches, newspaper opinion pieces, and a “targeted media campaign” to promote low fuel efficiency standards that would be amongst some of the weakest carbon emission rules globally. Following this, an August 2022 letter from the FCAI invited Department of Infrastructure staff to the Automotive Vehicle Emissions Forum hosted by the FCAI, which the Minister for Climate Change and Energy was speaking at. Noting the strategic attempt to position itself as "the moderate middle", the FCAI’s NEVS consultation response in November 2022 stated that its submission was “informed by what we know now, it relies on evidence not emotion, research not rhetoric and proof rather than predictions” while also advocating for low ambition CO2 standards.

Negative advocacy on fuel efficiency standards from Toyota and Hyundai: In November 2022 NEVS consultation responses, both Toyota and its subsidiary Lexus advocated for the FCAI's industry code to be a "logical baseline" for fuel efficiency standards, while Hyundai urged that the rule should "follow the structure of the FCAI voluntary CO2 standard." Both automakers also advocated for flexibilities that may weaken the standards' stringency, including Toyota supporting "super credits, off-cycle credits" and Hyundai advocating to “accumulate credit for over-achievement in any one calendar year to offset … in a subsequent period”, and ”to pool and trade credits” that match the FCAI response word-for-word. FOI documents also show that Toyota Australia CEO and FCAI Chair, Matthew Callachor, met with the Department of Climate in October 2022 and sent a letter to the Department of Infrastructure in August 2022, meeting the department in October 2022. The Guardian in May 2023 also reported that a Toyota Australia executive urged that it was “too early” to rapidly transition to BEVs, and that Toyota would lobby for a CO2 standard with a generous time-frame.

Strong evidence of climate advocacy misalignment from other automakers and the FCAI: Notes from a February 2021 meeting between the Department of Infrastructure and FCAI, stated that “some members fully support the voluntary standard, others support it but disagree with the design and others do not support it,” suggesting internal disagreements within the group. An August 2022 Australian Financial Review article, further suggested that internally, multiple FCAI members are “frustrated” by the organization’s “toothless stance regarding fuel-efficiency standards,” alongside highlighting the “growing disquiet … over the dominance Toyota has in shaping the chamber’s policy objectives.” Toyota is reported to be the largest FCAI funder due to its large sales volumes (22% of Australian vehicle sales in 2022) and is yet to sell a single battery electric vehicle in Australia.

Positive engagement appears to be led by Tesla, with broadly positive advocacy from Volvo Cars and Volkswagen: Tesla advocated for ambitious standards aligned with New Zealand's Clean Car Standard in its October 2022 NEVS consultation response and opposed flexibilities such as super and off-cycle credits. A Polestar (a Volvo Cars subsidiary) executive was quoted in an April 2023 ABC report as stating “the concern really is that if Australia doesn't get the fuel efficiency standard quite right, that it will just continue to sort of dwell at the bottom of the pile again … the fuel efficiency standard really has to play into the government's own …target to reduce emissions by 43 per cent by 2030”. Similarly, in an August 2022 WhichCar article, Volkswagen’s former managing director stated that the company “will be campaigning to have stronger standards" in line with Europe and the UK. However, neither Volvo Cars nor Volkswagen responded to the National Electric Vehicle Strategy (NEVS) consultation in November 2022, and both remain FCAI members, despite Volvo Cars announcing plans to only sell battery electric vehicles in Australia by 2026.

Mixed or unclear positions on a Fuel Efficiency Standard from many automakers: While both Ford and Mitsubishi (respectively 6% and 7% of total Australian car sales), appeared to take no clear position on the policy in their October 2022 NEVS consultation responses. InfluenceMap has not found evidence of most other FCAI members directly advocating on Australia’s fuel efficiency standard.