Government is believed to have reviewed regulations seeking to create a cleaner fleet, but has yet to share thoughts.

CONSIDERATION by the Government to entirely scrap an important emissions legislation for new passenger vehicles might still be possible.

But until absolute guidance from Government arrives, some in the industry at a loss about what future product choices will best suit the market.

June seemed the deadline for Government deciding whether to scrap the Clean Vehicle (nee Clean Car) Standard, which determined to create a cleaner new vehicle fleet.

But so far there’s been radio silence from the halls of power in Wellington.

The Motor Industry Association - a voice for almost all new vehicle distributors - believes something is going on, but at the moment it’s still being kept behind the scenes.

“Our understanding is that transport officials completed the first stage of the Clean Vehicle Standard review in mid to late June and that their advice is now progressing through the Government’s decision making process,” MIA chief executive Aimee Wiley said today.

“MIA does not know precisely when the Government will announce its decision, but we understand an announcement will follow once that process is complete.

“The Government’s decision will determine the next phase of work.

“MIA and its members remain ready to engage constructively with the Government and transport officials on the next stage of the review, whatever direction that takes.”

The MIA said in March it wants to keep the standard, but it needs "recalibration" to make sure it worked for importers, car distributors, and consumers.

Back then Transport Minister Chris Bishop said the Government was intent on carrying out a first principles review, with an outcome in June, so ‘obviously’ an option to scrap the standard is on the table.

Submissions, mainly from industry, have suggested little support for further changes by the coalition Government, which has already twice weakened the standard, implemented by the previous Labour Government.

Intent at introduction was to shift the playing field towards ensuring imports of low emission vehicles, both new products as well as vehicles previously owned overseas.

In 2024, the current administration relaxed the emissions targets. Last November it slashed by 80 percent penalties importers have had to pay if they fail to bring average emissions below the new targets of 108 grams of carbon per kilometre travelled this year and 103g/km in 2027.

The reducing emissions targets are in tune with Australia, whose own legislative aims were interwoven in NZ’s at the end of 2025.

Australia’s new car registrations’ count is 10 times the size of NZ’s, so a common strategy for CO2 aims conceivably made it easier for new vehicle distributors.

Many see having common products for both markets being advantageous for introduction and availability planning.

There was concern that, had Government pulled Clean Car altogether, Kiwis could be sold high-emitting leftovers that manufacturers could no longer sell in Australia.

As it originally formulated, legislation set out to charge importers a penalty for cars that exceed the target emissions level, with ability for this to be offset by also importing cars with lower emissions. Electric cars are the best for that, as they emit no CO2 at all, followed by plug-in hybrids, which have very low counts.

Non mains-replenished hybrids, though the most popular powertrains here in cars, are no particular panacea, as even the cleanest barely better next year’s emissions pass line. Some already fall short.

Slashing the emissions penalty eight months ago was defended by Bishop on grounds supply constraints meant importers could not source enough low-emissions vehicles to avoid being penalised.

It seemed a weak argument, as the reason why the best of those cars - electric vehicles - were not selling was entirely because Government policies, and the subdued economy, has suppressed interest.

The EV sector only picked up again in February, as result of fuel prices hiking because of the Middle East turmoil, but at that time stock levels were being kept low, so what was here quickly sold out, and now there are waiting lists.

More EVs are coming and the price of fossil fuels seems set to climb again, with the US resuming hostilities with Iran over the Strait of Hormuz.

The consultation for June’s deliberation included the motor vehicle industry, international bodies, other government agencies, some advocacy groups, and subject matter experts, but was not open to the public.

In its letter seeking submissions earlier this year, the Transport Ministry said the review was being carried out in two stages.

Stage one was "a first principles review of the standard ... to enable Cabinet to decide to either retain the standard or abolish it”.

Submitters were asked if they supported NZ retaining a fuel efficiency standard, and what the risks would be if it was abolished.

It would make us just one of two OECD countries to not have a vehicle emissions standard - the other is Russia.

Earlier this year the Wiley said the MIA supported retaining the standard, “with the emissions trajectory recalibrated to reflect domestic affordability and realistic product availability.”

“This is not about reducing ambition,” a statement of the time said. “It is about ensuring the settings work for importers and distributors as well as consumers, are durable over the long term and aligned with market realities, including affordability, supply, and demand conditions.”

Drive Electric was among EV advocacy groups asked to submit. Chairwoman Kirsten Corson said she was and was extremely alarmed by the potential of removing the standard completely “because the rest of the world is going in the other direction.”

She pointed to Australia, where in the first six months since making its fuel efficiency standard mandatory, overall emissions were dropping. EV uptake is booming there.

Drive Electric's submission warned NZ would become a "dumping-ground" for less efficient cars and was dubious of Government's claim that car-buyers would be charged thousands of dollars more if the penalties had not been cut, not least if oil prices rose.

New Zealanders' tendency to keep their cars for years meant petrol cars coming into the country today would hang around for decades, she said - costing their owners more to fuel and adding to New Zealand's emissions.

A slump in demand for EVs had been driven directly by the government's decision in 2023 to also end the Clean Car Discount, Corson said.

She wanted to see a tweaked version of that re-introduced, potentially targeted at the 70 percent of new car sales that go to businesses.