TransportEnergy grant programmes to continue on 'technology neutral' basis

Tue 21 December 2004 View all news

The Department for Transport has announced that the TransportEnergy grant programmes will be revised to adopt a technology-neutral approach designed to incentivise the development and market uptake of the lowest carbon vehicle technologies. Funding for the programmes, which are run by the Energy Saving Trust, will remain at £24m for the financial year 2005/6.

DfT plans that the new programmes will be in place in the first half of 2005. However, the timescale is dependent on European state aids regulations which exist to ensure that member states do not provide unfair assistance that distorts the internal market. National grant programmes must comply with these rules and limit the amount of grant that member states can provide for environmental initiatives. Consequently, while total funding remains at £24m, the level of individual grants will fall in some cases.

The Government has confirmed that all grant funding has to be paid out by 31st March 2005. In a very small number of cases commitments have already been made to expenditure beyond this date, and these commitments will be honoured.  All grant offers issued from 21 December onwards will have to have completed claim documentation received by EST by 31st March 2005 to allow payment to be made.  Funding cannot be carried over from this year to next year.

If state aid approval for new programmes is not obtained from the European Commission by the 1st April there may be a delay between the closure of the existing programme and commencement of any new programmes.

New Vehicle Technology fund projects will also be affected by the need to comply with state aid restrictions - although no details have been released.

LowCVP's response to the Government's TransportEnergy Consultation supported a technology-neutral approach to grant funding. It also called for schemes to be sufficiently resourced and structured in a way to ensure that suppliers can have certainty over grant availability for a consistent period of time.

The LowCVP response also called for funds to be focused at both stages and sectors of development in which they are most likely to lead to long-term development of the market for low carbon vehicles rather than short-term carbon savings. At present just 0.02% of new vehicle sales have exhaust emissions of below 100g/km - although the Government's Powering Future Vehicles Strategy has set a target of 10% for 2012.

DfT's press release and EST's response are attached.

< Back to news list