Cleaner road fuels given guaranteed duty differential to 2024 in Autumn Statement
Thu 05 December 2013
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The Government has given a commitment in today's Autumn Statement to maintain the differential between the main rate of fuel duty and the rate for road fuel gases such as liquefied natural gas (LNG) and compressed natural gas (CNG) and biomethane for 10 years. There is also a clear duty trajectory for LPG for the same period. The commitment will provide businesses with long-term certainty when considering investments in alternatively fuelled commercial and other vehicles.
The fuel duty differential between the main rate of fuel duty and the rate for road fuel gases will be maintained at current levels until March 2024. The differential between the main rate and the liquefied petroleum gas (LPG) rate will continue to reduce by 1 pence per litre in each year to 2024. The Government says it will review the impact of these incentives on vehicle uptake and the public finances at Budget 2018. The Government will also seek EU approval to apply a reduced rate of fuel duty to methanol.
LowCVP Managing Director Andy Eastlake said: "The LowCVP and its partners have been calling for longer term certainty in future fuel duty rates for cleaner fuels to encourage adoption and investment. This announcement will provide over ten years of stability for vehicle operators considering investing in low carbon vehicles, particularly for commercial fleets."
Yesterday's National Infrastructure Plan (NIP) announced the Government intention to invest £5 million during 2014-15 in an electric vehicle-readiness programme for public sector fleets. The programme aims to promote the adoption of ultra low emission vehicles, demonstrating clear leadership by the public sector to encourage future widespread acceptance.
The Government also announced as part of the NIP its plans to encourage the development of driverless cars including a review, reporting by end 2014, to ensure the legislative and regulatory framework supports the world’s car companies to develop and test driverless cars in the UK. There will be a prize fund of £10 million for a town or city to develop as a test site for consumer testing of driverless cars.
In other announcements in the Autumn Statement, the Chancellor confirmed that the fuel duty increase that was due to take effect on 1 September 2014,expected to add 1.61 pence per litre (ppl), will be cancelled.
The Government is also changing the law in 2014 to abolish the requirement to display a paper tax disc on all cars to cut administration costs and burdens. In future, enforcement that the tax has been paid will rely on digital records of who has and has not paid with on-road enforcement based on the use of automatic number plate readers.
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