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Clean Car Import Standard

Overview of the Clean Car Import Standard:

On 28th January this year the Government announced plans to implement the Clean Car Import Standard (CCS). The standard aims to lower New Zealand’s carbon emissions by balancing the high and low emission vehicles being imported into New Zealand.

Vehicles that are imported that do not meet the CO2 emission standard will face financial penalties that can be offset by importing cleaner cars (electric vehicles, hybrids, or low-emission models). This is one of a series of actions planned by the Government so New Zealand can move towards achieving its climate change goals.

Why:

The goal for the standard is to reduce vehicle CO2 emission pollution by introducing a CO2 emissions standard for imported new and used light vehicles. The average vehicle in New Zealand currently has CO2 emissions of around 171 grams per kilometre (g/km). The CCS goal is to reduce per vehicle CO2 emissions to an average of 105g/km by 2025. This level of emissions has already been achieved by Japan in 2014 (although the Japanese fleet is very different from the NZ fleet, especially in having a large proportion of small engine vehicles) and Europe has been progressing towards this target over the last 20 years or more. The Government hopes that the CCS will “prevent up to 3 million tonnes of CO2 emissions by 2040, mean more climate-friendly cars are available, and will give families average lifetime fuel savings of nearly $7,000 per vehicle.”

What does this mean for you?

The Government is hoping this will mean more electric cars will be brought into the market (both new and used), making EVs more available in New Zealand. They want you to think about a more fuel-efficient vehicle for your next car purchase.

Smaller light passenger vehicles and hybrids are very fuel efficient, so the benefit of purchasing a lower CO2 emitting vehicle is that you will spend less money on fuel.

MTA considers the government policy will likely result in an increase in price in the vehicles that do not meet the 105g standard. In the short term, due to low supply of EVs globally, the cost of cleaner vehicles may also rise. The Government has signalled that it is considering providing purchase incentives (e.g. feebate idea) to help buyers over this price hurdle.

What does this mean for car dealers?

The standard will come into effect in January 2022. In that year, dealers will need to record and report the emissions profile of vehicles they import. Penalties and credits will start being imposed in 2023. The Government says this time should give importers enough time to adjust to these new regulations and plan their vehicle mix.

This means that each car supplier must report the amount of CO2 that every vehicle produces. Vehicles with high CO2 emissions will be incur penalties, but this cost can be reduced through credits received for importing of low emission vehicles. The challenge for importers will rest on their ability to bring in a ‘balanced’ mix of vehicles to minimise end of year penalty obligations.

MTA’s comment:

MTA supports actions to address the problems facing us through climate change. However, we want to ensure that a proper effort is made to understand the real-world impact of the aspirational goals set by the Government and the Climate Change Commission.

With the CCS, we are worried that the global supply of low emission and electric vehicles will not be able to deliver to New Zealand enough vehicles to meet the targets being set. As with any market, when supply is reduced the price of a good goes up. EVs are currently a premium item and will be highly sought after other countries also seeking to meet climate change targets. The average car owner will need assistance and incentives to purchase a cleaner, newer, safer vehicle.

We also worry that the Government has not properly considered how to encourage the removal from the fleet of the older, less safe, less clean vehicles that we don’t want anymore.

We look forward to engaging with the Government on how to realistically deliver on these goals – through a manageable timeframe and robust incentives to both bring in and get rid of vehicles from the fleet.