New Zealand’s Clean Vehicle Standard, which sets annual CO₂ emission targets for vehicle imports, will be retained following a first-principles review, Transport Minister Chris Bishop has announced. The Government will also set separate targets for used vehicle imports to reflect their different and older technology, with revised settings due to take effect from 1 January 2028.

The Standard charges imports that exceed their CO₂ target and rewards lower-emissions vehicles with credits, allowing importers to manage a mix of vehicles provided net charges are avoided. A review in 2025 found the settings were not well matched to market conditions, with most importers struggling to meet passenger vehicle targets.

The first stage of a first-principles review found the Standard to be the most cost-effective means of increasing lower-emissions vehicle availability in New Zealand. Most industry stakeholders who participated in the review supported its retention, noting it was well established and that removing it would be disruptive for vehicle importers.

Officials will now engage with the vehicle industry on settings and report back early in 2027, ahead of new targets taking effect from 1 January 2028. Bishop said the Government’s goal was to calibrate settings so they are realistic and achievable for the industry.

Why this matters:

• Retaining the Standard signals policy continuity over disruption for importers.Industry stakeholders’ preference to keep an established framework suggests accumulated compliance systems and credit positions carry enough switching cost that recalibrating targets was seen as less disruptive than removing the scheme entirely.
• Separating used vehicle targets acknowledges a structural mismatch the original settings ignored.Applying the same emissions targets to older, higher-emissions used imports as to new vehicles likely made compliance disproportionately difficult for that segment, suggesting the previous settings penalised technology age rather than genuine emissions performance.
• A 2028 implementation date gives importers a defined planning window rather than an immediate shock.Delaying revised targets until 2028 while consulting through 2027 suggests the government is prioritising a negotiated, achievable calibration over a faster but more contentious reset.