The overhaul has been launched to meet European restrictions limiting the size of grants for environmental initiatives.
The shake-up will affect all schemes run by Transport Energy, the Energy Saving Trust scheme providing grants for environmental transport initiatives, including the PowerShift scheme, which provides money to help fleets buy green fuel cars and vans. It will also affect the CleanUp programme for older vehicles and the New Vehicle Technology Fund.
The announcement comes as the Department for Transport revealed it was providing a £24 million budget to fund the schemes, but any relaunch – and any new funding for fleets – will be held until the new blueprint has been given the go-ahead by the European Commission and by relevant local authorities, including The Scottish Executive, Welsh Assembly and Northern Ireland Assembly.
However, the Energy Saving Trust, which operates TransportEnergy grant programmes, said grant offer letters would be honoured until March 31, 2005.
Despite the assurance, the Society of Motor Manufacturers and Traders (SMMT) fears the level of grants could be slashed and has called on the DfT to keep the industry well informed on forthcoming changes.
SMMT chief executive Christopher Macgowan said: ‘This is a real concern to the industry and once again sends out all the wrong messages to those who want to buy and market cleaner vehicle technologies. Any new scheme developed to comply with EU state aid rules will take time to establish. Industry needs a stable framework of incentives so that products can be planned and launched effectively.’
Philip Sellwood, chief executive at the Energy Saving Trust, admitted the organisation faced a tough challenge.
He said: ‘The timescales for transition to the new programmes will be very tight but we will make every effort to fully support our partners and work closely with the DfT as they finalise details of the programmes early in the new year, and seek their compliance with European state aid rules.’