Emissions Reduction Plan: Transport takes 'leading role' with scrap-and-replace, low-emission vehicle leasing trials announced

The Government will trial a scrap-and-replace initiative and a low-emission vehicle leasing scheme as it looks to incentivise Kiwis to make the transition to clean transport alternatives.

They are included in the mega Emissions Reduction Plan (ERP) released on Monday, which reveals how the Government intends to cut New Zealand's emissions over the coming decades as it works towards net-zero by 2050.

Nothing is left untouched, with the Government planning initiatives across everything from agriculture, to energy, to waste and forestry. But transport - which makes up 17 percent of New Zealand's gross domestic emissions and 39 percent of carbon dioxide emissions - is in for a significant shakeup.

By 2035, the Government wants to reduce the total amount of kilometres driven by the light vehicle fleet by 20 percent while increasing the number of zero-emission vehicles to 30 percent of the overall light-fleet. It also wants to reduce emissions from freight transport by 35 percent and the emissions intensity of transport fuel by 10 percent.

Climate Change Minister James Shaw and Transport Minister Michael Wood said transport will "take a leading role in New Zealand's efforts to tackle climate change", with the Government planning an array of changes to make clean transport options more accessible for Kiwis.

That includes the establishment of a Clean Car Upgrade, a scrap-and-replace trial for lower- and middle-income families who want to trade in their gas guzzler for a more environmentally-friendly alternative.

"Families who trade in their vehicle will receive support for the purchase of EVs, PHEVs, and hybrids," Climate Change Minister James Shaw said. 

"By taking advantage of the Clean Car Upgrade, families will not only benefit from lower transport costs but will also be able to replace their high-emitting older vehicles with a safe and sustainable alternative."

Shaw said that for EVs charging at home, during off-peak hours, the cost would be equivalent to buying petrol at about 40 cents per litre. He noted that a similar scheme in California saw 10,000 people scrap their dirty vehicles and replace them with low-emitters. 

The Government's planning to do more work on this throughout 2022, with the trial of up to 2500 vehicles set down for next year. It will receive $569 million in funding from the Climate Emergency Response Fund (CERF). There will be a threshold to be eligible for the scheme.

Transport Minister Michael Wood and Prime Minister Jacinda Ardern.
Transport Minister Michael Wood and Prime Minister Jacinda Ardern. Photo credit: Getty Images.

A scheme where low-income families will be supported to lease a safe, low-emission vehicle from a community organisation is also on the cards. It is also expected to start early in 2023 across three communities and will cost $20 million initially.

"This will provide a leg-up to those who wouldn't otherwise be able to afford to shift to a low-emission vehicle, helping them reduce their living costs and get ahead," Shaw said.

A form of congestion charging was widely expected to be revealed in the plan, but the Government has kicked that down the road, only saying on Monday that in the second half of 2022 it will "decide whether to progress legislative changes".

Finance Minister Grant Robertson has spent recent weeks saying a congestion charge would rely heavily on communities having access to public transport alternatives.

If it decides to go ahead with congestion charging, the Government will work with Auckland Council on its design, engage with Wellington councils, and monitor interest from other centres. It could also investigate other additional pricing tools to reduce transport emissions.

There is no mention of any extension to the half-price public transport fares currently in place. A Newshub Reid Research poll out earlier this month showed wide support for making that initiative permanent. Robertson has said the policy will be reviewed in the future. 

Overall, Wood said $1.2 billion is being put into the transport sector from the CERF "to support people to move to public transport, increase walking and cycling, accelerate the uptake of cleaner vehicles with a focus on equity and decarbonise our freight system". 

"This is expected to reduce carbon emissions equivalent to taking 181,000 cars off the road between now and 2035."

The changes announced are expected to see a reduction in emissions of between 1.7 and 1.9 megatonnes of carbon dioxide over the first emissions budget, which runs until 2025.

"Along with changes in the vehicle fleet's profile and fuel efficiencies over time, these policies are estimated to achieve the emissions reductions required to meet the transport-sub sector target for the first emissions budget period," the plan says. 

What else does the plan include for transport?

  • Deliver a national public transport strategy

  • Deliver a nationally integrated ticketing system for public transport

  • Substantionally improve walking and cycling infrastructure

  • Support initiatives to increase the uptake of e-bikes

  • From 2025, require only zero-emissions public transport buses to enter the fleet, with a target of decarbonising the entire fleet by 2035.

  • Continue the Clean Vehicle Discount scheme

  • Set a maximum carbon limit for individual light vehicle imports

Where's the money going to?

  • $569m for the Clean Car Upgrade

  • $350m to fund transport services and infrastructure investments that reduce reliance on cars and support active and shared modes of transport

  • $20m for the vehicle leasing scheme

  • $23m to develop national and urban programmes to support shift to active and shared modes

  • $61m to support a sustainable, skilled workforce of bus drivers

  • $40m over four years to accelerate the decarbonisation of the public transport bus fleet

  • $20m to accelerate the decarbonisation of freight transport