New Zealand is set to scrap a rule to require diesel engines to use fewer than 40 per cent of their energy when running on electricity.

The government announced the change in a news release on Thursday, saying it would save the country $1.5 billion in electricity bills.

Under the Clean Air Act, diesel engines must be fitted with a device that automatically switches off the engine when the fuel consumption is below the prescribed limit.

New Zealanders are allowed to run on electricity for up to eight hours a day, but the current diesel fuel consumption has exceeded this for nearly 20 years.

In 2015, the government introduced a limit of 80 per cent, which the government says is a safe limit.

The government says the rule was introduced to prevent the development of new technologies that could increase the amount of diesel engines on the road.

“We are removing a key measure that will help protect our economy, our air quality, and our environment,” Environment Minister Tim Groser said.

More to come.

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