The radical plans have been unveiled in a Government document on keeping Britain moving in the next decade.
The report, called Powering Future Vehicles: The Second Annual Report, updates a document published in 2003 in which Ministers set out how they would reduce emissions from vehicles using UK roads.
In the latest report, the Government commits to 10 key areas where it will focus on making a difference to UK transport emissions.
These include working closely with stakeholders, including fleets, to maximise the potential for businesses to gain competitive advantage from using cleaner vehicles.
It also says there will be ‘challenging targets’ for making the UK a world leader in the move to a low carbon transport economy over the next decade.
The Government also says it will use its grant programmes to fund research and encourage consumer take-up of low carbon vehicles and fuels. This includes greater use of biofuels, following the 2003 EU Biofuels Directive that sets specific targets for use of the fuel by 2005 and 2010.
It also sets out a roadmap to the use of hydrogen fuels in the next couple of decades. To back this move, the Government will ‘ensure appropriate taxation of vehicles, fuels and infrastructure’, including a review of company car tax.
The report adds: ‘The Department for Transport will work with business transport users, to develop projects through which carbon savings made in the transport sector can be brought within the Government’s Emissions Trading Scheme’.
The EU Emissions Trading Scheme is due to start on January 1 and is expected to cover up to 10,000 installations across Europe.
Each member state is required to cap its CO2 emissions for installations covered by the scheme. If they produce more than their allowed emissions, they have to purchase allowances from the European market.
Cleaner companies that produce less than their allowance can sell them on the European market.
At present, transport is not included, but the report says: ‘The UK is in principle in favour of it being included in future phases.’
The Government has also promised to show its commitment by making greater efforts to slash emissions on its own fleet and encouraging other public authorities to do so.
Compared to 2002/2003, all departments have until 2006 to reduce CO2 emissions by 10%, have at least 10% of their fleet running on alternative fuels and reduce single occupancy car commuting by 5%.