Clean car standard aired, 2025 deadline

Government’s push to reduce exhaust emissions is met with mixed feeling.

 RESPONSE from within the motor industry about the ramifications of Government plans to move on its election promises to clean up transport emissions has been swift.

The Motor Industry Association, which represents the interests of new vehicle importers, light vehicle market leader Toyota New Zealand, the Automobile Association – which styles itself as the voice of New Zealand motorists – and Drive Electric, a pressure group pushing for more EVs, have all spoken up since Government today announced the first tranche of measures that it said would help New Zealand's 2050 carbon neutral target.

Already car distributors are arguing that a deadline of 2025 for a clean air emissions standard of just 105 grams per kilometre is too much, too soon. It wants the deadline to be extended to 2030, which is more in line with many other countries.

As is, the ruling could almost certainly make the sale of large capacity, fuel-hungry cars uncompetitive and might also be a hefty challenge to the ongoing availability of one-tonne utilities, a favoured vehicle type, in their current formats as these traditionally operate with diesel engines whose emissions are universally above 200g/km.

Among reported initiatives are something like the "feebate" scheme proposed last year, with Government saying it is considering an incentive to switch to clean cars.

Prime Minister Jacinda Ardern said with transport making up the country's second-highest amount of emissions after agriculture it was "important we reduce emissions from our vehicle fleet", according to a report from Radio New Zealand news.

The report also cited Transport Minister Michael Wood as saying the government had agreed in principle to mandate a lower-emitting biofuel blend across the transport sector.

It has also outlined its plan to only purchase zero emissions public transport buses from 2025, and a $50 million commitment to help councils fully decarbonise the public transport bus fleet by 2035.

Legislation will also be passed this year to introduce a Clean Car Import Standard. 

"The standard will begin next year, with the 105 grams of CO2/km 2025 target being phased in through annual targets that get progressively lower to give importers time to adjust.”

It is understood the terms of this will mean that vehicles with emissions that exceed this will be subject to penalty, likely a tariff, that would likely make those vehicles more expensive to buy.

Those below the line escape this, but do not appear to earn credits, as has occurred in some countries, where similar systems are enacted. Credits are used to encourage transfer to cleaner vehicles, notable those with mains-replenished (as opposed to hybrid) electric drivetrains acting to assist a fossil fuelled engine or completely drive a vehicle.

Car industry data relating to average exhaust emissions by brand suggest just Tesla, for obvious reason, is below the standard proposed by Government. Even Suzuki, which specialises in vehicles with modest capacity engines delivering strong economy, has a fleet-wide CO2 average of 130g/km. 

"The Import Standard will prevent up to 3 million tonnes of emissions by 2040, mean more climate-friendly cars are available, and will give families average lifetime fuel savings of nearly $7000 per vehicle," Mr Wood said.

He said the government was also considering options for an incentive scheme "to help Kiwis make the switch to clean cars", saying that there would be further announcements in the coming months.

The Government proposed a "feebate" scheme last term, but New Zealand First pulled the handbrake on this, following intense backlash from the National Party.

Climate Change Minister James Shaw said these measures were a "good first step", but there would need to be "many more steps taken after this one".

Ms Ardern said the government would finalise its first three carbon budgets later this year, following advice and recommendations from the independent Climate Change Commission.

The MIA’s chief executive, David Crawford, reminded his organisation has long supported “well thought out and constructive policies that will lead to an increased rate in the reduction of CO2 emissions from the light vehicle fleet..” 

In respect to today’s announcement, he said: “We welcome the Government’s commitment to introduce incentives and await more details on how these will work.

“However, while we believe the fuel economy standard is necessary, the speed at which we must reach the average target of 105g/km is the most aggressive and severe in the world. No other country has ever had to face a 40 percent rate of reduction in five years that we now must meet.”

The industry will urge the Government to extend the target date to 2030, a sentiment also expressed by Toyota NZ chief executive Neeraj Lala, who called the target “a tough ask.”

TNZ and luxury affiliate Lexus had a target to reduce tailpipe emissions to 152g CO2/km and 178g CO2/km respectively by 2030. Toyota’s hybrid car sales increased from 1636 in 2017 to 12,210 in 2020 and more hybrid and plug-in hybrid models will be launched this year. The makes’ first electric car, the Lexus UX 300e, is set to launch this year.

Mr Crawford said the 2025 target date “does not allow time for model development, vehicle sourcing arrangements and does not recognise that for many distributors in New Zealand their model choice is tied to the Australian market.

“With no similar policy required in Australia, our market, which represents just 0.018 percent of new vehicle production in any one year, is too small for manufactures to develop models just for us.”

The MIA also wants the rules to be the same for both new and used imported vehicles. The policy at present allows softer penalties for the latter. Mr Crawford believes this “will lead to an increase in older, less safe vehicles entering New Zealand.” 

The AA has also expressed many of the same concerns.

“The proposed emissions target for 2025 is an aspirational target that may not be achievable,” says spokesman Mark Stockdale.  

“We understand the intentions behind it and our members want to see more low-emissions vehicles available here.

“But the risk is that this target could simply result in higher prices for new cars that still don’t meet the emissions standard. That could even result in people holding onto their older, higher emissions car for longer.”

The biofuels mandate appeals. “The emissions standards focus on the approximately 300,000 vehicles entering the fleet every year, but we also need to reduce the emissions from the existing fleet of some 4.6 million vehicles. Biofuels are one way to do that.”

The AA says it supports a feebate which would complement an emissions standard. “Other countries have both an emissions standard and a feebate scheme, and their experience shows that both work to reduce emissions from new vehicles entering the fleet.”

The AA also wants a broader fleet strategy developed by the government and motor industry to devise an action plan to reduce transport emissions and also improve the safety of the fleet.

DriveElectric chair Mark Gilbert says standards proposed for 2025 have already been met in other comparable markets, like the European Union and Japan “and must be achievable here."

“The standard is a useful tool in that it asks importers to look at the portfolio of vehicles they are importing, which should increase low emissions choice across a range of vehicle types and price points. With more EVs coming into New Zealand, this also increases the second-hand market over time. 

“That said, such a standard is really just a first step towards managing a transition away from fossil fuel vehicles and towards no emissions vehicles.”

The organisation believes that to meet New Zealand’s legislated climate ambition, which is to keep global warming within 1.5 degrees Celsius, “our analysis shows we need to aim for at least 250,000 EVs on the roads by 2025, and for this trend to continue through to 2030.”

It argues Government needs to look to announcing a date by which NZ ends the importation of fossil fuel vehicles entirely.

“To support such ambition, we need a joint plan between the Government and industry to ensure we have the right package of policy settings, the necessary investment in charging infrastructure, and coordination among all the players through the EV ecosystem - from the grids, to electricity retailers, to car importers, councils and property developers.

“Policies that need to be considered include incentives, adjustments to fringe benefit taxes and depreciation, and investment to ensure we are ready for more at-home charging and public charging.”

More electrics and fast, pressure group says

Temptation to buy into used fossil fuelled stock rather than electric vehicles will threaten environmental ambitions, an EV support agency says.

mark gilbert, of Drive Electric.

 AN electric car advocacy organisation that has had the Government’s ear has be driven to offer thought on policies relevant to this subject announced by two major political parties.

Mark Gilbert, who chairs Drive Electric, a not-for-profit established purely to promote the uptake of EVs in New Zealand, was speaking today in direct response to policy statements released by Labour and National this week.

Drive Electric has indicated it can see positives from each party’s policies. However, it also seems to think both are aiming too low.

National said today it would set a target of getting 80,000 EVs on the road by 2023. That target represents a fourfold increase on the number of EVs currently in the national fleet.

Gilbert however, says Drive Electric believes national intent to achieve legislated climate ambitions demands the national EV carpark to exceed more than 250,000 vehicles by 2025.

According, he says, what the country really needs “is an ambitious bipartisan roadmap to decarbonise the light fleet in line with the Zero Carbon Act, detailed in a New Zealand Motor Industry Plan.

“In New Zealand the light fleet constitutes more than 90 percent of the travel on New Zealand roads, and remains a growing component of our nation’s emissions. We can’t leave a transition to chance.”

The former managing director of BMW New Zealand says this country is an eager taker of automotive technology. But it could easily head in the ‘wrong’ direction.

“The future of light vehicles worldwide is carbon-free. Unless we have a consistent policy roadmap that deliberately moves New Zealand towards EVs, we will lock in the importation of second-hand fossil fuel powered cars from markets like Japan and the UK as they decarbonise. 

“We congratulate the National party for their policy announcement today, including specifying a target of 80,000 EVs on the roads by 2023. Hitting these numbers would mean progress. The proposal on FBT (fringe benefit tax), in particular, is a real step forward.

“NZTA data for 2019 shows that almost 60 percent of new passenger cars were bought by companies. Incentivising the corporate fleet to transition, through initiatives like this and access to bus lanes and high occupancy lanes, is a vital way to introduce EVs into the country.”

Drive Electric would like the next Government to go a step further and work with the industry to detail how New Zealand will then get to 250,000 EVs by 2025, and then move to decarbonise the entire fleet.

“We welcome Labour’s recommitment to the Clean Car Standard. However, this is just one element of a roadmap towards a light vehicle fleet that does not emit carbon.”

Gilbert says a standard needs to be supported by additional measures to enable businesses and consumers to move into emissions-free vehicles.

“Perversely, without actively encouraging consumers to switch to EVs through tax or other incentives, a clean car standard makes it more likely New Zealanders will buy cheap, second hand petrol cars exported from Japan or the UK, instead of EVs.”

This, he suggests, will lock in the number of petrol cars on New Zealand roads for longer, making it more difficult to meet our climate change ambitions.

“For New Zealanders, it’s fair that New Zealanders understand the future must be electric, so they can take this into consideration when they buy their next car.

“The abundance of renewable energy in New Zealand means the owner of an EV in New Zealand can charge their vehicle at home for as low as 30 cents a litre.”

Drive Electric recently announced five key policy platforms it suggests are required to decarbonise the fleet. That document can be found at: https://driveelectric.org.nz/wp-content/uploads/2020/08/DE-policy-discussion.pdf

New grand plan: 250,000 EVs by 2025

The country’s major electric vehicle supporter has unveiled a new raft of proposals.

NEW Zealand’s grand plan to have 64,000 electric vehicles on the roads by 2021 is proving a failure – so now the sector has hatched an ambitious new plan to have at least 250,000 of the vehicles on our roads by 2025.

Drive Electric, the organisation that wants to make EV ownership mainstream, has announced a new campaign involving five key policy platforms it wants the next Government to adopt to meet that target.

It’s a tough ask, if the poor results of the Government’s Electric Vehicles Programme announced four years ago are any indication.

That plan involved a package of measures with a target of doubling the number of EVs in New Zealand every year to reach 64,000 cars by next year. But the target has nowhere near been reached - by mid-year this year the total had reached just 20,916 – with more than 13,000 of those registrations used cars imported from overseas.

But Drive Electric argues that if New Zealand is going to meet climate change targets set by the Zero Carbon Act, it will need to see at least 250,000 new EVs on the roads by 2025, and for this trend to continue through to 2030. And that number should not include hybrids, it adds, because those non plug-in vehicles are still powered by fossil fuels.

In an interview with MotoringNZ, Drive Electric chair Mark Gilbert, pictured, criticised New Zealand’s lack of action regarding the takeup of EVs.

“Dear old New Zealand seems to be stuck in a time warp,” he said. “But nothing’s going to change if nothing changes. That’s why we are putting this proposal out there – to point out that you’ve got to actually do stuff to make thing happen.

Drive Electric points out that New Zealand must reduce emissions by around 60 per cent by 2030 to stay within 1.5C of warming, which is the target contained in the Zero Carbon Act.

Road transport is the second-largest source of emissions in New Zealand. Our light vehicle fleet constitutes more than 90 per cent of the travel on New Zealand roads. Therefore, e-mobility is an essential part of our transport future.

Gilbert adds that for the desired level of EV ownership to be achieved, New Zealand needs a bi-partisan target and pathway that will create certainty and guide investment in e-mobility.

“It is fair to New Zealanders to be upfront about the changes that are happening when it comes to cars, which for many if their first or second-biggest asset.

“With emissions targets that need to be met, and automotive technology shifting towards emissions-free, the time is now to plan for a future New Zealand that embraces e-mobility.”

Drive Electric proposes five key actions for the next Government.

It wants development of a bi-partisan pathway for the transport sector to deliver New Zealand’s climate change objectives. This should feature clear targets and a well-defined transition pathway which engages industry and has bi-partisan support. This would create investment certainty for future governments, transport agencies, businesses and individuals.

It wants businesses to be encouraged to purchase EVs for their fleets. Such vehicles are yet to reach price parity with new petrol and diesel vehicles, and corporates may need additional encouragement to invest in them in the short term. Policy initiatives such as changing fringe benefit tax to enable private use of corporate EVs, or increasing the rate of depreciation of such cars, would incentivise their uptake. Other tax and purchase incentives could be explored, based on international experience in markets such as Sweden.

It wants the Government to take leadership in EV use. Currently, less than 1 per cent of the government fleet of 16,000 vehicles are EVs, and yet the New Zealand Government Procurement body has a goal to have the government’s fleet emissions-free by 2025. The Government could take a leadership position by executing on this position and moving the entire fleet to electric.

It wants New Zealand made a globally attractive market for EVs. Without a clear target and pathway to transition, the country risks being overlooked by international car manufacturers as a market for new technology, competitive pricing and ranges in EVs. Worse, without clear government guidance on EV targets and emissions standards, we risk becoming a dumping ground for cheap petrol/diesel and hybrid vehicles from UK and Japan as they move to EVs.

It wants New Zealanders to be encouraged to move to EVs. Setting a bi-partisan target and transition pathway would create future certainty for motorists to consider EVs, especially as the cost of ownership reaches parity.

A discussion document produced by Drive Electric in support of its new campaign says transforming New Zealand’s fleet to EVs would have positive impacts beyond reducing emissions.

The country would be less reliant on foreign oil, which would reduce the balance of payments. Air pollution would reduce. Over time, families would save money on fuel and operating costs, particularly as the total cost of ownership of EVs is set to reach parity with petrol and diesel vehicles before 2025.

“Finally, New Zealand is an ideal market for electrification, because our electricity is renewable,” says the document.

Drive Electric is a not-for-profit organisation with a membership that represents the entire e-mobility ecosystem including electricity companies, car manufacturers, and finance companies. The five key policy platforms were devised by these members, supported by external experts including investment consultant Dr Paul Winton, economist Shamubeel Eaqub, and sustainability consultant James Walker.

Dr Winton, the founder of climate action group the 1Point5 Project, says reaching 250,000 EVs in the national fleet by 2025 is a challenging but realistic target for New Zealand.

“If we were to achieve EV adoption rates similar to what Norway has today for new-to-fleet vehicles by 2025, this would result in 250,000 EV in the light fleet. If we continued at that rate, our light fleet would comprise 30-40 per cent electric or zero emissions vehicles by 2030.

Dr Winton claims New Zealand’s transition would be easier than when Norway began 10 years ago, because EVs are becoming less expensive and more capable.

“By 2025 there will be no clear reason for consumers or businesses not to buy EVs. To buy a petrol or diesel vehicle in 2025 would be to buy a car that is more expensive at the outset, more expensive to run and repair, has a shorter lifespan, performs worse, and with higher emissions.”