Government Keeps Clean Vehicle Standard, but Key Decisions Deferred to 2028

The Government will keep the Clean Vehicle Standard, the scheme that charges vehicle importers for bringing high-emissions cars into Aotearoa New Zealand, Transport Minister Chris Bishop has confirmed.

The decision follows a review launched earlier this year that included an option to scrap the standard entirely. Had it been scrapped, New Zealand would have been one of just two OECD countries without a vehicle emissions standard, the other being Russia. RNZ

Bishop said the review found the standard was "the most cost-effective way to increase the availability of lower-emissions vehicles in New Zealand." Most of the motor industry supported keeping some version of the scheme.

The Clean Vehicle Standard was introduced by the previous Labour government. It works by setting an emissions limit: importers who bring in cars above that limit pay a penalty, which they can offset by also importing lower-emissions vehicles. Think of it as a balancing system — importers whose fleet is clean overall pay little or nothing; those whose fleet is dirtier face a charge. Importers currently pay $15 per gram of tailpipe emissions over the limit for new vehicles and $7.50 per gram for used vehicles.

In November 2025, Bishop cut the penalty by nearly 80 percent, citing supply constraints that made it hard for importers to source enough low-emissions vehicles. RNZ reported in March that the government was then considering scrapping the standard altogether, months after that fee reduction. RNZ

The government has not yet decided on new emissions limits under the standard. Bishop said officials will work with the motor industry to develop settings that are "realistic and achievable." Officials are due to report back early in 2027, with new targets taking effect from 1 January 2028. A spokesperson for Bishop confirmed the current settings will stay in place until then.

The government has also agreed to set different emissions targets for used vehicle imports, reflecting that they have different and older technology than new vehicles.

Under the original settings, the standard was set to tighten to 108 grams of CO₂ per kilometre for passenger vehicles and 207 grams for commercial vehicles from 1 January 2026, according to a Ministry of Transport regulatory impact statement. The Ministry of Transport had previously assessed that meeting the 2025 or 2026 targets was unlikely without additional policies.

Australia's experience may have factored into the government's thinking. Australia introduced its own vehicle emissions limits late last year, and the first six months of data showed overall tailpipe emissions had dropped and most importers were able to meet the standard.

The broader context here is one of a policy that has been through considerable churn. The Clean Vehicle Standard sits within a framework of measures aimed at cutting transport-sector CO₂ emissions. The previous government's Clean Vehicle Discount and vehicle emission standards led to a 300 percent increase in the import of electric vehicles, according to a 2022 ministerial speech. The current coalition government removed the Clean Vehicle Discount early in its term, then slashed the standard's penalty fees, then opened a review that contemplated abolition. Keeping the standard resolves the question of whether it survives at all, but defers the substantive question — what the new targets will actually look like, and whether they will be more or less ambitious than what the government inherited. With officials not reporting back until early 2027 and new targets not taking effect until 2028, the scheme as it currently operates, with the reduced penalty rates Bishop set last November, will remain in place for at least another year.

The decision also leaves New Zealand with a vehicle emissions standard that is materially weaker than the one Labour enacted, but structurally intact. The question for the motor industry, climate advocates, and opposition parties will be whether the 2028 targets restore the scheme's original ambition or lock in the lower settings as the new baseline.