Clean car package to drive down emissions

The Government is taking action in line with the advice of the Climate Change Commission to increase the uptake of low emission vehicles by introducing a range of measures that will help meet New Zealand’s 2050 carbon neutral target and create jobs to support the economic recovery.

“Our transport emissions are the fastest growing source of greenhouse gas emissions in New Zealand so we need to start taking action now if we are going to meet our 2050 targets,” Transport Minister Michael Wood said.

“New Zealand is actually lagging behind on the uptake of EVs, so we are playing catch up internationally. Our monthly registrations of EVs are around half the global average and sales are well below the 50 per cent of monthly sales seen in some European countries.

“We’ve already committed to policies that will make a difference, like the Clean Car Import Standard, decarbonising the public transport bus fleet and revitalising rail, but we have to do more.

“A discount on electric, hybrid and low emission vehicles funded from a fee on higher emitting ones is the best policy to increase low emissions vehicle uptake in New Zealand.

“It’s a common policy overseas, a recommendation of both the Climate Commission and the Productivity Commission, and is supported by the likes of the Motor Industry Association – it’s time to get moving with it.

“The Clean Car Discount will make it cheaper for New Zealanders to buy electric and low emission cars. It will prevent up to 9.2 million tonnes of carbon dioxide emissions and will help with the upfront cost of switching over with Kiwis getting up to $8,625 back.

“We’ve made some changes to the policy proposed last term, so only cars under $80,000 and safer models are eligible for rebates. Rebates will begin from July 1 while fees on higher emitting vehicles to help fund the scheme won’t begin until 1 January 2022. The rebates will also expand from 1 January to include low emission vehicles, not just electric and plug-in hybrids.

“Importantly the policy only applies to new and used cars arriving in New Zealand, so the existing second hand market of cars that lower income families tend to purchase from will not be affected.

“We’ve also been doing the work to ensure Kiwis have the confidence to go electric, with electric vehicle chargers now available on average every 75km along most state highways. The Government has been investing directly into charging facilities through the Low Emission Transport Fund (formally the Low Emission Vehicles Contestable Fund).

“The Low Emission Transport Fund has already co-funded over 1,100 electric vehicle chargers nationwide, and as part of Budget 2021 we’re increasing our investment so total funding for the programme will reach up to $25 million per year by 2023/24. Other projects using low emission fuels like biofuels and hydrogen, will also now be eligible for funding.

“We’ll need to work with the sector to make sure vehicles are available and help us develop policies, which is why I intend to set up an electric vehicles sector leadership group in the coming weeks.

“Our proposed Sustainable Biofuels Mandate will help us reduce emissions from cars, trucks, ships and planes by 1.3 million tonnes until 2025 while zero emissions options are developed.

“It’ll also help us create jobs to support our economic recovery through encouraging a local industry,” Michael Wood said.

Minister of Climate Change, James Shaw said cutting emissions from transport is vital to addressing the climate crisis.

“Increasing the number of electric, hybrid and low-emission vehicles is a huge part of the work we are doing to build a low carbon Aotearoa in which people have clean, climate-friendly ways of getting around.

“In their final advice to Government, the Climate Change Commission said we need more low-carbon transport options that put our communities on the path to net-zero carbon emissions by 2050. However we recognise that with the additional cost, a low emissions vehicle can be out of the reach of many families. This is a particular challenge for those who rely on a car to get around.

“As technology develops and more manufacturers decide to stop making petrol and diesel cars, the cost of low emissions vehicles will come down. However at the moment they are still more expensive to buy. Today’s announcement helps to address that. It will ensure more families can enjoy the benefits of low emission vehicles and their lower maintenance and running costs.

“Reducing the cost of electric, hybrid and low-emission vehicles will also stimulate the second-hand market, so in the years to come even more people can access low carbon transport options.

“I would like to take the opportunity to acknowledge the work of my colleague Julie Anne Genter, whose work last term as Associate Transport Minister laid the foundations that got us here today,” James Shaw said.

Consultation on the Sustainable Biofuels Mandate is open until 5pm, 26 July 2021 and submissions can be made here.

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