The New Zealand vehicle industry has pointed to that country’s scheme as a warning to Australia on how to manage the shift to electric vehicles,because of the community backlash against the penalties levied on some cars to fund the discounts on cleaner vehicles.
The Australian standard would be applied to a carmaker’s entire fleet.Supplied
“The challenge on the standard is to work really closely and listen to the industry and the sector,and to set a standard that is challenging but actually achievable,” New Zealand Automobile Association policy chief Simon Douglas said.
New Zealand Motor Trades Association chief executive Lee Marshall backed those warnings by saying electrical vehicle technology had not developed as quickly as some government officials appeared to assume when the fuel standards began in January last year.
The warnings come as Energy Minister Chris Bowen considers Australian industry feedback on Labor’s plan to apply tougher fuel emission standards from January 1 to cut emissions from new vehicles by 61 per cent over five years.
Bowen said last week that the policy would proceed despite complaints from Opposition Leader Peter Dutton,but he added that the government believed in “careful collaboration with industry” to finalise the plan.
Bloomberg
The government objective is to require 141 grams of carbon dioxide per kilometre from passenger vehicles and 199 grams from utes and vans next year,across all new vehicles sold. The targets would fall each year to reach 58 and 91 by 2030. This would be a 61 per cent fall in carbon intensity for passenger vehicles over five years.
The policy would not apply to existing cars and would not be a tax;it would not raise revenue for the government. The Australian standard would be applied to a carmaker’s entire fleet,so a company might gain credits for cleaner vehicles in its range and could sell those credits to a carmaker with utes and SUVs that produce greater carbon emissions.
The Labor plan has won support from climate groups but has sparked concerns from the Australian Automobile Association,the Motor Trades Association of Australia and the Federal Chamber of Automotive Industries about the speed of the transition.
Douglas,the New Zealand Automobile Association policy chief,said the experience in New Zealand showed that fuel standards had to balance ambition with practicality.
“The industry does not oppose the clean-car standard,because we very quickly realised that if we didn’t have one in place,we would become a bit of a dumping ground for all the manufacturers of dirty cars,” he said. “Where we ended up,however,was that the rate of introduction and the charges that were levied were impossible to meet.
“They were setting standards that were higher than some of the European and Japanese standards,which are the markets from which we source our cars.”
In a sign of the global challenge with the shift to cleaner vehicles,US President Joe Biden is expected to announce revised fuel standards this week after objections from carmakers and unions to his original plan to cut emissions.
The New Zealand government has launched a review of its fuel standards and is tipped to relax the targets because of the complaints about the scale of the cuts.
A separate New Zealand policy,known as the Clean Car Discount,ended on December 31 after the National Party campaigned against it at the country’s election last year because it imposed a price increase on some petrol and diesel models in order to pay for a discount on electric vehicles.
New Zealand Prime Minister Christopher Luxon took the Nationals to power last November with a campaign that branded the Clean Car Discount a “ute tax” due to levies of up to $NZ5175 ($4800) on cars with internal combustion engines.
The Australian government is not replicating the Clean Car Discount,but it is planning to legislate lower vehicle emissions using a similar structure to the New Zealand standards.
Marshall said the New Zealand Motor Trade Association believed the country’s emission standards were too complicated and probably punished carmakers with a limited range of small cars with internal combustion engines.
“Certainly from 2026 onwards,the standards get incredibly challenging to achieve,” he said.
“I think the technology has not moved as fast as people thought it would three years ago,so the standards need to be adjusted.”
Dutton has claimed that the cost of a large SUV could rise by $25,000 under the Labor plan,but the final targets have not been decided and the source of the estimate,the Federal Chamber of Automotive Industries,has been criticised by former members such as Tesla and Polestar over the reliability of its claims.
Asked if New Zealand car prices had risen under the fuel standards,Douglas and Marshall said it was difficult to say because of the way the Clean Car Discount changed prices before it was scrapped.
“The big picture is we don’t know what the true market looks like,because of these interventions,” said Douglas. “We’re all waiting to see what the market establishes as the norm.”
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