A part of the proposed 'clean car discount' measures, designed to reduce CO2 emissions, is being described as draconian by an industry leader.
The government wants to change the sorts of vehicles people buy by making electric and fuel efficient ones cheaper.
- To read the ministry's full discussion paper, scroll to the end or click here
Under plans outlined by the Associate Transport Minister Julie-Anne Genter today, a fee would be imposed on vehicles with high CO2 emissions and the money used to subsidise low emitters.
Ms Genter said they had worked with those in the industry and had a positive response, in particular about the clean car discount.
"We've been working very closely with both the new vehicle association and the used import association and they are positive about the policies, they know we have to do something about climate change."
However, Imported Motor Vehicle Industry Association chief executive David Vinsen told Morning Report that while he accepted more could be done to reduce emissions, he didn't believe the minister's proposal was the right way of doing that.
"What the minister has proposed is a draconian way of doing it."
Mr Vinsen said the "feebate" scheme would influence demand and signal to the public which vehicles are preferable for them to buy according to the government's standards.
"We think a clear simple pricing signal to the buying public would be most effective."
Mr Vinsen said it wasn't a problem to influence demand and they would comply with that by providing stock accordingly, but to influence supply using emission standards was "wrong on many levels".
"The second part of the proposal where the government wants to influence what the industry offers is draconian, and it's unworkable, it's unnecessary, it adds another layer of bureaucracy, it will be horrendously complicated and it will add costs and the worst of it is it will be inequitable."
He said this part of the scheme also ignored consultation and discussions about the proposal.
"To influence what we are able bring in, in the way it's proposed could be quite draconian, it ignores the discussions and consultations we've had over the last 18 months both ourselves and the new vehicle industries, separately and in parallel."
Federated Farmers vice president Andrew Hoggard, who is also the organisation's climate change spokesperson, said the plan was going to be challenging for farmers and those living in remote areas.
"To the best of my knowledge we don't have the alternatives yet for the sort of driving we're doing. I'm not sure of charging networks there are in this sort of hinterland, some of the more remote farms - whether the electric vehicles will have that range."
Mr Hoggard told Morning Report that without those alternatives, the scheme would unfairly penalise farmers.
"Hopefully there's some sort of rule proofing policy that goes over this, that 'if you're out in the rural area, this isn't going apply to you' or you can get some sort of discount, because without the alternatives it's effectively just a tax on rural people.
"I mean this policy is about promoting change, promoting people to change their behaviour, if you haven't got the ability to change your behaviour you're just being taxed.
"If the technology isn't there for people to use, just penalising them ... isn't going to give us the outcome we want, it's just going to make us poorer."
He said he wasn't aware of any advanced climate-friendly vehicles currently in supply that would be suitable for New Zealand farmers' duties.
"To the best of my knowledge there's a few experimental tractors out there, you've got the two-wheel motorbike that's electric powered ... the stuff's going to happen, it's in the pipeline, [but] it's not there yet."
Motor Industry Association chief executive David Crawford told Morning Report the lack of availability of that technology could hit tradies and those in the light commercial sector the hardest.
"The technology is moving so we expect to see by the mid-2020s a range of hybrid utes and other technology that may become available, so it's being able to adopt that technology as quickly as we can, but for that light commercial sector, we're not there just yet."
A new fuel efficiency standard would also be introduced, requiring importers to gradually reduce the average emissions of the vehicles they bring in.
New Zealand is one of just three developed countries without fuel efficiency standards - along with Australia and Russia - and New Zealand's imports are among the dirtiest in the world, producing heavy emissions and costing a lot to run.
The government wants to phase in an annual emissions target over five years, requiring importers to reduce the emissions of the vehicles they bring in.
The 2025 target (105 grams of CO2 per kilometre) is in line with the average fuel efficiency achieved by Japan in 2014.
With cars being responsible for the majority of climate pollution, most New Zealanders would want to buy a car that was better for the environment, Ms Genter told Morning Report.
She said the target would encourage importers to bring in more climate-friendly vehicles, increasing the number and variety of models available.
"These changes would prevent more than five million tonnes of dangerous climate pollution going into our atmosphere and would make a major contribution to meeting New Zealand's climate targets."
The policies would help make electric, hybrid and fuel-efficient vehicles a "realistic option" for more New Zealanders by reducing their upfront cost, Ms Genter said.
New Zealanders would also save thousands of dollars because of lower transport costs over their lifetime, she said. The discounts and fees would be displayed on vehicles available for sale.