Fleet News

Fleet LPG conversion grants under threat

FLEET grants for liquefied petroleum gas vehicles could be cut in new proposals for the future of the Government's Powershift programme. The Department of the Environment, Transport and the Regions is inviting comments on plans to 'update the focus' of Powershift funding over the next three years, but experts believe plans to cut the grants will not discourage fleets from choosing LPG vehicles.

As well as reducing the level of grants for conversions and manufacturer-converted new vehicles, the consultation document appears to shift responsibility for cutting the cost of LPG vehicles when compared with petrol and diesel-powered equivalents to manufacturers. The proposals expect more production line conversions to LPG by manufacturers by 2003, reducing the cost of the conversion, and more emphasis on converting diesel vehicles to LPG.

Currently, grants of 40% of conversion costs can be gained where a reduction of up to 49% of Euro III standard emissions can be achieved. This rises to 60% for a cut of between 50% and 64%, and 75% for an improvement over Euro III by at least 65%. But the proposals suggest new grant levels of 20%, 30% and 50% for the three bands. From April 2002, the eligibility for LPG grants will be tightened to give priority for light-duty diesel vehicles, like car-derived vans, taxis and panel vans, and vehicles operating in areas of poor air quality.

Jonathan Murray, head of Powershift, said: 'An important factor in encouraging people to switch to LPG is stability in fuel duty, and in the Budget it was announced that the current level of duty would be maintained until 2004. The incentives provided in grants so far needed to be generous to kick-start the LPG market, but people are now seeing the savings in fuel costs, and a rise in residual values - an important factor for fleets - in some cases improving on the value of petrol-powered cars.'

The DETR also plans to promote the use of electric vehicles for public sector use, as well as incentives for compressed natural gas for road transport, because of its environmental and noise benefits over traditional diesel-powered heavy vehicles.

A consultation document can be found on the DETR website or the Energy Saving Trust's website. Responses should be sent by June 30 to Sue Billson, DETR, Zone 4/19, Great Minster House, 76 Marsham Street, London SW1P 4DR.

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