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Purpose of report  
The purpose of this report is to provide you with a draft Cabinet paper, in response to 
Cabinet’s request in March 2016 for a report back on how a contestable fund could best be 
utilised to help promote the uptake of low emission technologies. Cabinet also asked for 
further advice on the costs of a proposed demonstration of electric vehicles (EVs) across 
government fleets [CAB-16-MIN-0108.01 refers]. 
It also provides advise on the feedback from the Treasury on the draft Cabinet paper. 
Officials at the Ministry of Transport, Ministry of Business, Innovation and Employment and 
Energy Efficiency and Conservation Authority have worked closely to produce this new draft 
Cabinet paper. We consider it addresses the key concerns raised by Treasury in their 
departmental comments on the March paper. However, Treasury officials do not accept this 
and will provide separate departmental comments and have asked for split 
recommendations, though they have not provided these at this time.  
The paper proposes that dedicated fund is only established for one year, while separate 
work on re-purposing an existing levy is completed 

Among the key issues identified by the Treasury is a concern that the March 2016 paper did 
not clearly demonstrate a need for the proposed fund, especially in the longer term.  After 
consultation with the Treasury, the paper now proposes that the fund be established for one 
year using reserves already identified by Energy Efficiency and Conservation Authority.   
The Treasury also raised concerns over the lack of clarity around the administrative and 
governance arrangements for the fund. They indicated they were especially concerned about 
how the Government could be sure that any spending was high quality, and did not displace 
other higher quality projects. The Treasury’s preferred solution is to use the first year of 
operation of the dedicated fund as a way of resolving these practical issues. The information 
collected would be important to establish the fund for the long term.  
Although we have sought to address Treasury’s concerns in the paper, Treasury does not 
accept that sufficient work has been done to identify that the dedicated fund is required, or 
that it will deliver quality spending. They will be providing departmental comments to this 
effect on Friday for inclusion in the final paper.   
The proposed paper on re-purposing an existing energy fund should accompany this paper 
We are aware that the approach of creating the fund for only one year creates a risk, 
especially if the work on re-purposing an existing levy planned by Ministry of Business, 
Innovation and Employment, which depends on amendments to primary legislation, is 
delayed.  To some extent these risks can be managed by investigating alternative funding 
options at the same time, which include the options of a new bid for funding through the 
Budget 2017/18 or a reprioritisation of Crown funding through the Energy Efficiency and 
Conservation Authority.  
The paper notes that the ongoing funding was expected to come from a re-purposed levy in 
the energy sector.  We consider it would assist Cabinet’s ability to see how the two 
proposals are linked if the papers were considered at the same time.  We understand from 
Ministry of Business, Innovation and Employment officials that the paper could be finalised 
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relatively quickly, though it is unlikely it could be ready for consideration by EGI on 13 April 
2016, as is planned for this paper.   
Again, although the paper has sought to address Treasury’s concerns, they do not accept 
that it is appropriate to agree to the establishment of an ongoing fund after the first year, until 
the parallel process being undertaken by the Ministry of Business, Innovation and 
Employment on the re-purposing a levy, and determining the preferred funding option, has 
been completed.  
The proposed 24 vehicle trial will be funded directly from Energy Efficiency and 
Conservation Authority’s reserves 

Cabinet also requested advice on the costs of the proposed trial of EVs in the government 
fleet. The paper sets out the detailed costs in Annex 2 and the body of the paper notes that it 
would be explicitly funded from the approximately $4 million of reserves available. This will 
leave $3.5 million for other activities.   
The administration of the fund will be reported back to you 
We are aware of your desire for the Ministry of Transport to have an active role in the 
oversight of the dedicated fund and other activities to promote the uptake of EVs.  The 
Ministry fully expects to take a leadership role, along with the Ministry of Business, 
Innovation and Employment. However, we expect the actual deployment of the fund will be 
the role of the Energy Efficiency and Conservation Authority.  
The attached Cabinet paper also notes that the role of the leadership group established by 
the March Cabinet paper in the operation of the dedicated fund has not been fully 
determined. The paper proposes that it would include membership from Ministry of 
Transport, Ministry of Business, Innovation and Employment and Energy Efficiency and 
Conservation Authority. This will be subject of a further report back to you, as agreed by 
The recommendations are that you: 
note that the attached paper reports back to Cabinet on two matters on how 
related to how a contestable fund could best be utilised to help promote the 
uptake of low emission technologies that was requested in response to the 
March 2016 Cabinet paper on electric vehicles [CAB-16-MIN-0108.01 refers]  
note that the Treasury intend to make a Departmental comment and to insert 
split recommendations, to the effect that they do not support the fund being 
established at this time 
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