The absence of vehicle fuel efficiency standards and inaction on light vehicles imports have left New Zealand with one of the most fuel-inefficient vehicle fleets in the developed world.
The Sustainable Business Council and the Climate Leaders Coalition has identified the introduction of fuel efficiency standards as an easy practical step the government should take to achieve its net zero carbon targets.
Council executive director Mike Burrell said the government's recent announcement to accelerate the public sector's race to zero carbon within the next five years was a step in the right direction, but it also needed to partner with the private sector to reduce carbon emissions.
"We're one of the few countries in the OECD that don't have those standards and we need those standards," he said.
"It's not good for our safety, it's not good for the efficiency of our fleet and certainly not good for business. It's terrible for our environment."
Burrell said New Zealand should also follow overseas jurisdictions and introduce a carbon intensity standard by 2025.
"This would provide fuel producers and distributors with enough lead-in time to meet new requirements.
"Renewable fuel subsidies could be aligned to the level of anticipated support required in the early stages of the standard."
Other recommendations to government included measures to increase investment in low carbon transport, an expansion of programmes to make process heat more efficient and low carbon, and speeding up the adoption of methane reduction technologies.