Transport Minister Michael Wood tried to water down emissions, citing lack of green utes

Transport Minister Michael Wood sought to water down a transport emissions target. Photo / Dean Purcell

Transport Minister Michael Wood tried to water down the Government's vehicle emissions targets because of concerns there would be a "potential lack of availability of zero and low emitting utes".

Wood drew up a Cabinet paper to amend the Government's clean car legislation and loosen its vehicle emissions targets, but it appears this advice was overruled, and the policy remained the same as when it was initially introduced.

National said the fact Wood tried to soften the Government's own targets is an acknowledgement they are unworkable.

In December 2020 Wood unveiled a "clean car programme", including a clean car discount (better known as a "feebate") and a "clean car standard", which set targets on vehicle emissions for importers to meet.

The standard works by forcing importers to target an average emissions level for vehicle importers.

Importers can import highly polluting vehicles, but they have to offset the impact of these imports by importing low emissions vehicles too. Each year, the average emissions level would drop, meaning each year, importers would have to import, on average, cleaner cars.

Critics in the motor industry warned supply of clean vehicles might make the targets unachievable, with Wood saying the industry raised "concerns about the ability of vehicle importers to achieve the CO2 reduction targets that the Bill proposed to legislate in years 2025, 2026, and 2027" - adding that the 2026 and 2027 targets were thought to be particularly unachievable.

In December last year, Wood drew up a paper seeking "Cabinet's decision on whether to relax the 2026 targets and to set the 2027 target by regulation at a later time". This would have been an amendment to the bill which had been introduced and proceeded to select committee with its original targets.

The paper has been released to the Herald under the Official Information Act.

Wood told the Herald he "took a range of options to Cabinet, and all would achieve the goal of progressively lowering the CO2 emissions of vehicles entering New Zealand to 105 grams CO2 /km by 2025.

Wood proposed a softer emissions reduction. Photo / MoT

"Our progress against this target will be monitored as part of the 2024 review, in line with our election commitment," he said.

In the paper, Wood said the change would "seek to strike a balance between calls from many in the vehicle industry to ease these targets so they can achieve them with less difficulty, against the Government's, and of many other submitters, priority to rapidly decarbonise transport".

He said relaxing the target would "acknowledge the increased uncertainty, relative to earlier this year, about the availability of supply of low emissions commercial vehicles, including utes, and ongoing disruption in the supply chain and availability of key vehicle components".

Wood noted that New Zealand's average vehicle emissions "are among the highest in the world, and as a consequence, the rate of improvement New Zealand needs to achieve will be much faster than other automotive markets, such as Japan, Europe, and North America".

Wood believed the 2023 to 2025 targets were achievable. Even Toyota, the largest vehicle distributor (by volume), supported the 2025 target. It was only the later targets which might be difficult.

Wood warned this would likely be because of the "potential lack of availability of zero and low-emitting utes".

"Ute vehicles make up a significant proportion of vehicle sales today however there is presently no electric (zero emission) or hybrid (low emission) ute for sale in New Zealand, despite earlier industry indications that these would be available locally by now," Wood wrote.

The Motor Industry Association suggested there "will be at least 10 models of electric or hybrid utes by 2025 … but uncertainties over volume and vehicle capability remain".

National's transport spokesman Simeon Brown said that this showed Wood "clearly admitted that there are no alternatives in place for our farmers and tradies who require utes to do their jobs".

"Yet the Government has decided to forge ahead with taxing these vehicles regardless."

"The Minister seems to understand this significant problem with the Government's Car Tax policy, but the Cabinet overruled him, leaving our Farmers and Tradies to bear the brunt of another tax during a cost of living crisis," Brown said.

The Greens, however, were happy Cabinet stuck to its guns.

Transport spokesman Ricardo Menéndez March said "reducing emissions from our light fleet is critical, alongside the transformative work to enable a mode shift by better investing in electrified freight, free fares and improved public transport infrastructure".

The Government's EV policies are encouraging uptake. Photo / MOT

"The Green Party will always push in Government, and in Parliament, for the transformative change we need, so it's not going to surprise anyone to learn that we're pleased Cabinet did not soften the target," March said.

Both the clean car discount and clean car standard were first proposed by former Associate Transport Minister Julie Anne Genter.

Wood said that in the last decade "utes have doubled from 6 per cent of newly imported vehicle sales in 2010 to 13 per cent in 2021". Wood said the Bill would "place pressures on the vehicle market that will likely cause some reversal of this growth trend".

He said it would "encourage the substitution of high emission utes with lower-emission vans and 4WD SUVs", but to meet the CO2 targets, the Government would still rely on electric utes being shipped into the market.

Wood's proposed alternative targets were based on the European Union's vehicle emissions targets.

Cabinet, however, stuck to the initial target and the bill passed its third reading in February.