Guy Trafford says farmers should be welcoming the shift in focus to get the transport sector to reduce their emissions (as the rural sector has already done). Pity about the lack of options for farmers

With the Government’s changes to the ‘clean car discount scheme’ responses from farmers has been predictable if not perhaps a little disappointing. One of the areas of the Government’s actions over climate change I and others have been critical of is the focus on farming emissions while transport had seemed to be ignored.

Emissions figures up to 2021 were showing that while the agricultural sector was showing reductions, transport energy seemed stuck in the mire with little likelihood of clambering out. However, the recent news that EV’s and hybrids are making up to 20% of new car sales in 2022 up from 8% in 2021. This is well ahead of the forecasted figure may mean that when the next lot of figures come out transport may be finally starting to show the much-needed reversal of its emissions profile.

Farmers should be welcoming this.

Unfortunately, farmers are also required to use transport and also unfortunately, they don’t have the benefit of good (or even bad) public transport. At the moment the quandary about what vehicles farmers can access that genuinely meet their business needs and aren’t gas guzzlers is problematic.

The only thoughts I can provide is to avoid buying a new ute.

The way I see it petrol (or diesel) is going to be the new cigarettes. It will attract increased taxes until it no longer becomes economic to own one.

If the ETS can do this without additional government interference then so be it.

However, if as we see at the moment the additional tax applied to fuel via the ETS system is not enough to disincentivise wholesale conversions away from petrol/diesel powered vehicles then additional costs are likely to be overlaid on top. According to Stuff (2021) for every $70 on the carbon price in the ETS (only) an additional 16 cents is added onto the cost of fuel per litre. Given the volatility around fuel prices we’ve seen in the last 18 months, largely compliments of Russia, it is going to take a huge increase in the ETS price to get any sort of response.

I suspect the surge in EV sales lately is a combination of current cost, fear of the future, and of course trying to do the right thing.

To my mind anyone determined to purchase a new ute (or larger petrol/diesel car) needs to be prepared to wave good-bye to a heap of value. If the 20% loss of value when you drive it out of the car yard isn’t enough then the increasing fall in value over time exacerbated but fossil fuelled vehicles going out of fashion should make people think twice.

There are a number of vehicle manufacturing countries which have policies in place already banning the making of fossil fuelled vehicles by 2030’s and some like Norway by 2025. New Zealand has committed to have no new fossil fuel vehicle sales by or before 2040

Source: Wikipedia

So, the writing is well and truly on the wall, notice on the map even China is among the earlier banning countries. In fact twelve months ago MotoringNZ.com predicted to happen exactly what has with the Government response. The argument that there are no EV utes available is also starting to sound a little spurious. They may not be in New Zealand yet (apart from the LDV and that doesn’t really count) but they are not far away.

Perhaps an increase in demand will see them arriving sooner rather than later. What does seem to be a common thread among them is they are not cheap and that is not likely to change until supply catches up to demand. In the meantime, we have an aging 2010 BT 50 ute available for sale, the Toyota Blade will also be going. A leasing option for two Ioniq 5’s EV’s was too hard to walk past as was the knot in my stomach every time I filled the ute and car up, which is almost weekly for each of them.

I am fortunate (I think) that my days of needing a ute to carry loads around are numbered and so the decision was relatively easy to make. The issue around charging may prove to be an issue if the rate of car conversions out-paces the ability of the power network to keep up with electricity demand, we have solar power so less of an issue (man do I sound pure). But at least New Zealand is fortunate in being rich in renewable sources of energy, it is just going to take some additional will to bridge the gap between renewable energy (currently supplying 81%) and fossil fuel sourced.

At the end of the day, agriculture, although they may not think so, have been treated relatively benignly by governments over its externalities but it does seem that this is not going to extend to transport.

When it comes to the ‘clean car discount scheme’ the next review is two years away, hopefully there are more options available then which still receive a discount.

In the meantime, we can almost guarantee the price of fuel will have gone up, be it by the ETS, the removal of the government subsidy (this is due to happen June 30th 2023 and add another 25 cents per litre back onto petrol) or additional taxes and fees from government. EV’s may be paying a road tax by then, currently around 70 cents per litre plus GST so maybe $1 per litre equivalent of travel compared to maybe $3.00 and the price of second hand EV’s will have reduced when the lease expires.

On the plus side for livestock farmers, if the heat comes out of our transport emissions and agriculture continues with its reductions perhaps the focus will move away from emissions and more onto mitigations.