The Government has launched the Low Emissions Heavy Vehicle Fund (LEHVF) to promote innovation and offset the cost of hundreds of heavy vehicles powered by clean technologies, Energy and Transport Minister Simeon Brown and Climate Change Minister Simon Watts say.
As part of Budget 2024, the Government confirmed $27.75 million towards offsetting the purchase prices of low and zero-emissions heavy vehicles.
To help transport operators tackle the high upfront costs and the unknown total cost of ownership of zero and low-emissions heavy vehicles, the LEHVF will contribute up to 25% of the cost of new zero and low-emissions heavy vehicles, and up to 25% of the cost to convert existing higher emitting heavy vehicles to be powered by low-emissions technology.
“Boosting economic growth and productivity is a key part of the Government’s plan to rebuild the economy. The LEHVF will offset upfront costs for businesses, enabling them to increase productivity with vehicles that are cheaper to operate,” Brown says.
“By offsetting up to a quarter of these vehicles’ purchase price, the Government is encouraging businesses to trial these new technologies to reduce day-to-day operating costs, ultimately saving money for consumers at the checkout.”
Meanwhile, Watts says the fund will provide emissions benefits for years to come.
“Transport accounts for 18% of New Zealand’s total emissions, which is why the Government wants to remove barriers and accelerate businesses to switch to lower-emission technologies.”
According to modelling from the Energy Efficiency and Conservation Authority (EECA), it’s estimated up to 500 diesel-only vehicles would likely be replaced by mostly zero-emissions vehicles by 2028, as well as some low-emissions hybrid vehicles as a result of the Low Emissions Heavy Vehicle Fund.
“While this is a one-time initiative, there will be cumulative emissions benefits over the lifecycle of these low-emissions heavy vehicles. Initial estimates indicate that switching 500 diesel-only vehicles to zero and low-emissions alternatives will prevent 366,622 tonnes of carbon dioxide equivalent emissions,” Watts says.
The LEHVF will be reviewed in six months’ time to ensure it’s meeting its objectives and captures ongoing market advancements, he adds.
Tackling adoption barriers
National Road Carriers Association policy and advocacy general manager James Smith says moving to a low emissions model is challenging for the freight sector for various reasons.
This includes infrastructure limitations with charging stations or hydrogen refuelling, high initial costs of electric or hydrogen vehicles, the technology still developing compared with diesel, and the sunk cost and long lifespan of current vehicles.
“A key barrier to transition is the cost of technology. The LEHVF contestable fund created by EECA has already provided $75.9 million in government funding to support low emissions heavy vehicles.”
Smith says $27.75 million of new funding will be available to the heavy vehicle sector on a non-contestable first come, first served basis.
This will help accelerate the uptake of low emissions heavy vehicles, support early adopters and gather operational insights, he adds.
Examples supported through the programme to date include:
- $250,000 for Civic Limited to purchase two 10 tonne electric trucks and support charging infrastructure
- $500,00 to freight optimisation company CODA, in partnership with Zero Emission Vehicles Ltd and Bay Dairy Ltd, to design and manufacture an electric truck to shuttle dairy products from the Fonterra Te Rapa dairy factory to the Fonterra Crawford Street freight hub in Hamilton
- $255,000 to WEL Services to convert an internal combustion engine truck to an electric vehicle with an elevated work platform for line maintenance work
- $350,000 to TR Group to purchase three curtainsider freight trucks and make them available for hire to the general freight market. Appropriate charging infrastructure will be installed at TR Group’s Auckland yard and the company will work with customers to build their own. TR Group will also support the development of maintenance resources for the trucks
*Go to eeca.govt.nz/co-funding-and-support/products/low-emissions-heavy-vehicle-fund/ for more information.
