Canberra to ban new petrol cars from 2035

Fossil fuel cars will soon become a thing of the past in Australia's capital. Photo / 123RF

Motorists will be banned from purchasing new "fossil fuel" vehicles in Australia's capital from 2035.

In an Australian first, Canberra will become the first jurisdiction to mandate that all new cars must be electric.

But other states are expected to follow in coming years.

Minister for Emissions Reduction Shane Rattenbury said the new rules will apply to new cars, motorcycles and small trucks.

"Our intent is that from 2035, you will not be able to put new (cars) on the road," he said.

"But the government does not intend to take your car off the road if you're driving around in an all-petrol vehicle at the start of the year."

But there's an even earlier target that the ACT wants to hit by 2030.

By that time, it wants 80 to 90 per cent of new light vehicles sold to be zero-emission models.

Interest-free loans of up to A$15,000 are already on offer to buy electric cars in the ACT which has a higher take-up rate than other states.

If you're buying a Zero Emission Vehicle (ZEV) for the first time, you may not have to pay stamp duty.

If you buy a ZEV, new or used, you'll get two years' free ACT vehicle registration.

Eligible households can access up to A$15,000 to buy an electric vehicle under the Sustainable Household Scheme zero interest loans.

Rattenbury said while all of the details had not yet been finalised the ACT government wanted to send motorists a clear signal.

"We're trying to signal where we are going very early so that people have a clear understanding of where the future lies," Rattenbury said.

Overseas, the UK government has already announced plans to ban the sale of new petrol and diesel vehicles from 2030.

The European Union has also prepared draft legislation to ban the sale of new fossil fuel cars by the year 2035.

Singapore won't allow new diesel-powered car and taxi registrations from 2025.

Prime Minister Anthony Albanese has stopped short of announcing a ban on fossil fuel cars but is offering incentives to go electric.

Electric cars will be exempt from Australia's five per cent import tariff that will reduce the cost of a A$40,000 vehicle by A$2000.

They will also be exempt from fringe benefits tax which will encourage workplaces to give their employees electric cars.

The move will result in savings of up to A$8700 for a A$50,000 vehicle.