Key Takeaways (TL;DR)
- The ACT has positioned itself as a leader in climate action, targeting net zero emissions by 2045 through its recently released Climate Change Strategy 2026-36.
- However, an expert analysis reveals a critical gap: the strategy significantly underestimates the challenge of reducing transport emissions, which constitute over 60 percent of the territory’s total.
- Current policies, including a push for high EV sales and a 2035 ban on new internal combustion engine (ICE) vehicle registrations, are projected to leave residual transport emissions ten times higher than the net zero target.
- The strategy heavily relies on ‘mode shifting’ and urban form changes, which have a limited track record of rapid success in Australia and are too slow to meet the 2045 deadline.
- To bridge this gap, policies must focus on actively improving the fuel efficiency of the entire existing vehicle fleet, not just new sales, through targeted financial incentives for used efficient vehicles.
- Achieving net zero by 2045 is feasible but demands a more ambitious and comprehensive approach to fleet-wide emissions reduction than currently outlined in the ACT Climate Change Strategy.
ACT’s Climate Leadership Faces Critical Transport Challenge
The Australian Capital Territory (ACT) has long been at the forefront of climate action within Australia, often seen as a bellwether for ambitious environmental policy. With a relatively small population, minimal heavy industrial emissions, and a highly educated populace generally receptive to climate science, the ACT presents an ideal environment for implementing groundbreaking climate mitigation strategies.
The recently launched ACT Climate Change Strategy 2026-36, accompanied by its inaugural Action Plan, marks a crucial juncture. With a challenging target of achieving net zero emissions by 2045, these documents are vital in outlining concrete policies designed to steer the territory towards its ambitious climate goals with a high probability of success.
Gaps Identified in the ACT Climate Change Strategy
Despite the ACT’s pioneering stance, a detailed examination of the new strategy reveals significant shortcomings in its proposed actions, particularly concerning the territory’s largest emissions contributor: transport. While the strategy accurately identifies transport as responsible for more than 60 percent of the ACT’s total emissions, it appears to offer insufficient commensurate actions to tackle this formidable challenge.
The strategy correctly highlights the importance of decreased dependence on private vehicles, alongside enhancements in public transport services and active travel options, as crucial levers for reducing transport emissions. However, it largely places its primary reliance on achieving high levels of ‘mode shifting’—a transition from private cars to public transport or active travel.
While an ‘all-of-the-above’ approach to emissions reduction is certainly necessary, measures banking heavily on significant mode shift have historically struggled to achieve rapid, substantial results in Australia. Furthermore, strategies centred on altering urban form to lessen private car dependence, though inherently desirable, are often too slow to yield a substantial impact within the tight timeline leading up to 2045.
The Reality of Vehicle Fleet Turnover in the ACT
Much of the climate discourse over the past decade has focused on accelerating the adoption of electric vehicles (EVs) and moving beyond the early adopter phase. This emphasis on new EV sales is a natural starting point for emissions reduction efforts within the transport sector.
However, this focus can inadvertently obscure a critical reality: the vast number of new fossil fuel-powered cars entering the market will remain part of the active vehicle fleet for an extended period. Nearly every petrol or diesel vehicle sold today is likely to still be on Canberra’s roads in 2040, unless actively removed or scrapped much earlier than typical lifecycles suggest. This long-term persistence of internal combustion engine (ICE) vehicles is a factor not adequately analysed within the ACT Climate Change Strategy.
Modelling ACT’s Light Vehicle Fleet Towards 2045
To quantify the challenge, a ‘stock and flow’ model of the ACT light vehicle fleet was utilised to project potential outcomes by 2045 under the current ACT Government policies. This model incorporates two key policy assumptions, both of which represent significant ‘ifs’ in terms of their achievement:
- Achieving an 80-90% EV sales share by 2030 (compared to June 2026 figures of 43% EV sales).
- Prohibiting the registration of new ICE vehicles from 2035 onwards.
Further assumptions within the model include a growth in vehicle numbers consistent with recent years, an annual scrappage rate of 5% for ICE vehicles, and an EV scrappage rate of zero until 2035, increasing to 2% thereafter, reflecting the younger average age of the EV fleet. The existing vehicle fleet’s average fuel economy is based on 2024-25 ground transport emissions and typical annual distances travelled in the ACT.
New vehicles are assumed to have an average fuel economy aligned with the New Vehicle Efficiency Standard targets until 2029. Beyond 2030, these targets are conservatively maintained at 2029 levels, pending the Federal Government’s establishment of targets for subsequent years.
The model also posits that vehicles enter the ACT fleet primarily as new purchases. While second-hand vehicles are frequently traded within the territory or replaced from interstate, no significant improvement in fuel economy is assumed from these transfers, beyond what is achieved through the introduction of new, more efficient vehicles. This approach mirrors current ACT Government policy, which largely targets incentives towards new vehicles to shift fleet composition towards lower emissions options. While a modest CO2 component exists in annual ACT vehicle registration fees, consumer behaviour often shows a strong tendency to discount future running costs.
Projected Fleet Composition and Emissions Discrepancy
Based on these assumptions, projections for the ACT’s vehicle fleet in 2045 indicate that approximately 70% of vehicles could be battery electric. This figure broadly aligns with projections from the Australian Energy Market Operator (AEMO), which forecasts 80% EV penetration by 2050, acknowledging inherent uncertainties in such long-term forecasts.
However, the crucial finding emerges when examining the projected emissions. The model predicts residual transport emissions of 450 kilotonnes of CO2 per year by 2045. This figure, while representing roughly half of current transport emissions, is approximately ten times higher than the transport emissions allocated within the net zero scenario outlined in the ACT Climate Change Strategy.
This stark discrepancy suggests that the effort required to eliminate polluting ICE vehicles from the fleet has been significantly underestimated within the ACT Climate Change Strategy. The strategy’s section titled “Completing the transition (2040-2045)” optimistically states, “This stage will target residual emissions and legacy infrastructure. Fossil fuel vehicles will be phased out …” The numerical analysis, however, indicates that such a rapid phase-out of a substantial residual ICE fleet within just five years is not adequately supported by current policy trajectories.
Strategic Interventions to Accelerate Emissions Reduction
The value of modelling lies in its ability to test different parameters and evaluate the efficacy of various strategies. The current analysis highlights a clear path forward: if the ACT Government were to implement policies specifically designed to encourage the purchase of more efficient used vehicles—including EVs, plug-in hybrids, and conventional hybrids—significant additional progress could be made on transport emissions.
Rather than viewing the vehicle fleet merely as a pipeline where new cars enter and scrapped cars exit, a more effective approach considers the fleet as a continuously improving cohort. Every vehicle purchase, whether new or used, presents an opportunity to enhance overall fleet efficiency and reduce tailpipe emissions across the territory.
Targeted financial incentives could encourage car dealerships in the ACT to stock a greater proportion of highly efficient used vehicles. This dynamic would likely lead to high-emissions traded vehicles being transferred interstate, where they might be easier to sell, while dealerships routinely source more efficient used vehicles from interstate auctioneers and wholesalers to meet local demand.
Impact of Fleet-Wide Fuel Economy Improvements
Modelling demonstrates that if the average fuel economy of the existing vehicle fleet were improved by just 4% per year from now until 2045, it would effectively halve the projected residual transport emissions. More impressively, an 8% annual improvement in fleet-wide fuel economy could roughly achieve the emissions reductions necessary to reach net zero by 2045, even with nearly 150,000 ICE vehicles still present in the fleet.
Under such an ambitious scenario, the remaining vehicles would be considerably more fuel-efficient, likely comprising a mix of EVs, hybrids, and plug-in hybrids. The fleet-wide average fuel economy would need to be approximately 1.6 litres per 100 kilometres to achieve this level of emissions reduction.
Towards a More Ambitious and Comprehensive Net Zero Plan
This detailed exercise unequivocally demonstrates that relying solely on the introduction of new zero-emission vehicles and the ‘natural’ turnover of the vehicle fleet is an insufficient and overly slow approach to meeting the ACT Government’s net zero target by 2045. While the complete elimination of every ICE vehicle might not be strictly necessary, a fundamental shift in policy focus is imperative.
Critically, the ACT Government’s policies must extend beyond merely targeting new vehicle sales. There is an urgent need to focus on actively improving the tailpipe emissions of all vehicles currently in the fleet, both new and used. This could be effectively achieved by strengthening and broadening the existing differential vehicle duty scheme in the ACT, ensuring its application to all vehicle transactions, regardless of age or previous ownership.
The good news remains that a sufficient reduction in transport emissions to reach net zero by 2045 is indeed achievable. However, this ambitious goal necessitates the implementation of more robust, proactive, and comprehensive plans than those currently outlined within the ACT Climate Change Strategy. A holistic strategy encompassing both new vehicle adoption and existing fleet improvement is vital for the ACT to uphold its leadership in climate action and meet its crucial 2045 commitment.
Frequently Asked Questions (FAQs)
What is the primary challenge facing the ACT’s Net Zero by 2045 target?
The primary challenge is the significant underestimation of the effort required to reduce transport emissions, which account for over 60% of the territory’s total. Expert modelling suggests current strategies focusing on new EV sales and mode shift are insufficient to meet the 2045 net zero goal for this sector.
Why are existing policies on electric vehicles (EVs) not enough?
While promoting EV sales is crucial, the slow natural turnover of the vehicle fleet means millions of petrol-guzzling internal combustion engine (ICE) vehicles will remain on the roads for decades. Current EV targets, even if met, won’t decarbonise the entire fleet quickly enough to meet the 2045 deadline.
What are the main shortcomings of the ACT Climate Change Strategy regarding transport?
The strategy identifies transport as the largest emissions source but lacks concrete, rapid-impact actions. It relies heavily on ‘mode shifting’ (public transport, active travel) and urban form changes, which are typically slow to implement and show limited success in accelerating emissions reductions at the required pace.
How much higher are projected transport emissions compared to the net zero target?
Expert modelling indicates that under current ACT Government policies, residual transport emissions in 2045 could be around 450 kilotonnes of CO2 per year. This figure is approximately ten times higher than the transport emissions level required to achieve the net zero scenario outlined in the Climate Change Strategy.
What alternative policies are suggested to accelerate emissions reduction?
The analysis suggests implementing policies that encourage the purchase of more efficient used vehicles (EVs, hybrids, PHEVs) across the entire fleet, not just new ones. Strengthening differential vehicle duty schemes to apply to all vehicle transactions could incentivise the removal of high-emitting vehicles from the territory.
Is achieving net zero by 2045 still possible for the ACT?
Yes, achieving net zero by 2045 is still possible, but it requires a more ambitious and comprehensive approach. Policies must shift focus to continuously improving the fuel efficiency of the entire existing vehicle fleet through targeted incentives, alongside the push for new zero-emission vehicles, to bridge the current emissions gap.