Clean Vehicle Standard survives — but industry wants an end to the back-and-forth
Transport Minister Chris Bishop has confirmed the Clean Vehicle Standard will stay, prompting motor industry groups to call for cross-party agreement on vehicle emissions rules to end what one industry leader called "flip-flop jandal politics" (RNZ).
The Clean Vehicle Standard, brought in by the previous Labour government, puts a penalty on importers who bring in vehicles above target emissions levels. Importers can offset those penalties by also bringing in lower-emissions vehicles. The policy sits alongside the broader Clean Car Discount framework, which began in 2021 and provides rebates and charges based on carbon emissions for new and used imports (Ministry of Transport).
In November 2025, Bishop cut the Clean Vehicle Standard penalty by nearly 80 percent, saying importers could not source enough low-emissions vehicles to avoid being penalised (RNZ). The penalty rate now sits at roughly $15 per gram of carbon dioxide over the limit, compared with between $50 and $100 per gram under Australia's equivalent scheme.
Drive Electric chair Kirsten Corson welcomed the decision to keep the standard, calling it "the right call" and noting that abolishing it would leave Aotearoa alongside Russia as the only countries without such a framework. But Corson said the wider industry was struggling to keep up with shifting policy settings, which she described as "flip-flop jandal politics" (RNZ).
Motor Trade Association chief executive Lee Marshall offered a more measured view. He said that before the 80 percent penalty reduction, the standard was "too aggressive, too punitive" and unrealistic given the supply realities importers faced. Even so, Marshall said the Clean Vehicle Standard was "the right tool to use" and that he wanted targets to be aspirational but achievable rather than idealistic (RNZ).
Marshall said the government planned to finish public consultation on new Clean Vehicle Standard targets in 2027, ahead of them taking effect from 1 January 2028. He called for cross-party agreement on the emissions limits, saying it would be good "for the future of the auto industry" and would stop transport being a political football (RNZ).
The Motor Industry Association (MIA) welcomed the government's reset of the standard, saying it would "restore balance and support real emissions progress" (OICA). MIA forecasts put Clean Vehicle Standard compliance costs at around $125 million in 2025, rising to around $153 million in 2026, based on $67.50 per gram of carbon dioxide. Those figures predate the penalty reduction Bishop announced in November 2025.
The Ministry of Transport has prepared a Regulatory Impact Statement titled "Revising the Clean Car Importer Standard Targets", with a separately released annex (Ministry of Transport). The original Cabinet proposal for the standard sought agreement to introduce a vehicle import CO₂ standard, and the government proposed phasing it in for a year without charges to give the industry time to adjust to the changed regulatory environment (Ministry of Transport). A Stage 1 Cost Recovery Impact Statement was also prepared for the standard's administration (Ministry of Transport).
The standard's trajectory has been uneven. Labour introduced it with ambition and a charge-free phasing period. The coalition government then cut the penalty sharply. Now Bishop has confirmed retention, with new targets to follow in 2028. For an industry that orders vehicles months or years ahead, each shift carries cost implications.
The trans-Tasman comparison sharpens the picture. Australia's penalty rate of $50 to $100 per gram is three to nearly seven times New Zealand's $15. Whether that gap narrows will depend on the outcome of the 2027 consultation and whatever targets emerge for 2028.
The broader context here is about investment certainty over electoral cycles. Marshall's framing of transport as a "political football" reflects a sector that has watched the standard survive a change of government, absorb a near-80 percent penalty cut, and face another round of target-setting — all within roughly five years of inception.
Whether Labour and the coalition parties can find common ground on emissions limits is an open question. Neither side has publicly committed to Marshall's cross-party proposal. But with consultation not due to conclude until 2027 and targets not taking effect until 2028, the window for negotiation is wide.
