The Government's plan to slap a fee on the import of gas-guzzling cars to pay for a subsidy on greener vehicles does not go far enough, activists say.

But those in the industry say the up to $3000 fee strikes the right balance and would help make New Zealand's overall vehicle fleet greener in the long-term.

This morning, the Government announced its plans to offer discounts of up to $8000 for low-emissions vehicles being imported to the country.

These subsidies would be paid for by charging a fee, of up to $3000, on vehicles with higher emissions.

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Associate Transport Minister Julie Anne Genter said the plan would get more Kiwis into cleaner vehicles by reducing some of the cost burden.

Although welcoming the policy, saying it was a "good first step", Greenpeace energy campaigner Amanda Larsson said the $3000 fee on high emission vehicles was disappointing.

Instead, she said the Government should look to the French model, where their Government has a €6000 (roughly $10,000) fee on higher emission vehicles.

She said the policy would only be effective if the fee was set at "ambitious levels".

"That's why we are questioning where the $3000 cap is ambitious enough."

Larsson also called on the Government to set a timeline for banning the sale of new petrol and diesel vehicles.

But Toyota chief executive Alistair Davis thinks the up to $3000 fee "strikes the right balance".

He does, however, say the $3000 fee was fairly modest compared with similar schemes in other countries.

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Davis told the Herald the policy was sending a good signal to car companies that they need to bring in more fuel-efficient vehicles to New Zealand.

"[The policy] is going to progressively change the shape of New Zealand's car fleet towards something that's more akin to keeping us in step with the world trends on low carbon vehicles."

Auckland Action Against Poverty spokesman Ricardo Menéndez said the Government also needs to introduce more public transport subsidies to ensure people on low incomes have as many options possible.

The Energy Efficiency and Conservation Authority (EECA) – a Government department focused on improving New Zealand's levels of energy efficiency – said the policy could be a major step in transitioning New Zealand into a low-carbon economy.

"Transitioning to a low-emissions fleet requires a step change in the types of vehicles people are buying and the proposals would be the first major step for reducing our transport emissions."

Although he said the policy won't change the fleet overnight, it would help push New Zealand in the right direction.

"All low-emission vehicle imports turn over quite quickly in the market through second-hand sales and that's how you start the transformation."