- Clean Car fines slashed by 80% and frozen until the end of 2027.
- $264m in charges will no longer be passed on to consumers, says Government.
- Full review of the scheme next year, to be finished by July.
The Government has slashed Clean Car Importer Standard fines and frozen them for two years, in the face of growing deficits in the local car industry that it acknowledges were likely to push the price of new and used cars up significantly.
The Clean Car Standard (later Clean Car Importer Standard) was introduced in 2023, requiring the automotive industry to meet annually decreasing emissions targets; importers could accrue credits for being under, but face substantial fines for being over.
It has long been criticised by the New Zealand car industry for being virtually impossible to meet, especially with the dramatic slowdown in electric vehicle sales. Now, despite a revamp to bring it closer to the newer Australian clean-car scheme last year, it seems the Government agrees.
Charges have been cut by nearly 80%, from the top new-vehicle rate of $67.50 per gram, to just $15, or from $33.75 for used cars to $7.50. The rates will stand for 2026 and 2027, with a full review coming next year. Existing credits will also remain valid until the end of 2028.
“At a time when Kiwis are still feeling the pinch, the last thing they need is the cost of cars going up by hundreds, or even thousands, of dollars – but unless the Government acts urgently to fix the Clean Car Standard, that’s exactly what could happen,” says Transport Minister Chris Bishop.
Minister Bishop says 86% of importers are currently facing a net charge under the Standard: "The scheme is so out-of-whack with reality that even some hybrid vehicles will attract charges rather than credits.
“In total, it is estimated that the changes will avoid $264 million in net charges that could have been passed onto consumers through higher vehicle prices."
Unsurprisingly, the Motor Industry Association (MIA) - the organisation that represents the new-vehicle industry in NZ - has given the change its stamp of approval.
"Importers cannot earn credits when customers are not buying the vehicles that create them, forcing many into costly credit purchases or penalties," says the MIA.
"At $67.50 per gram of carbon dioxide, industry forecasts show compliance costs are likely to total around $125 million in 2025, rising to around $153m. None of this funding goes to Government or to emissions reduction initiatives. It circulates between companies and is ultimately transferred offshore."
“This became a costly compliance market rather than a policy that reduced emissions,” says MIA chief executive Aimee Wiley. “Importers unable to earn enough credits have been drained financially, putting vehicle prices at risk and limiting the ability to invest in the technologies that genuinely lower emissions.
The MIA says that the Standard is calculated on around one in every five new light passenger vehicles being electric, but actual sales this year are closer to one in 10. From 2026, the target was tightening again to around one in every four vehicles being electric.
"Consumers have continued to shift strongly toward hybrid technology since the Clean Car Discount ended," says the MIA.
"In terms of emissions reduction, hybrids sit between traditional petrol and diesel vehicles and zero-emission models. They offer certainty, fuel savings and practical benefits, which is why they have become the dominant choice in the market. However, the Clean Vehicle Standard is designed to drive a rapid shift toward zero and very low emissions.
"Regulation cannot force consumers to buy a vehicle they do not want or cannot afford."