EV drivers take a bow: Emissions are falling and the government says you’re largely responsible
Australia’s transport emissions have fallen for the second consecutive year outside of the COVID period, with the Federal Government pointing to growing EV uptake and cleaner energy generation as key drivers behind the decline.
New quarterly emissions data released by Climate Change and Energy Minister Chris Bowen shows Australia’s greenhouse gas emissions fell by 9.7 million tonnes over the year to December 2025, a 2.1 per cent reduction compared to the previous year.
According to the latest Quarterly Update of Australia’s National Greenhouse Gas Inventory, transport emissions dropped by 0.6 per cent over the same period, while electricity sector emissions fell by 3.8 per cent as renewable energy and battery storage continued to displace coal and gas generation.
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The Government said the latest figures marked the second consecutive annual decline in transport emissions outside of the pandemic period, suggesting Australia’s transport emissions may have peaked as more motorists switch to lower-emissions vehicles.
“EVs have grown from less than four per cent of new light vehicle sales in 2022 to more than 20 per cent in the first four months of 2026,” Bowen said.
“Our New Vehicle Efficiency Standard (NVES) is making sure Australians get more choice of efficient vehicles that save money at the bowser and cut emissions.”
The report also highlighted the growing role of battery storage in the National Electricity Market (NEM), with battery discharge almost tripling in 2025 compared with 2024. The increase helped reduce gas-powered generation during evening demand peaks by 30 per cent and contributed to the lowest quarterly gas generation level seen since 2000.
The Government said NEM emissions are now 32 per cent below 2005 levels, with the grid recording its cleanest result on record at 0.44 tonnes of emissions per megawatt hour.
Overall, Australia’s emissions are estimated to be 24.5 per cent below 2005 levels, while emissions from facilities covered by the Safeguard Mechanism fell 5.5 per cent over the year and are now more than 12 per cent lower than when the scheme’s reforms began.
Responding to the figures, the National Automotive Leasing and Salary Packaging Association (NALSPA) said the decline in transport emissions showed the Electric Car Discount, which provides a fringe benefit tax reduction for EVs purchased via novated lease, was delivering on its intended purpose.
“The Government’s data shows transport emissions are falling as more Australians reach for the electric charger instead of the fuel bowser by switching to EVs. The Electric Car Discount is helping make that transition possible,” NALSPA chief executive Rohan Martin said.
He said the fringe benefits tax exemption had helped put EVs within reach of more Australians and argued the latest emissions figures were further evidence that the policy was working as intended.
