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Car importers welcome feebate scheme, wary on emission target

Tuesday 9th July 2019

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New car importers have welcomed government measures to reduce emissions from the transport fleet, but warn one of the initiatives - a proposed clean car standard - may not be as effective as hoped.

Motor Industry Association chief executive David Crawford says a clean car standard – which would require dealers to lower the average emissions of cars they bring into the country - implies that distributors have more influence on consumers’ choice of vehicle and the type of cars being made than is the case.

“While the government believes that we are not importing the best models, the reality is that new vehicle distributors simply supply what people buy,” Crawford said in a statement. 

“New Zealand is a tiny global market, and therefore this policy is unlikely to achieve the results that the government is seeking.”

Policies that will work, he said, are those which aim to influence the purchase decision.

By comparison, the government's proposed discount scheme for clean cars was "the most powerful policy available to this Government to influence car purchase decisions.”

“The proposed clean car discount scheme, where vehicles attract either a rebate or penalty at point of sale depending on their emissions, sends a very clear signal to consumers and will over time increase demand for lower emitting vehicles,” he said.

The government today released its long-awaited proposals for encouraging greater uptake of electric, hybrid and other lower-emitting vehicles as part of its efforts to curb emissions and improve the quality of the light transport fleet over time.

Transport emissions account for about 20 percent of the national total and are also the fastest-growing. The Interim Climate Change Committee, which has criticised the potential cost of the government’s 100 percent renewable electricity goal, has prioritised transport in its latest work on sectoral emission reduction efforts.

Associate Transport Minister Julie Anne Genter says the package the government is now consulting on has the potential to reduce emissions by more than five million tonnes of C02 by 2041.

Discounts on more efficient cars, ranging from $600 up to $8,000 for new electrics - could also deliver consumers average fuel savings of $5,200 over the life of the vehicle. Vehicles bought under the clean car standard could deliver average life-time fuel savings of $6,800 – or $3.4 billion nationally – officials estimate. They haven’t calculated a combined benefit across the two policies.

Mercury NZ and Meridian Energy, strong advocates of electric vehicles, were quick to commend the proposals, both for the tangible impact they can have to reduce household and national emissions, and also as a means for lowering transport costs.

“Shifting to electric and fuel-efficient vehicles is a smart economic decision,” Meridian chief executive Neal Barclay said. “Kiwis pay hundreds more at the pump each year than people in the EU simply because our cars are inefficient.”

The age of New Zealand’s car fleet, looser emission standards, and the number of higher-emitting utes and SUVs mean the average motorist spends 65 percent more on fuel here than in the European Union.

New Zealand added 648 EVs to the national fleet last month – the most ever – taking the national total to almost 14,900.

While uptake is still increasing, today’s discussion paper says the upfront purchase cost is still an obstacle and EV growth is unlikely to be fast enough to be consistent with the government’s 2050 net-zero emissions target.

“If we want a largely electric fleet by 2050, nearly all newly registered vehicles would need to be electric by the early 2030s. The Ministry of Transport projections suggest that only around 40 percent of vehicles entering New Zealand will be electric in 2030 without further government intervention or incentives,” according to the 44-page discussion document.

The government has proposed making importers lower the emissions of the new cars they are bringing into the country in order to improve the choices buyers have. More EVs imported would help an importer offset the emissions of other higher emitting vehicles like utes and SUVs.

The government has suggested an average target of 105 grams of C02 per kilometre across an importer’s fleet, to be phased in over five years by 2025. Stricter targets – modelled at 80 grams by 2030 and 59 grams by 2035 by the Ministry of Transport – would be set based on carbon budgets from the Climate Change Commission that will replace the interim committee.

Average emissions of new light vehicle imports last year were 180g CO2/km. The ministry says the 105 gram target is not as strict as those set for Europe or Canada, or currently applying in Japan. Australia recently investigated 105 grams as a target there.

The government has proposed the clean car discount should take effect after 2021 when the current road user charge exemption for electric vehicles expires.

The scheme would impose fees of up to $3,000 on purchases of the most polluting new vehicles – up to three years old - which would be used to fund discounts of up to $8,000 for purchases of cleaner vehicles. Discounts of up to $2,600, and fees of up to $1,500, would apply for older imports.

Under the worked examples provided, in 2021 a buyer of a new Land Cruiser may have to pay an extra $3,000. A buyer of a petrol Suzuki Swift, or a Lexus IS300 hybrid, could get a $2,800 discount, while a Hyundai Kona EV or an LDV E80 van could qualify for an $8,000 discount.

The ministry estimates that 59 percent of households buying new-to-the-fleet vehicles are likely to receive a discount or not incur a fee.

“Of the low income households that purchase a new to the fleet vehicle, more are expected to receive a discount than pay a fee. This is because a lower proportion of their vehicle purchases are of high-emitting vehicles.

“All households will ultimately have the ability to avoid paying a fee by selecting a low emitting vehicle model.”

The government is receiving submissions on its proposals until Aug. 20


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