Budget 2006: New car environment label to be amended to reflect road tax changes
Wed 22 March 2006
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The Low Carbon Vehicle Partnership welcomes the Budget 2006 focus on incentives for low carbon vehicles and fuels.
The changes to Vehicle Excise Duty (road tax) further signal the Government’s intention to encourage a shift away from less fuel efficient/higher carbon cars.
The ‘environment label’ which appears on all new cars following last year’s LowCVP-brokered deal will be changed to reflect the Budget tax changes and the introduction of a new ‘Band G’. (Examples of how the new labels may appear are download-able below.)
The changes to Company Car Tax with the introduction of a lower 10% rate for cars with emissions below 120g/km in 2008/9 will provide company car drivers with a further incentive to choose the most efficient vehicles and should encourage manufacturers to supply new models qualifying for the lower tax band into the UK market.
The LowCVP has been leading efforts to develop carbon certification and sustainability assurance schemes as part of the Renewable Transport Fuels Obligation (RTFO) which mandates that petrol and diesel will contain 5% biofuels content by 2010/11.
The Partnership welcomes the ongoing commitment of the Government - highlighted in the Budget - to ensure that biofuels are delivered in a way that maximises their greenhouse gas savings while ensuring they are also sourced sustainably.
The combination of stretching targets with a package of duty-incentives and buy-out penalties for companies that fail to meet targets aims to strike a balance between the needs of both biofuels producers and the oil industry. The announcement provides a sound basis for the development of a strong UK biofuels industry by 2010.
Commenting on the Budget, Greg Archer, Director of the LowCVP said: “We welcome the Budget’s focus on providing incentives for low carbon vehicles and fuels to help meet climate change targets. While the monetary amounts involved are relatively small, they are a clear signal to producers and consumers alike of the likely direction of future tax policies.”
Examples of how labels may appear for a ‘G Band’ high carbon and a ‘B Band’ low carbon car are downloadable below.
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