Fleet News

PowerShift grant cuts hit LPG's future

PLANS to cut TransportAction PowerShift grants for liquefied petroleum gas vehicles could threaten the future of gas conversion companies and make fleets turn their backs on LPG, it has been claimed. A consultation paper on the future of PowerShift proposes cutting grants for LPG vehicles and conversions by up to 50% from August, but gas conversion company LPG Systems says the plans are 'ill-conceived' and will discourage manufacturers to invest further in the fuel.

Sales director Barry Luff said: 'The Government originally said grant funding would be available for a further three years. Now it is proposing cutting the grants and ending them in two years. Manufacturers have invested a great deal of money in this technology and if this is the Government's plan then we should have been told a year ago.'

In its response to the consultation, LPG Systems has asked for a meeting with Transport Minister Lord Whitty. Luff's letter to the DETR says the proposals 'completely prejudice the finances and investment programme we are engaged upon' and the company has suspended its calibration and testing process until the future of PowerShift is decided.

Luff said the LPG industry needed continued incentives until it gained a stronger foothold in the market, or it would become purely involved in after-market conversions. 'At the moment the promise of grants for new cars is quite attractive to fleets,' he said. 'But reducing grants will make it more difficult to gain fleet business. If fleets can see a reduction in the Government's commitment to LPG they will be worried about the effects on residual values.'

Only a handful of car manufacturers sell their own LPG vehicles, and a reduction in funding would not attract any more to the market. Luff added that the lack of incentives to convert new vehicles would kill off an important sector of the industry, leaving it with just aftermarket conversions for older vehicles with no improvement in emissions - something which would undermine the Government's green aims. He wants the Government to continue funding at present levels for the next three years.

The consultation document can be found on the DETR website at www.detr.gov.uk. 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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