New Zealand Fuel Economy Labels in Effect 7 April; Fuel Economy Standards Under Discussion

26 March 2008

The new vehicle fuel economy labels for New Zealand. Click to enlarge.

New Zealand’s vehicle fuel economy labelling regulations come into effect Monday, 7 April 2008. In parallel, submissions on the proposed New Zealand fuel economy standard for new and used light vehicles entering the fleet close on 28 March 2008. New Zealand is a “technology taker”—it does not manufacture vehicles in country; instead, it imports new and used vehicles.

The vehicle fuel economy rating is a star rating out of six and based on independent testing. There is one rating scale for all vehicles—the more stars, the less fuel it uses. For example, six stars for the most economic to a half a star for the biggest gas guzzler.

The information that will be displayed on the label is:

• Rating out of 6 stars;

• Liters per 100km (where available);

• Cost per year;

• Method of assessing fuel economy (cost per year); and

• Reference details.

The system applies to vehicles imported since 2005 and those manufactured since 2000.

The fuel economy rating is based on independent testing. Vehicles in New Zealand are tested to either the European (typically new cars) or Japanese (typically used cars) test methods. The average fuel price used in the fuel economy rating calculation will be reviewed each year, although it will only be changed if there’s been a big move in actual fuel prices. An average of 14,000 km annual travel (used by the AA and Department of Inland Revenue), has been used in the calculation as a reasonable basis for cost comparison.

Energy and Climate Change Minister David Parker says that the labels are estimated to cut fuel usage by 7% percent by giving consumers better information to make an informed purchase decision.

Proposed NZ fuel economy standards. The chart reflects the need to reconcile both European and Japanese test values. Click to enlarge.

NZ Fuel Economy Standards. Light vehicles represent 93% of the total vehicle fleet in New Zealand and are responsible for approximately 80% of the CO₂ emissions from road transport and approximately 13% of total greenhouse gas emissions.

In the New Zealand Energy Efficiency and Conservation Strategy (NZEECS), the Government announced a fuel economy target of 170g of CO₂/km by 2015 for light vehicles entering the fleet (equivalent to about 32 mpg US gasoline, with US EPA assumptions of 8,788 g CO₂ produced per gallon of gasoline). The current average is about 210g of CO₂/km (about 26 mpg US gasoline). Without further intervention, New Zealand expects the average emissions intensity of light vehicles entering the fleet to be 190g of CO₂/km (About 29 mpg US gasoline) by 2015.

Of the number of potential options to improve the fuel economy and CO₂ emissions of vehicles entering New Zealand, the government favors legislating a vehicle fuel economy standard. The government proposes expressing the standard in grams of CO₂ per kilometer as opposed to liters of fuel per 100 kilometers travelled. This reflects the intention and objective of the proposal, which is to reduce CO₂ emissions.

The proposed standard would apply to all passenger and light goods vehicles of 3.5 tonnes gross vehicle mass, or less. The proposed standard will reduce in steps over time. This means the fuel economy of the vehicles entering the fleet will be required on average to improve over time. The standard will reflect the target for fuel economy expressed in the NZEECS that by 2015, the average fuel economy of light vehicles entering New Zealand will be 170g of CO₂/km. This broadly reflects a 20% reduction from current levels.

As a transitional measure, the initial standard will be 213 g of CO₂/km. There are three steps down to 170g CO₂/km on average for vehicles entering the fleet in 2015. The standard beyond 2015 will be established by Government at a later date.

Because New Zealand imports its vehicles primarily from Europe and Japan, there are essentially two standards: one standard is for vehicles that have been tested to the European drive cycle test and have a valid European test cycle value. The other is for vehicles that only have a Japanese drive cycle test value. The Japanese test cycle standard is lower at 2015 because of the difference in the way the fuel economy is tested in the Japanese drive cycle.

Most new vehicles, including Japanese new vehicles, entering New Zealand have a European drive cycle test value, so the European standard will apply. But for vehicles that do not have a European drive cycle test value, mostly Japanese used imports, the Japanese standard will apply.

The government is exploring three possible implementation options, represented in a discussion document published in January 2008:

• Tradable credits scheme. Importers are given a tradable certificate or credit for each vehicle that is better than the fuel economy standard. Importers who fail to achieve a compliant annual average would be required to pay a penalty.

• Vehicle levy scheme. Each vehicle entering the fleet is assessed against the fuel economy standard and a charge is paid for every vehicle that does not meet or better the standard.

• Industry code of compliance. Companies sign-up to an industry code of compliance administered by an industry representative group. Penalties would be based on the expected carbon footprint for vehicles that do not meet the standard.

The government is taking comments on the standards until 28 March 2008.

Resources

• FuelSaver.Govt.Nz

• Improving the fuel economy of vehicles entering the New Zealand fleet discussion document