New Zealand loves utes. We buy more utes per capita than even Australia, and so its no surprise that rural sectors are up in arms about the Clear Car Discount. Ute owners will be hit hardest because their diesel engines are the heaviest LCV polluters.
The principle behind encouraging consumers to choose lower polluting vehicles by incentives and taxation has been around in Europe for two decades. Locally, it’s a big shift in mindset. Of course, tidying up and removing the FBT loophole that allows the private use of commercial vehicles would also dampen the demand for utes.
But here’s the key point. We can get cleaner utes in New Zealand right now. It’s just that manufacturers have chosen not to bring them in. All utes sold here are Euro 5 emissions standards, but every one of them is available in cleaner Euro 6.
We don’t have legislation requiring manufacturers to bring in cleaner utes, so market forces demand that we bring in Euro 5. Why? Because achieving Euro 6 is expensive; vehicles typically require AdBlue, a diesel particulate scrubber, that needs to be added to a separate tank to clean the exhaust emissions. It would add between $500 and $1000 to every ute sold in NZ. In order to minimise price point to maximise volume, local distributors opt to take the cheaper Euro 5 standard.
This is where it gets a little messy; in NZ, with the Clear Car Standard we will only focus on Carbon Dioxide (CO2) emissions. The advantage of Euro 6 over Euro 5 (for diesel light commercial vehicles) is the targeted reduction in Nitrogen Oxide (NOx); Total Hydrocarbon (THC); and Particulate Matter (PM), which is a soot. So even though Euro 6 is significantly cleaner, NZ wouldn’t immediately benefit from any tax breaks or incentives from taking Euro 6 because the target measure of CO2 is not reduced between the two standards. The standards focus on reducing the other polluting components.
We use differing standards to measure fuel efficiency and emissions from Europe. Most brands use ADR 81/02 for their local product. This is a fuel economy test that is not compatible with the new WLTP (or even the old NEDC testing standard). So take the same vehicle, test it under both regimes and you’ll get different results. The government has to clean up this non-comparable standards mess to help us improve the pathway to cleaner vehicles.
Lastly, there is a solution right here, right now. Vans, not utes. By switching from a ute to a van, a business can lower their emissions by 10-20% and increase their fuel economy. Arguably, vans help keep tools and equipment more secure too, with better access to those tools for their staff.
The table below shows the difference in fuel economy and emissions between a Ford Ranger XLT and a similar sized Transit Custom. The least CO2-emitting ute – a 2.0 litre Ford Ranger is still 3g/km outside the first fee band of 192 g km, whereas the Transit Custom is in the zero band.