Government Revamps Heavy Vehicle Fund to Drive Clean Freight Innovation

New Zealand’s transport sector is on track for a major shift toward cleaner, more efficient freight operations, as the Government announces a refreshed Low Emissions Heavy Vehicle Fund. The updated initiative, unveiled by Energy Minister Simon Watts, aims to better support businesses in transitioning to low and zero-emission heavy vehicles—critical for decarbonising one of the country’s most emissions-intensive sectors.

Minister Watts highlighted the significant opportunity heavy freight offers in achieving national climate goals, stating:

“Heavy freight represents a high-impact opportunity to reduce emissions and enhance energy efficiency on our roads.”

With global markets already embracing clean heavy freight technologies, New Zealand’s upgrade of the fund is designed to ensure local businesses are not left behind.

Why Heavy Freight Matters

Heavy freight vehicles contribute disproportionately to road transport emissions due to their size, weight, and long-distance operations. They are a crucial target in the Government’s second Emissions Reduction Plan, which outlines actions across key sectors to meet New Zealand’s climate targets.

According to Minister Watts, modernising freight systems through clean energy technology will help not just with emissions, but also with enhancing the resilience and competitiveness of supply chains.

“Globally, clean heavy freight is reshaping modern, competitive supply chains. We want to keep working on getting the market going here, so New Zealand businesses have more choices.”

Key Changes in the Fund Refresh

The Low Emissions Heavy Vehicle Fund, administered by the Energy Efficiency and Conservation Authority (EECA), has undergone a strategic update following a performance review earlier this year. The revised structure incorporates several changes aimed at accelerating adoption:

1. Expanded Vehicle Categories

Eligibility has been broadened. Now, all medium and heavy vehicles starting from 12 tonnes gross vehicle mass (GVM) qualify for higher levels of financial support. This change includes a wider range of commercial trucks and logistics vehicles, helping more businesses access funding.

2. Broadened Eligibility for Conversions

Vehicles registered in New Zealand within the last five years are now eligible for grants covering up to 25% of the cost to convert from internal combustion engines to low or zero-emissions technologies. This opens the door for fleet owners to modernise without purchasing new vehicles.

3. Increased Grant Levels

To encourage more widespread uptake, grant amounts have been increased for:

• Zero-emission conversions

• New hybrid vehicles

• Hybrid conversions This financial incentive is expected to significantly improve the business case for investing in clean freight solutions.

Inclusion of Hydrogen Fuel Cell Technology

While electric trucks have gained popularity for urban and regional transport, the fund’s refresh also recognises the rise of hydrogen fuel cell vehicles. These are increasingly seen as viable for long-haul and heavy-load applications, especially in sectors where battery capacity and charging logistics remain barriers.

The new fund guidelines ensure that hydrogen trucks, like their electric counterparts, receive support—positioning New Zealand alongside leading global markets investing in hydrogen transport infrastructure.

Alignment With Broader Investment Support

The updated fund is not operating in isolation. The Government’s Investment Boost policy—aimed at stimulating economic growth—will allow businesses to write off new capital investments in the same year they are purchased. This includes investments in low emissions vehicles and technology, further enhancing the financial viability of transitioning fleets.

“Investment Boost will support investment in projects and the uptake of low emissions technology – including hydrogen,” Minister Watts confirmed.

EECA’s Role and Future Monitoring

The updates follow recommendations from a recent performance review conducted by EECA, ensuring the fund stays responsive to market developments and technology trends. EECA will continue to manage the fund and track its impact on emissions reduction and energy efficiency outcomes.

Through these reforms, the Government seeks to enable coordinated action between policy makers, fleet operators, technology providers, and infrastructure developers. The emphasis is on speed and smart execution, ensuring that businesses large and small can play a part in building a sustainable freight system.

Toward a Sustainable Freight Future

As supply chains evolve under environmental and economic pressures, Minister Watts says the refreshed fund will help ensure that the seamless and sustainable movement of goods becomes the new standard across New Zealand.

“By embracing these clean technologies, we can ensure the seamless movement of goods across the country, securing a sustainable transport future for New Zealand.”