Fleet News

Clean-fuel grants are ‘left in limbo’

THE Government has been accused of sending out ‘completely the wrong message’ over green vehicle grants after leaving the system in limbo because of a European row over grant aid rules.

Until this year, there was an official grant scheme to help fleets cover the extra cost of purchasing or leasing clean-fuelled vehicles offered mainly under the PowerShift banner.

But the scheme has been killed off because it broke European rules on providing funding and there is still no clear decision on the launch of a new scheme.

Transport Minister Dr Stephen Ladyman has said that an all-new grants scheme will be in place by the autumn.

But this week, the Society of Motor Manufacturers and Traders said the whole clean-fuel industry was facing a ‘lost year’ because the grants problem was taking so long to sort out.

Six new schemes have been submitted to the European Commission by the DfT, including a Low Carbon Vehicle Programme, an Air Quality Retrofit Programme and a Low Carbon Bus Programme, with a total budget of £24 million. So far though, only the Infrastructure Development Programme has received Commission approval. Of the remaining five, Government must now respond to a number of concerns. These are unlikely to be reviewed by the Commission until autumn, leaving the SMMT doubtful that any will be up and running before 2006.

SMMT chief executive Christopher Macgowan said: ‘Long-term incentives for the take-up of cleaner vehicles are vital to building consumer confidence and driving manufacturer investment.

‘So it is important that Government does not allow 2005 to be a lost year. The situation sends out the wrong message at a time when grants should play a central role in the Powering Future Vehicles strategy, as well as supporting the work industry is doing to deliver new technologies and provide better information.’

Green delays: the new programmes

  • Low Carbon Research and Development Programme - funding for vehicle makers to develop prototype low emission vehicles
  • Low Carbon Bus Programme - grants for bus operators
  • Low Carbon Vehicle Programme - grants for buyers of cars and car-derived vans
  • Air Quality Retrofit Programme - funding for conversions and exhaust system retrofits
  • Air Quality Vehicle Programme - grants based on air quality standards at type-approval level for new buses and trucks
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