Govt won’t proceed with fuel economy standard

Hon Steven Joyce
Minister of Transport

28 August 2009
Media Statement

Govt won’t proceed with fuel economy standard

The government will not progress the development of a regulated vehicle fuel economy standard, as proposed by the previous Labour government.

Transport Minister Steven Joyce says the potential benefits of the scheme would have been outweighed by the cost to motorists.

While the details of the scheme were never confirmed, it would have meant that importers of less fuel efficient vehicles would have needed to buy credits, and more fuel efficient vehicles would have been awarded credits.

The scheme was separate to the Emissions Trading Scheme.

Mr Joyce says the scheme would have added significant extra costs to vehicle importers and that these would ultimately have been passed on to motorists.

It is estimated that the scheme could have resulted in costs of up to $1,500 when purchasing a larger car.

“While most countries deal with only a small number of importers and manufacturers, New Zealand does not have a domestic vehicle manufacturing industry and imports a large number of used vehicles through several thousand importers.

“This means that the proposed scheme would have been difficult and costly to carry out.”

Mr Joyce says the government is focused on reducing transport emissions without imposing significant costs.

“Transport fuels will of course be included in the Emissions Trading Scheme. We have also announced a Road User Charges exemption for electric vehicles until 2013 and a grant for biodiesel production in New Zealand until 2012.

“Current trends suggest people are already choosing smaller, more fuel efficient cars without any direct intervention by the government.”

The average CO2 emissions of new vehicles entering the fleet have dropped from 220.6 gm/km in early 2006 to 203.8 gm/km in the first half of 2009.

Mr Joyce said that in the current economic climate the government had to ensure that its work offered clear benefits for New Zealanders. With this in mind, further work on the regulated fuel economy standard could not be justified.

ENDS