Modernised energy ratings will appear on all new cars from October, the federal government has announced.
The ratings will show fuel consumption of a new vehicle in city and country driving, along with its rate of greenhouse emission.
"The new label is about helping motorists make informed choices about the environmental impact of their new car and the cost of running their vehicle on the family budget," Transport Minister Anthony Albanese said in a statement.
"While the numbers on a fuel consumption label do not replicate all driving conditions, additional information on the new fuel consumption label will help consumers to better understand the fuel consumption of vehicles under different traffic conditions."
Mr Albanese will sign off on the new labelling system next week and it will be mandatory on new model cars from October.
The announcement came as the nation’s peak motoring body, the Australian Automobile Association (AAA), announced a string of climate change initiatives.
Association executive director Mike Harris announced a nationwide audit of all motoring clubs in a bid to lower the emissions of the five million emergency calls responded to annually by organisations like the NRMA and RACQ.
The AAA will also convene an international summit in June to study how to further reduce the dangerous gases emitted by cars.
"We will encourage sustainable motoring," Mr Harris said at the joint government-AAA launch.
But he promised there would be no attempt to demonise motorists.
"The AAA clubs are acutely aware of the importance of the car to people from all walks of life."