What the climate change policy shifts mean for Australia's future

Challenges ahead for reaching emissions reduction targets.

Australians are buying fewer plug-in hybrid electric vehicles (PHEVs) following the removal of the fringe benefits tax (FBT) exemption for these models at the end of March. Plug-in hybrids represented 2.9 per cent of sales in April, down from 4.7 per cent of sales year to date to March 2025.

Federal Chamber of Automotive Industries (FCAI) chief executive Tony Weber noted that the figures highlight the impact of government policy decisions on consumer behaviour in the automotive market.

“The earlier inclusion of PHEVs in the FBT exemption played a critical role in making these vehicles accessible to more Australians. Removing that support has led to an immediate and disappointing drop in demand in a price-sensitive vehicle market.”

FCAI members reported battery EV sales made up 5.9 per cent of the market in April. This modest result reinforces the scale of the challenge ahead as Australia seeks to meet its emissions reduction goals under the New Vehicle Efficiency Standard (NVES). “For NVES to succeed, it must be supported by holistic policy settings that assist consumers to move to zero and low-emission technologies, including continued investment in recharging infrastructure,” said Weber.

The latest Director Sentiment Index from the AICD reveals that only 17 per cent rank climate as a top immediate issue for the government, with economic pressure and regulatory burden front of mind for directors.

The AICD Climate Governance Forum will be held on 8 August 2025 at the Melbourne Convention and Exhibition Centre.

Need for rules reduction

Easing the regulatory burden on listed companies could open new ways to boost public listings. Regulatory accumulation is a potential reason for the waning attractiveness of public markets.

Member engagement indicates it is also contributing to the decline in the number of well-qualified directors seeking roles on listed boards, according to the AICD’s submission in response to the ASIC discussion paper, Australia’s evolving capital markets: A discussion paper on the dynamics between public and private markets.

The submission suggests the heightened risk of shareholder class actions and an increasingly complex stakeholder environment are also inhibiting the growth of public markets. The AICD welcomes ASIC’s proposal to refine the listing pathway and advocates for additional measures to help ease the regulatory burden on listed companies, including:

• Expanding the regulatory initiatives grid economy-wide
• Reinstating a CAMAC- (Corporations and Markets Advisory Committee) type body to support government policymaking in relation to corporate law and corporate governance
• Undertaking a substantive review of the Corporations Act 2001 (Cth).

“While we agree close examination of shifting market dynamics is important, we have yet to see compelling evidence for broader private market regulatory intervention,” the submission stated.

This article first appeared under the headline 'Update' in the June 2025 issue of Company Director magazine.