Budget 2022 - What's In It For EVs?

The latest budget was released last week, setting out the spending plan for the next 5 years. A strong emphasis has been put on mitigating the rising cost of living and reducing emissions. All industries now have the pressure on to reduce carbon emissions to meet the emissions budget interim targets on the path to net-zero emissions by 2050. The emissions reduction plan has been put in place to achieve these emission budget targets.

The emissions budgets are as follows:

  • Emissions Budget 1 (2022–2025): 290 megatonnes of carbon dioxide equivalent greenhouse gases (72.4 megatonnes per year)

  • Emissions Budget 2 (2026–2030): 305 megatonnes (averages 61 megatonnes per year) [in principle]

  • Emissions Budget 3 (2031–2035): 240 megatonnes (48 megatonnes per year) [in principle]

These targets are to be reached domestic alone and are separate from the Paris Agreement which is set up to allow countries to work together to cut emissions on top of their efforts at home.

The 2022 budget allocated $2.75 billion to the Climate Emergency Response Fund which is centralised around reducing emissions and committing funding to the research and development of new technologies.

Although what we want to know is: what’s in it for electric vehicles?

Well, the first of the projects to boost electric vehicles in NZ is the vehicle electrification project. $4.977 million of funding has been allocated over the 5 years to purchase 148 electric vehicles for the Department of Conservation, the necessary charging infrastructure and ongoing operational fleet costs.

Department of Conservation to add 148 EVs. Pictured is one charging
Department of Conservation to add 148 EVs

To ensure that low-income Kiwis can also get into an EV, the government has introduced the Social Leasing Scheme and the Vehicle Scrap and Replace Scheme. $20 million has been allocated to the Social Leasing Scheme that leases low-emission vehicles to low-income participants. The Vehicle Scrap and Replace Scheme offers support to low-income households to shift to a low-emissions vehicle upon scrapping a high emitting vehicle. This scheme has been allocated $568.762 million to take high emission vehicles off the road and get more clean vehicles on it.

A further $40.645 million has been allocated to decarbonise the public transport bus fleet. This initiative provides funding for zero-emission buses and the associated infrastructure needed. $20.116 million has also been distributed across transport and business, science and innovation for funding activities that support decarbonising the freight and supply chain sector. This also includes contestable funding for low emission freight solutions.

Of course, all of this electrification of transport needs powering, so $5.225 million has been allocated to supporting the transition to a renewable electricity system. This funding will support a transition to a highly renewable electricity system and facilitate the public sector obtaining renewable energy sources too. However, this funding seems rather out of proportion to the amount of additional renewable energy that the country needs to add to keep up with rising electricity demand. I was expecting the government to implement an incentive for Kiwis to install solar energy to assist this shift, as many other countries have already done, but it does not seem to be in the plan yet.

Public DC EV Charger at Hampton Downs charging Hyundai Kona
Public DC EV Charger at Hampton Downs

The Clean Car Discount remains in effect with rebates for low emissions vehicles and fees for high emitters. This incentive, alongside the other projects and schemes introduced in the budget, is a great push to get Kiwis to make the switch to EVs, especially the support for lower-income households that otherwise may not be able to afford an EV. However, I do wonder if there is enough investment into public charging infrastrastructure yet. $25 million per year is available for decarbonisation technology and infrastructure through the Low Emission Transport Fund. But, there are still many gaps in the network that may not be filled at the same rate as EV uptake.

Although it seems to have taken forever for NZ to get serious about climate change and reducing emissions, it is great that we have these schemes now being put into place. The technology and EVs available are only getting better so it will be interesting to see where we are by the end of emissions budget 1 in 2025. Will we make the target?

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