The amendments to the Emissions Trading Scheme (ETS) announced by the Government need to also include spending the ETS levy on fuel for projects that help reduce transport emissions, says the NZ Automobile Association.

“Motorists are going to be paying more under the revised scheme for the CO2 they use when driving, and the extra tax collected needs to be invested in projects that help reduce the reliance on fossil fuels, such as developing alternative fuels,” says AA PetrolWatch spokesperson Mark Stockdale.

The AA says motorists pay an ETS levy of 6.7cpl on 91 octane petrol and 7.8cpl on diesel at the current price of CO2, which is capped at $25/tonne. If the price of CO2 rises to the maximum value under the reforms of $35/tonne, this year, that will add another 3cpl, and if it doubles to $50/tonne during 2021-25 then the ETS levy would be 13.5cpl for petrol and 15.6cpl for diesel.

At the moment the government is collecting about $420m a year in ETS revenue from transport, which could potentially double under reforms, but none of this is dedicated to offsetting CO2 emissions from the transport fleet.

“The objective of the reformed ETS scheme is to reduce CO2 emissions, and the transport sector needs to play its part, but today‘s announcements do not guarantee that the increased levies will reduce CO2 from transport, which has been the fastest-growing sector for emissions,” Stockdale said.