Imports: Government weakens emissions standards for cars, aligning NZ with Australia

Transport Minister Simeon Brown said the changes would save motorists money. Photo / Mark Mitchell

The Government is watering down emissions standards for vehicles imported into the country, aligning New Zealand’s targets with those in Australia.

Transport Minister Simeon Brown said the changes would save motorists money, as penalties under the existing standard would have cost vehicle importers $800.6 million in 2027 - a cost that would have been partly passed on to consumers.

But Green Party transport spokeswoman Julie Anne Genter, who put up the first version of the standard as Associate Transport Minister in 2019, said the Government was cleaning up a mess that it created when it axed the clean car discount subsidies for EVs and hybrids.

The last Government had two key policies for greening New Zealand’s vehicle fleet: the clean car discount, which paid out subsidies for clean EVs and hybrids paid for by levying fees on polluting cars, and the clean car standard, which encouraged importers to bring cleaner vehicles into the country by setting an average emissions standard.

Importers could come in below that standard by importing EVs and hybrids, or they could come in above by importing more polluting cars. If the importer imported, on average, vehicles that polluted above the standard, they would have to pay a fee.

The coalition campaigned on scrapping the clean car discount, which it dubbed a “ute tax”, but said they would keep the standard, albeit in altered form.

On Tuesday, Brown revealed changes to the standard, which he said would align the scheme with Australia’s. For passenger vehicles the 2027 standard will move from 63.3g CO2 per km to 103g CO2/km. For commercial vehicles it will go from 87.2g CO2/km to 175g CO2/km in 2027.

Brown was concerned about the cost the standard would pass on to consumers.

“Advice provided to me by the Ministry of Transport found that under current targets set by the former Government, CCS penalties are forecast to amount to approximately $800.6m of cost to consumers purchasing a new car in 2027 which is around $5549 per vehicle,” he said.

Brown appointed a review of the scheme earlier this year. He said that review “found that the standard’s current targets are too stringent and are increasingly difficult for importers to meet, as they are out of step with manufacturing standards from leading vehicle manufacturers”.

“In fact, the review found that the commercial targets for 2026 and 2027 are more stringent than every other country in the world. If we don’t change the path we are on, we will simply pile costs onto consumers while also failing to make emissions reductions. New Zealand won’t have access to the low emission vehicles needed to meet the strict standard as manufacturers are not in a position to introduce them to our market,” he said.

However, Genter said the Government has created its own problem by scrapping the clean car discount, which created an incentive for people to buy EVs and hybrids. She argued the popularity of low-emissions cars under the scheme would have meant the cost to importers would have been much lower. Now the scheme has been scrapped, far fewer “clean” cars are being imported, increasing the penalty faced by importers.

Kathryn Trounson chairwoman of the EV consumer group Better New Zealand Trust, said that EV sales had fallen 81% under the new Government, while the average emissions of new vehicle imports had increased 32%.

“The clean car standard was the one policy left that was effective in driving down vehicle emissions. Weakening it will set us back years,” she said.

“A weaker clean car standard will mean, fewer fuel efficient vehicles on the road, leading to higher petrol bills Kiwi families and billions more in oil import costs for New Zealand for decades to come,” she said.

But others have complained the standard is only adding to a difficult time for vehicle retailers.

Last month, Motor Industry Association (MIA) head Aimee Wiley described the situation as “even more daunting than the peak of the Global Financial Crisis”.

“The clean car standard is also biting hard right now,” she said.

“Getting the product mix offering right is crucial and that includes timing, availability, and an ample supply of clean car standard CO2 credits to offset any penalties triggered by the sudden shift in consumer demand,” Wiley said.

“Such layers of complexity are further dividing the winners and losers. Unfortunately, not everybody can win.

Labour’s transport spokesman Tangi Utikere told the Herald the changes were “pretty disappointing” in light of the decision to also scrap the clean car discount.

Utikere said the changes appear to have been rushed, given legislation to enable the changed standards was only passed under urgency a fortnight ago, and the emissions standards had to be consulted on.

“It sounds as though [the changes] were already in the pipeline so to speak,” Utikere said.

“That would be very concerning we need to be ambitious we need to be serious about reducing our emissions. Watering down these targets is not showing that ambition or that seriousness about taking responsibility,” he said.

Thomas Coughlan is deputy political editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the Press Gallery since 2018.