Government fails to offer incentives for green motorists

Some countries make it pay to have an environment-friendly car. Why can't the UK? David Prosser reports

t has been another bad week for the environment. Not only did a Government report warn that concentrations of greenhouse gases may be doing more damage than previously believed, but ministers also accepted that there is little chance of cutting emissions to below dangerous levels.

Campaigners are becoming increasingly frustrated with the UK's failure to tackle climate change. The latest controversy is the lack of financial incentives for motorists who do their best to limit their impact on the environment.

"We are desperate to see incentives to persuade more people to buy smaller cars and drive less often," says Steve Hounsham, of Transport 2000, the group that campaigns for a more sustainable transport policy. "Over the past eight years, the real cost of motoring has fallen, while the cost of public transport has risen, and we must address that using the tax system."

What really infuriates many drivers is that the financial help available for greener motorists has actually been reduced in recent times. For example, the Powershift grants for drivers who convert their engines to run on liquid petroleum gas (LPG) have disappeared - chiefly thanks to a continuing stand-off between the Government and the European Commission.

Until March 2004, drivers who wanted to convert their cars to allow them to run on LPG could apply for a £1,000 grant from the Energy Saving Trust (EST), a Government-backed agency. The aim was to encourage wider take-up of LPG, which produces lower carbon dioxide emissions than traditional fuels.

However, almost two years after the EST was forced to review the scheme, in order to comply with European Commission rules on state aid, the grants still have not been brought back. "We've been working with the Department of Transport but we still have not won EC approval for the scheme," says Leander Clark, of the EST. "It's extremely frustrating because it's not something we have any control over."

Jon Nicholson, who runs the Bio-Power network of bio-fuel producers, is similarly fed up. "If the Government wanted to, we could replace the fossil-fuel petrol industry within 10 years, but there are too many vested interests," he says. Nicholson's colleagues mostly produce bio-fuels from waste vegetable oil. Most cars that currently run on diesel can be modified to use the fuel, drastically reducing carbon emissions.

In order to promote the use of bio-fuel, the Government offers a lower duty rate to users - 27p of tax per litre, rather than the usual 47p - but bio-fuel producers are furious about the way the system works. Only fuel that has been produced using a very specific process, known as trans-esterification, qualifies for the reduced rate. This process requires energy, which means the fuel is less environmentall-friendly than it would be in a purer form.

In any case, Nicholson points out that in countries such as Germany, all bio-fuel is tax-free and has been widely taken up.

"In all other nations in Europe there is no specific tax for bio-fuels, there is only a tax on mineral fuels," he says. "Instead, Britain has provided a tax break on bio-fuels that meet certain technical criteria, but these criteria do not relate in any way to the actual environmental benefits achieved."

The rules make it very difficult for smaller providers to qualify for the tax break, let alone individual motorists who could produce their own bio-fuel with the use of waste oil.

Charities such as Friends of the Earth argue that technical squabbles such as the bio-fuel argument send the wrong message to motorists. Road transport emissions are up 50 per cent since 1990 and account for a quarter of Britain's carbon emissions.

"This is all about the financial signals that drivers get from the Government," says Tony Bosworth, of Friends of the Earth. "We need to get people to drive smaller and more efficient cars."

Friends of the Earth wants the Government to increase the differentials between the different rates of road tax charged to drivers. Currently, motorists pay between £65 and £170 in tax each year, depending on the emissions from their vehicles - but the car tax bands only increase in value by around £10 a time.

"The Department of Transport's own research shows that if the difference topped £100 for each indvidual band, that would make half of all motorists change their purchasing decisions," Bosworth says.

Five cost-free steps to greener motoring

Watch the speedo: cars create most pollution at speeds of under 15mph - up to 60mph, your pollution reduces, before increasing again at higher speeds.

Be efficient: take off roof-racks, which create drag, when they're not needed. Keep windows closed and remove unnecessary luggage. This will reduce petrol consumption.

Keep your distance: sharper braking wastes fuel.

Maintain your car: have the engine tuned, change air filters and keep the tyres pumped to maximum pressure to reduce fuel consumption.

Switch off: electrical items - particularly air conditioning - dramatically increase fuel consumption. Don't use them if you don't need them.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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