In its final weeks in power, Labour made the call to delay the introduction of new air quality limits for vehicle imports after consultation with the motor industry
Stricter limits on air pollution from car exhausts which were due to be introduced from early 2025 have been pushed back by more than two years.
New Zealand and Australia are the only developed countries that haven't adopted the Euro 6 pollution controls, which were first taken up by the European Union in 2014. Overseas, they are set to be superseded by new, more stringent Euro 7 limits, meaning New Zealand will be two generations of standards behind many of our peers in the second half of the decade.
Standards were last set in New Zealand in 2012, aligning with the Euro 5 rules first adopted by Europe in 2009. They also tied into Australia's changes, given the two countries share an auto market.
According to research released last year, air pollution from motor vehicles is responsible for more than 2000 premature deaths in New Zealand each year. That's more than one in every 20 deaths or nearly six times the annual road toll.
READ MORE: * The Invisible Killer: New Zealand's air pollution crisis * Air pollution limits proposed for car imports
Alongside those findings, the Ministry of Transport commissioned a report from the researchers on the impacts of adopting Euro 6. As first reported on Newsroom in April, the report found New Zealand could save as much as $8 billion in avoided health and productivity losses by 2050 if Euro 6 were implemented for new vehicle imports.
In May, the Ministry of Transport consulted on moving to Euro 6 standards for light vehicles and corresponding Euro VI rules for heavy trucks. From February 2025, imports of new light vehicle models would be required to be compliant with Euro 6. Used vehicles and new vehicles of existing models would be subject to the rules a year later.
Officials acknowledged that adopting Euro 6 on a faster timeline than Australia (which is currently looking at 2027) would require New Zealand to decouple its auto market. Suppliers would need time to do that, so they decided against a 2024 implementation date, which would have had the greatest net benefits.
"The majority of our vehicles are also approved for sale (homologated) to the Australian Design Rule (Australia’s version of the Euro standard), and re-homologating vehicle models to meet the Euro 6/VI standard, which is not required in Australia, could increase overheads significantly (by millions of dollars). Allowing sufficient lead time for vehicle importers to decouple from the Australian market would reduce the overheads inevitably passed on to consumers."
However, in a summary of submissions released last week, the ministry said feedback from the motor industry had prompted it to reconsider the decision to move ahead of Australia.
"Aligning has the potential to forgo a net benefit of around $322 million-$334 million in avoided health harm. However, we have not been able to quantify how much of this value will likely be eroded by the supply and price risks submitters identified," officials wrote.
In a decision authorised by Cabinet in September, as one of the final acts of the Labour Government, the Euro 6 timeline for new models was pushed back to between July 2025 and July 2027, depending on when Australia decides to adopt them. Existing car models would see Euro 6 rules pushed back from February 2026 to July 2028.
Australia is considering its timeline for Euro 6, with a draft regulatory impact statement released last year containing an option of 2025 or 2027.
Green Party MP Julie Anne Genter, who has been outspoken on air pollution issues, said it was "grossly irresponsible" to delay the rules.
"The former Labour government made a choice to prioritise the convenience and profits of the car industry over the health of our people. I'm appalled," she said.
"It's not even necessarily the case that the car industry would be worse off. They always say they will be, but they said that they had concerns about the Clean Car Discount and the Clean Car Standard as well and they are now well ahead of what the Clean Car Standard set them in terms of emissions targets."
The study commissioned by the transport ministry on the benefits of adopting Euro 6 suggested the country would save $6.5 billion if the rules came into force in 2025, versus $3.7 billion if a 2027 date was selected.
A spokesperson for the ministry said the delay was considered against the health impacts of doing so. The primary health impact would come from diesel utes, which would continue to be imported against Euro 5 standards rather than Euro 6 in the interim years.
Lee Marshall, the chief executive of the Motor Trade Association, told Newsroom the benefits wouldn't have materialised if New Zealand had gone out of alignment with Australia.
"From a car manufacturer's perspective, we are one destination market. And given [New Zealand] is only one seventh of the new vehicle market in this part of the world, it would have been very dangerous to move out of sync with Australia because our market is too small for any manufacturer to make a New Zealand-specific model," he said.
"If the rules had come in sooner, there's no reason to expect that there would have been any benefit sooner. I think the unintended consequences that we always saw with this was if it did go ahead of Australia, the risk was always going to be that manufacturers would simply cut non-compliant vehicles from our market, which would really only serve to either increase the number of used imports coming into the country or increase the average fleet age even longer."
Rather than importing more expensive, cleaner vehicles, New Zealand would have just been flooded with more dirty used cars and people would have driven their cars longer because of the price increases for new vehicles, Marshall believed.
"It's nice to have given feedback and for the MoT to have taken it on and actually acted on it," he added. "It's nice that they've taken it on board. Very grateful to the MoT for that."
