Under the Australian Government's Australian Design Rules, vehicle manufacturers need to measure noxious emissions standards in a laboratory test, and have laboratory-based fuel consumption information displayed on a "Fuel Consumption Label" wherever you fill up.
But since there is no way for anyone to know how these lab results translate in the real world, the Australian Automobile Association (AAA) commissioned a study of 30 vehicles to work it out - and preliminary results are showing a big difference.
So much so, researchers are saying laboratory testing may be irrelevant, consumers are being misled about vehicle emissions and planned national emissions reduction regulations "may be based on flawed assumptions".
To complete the real-wold element of the testing, engineering firm ABMARC is analysing the emissions of cars in Melbourne using portable, lab-standard equipment.
Results so far are showing emissions of noxious gasses up to four times the regulatory limits, while greenhouse gas emissions and fuel consumption was up to 35 per cent higher than figures shown on the relevant Government-mandated Fuel Consumption Label, and 20 per cent higher on average.
Full results are due by mid-2017, but results from the first 10 vehicles have already been released for both the work of the Ministerial Forum on Vehicle Emissions, and the ACCC's market study into the new car retailing industry.
"These results suggest that as emissions regulations around the world become more stringent, auto manufacturers are producing vehicles that limit emissions in the laboratory, but not necessarily in the real world," AAA Chief Executive Michael Bradley said.
"Proponents of stricter regulations say higher vehicle and fuel costs passed on to motorists will over time be offset by fuel savings, but our results undermine such assurances as savings accrued only in a laboratory are of little use to consumers in the real world".
Bradley says with the Government actively considering stricter standards for Australia's vehicle and fuel sectors, it's "critical" that real-world testing is introduced, "to ensure motorists aren't asked to pay more for regulation that fails to deliver environmental benefit".
The AAA pointed out that the European Union is currently transitioning away from relying solely on laboratory testing to improve the effectiveness of its emissions regulatory model, and is openly encouraging the Australian Government to follow suit.