Developing a Low Emission Vehicle Strategy for SA Discussion Paper (Nov 2010)

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1 Developing a Low Emission Vehicle Strategy for SA Discussion Paper (Nov 2010) DTEI and the Climate Change Division of the Department of the Premier and Cabinet has released a Discussion Paper dealing with the development of a Low Emission Vehicle Strategy for South Australia (dated 15 November 2010). In addition, the SAFC CEO accepted an invitation to join the industry reference group assembled to assist the Department in their task. The first meeting of that group was held on 14 December A PowerPoint presentation covering development of the strategy is available at on%20vehicles%20in%20sa.pdf Comments close on 25 February Justification for a Strategy Cars are changing. Climate change, urban air quality, increasing fuel prices and energy security are driving global advances in low emission vehicle technologies. This has resulted in a step change in the types of passenger vehicles being demanded by, and offered to, motorists, and growing divergence in the types of fuels being used to power them. South Australia needs to be prepared for these changes and capture the opportunities they present. These include opportunities for our energy supply and automotive industries and opportunities to achieve our climate change and sustainability goals. The South Australian Government is committed to developing a Low Emission Vehicle Strategy (the strategy ) to respond to these changes and to provide a strategic approach to accelerating the uptake of low emission vehicles in South Australia. This will be a strategy for the South Australian Government, and whilst it will be developed with input from industry and other key stakeholders, it will remain a document to guide Government action. It is proposed that the strategy will focus on supporting industry and consumers and the creation of the right environment to increase the number of low emission vehicles on our roads. It is also proposed that the strategy will not favour any particular technology but that it will recognise that various low emission vehicle technologies are each at different stages of maturity and face different barriers to widespread adoption. A series of questions are asked within the Discussion Paper and the Draft SAFC Comment addresses these.

2 Draft SAFC Comment Mr Richard Day Sustainability and Climate Change Division Dept of the Premier and Cabinet GPO Box 2343 Adelaide SA 5001 Dear Mr Day RE: Discussion Paper: Developing a Low Emission Vehicle Strategy for South Australia Thank you for the opportunity to provide comment on the Discussion Paper: Developing a Low Emission Vehicle (LEV) Strategy for South Australia dated 15 November As you may be aware, SAFC is South Australia s peak, multi-modal freight and logistics industry group that advises both the Federal and State governments on industry related issues, and is funded by both governments. It represents road, rail, sea and air freight modes and operations, and assists the industry on issues relating to freight logistics across all modes. SAFC congratulates the Department of the Premier and Cabinet and the Department of Transport, Energy and Infrastructure on the development of this Discussion Paper which promises to address an issue for which the community shows great interest. Specific responses to the questions posed within the Discussion Paper appear at Attachment A. By way of general comment SAFC suggests that the document could be significantly enhanced through the introduction of a preamble that would discuss the non-lev elements of any transport emissions strategy, such as travel demand management and fuel efficient driving practices and the like. This change could remove from the discussion a great deal of unfocused debate regarding environmental issues that are not directly related to LEV s. In addition, SAFC suggests that as the Strategy is not aimed at vehicles utilised by any of the other 3 modes in operation in SA (rail, sea and air) that the strategy be renamed to Developing a Low Emission Road Vehicle Strategy. SAFC looks forward to working in partnership with Governments and industry to progress the development and implementation of a Low Emission Vehicle Strategy for South Australia. Feel free to contact the SAFC CEO, Neil Murphy, on the numbers listed below in this regard. Yours Sincerely John McArdle Chairman SA Freight Council cc: Mr Paul Davies, Department of Transport, Energy and Infrastructure

3 ATTACHMENT A Discussion Paper: Developing a Low Emission Vehicle Strategy for South Australia SAFC Response to Specific Questions CONSULTATION POINT 1 Feedback is sought on the proposed interpretation of the term low emission vehicle for the purposes of the strategy. SAFC believes that in addition to the 6 categories of LEV proposed within the Discussion Paper an additional category Initiatives Involving Conventionally Fuelled Vehicles should be included. This would enable some discussion of initiatives that promise to deliver significant environmental benefits through reductions in emissions per passenger/tonne carried but are not strictly a Low Emission Vehicle (LEV). For example, high occupancy vehicles (eg: carrying say 4 persons) and light weight small vehicles (eg: Smart Cars). In addition, SAFC believes that there may be some confusion amongst the community regarding Hybrid Electric Vehicles and Plug-In Hybrid Electric Vehicles as defined within the Discussion Paper. Some further clarity should be included within the proposed definitions. CONSULTATION POINT 2 Stakeholders are invited to comment on these proposed principles. The policy principles proposed within the Discussion Paper are generally appropriate. However, SAFC contends that it may be appropriate to incorporate a principle relating to modal shift (from road to rail and from rail to sea) which, where appropriate could have a significant impact upon emissions per net tonne kilometre and per passenger kilometre (through a shift to public transport options). In effect less emissions per tonne/person kilometre. CONSULTATION POINT 3 Feedback is sought on the identified roles for State Government SAFC acknowledges the proposed roles and responsibilities for the SA Government and generally agrees with the thrust of the proposal. Nonetheless, SAFC provides the following input for consideration: An SA Government role as the Regulator is acknowledged but whilst it may be possible for the...specific issues of individual states... to be addressed national harmonisation is a higher order objective that should be pursued at every opportunity. SAFC contends that the roles of Facilitator and Investor as outlined, are quite similar and should be merged into a single item. SAFC suggests that the role as Investor ultimately be removed. An additional role under the Regulator category may relate to the Government s ability to influence access pricing mechanisms and outcomes. For example, it may be possible to implement differential pricing regimes favouring LEV s under any new mass-distance-location pricing regimes.

4 CONSULTATION POINT 4 Stakeholders are invited to contribute concise role statements. SAFC considers environmental issues within its Regulations Working Group. This Group includes both industry and government representation and provides a useful discussion forum for the consideration of regulatory change proposals (including those relating to the environment) as well as opportunities that may emerge from regulatory change which could ultimately benefit the industry. A possible role statement for transport and logistics industry might be based upon the following statement: The transport and logistics industry reacts to the business environment and how that impacts upon operations within the industry. Industry will base its decisions upon the most beneficial market outcome from their individual perspectives. Industry will work in partnership with Governments and the community to progress the implementation of the LEV Strategy where market forces indicate that benefits will accrue. From a SAFC perspective, a possible role statement for the Council might be: SAFC articulates industry views in a variety of forums and influences policy outcomes, as well as disseminating government information where appropriate. SAFC will work in partnership with the heavy vehicle industry, including drivers, owners and manufacturers, as well as governments to promote the uptake of new technologies (vehicles and fuels) aimed at assisting industry in arriving at its market based decisions and the community to achieve its climate change and sustainability objectives. CONSULTATION POINT 5 Stakeholders are specifically invited to comment on the proposed themes and areas of activity, including any gaps or omissions. Comment relating to the proposed themes is provided individually: Theme 1 Industry Item 1.d - Depending upon the proposed reforms...advocat[ing] for reforms to the treatment of vehicles under fringe benefits... may be counterproductive to efforts aimed at...continu[ing] to support the South Australian automotive industry... (Item 1.a). Indeed, should the Australian dollar remain at historically high levels for an extended period of time significant tax advantages (including FBT concessions) favouring Australian built vehicles may be necessary. The SA Government could take an Advocate role in this regard. SAFC contends that it may also be beneficial to see the introduction of a subsidy scheme (including accelerated depreciation and the like) to facilitate replacement of the truck fleet with more environmentally friendly (eg: Euro 4 and Euro 5 engines) vehicles. The Californian Government, in conjunction with the Port of Los Angeles has implemented a scheme aimed at phasing out older, more polluting trucks and replacing them with vehicles that are more environmentally friendly). The Californian scheme may provide a useful case study in justifying any proposed subsidy schemes.

5 Theme 2 Consumers SAFC highlights that the transport and logistics industry in Australia and South Australia is a significant consumer of vehicles and therefore some strategies aimed at encouraging the uptake of LEV s may be necessary for this sector. SAFC would be willing to work with government to raise industry awareness (similar to the proposal regarding an RAA/Government partnership contained in Item 2.a). Theme 3 Refuelling and Recharging SAFC comments that ensuring that the electricity network can cope with the 5:00pm Recharge Rush will be a significant issue that will need to be addressed if suitable refuelling and recharging opportunities are to be achieved. Theme 4 Planning Ahead SAFC commends the State Government on their foresight in developing this Discussion Paper.