New development in New Zealand's Clean Vehicle Standard: departure from weight-based method, introduction of credit flexibility

The New Zealand Government, led by current Transport Minister Chris Bishop, is proposing changes to the Clean Vehicle Standard in a bid to reduce costs for consumers buying cars and support the importation of more fuel-efficient and cheaper vehicles for Kiwis.

These changes are part of the "Land Transport (Clean Vehicle Standard) Amendment Bill (No 2)". The first reading of the bill took place this month.

The proposed modifications follow a previous relaxation of the Clean Vehicle Standard in 2024, when it was brought into line with Australian regulations. The changes aim to address the weight adjustment, which was intended to be used in conjunction with the Clean Car Discount, but is no longer in place.

The weight adjustment was originally designed to account for the popularity of heavy, high-emitting vehicles. However, it was seen as unfair to small, fuel-efficient vehicles, particularly those manufactured by companies specialising in low emissions and improved fuel efficiency.

Under the proposed changes, the Clean Vehicle Standard will remove the weight adjustment from its formula. This adjustment allowed importers to earn credits based on the weight of the vehicles they imported. The changes will now allow importers to trade these used-vehicle credits for new ones.

This flexibility is important given importers have little control over market factors such as supply and demand conditions. The changes will give importers more flexibility in complying with the Clean Vehicle Standard targets.

To offset a charge on a new vehicle, importers will need two credits earned on used vehicles. This means that smaller, more fuel-efficient vehicles are likely to benefit from the proposed changes, as they tend to generate more credits per vehicle.

The relationship between vehicle weight and emissions is breaking down due to the increasing number of hybrids and electric vehicles in the market. As a result, the CO2 targets for the Clean Vehicle Standard will be set without the current weight-adjustment formula.

The changes are aimed at reducing costs for consumers buying cars, making it easier for Kiwis to access more affordable, fuel-efficient vehicles. The specific manufacturers that are expected to benefit from these changes were not named in the provided search results. However, it is clear that these changes are a step towards a cleaner, more cost-effective future for New Zealand's automotive industry.

New development in New Zealand's Clean Vehicle Standard: departure from weight-based method, introduction of credit flexibility