New Clean Vehicle Standard Updates Promise More Affordable and Fuel-Efficient Cars for Kiwis

The Government is updating the Clean Vehicle Standard to give vehicle importers greater flexibility in how they meet annual CO2 targets and ensure that Kiwis can access more fuel-efficient cars that cost less at the pump, Transport Minister Chris Bishop announced today.

The Government supports the Clean Vehicle Standard to ensure that New Zealand has an affordable mix of clean vehicles. This works by imposing charges on importers who bring in too many high-emission vehicles, while awarding credits to those who import more low-emission vehicles.

When importers don’t meet the targets, they’re more likely to pass on costs to Kiwi consumers. When importers do meet the targets, there’s no need to pass on the charges. We are making it more flexible for car importers to achieve their targets so less costs are passed onto Kiwis buying cars.

The Government will allow credits to be transferred between used vehicle importers and new vehicle importers. To reflect the greater fuel saving potential of new vehicles over their lifetime, importers will need two credits earned on used vehicles to offset a charge on a new vehicle.

We are also extending the lifespan of credits from three years to four. To allow importers to respond to the market they will be able to offset their charges from one year by supplying and selling more low emission vehicles the following year if  conditions improve.

Finally, we are enabling CO2 targets to be set that are not adjusted by vehicle weight. The relationship between vehicle weight and emissions is breaking down. It used to be that heavier cars would often have higher emissions but as more hybrids and EVs have entered the market that is no longer the default assumption. A weight-based approach was only designed to be temporary.

These improvements to the Standard will give importers more flexibility in how and when they comply with the targets. Flexibility is critical given importers have little control over market factors such as supply and demand conditions.

Overall, the improvements will support importers to bring in vehicles that are more fuel efficient and cheaper for Kiwis to run.

The changes are being made through the Land Transport (Clean Vehicle Standard) Amendment Bill (No 2), which passed its first reading today.