Changes to Clean Car Discount raises fees for high-emitting vehicles

Transport Minister Michael Wood has today announced sweeping changes to the Clean Car Discount scheme that aim to drive down emissions further than previously estimated, raising fees for high-emitting vehicles in the process.

The changes come as uptake of low emissions vehicles has exceeded both the New Zealand Government’s projections as well as the industry’s, having granted over 100,000 rebates since the policy was introduced in 2021.

That’s a figure that the Government didn’t expect to reach until 2027 and because of this, it wants to push those numbers higher.

Wood also said we have one of the fastest uptakes of electric vehicles in the world, thanks to the Clean Car Discount scheme, with 20 per cent of all new cars being EVs in 2022, up from eight per cent in 2021.

The new changes to the programme will see emissions be reduced by 50 per cent more than the Government originally estimated by 2035 and 230 per cent more by 2025.

With that, New Zealand is forecast to save the importation of 1.4 billion litres of petrol, meaning the economy will save an average of $325 million a year on fuel based on current prices.

New and used imports will now have to emit less than 100g of CO2 per km compared to the current 146g to receive a rebate, while the threshold for fees has been reduced from 192g of CO2 per km to 150g.

There will also be increases to fees paid by higher-emitting vehicles.

“To fund the changes to make it easier for New Zealanders to purchase cleaner imports, we’re adjusting charges on high emissions vehicles. This includes vehicles like utes which are amongst the highest emitting vehicles within our fleet,” says Wood.

Other adjustments to the scheme to “maintain momentum” include more focus on fuel efficient vehicles, an increase in rebates for zero emissions used imports from $3450 to $3507, and an adjustment to eligible vehicles to promote EV uptake.

A special rebate for new and used low emission disability vehicles will also be introduced.

Topping it all off will be an increase of $100 million for the Clean Car Discount’s repayable Crown grant in Budget 2023.

“The Clean Car Discount is doing what we set out to achieve, which is reduce transport emissions and provide transport options to New Zealanders that will lower household costs is the long term,” says Wood.

The changes will take effect on 1 July 2023.