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The Government is taking action in line with the advice of the Climate Change Commission to increase uptake of low emission vehicles by introducing a range of measures that will help meet New Zealand’s 2050 carbon neutral target.

The Land Transport (Clean Vehicles) Amendment Bill 2021 is one such measure, which is intended to achieve a rapid reduction in carbon dioxide emissions from light vehicles imported into New Zealand. Clause 4 of the bill introduces a new definition into the Land Transport Act 1998 (LTA), defining a Light Vehicle as a motor vehicle that has a gross vehicle mass of not more than 3,500kg.

Clause 5 of the bill inserts new sections 167A to 167C into the LTA. The proposed new section 167A provides regulations imposing fees and charges for the purposes of a Clean Vehicle Discount. The Clean Vehicle Discount is proposed to make electric and low emission light vehicles more affordable by offering a discount, in the form of a rebate, for eligible imported electric and low emission vehicles first registered in New Zealand from 1 July 2021 through to 31 March 2022. Petrol hybrids (hybrids whose motive power is not derived, wholly or partly, from electricity) do not currently qualify for a rebate.

Subject to legislation being passed, it is proposed that from 1 April 2022, fees and rebates will be applied according to the emission level of vehicles. Vehicles with a purchase price of $80,000 or more (including GST and on-road costs) and those with less than a 3-star safety rating (as published on the Rightcar website) will not be eligible for the rebate.

The fees for high emission vehicles were meant to come into effect from 1 January 2022, however this has been delayed until 1 April 2022 due to the current Delta outbreak. Buyers purchasing high carbon emission vehicles will pay a higher price in recognition of the increased environmental and economic costs they are imposing. The fee on new imported high emission vehicles could be up to $5,175, and $2,875 on used imports. This fee would then be used to subsidise discounts of up to $8,625 for people buying new electric or low emission vehicles, and up to $3,450 for people buying used electric or low emission vehicles.

The Bill has received some criticism from industries such as farming and building regarding a lack of suitable vehicles to replace current high emission vehicles such as utes. It was confirmed by Prime Minister Jacinda Ardern that the Government had considered an exemption due to the lag in technology for electric or low emission vehicles in those industries, however, this exemption was no longer in the pipeline due to the difficulties filtering out those who did not require a ute for work purposes.

The Bill was introduced in September and has passed its first reading. The Select Committee will report back in early February 2022 when the remaining stages of the Bill will be progressed.

If this article has raised questions for you, reach out for a chat to Julie Millar at julie.millar@gibsonsheat.com or 06 370 6478

Disclaimer: The information contained here is of a general nature and should be used as a guide only. Any reference to law is to New Zealand law and legislation. We recommend before acting on it, you consult your accountant or tax adviser