‘Sensible circuit-breaker’
The Imported Motor Vehicle Industry Association (VIA) has welcomed the coalition’s decision to cut the clean car standard (CCS) penalty for used imports to $7.50 per gram of carbon dioxide from January 1.
The changes will apply from 2026-27 and there will also be a major review of the supply-side scheme next year.
VIA understands the penalty change will be included with legislation before parliament. This will extend the lifespan of carbon credits, which can be traded between new and used-vehicle account holders.
“This is a sensible circuit-breaker,” says Greig Epps, VIA’s chief executive. “It will take the heat out of prices while the system is reviewed. Our members have supplied evidence and case studies that got us here. We thank ministers and MPs who listened.”
Epps says the government’s announcements, which were made on November 17, are important because:
• Around 70 per cent of used imports are currently penalised and one-half of those charges are more than $1,000. At that level, buyers in the $10,000 to $15,000 price bracket often walk away or trade down, slowing fleet replacement.
• With fewer mid-life vehicles being imported to refresh the fleet, New Zealanders are holding onto their cars for longer. This increases the fleet’s age and slows – if not reverses – gains made in previous years.
• A lower penalty rate should stabilise retail pricing to keep buyers in the market, accelerate the refresh of the fleet, and improve emissions and safety outcomes.
• Credit-life extension and cross-sector credit trading will help unlock value stranded in new-vehicle accounts and lower costs for consumers in the used market.
VIA emphasises next year’s review of the CCS needs to fix the scheme’s underlying architecture and, in particular, the weight adjustment in the target-setting algorithm.
“A key problem is weight adjustment,” says Epps. “It distorts outcomes for practical family cars. Judge vehicles on their actual emissions and let credit trading work across the whole market. That’s how you deliver affordable, lower-emitting cars faster.”
VIA says it’s important for timely decisions to be made next year to avoid the reforms being delayed during the general election period. “We support pragmatic relief now and decisive settings next. Keep the review tight and early, remove or neutralise weight adjustment and make credit trading work in practice from day one.”
