AAP

Australian motorists could save around $600 a year at the petrol pump by driving a more fuel efficient car, federal Transport Minister Anthony Albanese says.

Mr Albanese highlighted the potential benefits to consumers and the nation when releasing a discussion paper on new mandatory carbon dioxide emissions standards which will apply to all passenger vehicles from 2015.

"This is an important part of the Gillard government's plan to make positive change in how we live, work and travel," Mr Albanese told reporters in Canberra on Tuesday.

He said motorists could make "considerable savings" at the bowser.

"Modelling suggests Australia could be saving around 1.1 billion litres of fuel worth $1.8 billion every year by 2024," Mr Albanese said.

"A typical motorist could save around $600 a year on fuel costs."

Increasing fuel efficiency in light vehicles is part of the government's commitment to cutting carbon emissions in Australia.

Labor proposes a five per cent cut in Australia's overall carbon pollution on 2000 levels by 2020.

The government plans to introduce a carbon tax from mid-2012 followed by an emission trading scheme three years later.

Mr Albanese said fuel was excluded from the carbon price regime to reduce the cost impact on families and small businesses.

"As light passenger vehicles account for half of Australia's transport emissions, we recognise that we need to find other effective measures to address the growing emissions from the transport sector," he said.

"Mandatory standards limiting CO2 emissions from vehicles are internationally recognised as one of the most cost effective means to reducing carbon emissions from the transport sector and are complementary to a carbon price."

The government has previously suggested cars should have to emit less than 190g of carbon dioxide per kilometre by 2015, and less than 155g/km by 2024.

But Tuesday's paper notes that's just a starting point for discussion.

The national automotive body supports the push.

Federal Chamber of Automotive Industries acting chief executive Steve Payne said new vehicles have become more efficient in the past eight years, with average carbon dioxide emissions falling by more than 15 per cent.

"Carbon dioxide emissions from new vehicles have reduced significantly without regulation and the industry now looks forward to working constructively with the federal government in developing a new standard," Mr Payne said in a statement on Tuesday.