Explainer: What the hell is the Clean Car Standard?

The Clean Car Standard will take effect January 1, 2023. If you’re not sure what it actually means and how it differs from the Clean Car Discount already in play, you’re not alone. Let’s take a look at what it is and how it can affect you.

The Clean Car Standard (CCS)

The CCS is designed for the automotive industry, not buyers. It encourages importers to meet strict CO2 targets, through a “pay-as-you-go” plan (more suitable for people who do not import many vehicles at once) or a “fleet average” scheme (the main importers in New Zealand). .

If the CO2 average of an importer’s fleet exceeds the limit, it will be fined, while fleets below the limit will receive credits that can be used as a buffer against impending fines or traded to other brands.

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The difference with the Clean Car Discount is that the Standard is designed to encourage industry to bring cleaner cars to the country, while the Discount is designed to encourage people to buy them.

According to the cabinet, De Standaard is working on a “complex calculation of weights and targets”, which ultimately means that the CO2 limit comes from the weight of a vehicle. Heavier models, such as cars, will not be hurt as badly, but light vehicles must meet an extremely low CO2 figure to avoid being fined.

Fleet milestones are currently set at 145g/km for cars and 218.3g/km for cars for 2023 and 63.3g/87.2g from 2027 respectively. The fines are set at $45 per gram of CO2 ( half of that for used cars) multiplied by the sum of the emissions above the target of each vehicle sold. Since this can apply to thousands of vehicles, those costs will quickly add up. The Motor Industry Association (MIA) estimates that the new auto industry could face tens of millions in fines by 2023 alone.

Theoretically, there will be no price changes due to the CCS as the government expects distributors to offset their higher emission vehicles with cleaner cars. Toyota, for example, is in a good position for this, with a huge range of hybrids available to offset the Hilux, Hiace, Land Cruiser and Supra.

On the other hand, manufacturers who import a lot of lightweight but (relatively speaking) high emissions will be severely penalized under this system. It doesn’t help that New Zealand isn’t really big enough to have much say in what automakers build, meaning these brands can’t exactly ask for more hybrids or electric vehicles.

Most manufacturers are preparing new models for key market targets, such as the Euro7 emission standards and the phasing out of combustion in Europe, currently set for 2035.

MIA chief technical advisor Mark Stockdale said it is concerned that the targets are too high and too fast, partly because New Zealand importers place orders some 18 months in advance, meaning orders for 2023 products before the Clean Car Standard has been completed.

Ultimately, despite what the government wants to see happen, it is likely that the Clean Car Standard will raise prices for new and newly imported used vehicles from 2023 onwards.

“The only solution then is for the importers to pass on the fines as overhead in the price of the vehicle. But unlike the CCD, we don’t know exactly how much those fines will be per vehicle – it depends on what the average fleet emissions look like for each importer at the end of the year, as well as how they choose to reclaim those fines Stockdale said.

The Clean Car Discount/Program (CCD/CCP)

As a refresher, the Clean Car Benefit (also known as the Clean Car Program) is the ‘feebate’ that charges high-emission vehicles extra at the initial purchase and gives cash back for low- or no-emission vehicles.

In early April 2022, the previous “EVs get the full discount, PHEVs get half the discount, everything else gets nothing” approach was abandoned in favor of a sliding scale based on emissions.

This means low-emission vehicles — even those without additional electrical features — could qualify for a discount, provided they cost less than $80,000. All high-emission vehicles will be charged, regardless of how much they cost. The discount was also open to used cars, but only for first-time registrations.

Confusingly, Waka Kotahi NZTA alternates between figures including and excluding GST. The maximum discount is $8625 for new vehicles and $3450 for used imports, including GST. In this case, GST seems to actually benefit buyers.

But how do they figure out how much to charge? That comes down to how much carbon they pump out of their exhausts.

0g/km CO2

All-electric vehicles still get the full $8,625 ($7,500 + GST) discount, because they don’t produce any CO2 while driving.

1 to 56g/km CO2

Any new car that emits between 1 and 56 g/km of CO2 qualifies for a $5,000 + GST ​​rebate, while a newly registered used car in the same band qualifies for a $2,000 + GST ​​rebate. It will mainly consist of plug-in hybrids.

57 to 146g/km CO2

Any new car that emits between 57 and 146 g/km of CO2 will receive a discount calculated by taking the full amount of $7500 + GST ​​and subtracting the result of “emissions X $50 X 130/145” . This means that a car that emits 123g/km of CO2 will receive a discount of $1987+GST.

The equation for newly registered used imports is “emissions X $20 X 130/145” subtracted from the maximum rebate of $3000 + GST, meaning a used import that emits the same 123g/km of CO2 will receive a rebate of $750 + GST.

146g/km and 192g/km

This is in the ‘zero’ band, meaning cars emitting between 146g/km and 192g/km will not be reimbursed or discounted.

193g/km CO2 and above

Although this category starts at 193 g/km, the count starts at 186. Each gram of CO2 above 186 will be charged $50, with a maximum of $4500 + GST.

This means that a new vehicle emitting 193 g/km of CO2 would be reimbursed $350 + GST, while something emitting 250 g/km CO2 would be reimbursed $3200 + GST.

For newly imported used vehicles, the fee per gram is $37.50, up to a maximum of $2500+GST.