Government weakens carbon-emissions targets for imported cars

Tuesday, 9 July 2024

The Government is relaxing emissions targets for 2026 and 2027, arguing the targets set by the former government weren’t realistic and would have pushed up car prices.

The Government is weakening emissions-reduction targets for new and used imported cars.

Transport Minister Simeon Brown said the targets would be relaxed to align with targets that will apply in Australia.

But an electric-car industry body said the penalties for missing the targets would be higher in Australia than here, so the revised New Zealand regime would be weaker than Australia’s.

The changes announced by Brown mean importers will be able to import cars that emit more emissions than previously envisaged in 2026 and 2027 without facing financial penalties.

Targets for commercial vehicles have also been relaxed from the start of next year.

Brown said the Transport Ministry had forecast importers would not have been able to meet the original targets set by the former government, and would have instead needed to pay about $800 million in 2027 in penalties.

That could have pushed up the cost of buying a new car that year by about $5549 per vehicle, he said.

“If we don’t change the path we are on, we will simply pile costs onto consumers while also failing to make emissions reductions,” he said.

The Government will now let importers bring in cars with average emissions of 108 grams of carbon dioxide per-kilometre travelled in 2026 and 103g/km in 2027 without facing a penalty.

Simeon Brown’s statement that NZ’s targets would have been the most stringent in the world have been disputed by Chinese EV maker BYD.

That is down from the 133.9g/km target that applies this year, but a weakening of the previous targets for 2026 and 2027, which were set by the Labour government at 84.5g/km and 63.3g/km respectively.

Brown said the new targets aligned with those that will take effect in Australia.

But Drive Electric spokesperson Kirsten Corson noted the fines for exceeding the targets in New Zealand were currently less than half those that will be imposed in Australia, saying that made the New Zealand regime more permissive.

Australian importers will pay A$100 (NZ$110) for each g/km a car exceeds its emissions targets, whereas the equivalent penalties in New Zealand are $45 per g/km for new cars and $22.50 per g/km for used cars.

Corson said she was seeking clarification from the Government on whether it intended to align the size of the penalties, as well as the emissions targets themselves with Australia.

If that didn’t happen, New Zealand would have a “weak standard that the automotive sector wouldn’t take seriously”, she said.

The Government faced criticism ahead of Tuesday’s announcement over the extent of the consultation it conducted over the new settings.

A Transport Ministry spokesperson said in May that it consulted with the Motor Industry Association, the Vehicle Importers Association, the Motor Trade Association and the AA before providing advice to Brown.

All are understood to have voiced strong doubts about the viability of the original emissions-reduction targets.

But the Transport Ministry didn’t open up its review to public submissions and did not consult with Drive Electric, which represents the EV industry.

Warren Wilmot, New Zealand country manager for Chinese EV manufacturer BYD, said China had more stringent emissions-reduction targets than had been originally set by the former government in New Zealand.

He said BYD had not had an opportunity to speak with Brown before he made his decision, which he described as disappointing.

“I would say there's been a lot of lobbying done by Japanese and American brands. They've probably been saying to the Government, ‘look, there aren't the cars, these targets are too tough’.”

But BYD had no constraints on the number of EVs it could supply New Zealand, he said.

If the Government wanted to meet its obligations under the Paris Agreement to reduce emissions, the easiest way to do that was to clean up the vehicle fleet, Wilmot said.

Labour transport spokesperson Tangi Utekere said the change to the standards showed the Government was not serious about being ambitious addressing climate change.

“We have got global ambitions to reduce our footprint, and the only way we are going to do that is by having targets that are aspirational.”

At the same time as weakening the emissions standards for 2026 and 2027, Brown set the first targets for 2028 and 2029 at 76g/km and 65g/km respectively.

Corson said the targets for those years would “need to be aggressive”, given the prospect of the country having to pay billions of dollars for overseas carbon offsets to meet its overall emissions-reduction pledges.

“Every car that's going on the road today is going to be on our roads for 20 years, so these policies are really important,” she said.

Kathryn Trounson, chairperson of the Better New Zealand Trust, which lists the Energy Efficiency and Conservation Authority, lines company Unison and Interislander among its supporters, said the target change was “the latest in a series of policies from Simeon Brown that will mean more gas guzzlers on the roads”.

The Clean Car Standard was the one policy left that was effective in driving down vehicle emissions, she said.

“First he scrapped the Clean Car Discount, then he put a higher road tax on EVs than on hybrids and some petrol cars and now he's gutting the emissions standards,” she said.

“Before this government started its anti-EV policies, New Zealand was at the forefront of clean transport, now we're at the back of the pack. Under this government, average emissions of new vehicle imports are up 32% and EV sales are down 81%.”