New car industry pulls support for Clean Car Standard

Friday, 17 September 2021

Transport Minister Michael Wood speaks at the release of the Ministry of Transport’s green paper (first published May 14, 2021).

The Motor Industry Association (MIA), the industry body that speaks for local new car distributors, has withdrawn its support for the Government’s Clean Car Standard, after it “ignored well thought and considered advice from the industry.”

The Clean Car Standard will introduce fuel economy standards to reduce CO2 emissions from the national transport fleet. Currently, it includes setting a limit of 139 grams of carbon per kilometre travelled on the average emissions of new and used imported light vehicles in 2023. That would drop to 128g/km the following year and to 105g/km in 2025.

From 2025, if they imported new cars with average emissions of 171g/km, which was the average for all cars on the road last year, they would need to pay a penalty of $4950 per vehicle, for example. The penalty would be $2475 per vehicle in the same situation, if all their imports were second-hand.

The Motor Industry Association says the Government ‘has demonstrated an appalling lack of understanding’ when it comes to actually reducing the country’s transport emissions.

Transport Minister Michael Wood said in February this year that the Government isn’t expecting any significant income from the penalties because it expects the industry will “largely achieve” the 105g/km target.

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It also pays to mention that 2022, the first year of the Standard, will be an importer registration, education and familiarisation period only. Suppliers are not obliged to meet any targets until January 1, 2023.

However, the big problem with the CO2 emissions targets is that they are so steep that no current distributors aside from those like Tesla that only deal with battery-electric vehicles will be able to reach them in the time span required.

According to the MIA, in introducing the Land Transport (Clean Vehicle) Amendment Bill the Government “has demonstrated an appalling lack of understanding of how to effectively reduce emissions from the light vehicle fleet and will instead impose unwarranted and significant costs onto consumers.”

They are particularly harsh on light commercial vehicles, where there are few options for low-emission alternatives arriving before 2030.

New targets for 2026 and 2027 were introduced in the latest version of the Standard, which aim to up the reduction rate from 40 per cent from now until the end of 2025 to 43 per cent over 2026 and 2027.

No jurisdiction anywhere in the world requires this rate of reduction, says the MIA, which will see us get ahead of what Europe requires for that same time period.

These fees combined with penalties from the Clean Car Discount could see the price for light vehicles rise by as much as 20 per cent, and because the Standard is applied on a weighted basis, even small vehicles will be hurt.

Another new introduction to the Standard is a requirement for all vehicles manufactured after January 2022, whether new or used, to be tested by either the WLTP standard or the American EPA protocol. The MIA says the WLTP cycle is only required for Euro 6d emissions, which Australia and New Zealand have not yet adopted.

Currently, more than 90 per cent of vehicles entering the New Zealand market are complied for Euro 5, with a few qualifying for Euro 6b.

This means come January 2022, over 90 per cent of new light vehicles entering New Zealand will not be able to be tested using the WLTP testing protocol as these vehicles are homologated for the Australian market under Euro 5 or Euro 6b which uses the NEDC testing protocol.

The paper also states that our vehicle sources are Europe and Japan, who both already require WLTP testing, and isn’t entirely accurate. Most of the new vehicles here do come from those countries, but they are made for Australia regulations, which does not include WLTP.

“There is no obvious rationale, and it seems it is a revenue gathering exercise for New Zealand to have targets that are tougher than other jurisdictions like Europe. New Zealand new vehicle importers parent companies are already making their production plan out to 2030 and these will be based on what Europe, Asia and Australia need not what our government wants.”