Government to slash emissions charge for imported vehicles

Monday, 17 November 2025

The Government is dropping the cost of bringing higher-emitting vehicles into the country, in an overhaul of the clean car standards.

Carbon dioxide charges for new and used imported vehicles would be slashed as the scheme, aimed at incentivising the importation of lower CO2 emitting vehicles, had become “out-of-whack” amid a shortage of cleaner emitting used vehicles, and reduced demand for new EVs, Transport Minister Chris Bishop said on Monday.

Bishop announced the change alongside Prime Minister Christopher Luxon at the regular press conference after a Cabinet meeting.

The clean car standard charges will be temporarily cut from a top rate of $67.50 to $15 per gram of CO₂ for new vehicles, and from a top rate of $33.75 to $7.50 for used vehicles, for 2026 and 2027.

No credits earned by importers would expire before December 31, 2028.

A full review of the scheme would also be completed by June 2026.

Bishop said this would avoid $264 million in charges that could have been passed on to car buyers.

“The standard has helped lift fuel efficiency, but market conditions have changed.

“Most importers are now unable to meet the passenger-vehicle targets. In fact, 86% of importers are facing a net charge rather than net savings from credits. The scheme is utimately pretty out-of-whack with reality.

“Some hybrid vehicles, not all, but some hybrid vehicles actually attract charges rather than credits.

“So ultimately, for Kiwis … it means that these import charges are almost certain to be passed along to consumers … we are determined to avoid that situation.”

The clean car standard scheme came into effect in January 2023, and sought to incentivise the importation of lower-emission vehicles by applying a charge to vehicles which had a CO2 emission to weight ratios above a set target.

Importers would also receive credits for vehicles that had CO2 emissions to weight ratios below the target.

Separate to the clean car standards scheme, the prior Labour Government ran the a clear car discount scheme, which sought to increase the uptake on EVs by providing a subsidy for purchasers.

Bishop said the Government maintained its “fundamental philosophical objection” to this policy, but a drop in demand was for reasons more complicated than the removal of this subsidy -- such as retailers pumping discounted cars into the market.

The Government had also, in July 2024, reduced the emissions targets within the clean car standards to match the Australian standard, then-Transport Minister Simeon Brown arguing the emissions targets within the scheme were “too stringent and increasingly difficult for importers to meet”.

Bishop, on Monday, said the advice at the time was that these changes would work, however this had not transpired.

This latest round of changes were “a pragmatic, short-term step that is fully supported by the motor vehicle industry, and both used and new”, he said.

Labour Party leader Chris Hipkins said the Government was trying to clean up its mess, and it was “ironic” the ministers said there were not enough EVs.

“They collapsed the importation of electric vehicles when they cancelled the clean car discount.

“Ultimately, the Government haven't come up with any kind of credible plan to reduce our overall emissions, and so [the] New Zealand taxpayer is going to end up paying more to subsidise pollution, to subsidise more emissions.”

Green Party transport spokesperson Julie Anne Genter said the changes showed the Government was “so deeply in the pocket of industry”.

“National promised to retain the Clean Car Standard, but their changes will render it utterly futile.”