Fleet News

Call to replace VED with charge based on emissions

VEHICLE excise duty should be replaced by a graduated charge based entirely on a car's emissions. This view is put forward by the Institute for European Environmental Policy in a research paper entitled 'Fuel duties and Greening Vehicle Excise Duty'.

Under the proposed system the overall payment rate is determined by the measurement of a car's carbon dioxide emissions when new. The higher the emissions, the higher the tax paid. The scale of charges suggested ranges from £160 for the dirtiest engines to £80 for the cleanest.

The paper's author Dr David Taylor also suggests the duty levels on diesel be increased to equivalent levels for petrol because of its relatively high carbon content. The tax disc, Dr Taylor suggests, could become the mark of a 'dirty' car and be excluded from environmental zones established in urban areas. Under the new VED system carbon dioxide emissions would be measured in grams per kilometre.

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