Government to retain Labour's clean car standard for imported high-emissions vehicles

The New Zealand government has decided to maintain the Clean Car Standard despite earlier discussions about potentially abolishing it. The policy, originally introduced by the previous administration, imposes fees on importers for high-emission vehicles. This decision comes after a comprehensive review process that considered eliminating the standard entirely, which would have placed New Zealand among only two OECD nations, Russia, without such regulations. The Clean Car Standard operates by charging importers a fee based on the amount their vehicles exceed the targeted emissions levels. Importers can mitigate these costs by importing lower-emission vehicles, which earn them credits. In November last year, Transport Minister Chris Bishop reduced the penalty by approximately 80%, citing supply challenges that limited importers' ability to acquire sufficient low-emission vehicles. This adjustment aimed to prevent additional costs for consumers while easing pressures on the import sector. Bishop initiated a full review of the standard earlier this year, which explored the possibility of removing it altogether. Such a move would have left New Zealand without a vehicle emissions regulation, making it unique in the Organisation for Economic Co-operation and Development (OECD). Advocates for cleaner transportation expressed concerns that relaxing or removing the standards might lead to the influx of higher-emission vehicles, particularly those deemed unsuitable for markets like Australia, which recently implemented its own emissions limits. Data from Australia’s initial implementation showed a reduction in tailpipe emissions and demonstrated that most importers could comply with the new standards. Bishop emphasized that the recent reduction in penalties was crucial in maintaining affordability for consumers and reducing strain on the import sector. However, the review concluded that the Clean Car Standard remains the most effective method for increasing the availability of lower-emission vehicles within New Zealand. Industry representatives largely endorsed keeping the standard in some form. They highlighted that the policy has become well-established, with importers having accumulated both credits and charges over time. Removing the standard at this point would cause significant disruption to the vehicle industry, according to industry feedback gathered during the review. Moving forward, the government will focus on refining the settings of the Clean Car Standard to ensure they are practical and attainable for the automotive sector. Bishop mentioned that different emission targets will be applied specifically to used vehicle imports, acknowledging the distinct technological characteristics of these vehicles. Officials are expected to provide updated guidelines early in 2027, with new targets and settings coming into effect from 1 January 2028. Until then, the existing standards will remain in place. These include a charge of $15 per gram of tailpipe emissions over the limit for new vehicles and $7.50 per gram for used vehicles. The government has confirmed that these current rates will continue until the revised framework is implemented.