Local motor industry responds to new emissions rules

Thursday, 28 January 2021

The Government today announced new key policy decisions to reduce New Zealand’s carbon emissions generated by the transport industry.

These include promising to pass a law implementing its long-planned Clean Car Import Standard this year, as part of a suite of climate change measures. It is also hinting that something like the “feebate” proposal could return, as it is considering some kind of incentive to get Kiwis into cleaner vehicles.

Vehicle suppliers will have different targets to meet, and will only have to ensure that the average efficiency of the cars imported in any given year meet the standard. This means higher emission vehicles will still be allowed to be imported, but will have to be offset by cleaner vehicles.

The average light vehicle in New Zealand currently has CO2 emissions of around 171g/km. It is aiming to get that down for new vehicles to 105g/km by 2025, a standard met by Japan in 2014 and Europe in 2020.

Prime Minister Jacinda Ardern also announced that the Government would eventually mandate a lower-emitting biofuel blend across the industry and recommitted the Government to only allowing local councils to buy electric buses from 2025.

There is widespread support for the proposals in the motoring industry, though the 2025 date for reducing annual carbon emissions may be too aggressive.

* Transport Ministry says 'ambitious' Clean Car Standard needed

* NZ risks being dumping ground for 'dirty diesels', carmaker warns

* 'Feebates' set to come in under another name as roadblock cleared for cap on average car emissions

The Motor Industry Association’s CEO, David Crawford, said the MIA welcomes the Government’s commitment to introduce incentives and that it supports well-thought-out and constructive policies to reduce CO2 emissions in the light vehicle fleet.

“However, while we believe the fuel economy standard is necessary, the speed at which we must reach the average target of 105 grams of CO2 per km is the most aggressive and severe in the world. No other country has ever had to face a 40% rate of reduction in five years that we now must meet.

New Zealand is one of a handful of countries to increase gross greenhouse gas emissions since 1990.

“We urge the Government to amend the target date to 2030.

“Contrary to the views of Government, the 2025 target date does not allow time for model development, vehicle sourcing arrangements and does not recognise that for many distributors in New Zealand their model choice is tied to the Australian market. With no similar policy required in Australia, our market, which represents just 0.018% of new vehicle production in any one year, is too small for manufactures to develop models just for us.

“We also urge the rules to be the same for both new and used imported vehicles. Giving used imported vehicles softer penalties will lead to an increase in older, less safe vehicles entering New Zealand.”

The New Zealand Automobile Association (AA) also supported the government’s targets, but likewise expressed concerns over the tight timeframe, with AA spokesperson Mark Stockdale calling the proposed emissions target for 2025 an “aspirational target that may not be achievable.”

“We understand the intentions behind it and our Members want to see more low-emissions vehicles available here but the risk is that this target could simply result in higher prices for new cars that still don’t meet the emissions standard,” Stockdale said.

“That could even result in people holding onto their older, higher emissions car for longer.”

Stockdale said that the AA was disappointed that the revised emissions targets developed by an industry working group in conjunction with the Ministry of Transport have not been adopted.

“This proposed the same target, but for 2028, which would give the car industry enough time to source vehicles for the New Zealand market.

Models like Toyota’s Yaris family, which can be had in hybrid form, will do well to help the manufacturer reduce its overall emissions.

“As it is the proposed targets are the most stringent of any country in the world, and the timeframe is just too short.”

While the AA welcomed the potential biofuel mandate as a way to reduce the emissions of the current New Zealand fleet, the organisation was concerned that the $420 million per year collected from an 8 cents per litre fuel levy to offset transport emissions through the ETS wasn’t actually being targetted at reducing emissions, something the AA thinks should happen.

“Within a few years, that fund will rise to $800m a year, and this money must be used to help establish a viable second-generation biofuels industry, and to fund other initiatives to reduce transport emissions and incentivise the uptake of low-emissions vehicles,” Stockdale said.

The CEO of Toyota New Zealand, Neeraj Lala, said the Clean Car Import Standard is an “encouraging move from the Government.”

Lala supported the MIA’s stance that the 2025 deadline was too aggressive, saying that to get to105g per km by 2025 “is certainly a tough ask,” but said that the company was “prepared to work in partnership with the Government to achieve a transition to a low carbon vehicle fleet.”

Toyota New Zealand has its own target to reduce tailpipe emissions to 152g CO2/km and 178g CO2/km for Toyota and Lexus respectively by 2030. It has already achieved the Lexus target (currently 151.4g CO 2 /km).

Toyota and the MIA have been working for several months on a lower-emitting vehicle standard.

Drive Electric, the not-for-profit organisation that promotes electric vehicle use in New Zealand, also weighed in, saying the standards being proposed have already been met overseas and “must be achievable here.”

“That said, such a standard is really just a first step towards managing a transition away from fossil fuel vehicles and towards no emissions vehicles,” said Mark Gilbert, Chair of Drive Electric.

“To meet New Zealand’s legislated climate ambitions, to keep warming within 1.5 degrees celsius, our analysis shows we need to aim for at least 250,000 EVs on the roads by 2025, and for this trend to continue through to 2030.

“… We should look at announcing a date by which we end the importation of fossil fuel vehicles into New Zealand, entirely. This has been done in many other markets around the world, including the United Kingdom.

“To support such ambition, we need a joint plan between the Government and industry to ensure we have the right package of policy settings, the necessary investment in charging infrastructure, and coordination among all the players through the EV ecosystem - from the grids, to electricity retailers, to car importers, Councils and property developers.

“Policies that need to be considered include incentives, adjustments to fringe benefit taxes and depreciation, and investment to ensure we are ready for more at-home charging and public charging.”