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50% of new cars to be electric vehicles by 2030 under Labor climate change policy

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Labor will set a national electric vehicles target of 50% new car sales by 2030, and 50% for the government fleet by 2025, as well as allowing business to deduct a 20% depreciation for private fleet EVs valued at more than $20,000, as part of its climate change policy to be unveiled on Monday.

Bill Shorten will also flag a new pollution regulation on car retailers “in line with” 105g CO2/km for light vehicles, which is consistent with American emissions standards, but will consult on coverage and the timeline to phase in the change rather than impose it immediately.

That caveat notwithstanding, the signal is likely to trigger pushback. Efforts to impose pollution standards for vehicles have been derailed during the Coalition’s period in office in part by internal opposition from Nationals, and by strenuous lobbying from influential stakeholders, including motoring associations, driver groups and the Australian Institute of Petroleum.

As Guardian Australia revealed on Saturday, Labor will, if it wins the coming election, beef up the Morrison government’s heavily criticised safeguard mechanism.

It will use the existing architecture, but create new pollution reduction requirements for the aviation sector, cement, steel and aluminium, mining and gas, direct combustion and the non-electricity energy sectors.

Currently the safeguard mechanism applies to businesses with direct emissions of more than 100 kilotonnes of carbon dioxide-equivalent pollution each year, and Labor’s policy will cut that threshold to 25 kilotonnes, which means around 250 companies will be covered.

Businesses will be required to meet their declining baselines by either reducing their emissions to an agreed level, or buying offsets to cover any difference, which imposes a cost on their operations.

While Labor wants to reduce pollution in the entities covered by the rebooted safeguard mechanism by 45% on 2005 levels by 2030 in line with its national emissions reduction target, it will consult with industry on the specific baselines and trajectories that will apply to each covered entity.

Labor will allow firms to overachieve on their baselines, and earn credits which can be sold in a trading scheme, which is likely to link eventually with the electricity sector, which is covered by a separate regulatory regime.

There will also be assistance for emissions-intensive, trade-exposed industries, including applying a comparative impact principle, ensuring Australian industries face comparable impacts from climate change policies in relevant international markets, and a new fund of $300m over six years will help firms lower their carbon emissions.

Labor wants to boost the carbon offset market, increasing supply through the Carbon Farming Initiative and allowing the use of international permits to help business meet their pollution reduction requirements at least cost.

But it will not use Kyoto credits to meet the Paris target. The Morrison government has been blasted by environmental and investor groups for banking a 367-megatonne contribution from Kyoto carryovers as part of its recently released carbon budget, which details the emissions reductions from various programs that will be required to meet the Paris target.

Labor’s policy will not hit agriculture, apart from the imposition of stronger national land-clearing regulations, which will be in line with a regime that currently applies in Queensland.

While keeping the Coalition’s safeguard mechanism, and beefing it up to drive down pollution in sectors where emissions have been rising since the then Abbott government abolished the Gillard government’s carbon price, Labor will abolish the other vestige of the Direct Action scheme, the emissions reduction fund.

The Coalition initially allocated more than $2bn to the ERF, which pays farmers and businesses to cut carbon dioxide pollution to below what it would otherwise be. As part of an attempted pivot on climate change prompted by a voter backlash about the Coalition’s negative record, Scott Morrison recently rebadged the ERF the “climate solutions” fund, with another $2bn to be rolled out over 10 years.

The release of the new climate policy will come at the start of the final sitting week of the current parliament, with the federal election just around the corner. While Labor will be wary about reigniting a new version of the “carbon tax” fight, strategists on both sides of politics report voters are deeply concerned about climate change.

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The policy is targeted at areas of the economy where emissions in Australia are continuing to rise. Emissions for the year to September 2018 went up 0.9% on the previous year, according to the latest inventory, primarily due to a 19.7% increase in LNG exports, but there were also increases in stationary energy, transport, fugitives, industrial processes and waste sectors.

The increased pollution from stationary energy reflects production growth in the mining sector, in steel and aluminium. The increase in LNG production has driven a 7.3% increase in fugitive emissions over the year to September 2018.

Transport emissions also increased 2% over the year to September, with an 8.4% increase in diesel consumption, reflecting increased diesel passenger vehicle sales and more freight activity.

Ahead of Monday’s policy release, Shorten said “climate change is real, and it’s doing real damage to our environment and our economy”.

“Australians know the truth of this. Farmers understand that if we don’t act on climate change, there will be more frequent and more protracted droughts, floods, dust storms and hail storms,” he said.

“The Reserve Bank has warned climate change is a significant risk to our economy and communities on the Reef coast know that if we don’t act on climate change, it will be too late to save our greatest natural wonder.

“All Australians are aware that if we don’t act on climate change, we’re passing on a tougher problem and a worse environment to our children and grandchildren.

“For the sake of our economy, for the sake of our environment and for the sake of the country we want to hand on to the next generation, Labor has a clear plan to take real action on climate change.”

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