Sitting date: 21 Aug 2025

LAND TRANSPORT (CLEAN VEHICLE STANDARD) AMENDMENT BILL (NO 2)

First Reading

Hon CHRIS BISHOP (Minister of Transport): Madam Speaker, I present a legislative statement on the Land Transport (Clean Vehicle Standard) Amendment Bill (No 2).

DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon CHRIS BISHOP: I move, That the Land Transport (Clean Vehicle Standard) Amendment Bill (No 2) be now read a first time. I nominate the Transport and Infrastructure Committee to consider the bill, with a period of four months and one day for the select committee process.

This bill is a short bill that makes needed changes to make it more likely that New Zealanders will benefit from the clean vehicle standard rather than face higher vehicle prices because of it. The standard is our light vehicle fuel-efficiency or carbon dioxide standard. If it works as intended, New Zealanders will benefit from estimated fuel savings of $1.5 billion to $1.7 billion over 2023 to 2050 and 8.2 million to 9.6 million tonnes of carbon dioxide emission reductions over the same period.

We'll only achieve those benefits if vehicle importers achieve the standard's annual carbon dioxide targets. This is because every vehicle that doesn't achieve its target attracts charges. If importers can't offset those charges with credits earned on low-emissions vehicles, then those charges flow through into high vehicle prices. Higher prices will make it even harder for New Zealanders to afford to replace their vehicles with more fuel-efficient and lower-emitting vehicles. To prevent this outcome, the bill gives importers more flexibility in how and when they comply with the targets; flexibility is critical because importers can't control all the factors affecting whether they can supply the low-emissions vehicles needed to comply with the targets, nor can they control whether consumers will buy them.

Currently, many importers are not achieving their targets and are attracting charges because of unfavourable supply-and-demand conditions. For example, there is currently a shortage of used EVs available for importers to supply to our market, so the bill makes it easier for importers to offset charges with credits. There are three main ways it does this.

First, it allows credits to be transferred between used-vehicle importers and new-vehicle importers; currently this can't happen because credit transfers between the sectors are prohibited. To acknowledge the greater fuel-saving value of new low-emissions vehicles, the bill sets a 2:1 exchange rate—so you'll need two credits earned on used vehicles to offset a charge on a new vehicle. Secondly, the bill extends the lifespan of credits from three years to four years. This gives importers more time to use the credits that they earn from importing volumes of fuel-efficient vehicles. Third, the bill extends the ability for importers to offset the charges accrued in a year by supplying and selling more low-emissions vehicles the following year when conditions improve. Currently, the ability to borrow credits will stop at the end of 2025.

Finally, the bill futureproofs the standard by enabling targets to be set that are not adjusted by vehicle weight. It's the Government's view that this ability will be needed over the next five years as EVs and hybrids disrupt the traditional positive relationship between vehicle weight, fuel use, and emissions. In other words, soon, large SUVs will not need easier targets than small hatchbacks. The bill makes it more likely that the standards' annual carbon dioxide targets will be achieved, and, by doing this, New Zealanders will have access to vehicles that cost less at the pump and reduce carbon dioxide emissions.

So, with those brief remarks, I commend the Land Transport (Clean Vehicle Standard) Amendment Bill (No 2) to the House.

ASSISTANT SPEAKER (Teanau Tuiono): The question is that the motion be agreed to.

Hon Dr DEBORAH RUSSELL (Labour): This bill is a bit of a shocker, really. It's an extraordinary thing that that side of the House is doing. It stacks up with all their other climate-denying work, but this one is a bit of a corker.

I don't get it. The reason that we have clean car emission standards is so that we start transitioning our fleet from internal combustion, using fossil fuels, to electric vehicles. The idea is to actually decrease emissions. It's a critical need. We have a Paris target of reducing our climate emissions to net zero by 2050, and the way we have been trying to do that is, primarily, so far under this Government, by planting more trees. We've carried on emitting carbon. We're not trying to get actual carbon emissions down. Instead, we're just offsetting them with trees. The trouble is that that approach is going to fail. We cannot plant our way out of climate change. In order to effectively address climate change, we have to get emissions down.

There are two major sources of greenhouse gas emissions in our country—two major industries or areas of our economy that we get greenhouse gases from. One is from agriculture, and there is whole lot of work going on in that space to see how we can actually reduce methane flow. That's what we have to do with methane flow. The other is transport. Transport is one of our biggest sources of greenhouse gas emissions. And unlike methane, where there are some pretty interesting technologies coming through which may help with that—in terms of carbon, we have to get the emissions down.

The clean car standards were a part of that. The whole idea was to incentivise the transfer over to an electric vehicle fleet. There were a whole lot of strategies around that. One was the Clean Car Discount, a scheme that was working really well; and one was this clean car importer standard. This whole clean car importer standard was a way of incentivising the uptake of electric vehicles by ensuring that we had to bring more electric vehicles into the country in the first place. This bill changes that around. It's noticeable, in the departmental disclosure statement, that the people that were consulted with included the motor vehicle industry but did not include the Climate Change Commission. In fact, there's very little assessment of the impact that it will have on our climate emissions. Going through in terms of deciding on which option was best to address this policy, the people who had all the input on it were various industry stakeholders. They were the people who were consulted to see whether or not we should change around the Clean Vehicle Standard.

Going through the regulatory impact statement is quite an eye opener. I'll see if I can find the relevant bits. The way it sets it out is it says that current vehicle importers were not going to meet the target for importing clean vehicles, so they've changed the targets. They've just simply changed the targets. Well, that's not going to get emissions down, is it? "Oh, we're not going to be able to do it, so we just won't do it." But we still need to get emissions down. Climate change is a pressing, pressing need for us to address. What are they doing? They're consulting vehicle importers about how to avoid getting emissions down. It's a shocking bill, and it demonstrates, yet again, that this Government is not—is not—committed to addressing climate change. The Labour Party does not support this bill.

ASSISTANT SPEAKER (Teanau Tuiono): The member's time has expired.

Hon JULIE ANNE GENTER (Green—Rongotai): Tēnā koe, Mr Speaker. Kia orana, Mr Speaker, and tēnā koutou e te Whare. The Green Party is not supporting this bill. As someone who worked closely on both the Clean Car Standard and the Clean Car Discount in the initial days, I can tell you that those were evidence-based policies that have been used in other jurisdictions to improve fuel economy. And the overall benefits to New Zealand of having more efficient vehicles is undeniable, because we spend more money to drive a given amount on petrol or on diesel, as a consequence of having less efficient vehicles. There's this bizarre ideology on the other side of the House that somehow having more polluting vehicles is good for New Zealand; it's not. It's not good for New Zealand.

The way that the Clean Car Standard and the Clean Car Discount worked was intentionally done so that they worked together. The idea of the standard is quite simple. It's that over time we're expecting vehicle importers of both new and second-hand vehicles to improve the fuel efficiency of the vehicles that are being imported. The Clean Car Discount used a feebate signal, which was a levy on polluting vehicles, which is recycled into a discount or a rebate on zero-emissions and low-emissions vehicles. That feebate was actually far more effective than I think anyone realised. I mean, I knew it would be effective, hence why we worked on the policy, but when they actually brought it in, the Labour Government brought it in, it was massively successful and effective.

Usually, the vehicle importers understand that they want something like the Clean Car Discount. They find it difficult to implement the standards without the overt price signal. So the reason why the Government is now having to come back again with another bill to amend the clean vehicle standard—now, this is the second amendment bill in just a few months—is to give importers more flexibility to achieve the standard. Ultimately, what it's doing is just making it harder for us to achieve the actual targets to achieve the goal.

As the Climate Commission recently recognised, the Government has no plan to reduce our reliance on fossil fuels or things that create greenhouse gas emissions, and that is totally ridiculous in 2025. It's completely ridiculous, and it's particularly ridiculous, when you consider that everything we do to reduce the fossil fuel intensity of our vehicle fleet is not just beneficial from a climate point of view, it's beneficial from an air pollution point of view, it's beneficial from a pure cost point of view, and from an energy sovereignty point of view.

We have majority renewable electricity generated in this country, right here in this country. Electric vehicles are far more efficient than internal combustion engine vehicles. So just switching to electric vehicles is an efficiency gain, a massive efficiency gain. It doesn't matter how that electricity is generated. Even if it was generated from coal, it would still be more energy efficient. Now, personally, the Green Party doesn't believe we should be using coal to generate electricity; there's no question. But even if it were the case, an electric vehicle would be more efficient than a combustion engine vehicle. So we have everything to gain from switching to more efficient vehicles.

But guess who doesn't want us to switch more efficient vehicles? The vehicle manufacturers. And the oil companies, obviously. Why? It doesn't benefit New Zealanders. People would like to spend less money on driving around, wouldn't they? Well, the best way to do that is to make sure that the vehicles coming into the country are more efficient. And every country in the world that has achieved progress in the area has done so through a combination of standards and price incentives. That's what works, and the economic benefits massively outweigh the cost.

So, you know, classic National-led Government being lobbied by big corporate interests, and who misses out? Who's paying the bills on this? Who's paying for it? It's New Zealanders paying higher petrol bills, higher diesel bills, higher hospital bills, higher emissions, which is going to cost us in the medium and long term. But this is a Government of absolute climate deniers who can't even understand how the economy works. I mean, they're claiming victory from dropping interest rates. Geniuses! They dropped the interest rates because the economy crashed.

MARK CAMERON (ACT): Thank you, Mr Speaker. I must confess to the House that I'm not the actual speaker that would normally speak to this bill, but I have a couple of thoughts, if I may. I can imagine the heckling will begin, at some point in the near future, from my team on the left. But I'm fascinated when I'm trying to digest what the Land Transport (Clean Vehicle Standard) Amendment Bill (No 2) looks like in the real world—in the real world of choice. I think, in a house of debate—and this is, of course, a house of debate—that New Zealanders are a group of collective deniers. Well, certainly, this side of the House is.

As we speak to what this bill does, it extends the lifespan of carbon dioxide emissions credits that are earned on low-emission vehicles—yeah, three or four years—and removes the restriction on carbon dioxide emission credit transfers between new and used importers and various sectors.

I just want to touch on a point that the previous member did make—that this side of the House were climate change deniers. I find that an oddity that that side of the House, if I could be so obliging to share a couple of thoughts pursuant to Indonesian coal—now, in the world of hydrocarbons, if I get the pronunciation correct, we have seen huge increases to hydrocarbons, like coal in this instance, coming into New Zealand. That helps electrify the grid. If we look at the world of averages—whether it's electrification and the use of electrified vehicles in this instance or hydrocarbons being used for the sake of petroleum by-products or petroleum or diesel or petrol—how can we not square up, either way when we're having this debate, that invariably there's an endpoint user that has a pollution problem. Now, it could be the electrification of the grid and a greater consumption of it, or it could be used in hydrocarbons that are used in motor vehicles that happen to be internal combustion engines.

I am a bit struck by Julie Anne Genter's remarks. I don't think it is balanced to say, in this instance, that members on this side of this House are climate change deniers. We're just having a balanced debate. Where I land on this bill, having not had a chance to read a great deal of it—I maintain that it sort of lands on about the right place in the world of averages, so, on that basis, I commend it to the House.

ANDY FOSTER (NZ First): Thank you, Mr Speaker. I rise on behalf of New Zealand First to speak on this Land Transport (Clean Vehicle Standard) Amendment Bill (No 2). This is something I think was signalled in the 2024 Budget that this work was going to be done. In fact, it's interesting in the speaking notes I've got here that I refer to it being proposed by the Hon Simeon Brown. So it suggests it was a little while ago that this was being talked about.

This clean vehicle standard is about trying to make sure that over time the emission levels, which are produced by vehicles which are imported into this country, are progressively reduced. That doesn't change in this bill. What this bill is mostly about is two things. The first one of those is about saying, "Let's do that. Let's hit those targets by regulation rather than by locking them in legislation." Because—oh gosh—every time we change a piece of legislation we've got to go through the whole process. That is enormously expensive, enormously cumbersome. And quite frankly, why we don't lump a whole lot of these pieces of small legislation together—that would be much more efficient. That would certainly reduce a lot of hot air.

The first thing that this bill does is to say instead of doing it through legislation, let's do it through regulation, so it is a much more flexible, much quicker way of responding. Of course, different Governments may do that in different ways in terms of the regulatory process. So the standards and the process still exist. [Interruption] It's wonderful seeing the byplay going across the House there. But anyway, I'll carry on with it.

Look, over time we are quite clearly seeing the vehicle fleet, by and large, becoming more efficient. Obviously, we've had an uptake of electric vehicles: we've got plug-in hybrid vehicles, we've got more hybrid petrol vehicles as well. And the level of emissions from those, and the fuel efficiency of those, is coming down.

In fact, that is one of the reasons we're having to look at changing the way in which the whole road transport system is funded. Because what's been reliant on both the road-user charges and FED, the fuel excise duty, that level of charge, particularly the FED side, is starting to reduce. That is a problem for our ability to be able to fund transport generally, whether it's public transport or maintaining and building our roads. So we need to change things there. Over time the intent is that we will get a more efficient vehicle fleet, and then, obviously, we've got to change the funding around it.

I just want to pick up on one other thing, which is what my colleague Mark Cameron was talking about, about choice. What is the part that the market plays in this? What we should be trying to do is to send the right signals in terms of the actual costs that apply: the costs of using the road, the weight of vehicles on the road and so on, the damage the vehicles do to the road—but also, the emissions side of things, and that's why we have an emissions trading scheme, for example, whether that's working efficiently or ineffectively. Then people can make their choice. They can say, "Well, an electric car may cost me more to buy in the first instance. But is it cheaper to run because it's more efficient? Yes, maybe. Maybe I choose that; maybe I don't." And people have the ability to choose that depending on the circumstances and the needs that they have for their particular vehicle. That is called choice. That is called a market. We need to make sure that we do that because we can't be forcing people to make particular choices.

I'm looking forward as the chair of the Transport and Infrastructure Committee to seeing this piece of legislation in front of us, the submissions that we get on it, and to making decisions on that and reporting that back to House in due course. I commend this bill to the House.

MARIAMENO KAPA-KINGI (Te Pāti Māori—Te Tai Tokerau): Kia ora tātou. Thank you, Mr Speaker. Kia ora tātou e te Whare. I rise to speak for Te Pāti Māori on the Land Transport (Clean Vehicle Standard) Amendment Bill (No 2). So here I am—here I go. This bill undermines our commitment to reducing climate change through the Clean Vehicle Standard. It does so by introducing more flexibility in meeting the targets, which, effectively, weakens the standard itself.

[Authorised reo Māori text to be inserted by the Hansard Office.]

[Authorised translation to be inserted by the Hansard Office.]

Specifically, the bill extends the lifespan of carbon dioxide emissions credits earned on low-emission vehicles from three years to four. It removes restrictions on transferring these credits between the new and used import sectors, and it allows borrowing of future carbon dioxide target overachievement beyond 2025. This subject itself isn't one of one of my—you know, I don't know this really well, but certainly listening to Julie Anne Genter and others, when I did spend a little bit of time with the Transport and Infrastructure Committee at times, I believe her, is the thing to say.

The Clean Car Standard limits the average carbon dioxide emissions from the tailpipes of new cars imported into Aotearoa. I'm sorry, I just heard a bit of muttering over to the left there; wasn't sure what it was meant to do.

Arena Williams: Just muttering.

MARIAMENO KAPA-KINGI: Yes, yes, another bunch of mumbling, bumbling ideas. It was introduced to reduce emissions and prevent our country from becoming a dumping ground for inefficient vehicles rejected in other places with stricter environmental rules—worth noting.

Te Pāti Māori climate change policy is designed to incentivise low-income and rural farming, and that takes quite a bit, knowing that I come from Te Aupōuri and so on and they're like, "How are we going to get a blinkin' plug-in thing here, Meno?", but let me tell you, the mood is changing. Our whānau are getting that this is a smart and good thing. So let's just keep talking about this, making it happen, and making it work. So, to incentivise low-income and rural farmers to purchase electric and low-emission vehicles.

This bill, however, makes it harder to achieve these goals—thank you to those on the left. Climate change poses an existential threat not only to our environment but to our way of living and to our people and to our place and to our identity. So it just gets more grave the more I read on. Any legislation that prioritises short-term profits over long-term health of our taiao and of our environment harms our grandchildren and our great-grandchildren. So be it on your heads, to those on the left. Modelling shows that by 2035, these changes could result in 39,000 fewer fully electric vehicles and 19,000 fewer plug-in hybrids on our roads. This is yet another piece of legislation pushed through by this Government to weaken environmental protections for short-term gain.

The Government often speaks of striking a balance, and I was listening to that bit of rhetoric earlier, but I don't believe them, and I'm not convinced; it has very little merit, when I hear it from the left of the House, when we face already multiple once-in-a-lifetime extreme weather events every year. Obviously, I think of Whangaroa when I'm talking about that, I think of Whangārei, I think of Te Kaipara and those terrible moments which they talk about being once in a lifetime but, in fact, I think I've probably experienced about four or five lately. And still people deny; still Government is denying that these things are real and have serious and long-term impacts for our whānau on the ground every day. Even now, when you go through Kaeō and you go through Whangaroa and you go through the back road, it's the decimation of properties, farms, roads, structures, infrastructure to a tiny little town reduced hugely by all of the flooding that happens not just once in a lifetime but far too often.

So there is absolutely no way that we would support this. We do not support it, we do not commend it, and we would ask that maybe change your mind. Let's do that. Kia ora tātou.

DAN BIDOIS (National—Northcote): Good news for Labour and the Greens today. Statistics New Zealand figures just out show that emissions in New Zealand decreased to December last year by 1 percent—total greenhouse emissions. In 13 out of 16 regions in New Zealand it decreased. So despite the rhetoric from the other side, something is working in the coalition Government with respect to emissions. So on that basis, I look forward to welcoming the bill at select committee and I commend this bill to the House.

Dr CARLOS CHEUNG (National—Mt Roskill): For communities like Mt Roskill, home to many hard-working families, this bill matters. It supports our climate goals but also makes cleaner vehicles more accessible and affordable. By giving suppliers more flexibility, we reduce costs that would otherwise be passed on to the consumer. This means families in Mt Roskill can benefit from cleaner, cheaper-to-run cars without being priced out. It is a fair, smart, and future-focused policy. I commend this bill to the House.

ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Speaker, for the opportunity to speak on the Land Transport (Clean Vehicle Standard) Amendment Bill (No 2). What a shame it is that we are here debating this bill, which will take us another step backwards away from New Zealand's Paris Agreement targets. They are targets that this Government claims to still be honouring, and yet Government Ministers just yesterday in the House at question time were waving haere rā to Paris, haere rā to climate leadership, and haere rā to New Zealand's place on the world stage as a nation that actually did its bit and gave young people around the world and young New Zealanders a fair go. [Interruption]

Who's going to pay the cost of this, Mark Cameron? Who's going to pay the cost of this, James Meager? I'll tell you. The people who will pay the cost of bills like this—the Land Transport (Clean Vehicle Standard) Amendment Bill (No 2), which is a tax break for industry—are the young New Zealanders who are going to pick up the bill for the remediations that we will need to pay as a nation going forward.

Do you know what this bill does? This bill lets some importers bank up their credits for as long as they like and sell them to other parts of their business or—it's quite unclear yet, but we'll get to the bottom of it in the select committee—others who would otherwise import dirty vehicles longer and more than they would have otherwise under a Labour Government. This bill puts dirtier cars on the road. This bill makes it harder for those people who want to transition to be able to do that. This bill is a sop to industry, who asked for it, and it doesn't have any place in a Parliament that would pride itself on values-based and evidence-based policy to deal with climate change. This is a real shame.

There are two major areas that New Zealand should be focusing on in reducing its climate—

Mark Cameron: Oh, here we go.

ARENA WILLIAMS: —obligations, and Mark Cameron says, "Here we go." He doesn't want me to talk about the farmers, so I'll give him the good answer that he's after. Transport is one we all agree on. Transport is part of New Zealand's economy where there are good wins to be made. I'll tell you who said that: the Hon Simon Bridges, when he was the transport Minister.

Remember when the Key Government used to like electric vehicles (EVs)—when they used to point to electric cars as part of a transport solution which would actually make a difference to Aotearoa? They said, "Oh, buses—we're not so keen on buses. Trains—we're not so keen on trains. But EVs are coming, guys—just wait." Well, now this is what's coming: the next National Government, which walks that back. You can't trust them.

You can't trust them when they point to some techno solution. These guys are looking into the future and they're casting around for something that will get us out of the hole without doing any of the heavy lifting, and then the next National Government comes around and says, "Oh well, it was all too hard, and industry has come with their hands out and we feel very sorry for these big car manufacturers, who have all these tax credits banked up that they can't get the value out of. So we're going to let them use those tax credits for money. That'll be good—that'll sort it out." No, it won't sort it out. It won't help people buy cleaner cars, it won't help reduce the footprint of the transport fleet in New Zealand, and it certainly won't help future generations and young New Zealanders get themselves out of this mess.

Many of the MPs, in a few hours, will be meeting with groups of young people from the Aspiring Leaders Forum. They are here today in Parliament because they think about the future issues that affect our country. They have tried very hard to get into this programme and are proud to be here.

Dr Carlos Cheung: You are here to advocate for people in South Auckland.

ARENA WILLIAMS: Some of them are from the member Carlos Cheung's electorate of Mt Roskill, and they believe in MPs like him to represent their generation for the future. What they are seeing from a debate like this is that this Government is happy to lump costs on to their generation and their children's generations because they will not deal with the reality now, which is that we need standards, we need rules that are debated and set by this Parliament, where we are accountable to them.

You know, instead of having this debate in the future, we won't actually have it in here at all, because it will be set by regulation, and Andy Foster stands up and he goes, "Oh, good, the bureaucrats can sort it out. Get that red tape out and wrap it all around these standards. Elected members shouldn't be accountable when they are lumping costs on to future generations. Elected members should not be accountable to young people." Well, I say to Mr Andy Foster that he is an excellent committee chair, but he is dead wrong on this issue.

Andy Foster: Oh, not at all—not at all.

ARENA WILLIAMS: Young people want you to advocate for them, Andy Foster. Young people deserve parliamentarians to come to this House and give it a go—to give them a fair go—that their generation wouldn't be picking up the bill for short-sighted legislation like this.

Dr VANESSA WEENINK (National—Banks Peninsula): I'd just like to bring the energy in the room down a little bit; I think that'd be good. Because this is just another example from the other side of where they're just yelling and screaming about something, when they've demonstrated that they're not bothered to talk to industry about how things might actually work. We have listened to the way that pragmatic things need to be done. We have provided flexible options so that we can actually get more clean vehicles into this country. I commend the bill to the House.

A party vote was called for on the question, That the Land Transport (Clean Vehicle Standard) Amendment Bill (No 2) be now read a first time.

Ayes 68

New Zealand National 49; ACT New Zealand 11; New Zealand First 8.

Noes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Motion agreed to.

Bill read a first time.

ASSISTANT SPEAKER (Maureen Pugh): The question is, That the Land Transport (Clean Vehicle Standard) Amendment Bill (No 2) be considered by the Transport and Infrastructure Committee.

Motion agreed to.

Bill referred to the Transport and Infrastructure Committee.

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