Finance Consumer Morrison government under pressure to redo ‘misleading’ electric vehicle modelling
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Morrison government under pressure to redo ‘misleading’ electric vehicle modelling

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The Morrison government is facing fresh calls to rethink its position on electric vehicles amid accusations it based its strategy on ‘misleading’ modelling.

In a Future Fuels discussion paper released in February, the federal government ruled out introducing purchase incentives to improve the affordability of cleaner cars on the basis that such subsidies represented poor value for money.

But in the latest submission to a government process that closed on Friday, The Australia Institute argues that this position was based on dodgy modelling that was only added to the paper after the government had already decided against using purchase incentives.

“The government’s rush job modelling is apparently for ‘illustrative purposes only’ and yet has been used by numerous federal ministers to claim that EV incentives do not represent value for money,” Australia Institute researcher Audrey Quicke writes in the submission.

“What is worse is that the modelling contradicts the government’s own 2020 Emissions Projections, and specific comments made by the Treasurer when he was the Minister for Energy.”

When it comes to decarbonisation policies, Bloomberg ranks Australia third last in the Group of Twenty forum.

Contested modelling

The Australia Institute objects to the modelling – which claims hybrids would cut emissions more efficiently than battery electric vehicles in some parts of Australia – on several counts.

Firstly, it says the modelling inflates the emissions associated with battery electric vehicles by restricting its analysis to a five-year period, rather than the average 10-year lifespan of a car in Australia.

As a result, it says, the modelling fails to “fully account for the declining emissions intensity of the electricity supply system over the life of a vehicle”.

Secondly, the think tank points out the modelling does not take into account the widespread usage of rooftop solar among owners of electric vehicles.

Seventy three per cent of the 150 EV owners who participated in a 2018 survey said they owned rooftop solar – compared to 21.6 per cent of homes nationally at the time – yet the government’s modelling does not factor this into its calculations, nor the fact that Australia’s largest EV charging network, Chargefox, is powered by 100 per cent renewable energy.

The government’s ‘misleading’ modelling found that hybrids were a better choice, in terms of reducing emissions, than electric vehicles in some parts of the country.

“When 20 per cent off-grid renewable electricity charging is included, the emissions intensity profile of EVs falls below that of the hybrid for every Australian grid, and well below the [internal combustion engine] vehicle,” the submission states.

Thirdly, the institute says the modelling, by focusing on average emissions intensity, does not account for the additional supply of renewable energy that is likely to meet demand.

This means the extra electricity produced to meet the additional demand from EVs would likely have a much lower emissions intensity than the current average.

And then there’s the government’s own contradictory forecasts.

Official emissions projections produced in 2020 found that, by 2025, battery electric vehicles would have a lower emissions intensity profile than the hybrid model used in the modelling.

How the modelling looked using The Australia Institute’s assumptions.

More support needed

The think tank’s submission also notes that the modelling was only added to the discussion paper after the government had already decided to rule out taxpayer subsidies, as the modelling was not found within a previous version of the paper leaked to the ABC in December.

Coming just days after the federal Opposition pledged to cut taxes on low and zero-emission vehicles, the think tank’s submission urges the federal government to expedite the transition to EVs by:

  • Redoing the modelling in the discussion paper
  • Providing short-term financial incentives to reduce the upfront cost of buying an EV, as taxpayer-funded research in 2018 found that such policies were the most effective way of encouraging people to buy cleaner cars
  • Introducing light vehicle CO2 emissions standards, in line with European standards
  • Completely electrifying government vehicle fleets by 2030.

The submission came less than two weeks after the government modelling came under fire during Senate estimates.

Department officials under pressure

During estimates, Greens senator Janet Rice grilled government officials over their decision to restrict their analysis to a five-year period, and questioned why they had chosen to compare a large electric vehicle with a smaller petrol car when calculating the cost of reducing emissions, among other things.

After finding out that the modelling was conducted after the report was first leaked to the ABC, Senator Rice pressed the officials to explain why it was added just weeks before the report’s release, before concluding that Energy Minister Angus Taylor must have told them to do so.

“The minister’s office basically said, ‘Find some modelling that’s going to make electric vehicles look more expensive in emissions’,” Senator Rice asserted. (You can read the full exchange on pages 113 to 115 of this Parliamentary document.)

But David Fredericks, secretary of the Department of Industry, Science, Energy and Resources, soon rejected that characterisation.

“Senator, to be fair, we have a right to respond to that, and we reject that,” he said.

A spokesperson for Energy Minister Angus Taylor said the government rejected The Australia Institute’s claims but would take time to consider the various submissions to the Future Fuels discussion paper.

“The government rejects the claims from the Labor-Greens aligned lobby group,” the spokesperson said.

“Analysis by the Department of Industry, Science, Energy and Resources shows subsidies for battery electric vehicles are not value-for-money for taxpayers and are an expensive form of abatement.”

The government is expected to release its final electric vehicle strategy by the middle of this year.

UPDATE: This article was updated on April 6 to include a statement from a government spokesperson.

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