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The great feebate debate – the pros, cons and confusions

Words by  Erik Zydervelt

The term feebate has been floating around the New Zealand political zeitgeist from as early as 2018 but with the recent announcement for this year’s NZ Government budget, we may finally have one of the solutions to transport emissions Kiwis have been clamouring for. 

While there is much merit in this feebate scheme, is it New Zealand’s best bet for encouraging more sustainable transport, in order to meet our net-zero emissions target, or can we explore alternative solutions that involve a shifting mindset instead of government expenditure? Or is the question more nuanced than that – should we be implementing schemes like feebates while also trying to end New Zealand’s love affair with the private car?

A feebate is a scheme that rewards the purchasing and import of low emission vehicles, and penalises those buying gas-guzzling, heavy vehicles. This was first bandied about in Parliament in 2018-19 but was ultimately stalled by NZ First within the Labour-Green-NZ First coalition. But now with an out and out Labour majority, the runway is clear to introduce new dynamic environmental policies. 

The feebate wasn’t mentioned explicitly, but political theorists (myself included) believe that the $302 million within the budget set aside to “implement a regime to incentivise the uptake of low-emissions vehicles” is just that.

The feebate that was originally proposed was designed to be net-neutral, taking the money from heavy carbon-emitting vehicles and using those funds to make more sustainable vehicles cheaper. This would have no extra cost to the government (apart from the manpower required) but also wouldn’t rely solely on the import of new BEVs – as light combustion vehicles such as Suzuki Swifts or hybrid vehicles like Priuses would be included. 

Feebates aren’t a new concept and have been introduced with great success overseas. We’ve already seen some countries bite the bullet and invest in this scheme, including:

  • France – The French Government introduced the bonus/malus scheme in 2008, deeming it a success within a year. According to official figures, sales in France of vehicles consuming less than 130 g/km CO2 increased by 45% in the eight months since the scheme was introduced. In that time, average CO2 emissions from new cars sold fell by 9% (8 g CO2/km). There was, however, a surge in purchases of 4x4s between the scheme’s announcement and its introduction. 

  • Sweden – In 2014 Sweden introduced a rebate system, before switching this to a feebate system in 2018 as it became clear encouraging cleaner vehicles would cost the government significantly. In the month of the feebate’s implementation, EV registrations in Sweden hit a historic high for that time of 18 percent – now projecting a 20 percent share of newly-sold cars that are chargeable, which is the highest in the world after Norway.

  • Singapore – Singapore introduced its feebate system in 2012 to similar success to Sweden and France. One noticeable difference in the Singaporean system is the emphasis on taxis due to their high concentration and because they spend more time on the road than personal vehicles. The rebate for taxis is set at 50% higher than cars to encourage lower emission fleets.

So how will this work in New Zealand? No details have been revealed just yet but the original feebate discussed in 2019 would have seen imported EVs and ‘clean’ cars subsidised by up to $8000, with penalties of up to  $2000 imposed on imported ‘dirty’ vehicles. 

And while this may seem like a win-win solution, many environmentalists are rallying against a simple 1:1 transition of petrol vehicles to EVs and calling for more support for transport modes that cut down on the need for private cars. There is a huge support for alternative transport to cars, EV or otherwise, just look at the “Liberate the Lane” event on the Auckland Harbour Bridge this past weekend. For one, the manufacturing of EVs is still a massive polluter and the batteries for these vehicles contain rare and very toxic materials such as lithium, making them dangerous to simply trash once they’ve passed their prime. 

We need to support people to make the shift to EV ownership while also considering a world with significantly fewer cars, like a 50%-90% reduction of total vehicles on NZ’s roads. While a hard pill to swallow, there are so many more ways we can decrease our transport emissions through technology readily available in New Zealand.

There are e-scooters and ever-increasing bike lane spending in every major city that are cheap and effective for short trips- an example of this being Wellington’s recent $200m+ commitment. We also have buses and trains which, with proper funding, would be fit for purpose for many New Zealanders. And for those trips that can’t be made for public transport, there is car share, a solution which reduces emissions and congestion – bringing more positive outcomes to the environment and our society. 

There are also concerns that this feebate doesn’t go far enough as it was only designed to apply to new and imported vehicles, not those that are sold secondhand within New Zealand. The older a vehicle is, the more CO2 it emits so focusing only on imports may not have the impact we’re hoping for. 

One aspect that the full feebate scheme misses the mark a bit on is that it ignores a mixed and shared use model, which could have lasting impacts on our planet. Car-share, public transport, ride hailing/taxi and micro-mobility options, including active transportation such as cycling and walking, are clearly the most efficient way of reducing our emissions. 

At the end of the day the average trip in NZ is a mere 9kms, most of which can easily be replaced by private vehicle alternatives. As a country we are looking for non-traditional, net zero carbon outcomes, so there is a serious need to invest in non-traditional modes of transport and divorce ourselves from the long-standing love affair Kiwis have with private vehicle ownership.

This is absolutely required in order to make our cities cleaner, less congested, and substantially more liveable. The feebate is great as a first step, but we risk only making one small step and resting on our laurels, instead of thinking of transport emissions as a multi-faceted issue with multiple interlocking solutions. 

Erik Zydervelt is CEO and co-founder of Wellington-based climate-positive free-floating car-share Mevo.

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