Market Update | 9 February

• Draft release of the proposed New Vehicle Efficiency Standard
• Federal Government announces $41 million in Energy Efficiency Grants for Small and Medium Enterprises
• Draft release of exposure legislation under climate-related financial disclosure

Cleaner, Cheaper to Run Cars: The Australian New Vehicle Efficiency Standard

On Sunday (04/02/2024), the draft proposal for the New Vehicle Efficiency Standard (NVES) was released. To more closely align Australian standards with those seen around the globe, the NVES will introduce an annual limit on the carbon dioxide emitted across a supplier’s fleet of vehicles.

Aimed to incentivise cleaner cars, suppliers can continue to sell less fuel-efficient cars but must offset through the purchase of credits or paying a penalty, in the event they sell more polluting cars than the target. Conversely, credits can be sold by suppliers selling more fuel-efficient cars than the target.

With cars being responsible for approximately 13% of Australia’s greenhouse gas emissions, the NVES is projected to deliver an abatement of 369 million tonnes of carbon dioxide by 2050 and approximately $108 billion in fuel savings for consumers.

Further $41 Million for Small and Medium Businesses

On Thursday (08/02/2024), the Albanese Government announced a further $41 million in funding for Energy Efficiency Grants (EEG) for Small and Medium Enterprises (SMEs) to invest in energy-efficient technologies. This comes in addition to the initial round of grants, bringing the total to $62 million for the national initiative.

The initiative is hoped to lower emissions and bring relief to SMEs by putting downward pressure on energy bills.

Applications for grants between $10,000 and $25,000 for upgrading to technologies like heat pumps for hot water and air conditioning open across the country, starting with Victoria on Thursday 22 February 2024.

Climate-Related Financial Disclosure: Exposure Draft Legislation

In a recent Treasury release, the exposure draft legislation proposes the introduction of mandatory climate-related financial disclosure for all entities that meet the prescribed size thresholds or are a ‘registered corporation’ under the NGER Act.

While the reporting requirements will be phased in over three periods, the first disclosure period will be required for 30 June 2025 year ends and will include limited assurance of Scoe 1 and Scope 2 greenhouse gas emissions for reports prepared from 1 July 2024.

These reporting requirements are to be included as part of a new ‘sustainability report’, along with financial, directors’ and auditors’ reports.

A transitional period with limited immunity from ASIC will be included as part of the change, giving organisations time to develop experience and practice effectively without being subject to the existing liability arrangements.

At Ecovantage, we consistently analyse market activity, policy changes, consultation releases, and creation rates in conjunction with wider landscape activity. This allows us to keep our clients at the forefront of all relevant changes, and to leverage the advantage that this presents. Thank you for your continued support, and please reach out if you have any general or project-specific questions.