Feebates vanish but Labour still has the more ambitious policy on car emissions
Friday, 11 September 2020
ANALYSIS: Labour has expunged the Government’s previous plan to introduce “feebates” to encourage people to switch to EVs and other low emission vehicles from its energy policy.
The feebate scheme would place a levy of up to $3000 on thirsty gas guzzlers and pass on the money raised in the form of subsidies of up to $8000 to buyers of EVs and other very fuel-efficient cars.
But Labour campaign manager Hayden Munro explained the feebate scheme had not been a Labour Party policy.
Rather it sprung from the Greens.
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National Party leader Judith Collins seized on the development announcing its policy on EVs on Friday, saying Labour had “failed to deliver a single new policy to increase EV uptake”.
“Their abandoned car tax actually slowed EV sales and, if implemented, would have punished those who could least afford it,” she said.
National unveiled its own policy to boost EV uptake, which includes setting a target for a third of the Government’s light vehicle fleet to be electric by 2023 and allowing EVs to use bus lanes and high-occupancy lanes.
EVs would be exempted from fringe benefit tax until 2025 and from road user charges until at least 2023.
Collins had warm words for EVs saying their benefits were extensive and described them as “critical to decarbonising the transport sector”.
So has National overtaken Labour on greening our transport fleet as we enter the home straight to election day?
Well, no.
Labour has retained its commitment to the Clean Car Standard in its election policy, which was always designed to be the cake under which the icing of the feebate policy would sit.
The Clean Car Standard would require vehicle importers reduce the average emissions of cars they import from about 180 grams of carbon dioxide per-kilometre-travelled last year to 105g/km by 2025.
Targets after 2025 would be set by future governments.
Importers that didn't meet the emissions target would pay a financial penalty.
The Clean Car Standard would effectively set the “cap” on emissions, while the feebate scheme was for the most part just a way of shaping the demand for cars to fit the requirement imposed by that cap.
The Treasury estimated that if the feebate scheme was in place for six years, it would save 1.6 million tonnes of carbon emissions over 20 years.
But it estimated that the Clean Car Standard would cut emissions by 5.1 million tonnes over the same periods, illustrating which was the most important of the two policies.
Some experts have argued that the 105g cap set in the Clean Car Standard is too weak.
Swedish EV policy expert Jakob Lagercrantz noted Europe would have a tougher target of 95g from 2021 and has questioned why New Zealand wouldn’t set the same goal.
But no-one seems to doubt it would radically reshape the car market.
Motor Trade Association strategy manager Greig Epps has even questioned whether the 105g target might be 'too far, too fast'.
Collins’ barb that the current Government did little to advance EVs is objectively true, however.
As is her point that by dangling feebates in front of car buyers for so long and then failing to deliver them, the Government would have discouraged the purchase of EVs.
Some car buyers will have stalled on purchasing EVs while they waited for the subsidies that never came, and the hiatus will have encouraged some buyers of gas guzzlers to bring forward their purchases.
Now it seems those subsidies and surcharges may never come.
But the targets set by the Clean Car Standard would still need to be reflected in pricing that favoured low-emission vehicles, including EVs, through “cross-subsidies” – so that’s not as big a deal as it sounds.