• DfT announces £50m fund for public low carbon van procurement
• Council of Europe to discuss car taxes on 13 November
• BMW UK MD slams “petty politicians” over green taxes
• Hillary Clinton proposes 55 mpg limit for 2030

A new Department for Transport fund outlined by Transport Minister Jim Fitzpatrick yesterday will be worth an initial £20 million to procure lower carbon vehicle models for use in public sector fleets and to kick-start the UK market for lower-emissions vans.

Should initial trials be successful, an additional £30 million has been earmarked to be used to develop the programme further.

Jim Fitzpatrick said: "Bringing cleaner, greener vehicles onto the market as soon as possible is a priority for the Government, but we want to direct our efforts where they will have the biggest impact in reducing emissions and tackling climate change.

"Vans account for around 15% of carbon emissions from road transport, but currently there are no mass market low carbon models on offer to the UK van buyer - although the technology to create them exists. By using the public sector's considerable purchasing power, we aim to give investors and manufacturers confidence in the existence of a market for lower carbon vans, to encourage them to bring them to market more quickly than they would do otherwise. This could have a big impact in cutting carbon emissions on our roads."

The DfT will shortly issue a competitive tender to appoint a partner organisation with specialist technical and commercial expertise on low carbon vehicles to deliver the programme. The appointment is expected to be made in early 2008.

The £20million was initially proposed as part of the Low Carbon Transport Innovation Strategy, to speed up the development of low carbon vehicles for the UK market using public sector spending power.

Since the proposal, the Department has engaged with stakeholders to find out how best to direct the money for greatest environmental impact. The bulk of the funding will be used to procure lower carbon vans in the first instance, with smaller demonstrations of lower carbon minibuses, all-electric vans and, potentially, plug-in hybrid cars.

Initial public sector participants are expected to include the Metropolitan police, Environment Agency, Transport for London, the Royal Mail, HM Revenue and Customs and the Government Car and Despatch Agency. Subject to funding availability, the DfT will seek to involve more public sector organisations in the programme, e.g. local authorities, other government bodies, and possibly schools and hospitals.

(www.dft.gov.uk)

EU member states’ finance ministers will discuss car taxes and VAT reform with the European Commission next Tuesday. The Commission reportedly wants to abolish car registration (excise duty) taxes; to create a mechanism to refund double taxation; and to restructure car taxation across the EU to be totally or partly CO2 emissions-related, as in the UK.

However, a document to be discussed by ministers and reported by Planet Ark yesterday suggested there was considerable opposition among them to CO2-based car-related taxes, and a pan-EU consensus that vehicle registration taxes (excise duty) should not be abolished, though refund systems would be acceptable.

A large majority of EU member states is said to support an approach to a new directive that would merely oblige them to differentiate passenger car-related taxes, totally or partly, on the basis of CO2 emissions or fuel consumption. EU taxation policy is subject to unanimous voting by all 27 EU member states.

The Government is in danger of taxing Jaguar and Land Rover out of existence according to comments by Jim O’Donnell, managing director of BMW UK reported by Headline Auto yesterday. Mr O’Donnell said that plans to tax expensive cars would seriously threaten the future of the British car industry and ignored the technology that such vehicles introduce.

He said: “Such cars are not just large, they are often technology leaders. Expensive new safety and efficiency measures tend to find their way first on the larger, luxury vehicles. ABS, catalytic converters, air bags, navigation systems and many more all started on high end models.

“We welcome the approach to a well thought out and balanced approach free from political dogma and I believe our political leaders need to give more than a nano-second’s consideration to the positive characteristics of top end cars.

“A determination to tax larger cars out of existence threatens smaller manufacturers such as Jaguar and Land Rover. Do our political leaders really want to kill off major contributors to the UK economy and major employers?”

O’Donnell said that poor management, unrealistic unions and the apathy of successive governments towards vehicle manufacturing in the UK had resulted in the demise of a once strong indigenous industry. He added: “The UK needs both Jaguar and Land Rover as strong competitors in the global marketplace.”

O’Donnell also criticised increasing local taxes such as congestion charging: “Our government has led the way on CO2 emissions in the EU but it all goes wrong in the shires. We see a burgeoning class of minor council officials who are using – or should that be abusing – their positions of power to create their own tax penalties on motorists.”

He cited that London congestion charge which is now turning into a green tax with charges for high emission vehicles. He called for Mayor Ken Livingstone to “make your mind up” and that said that the new charges would save 8,100 tons of carbon each year, the equivalent of three hours’ emissions from Heathrow Airport.

Noting other local schemes such as Nottingham’s £350 car parking tax, O’Donnell added: “The government must stamp on this regional tax spree by out of control councils now. It must restore some sort of respect for CO2 tax planning by leading from the front and putting the petty politicians back in their boxes.”

The leading Democratic presidential contender Hillary Clinton has this week proposed steeper corporate average fuel consumption reductions than those recently debated in Congress, and so far the most ambitious CO2 reduction plans among her rival candidates.

Recognizing that transport accounts for 70% of U.S. oil consumption, Senator Clinton would increase fuel efficiency standards to 55 mpg by 2030, but would help manufacturers re-tool their production facilities through $20 billion in “Green Vehicle Bonds.”

On biofuels, she would: (A) require oil companies and other major gasoline retailers to have E85 pumps at half of their stations by 2012, and 100% by 2017; (B) require manufacturers to make all vehicles flex-fuel vehicles by 2015; (C) and invest in freight rail upgrades to bring biofuels more efficiently to market. She wouldl invest $2 billion in cellulosic ethanol research and provide loan guarantees to build the first two billion gallons of cellulosic ethanol capacity.

Senator Clinton's plan would reduce U.S. greenhouse gas emissions by 80% from 1990 levels by 2050 and cut oil imports by two-thirds from 2030 projected levels, more than 10 million barrels per day. She would establish a $50 billion Strategic Energy Fund, double investment in basic energy research, and legislate for energy conservation, e.g. through banning incandescent light bulbs.

A Clinton administration would set a greenhouse gas emissions target for advanced biofuels to ensure that they move over time towards a standard of emitting at least 80% less greenhouse gases than gasoline, and would develop biofuels guidelines to take into account impacts on land and water resources, water supplies, food prices and wildlife.

The three domestic light vehicle manufacturers in the U.S. have opposed a Senate-approved corporate average fuel economy target for 2020, slightly tougher than Senator Clinton’s at 35 mpg by 2020, and representing a 40% increase over the current standards for cars and light trucks. Under Senator Clinton's plan, the target would be 40 mpg in 2020.

(www.hillaryclinton.com)