Vehicle Excise Duty (VED) concessions

A Graduated VED system linked to CO2 emissions for new cars was introduced in March 2001. VED is no longer based on engine size but is charged according to the CO2 rating which is measured as part of the vehicle's type approval test that precedes first registration (this figure is fixed for the life of the vehicle). The system features discount rates for cars that run on cleaner alternative fuels. Although diesel vehicles produce lower CO2 emissions they produce higher levels of other pollutants which affect air quality and damage health and are charged extra.

Buying a car with lower CO2 emissions can save up to 45% in running costs (source the DVLA)

Company car tax reforms

From April 2002, the charge on the benefit of a company car was graduated according to CO2 emissions and the reductions for business mileage and older cars were abolished.

The charge for cars with an approved CO2 emissions figure builds up from 15% of the cars list price (+ accessories) in 1% steps for every additional 5 g/km over a qualifying level (with a maximum charge on 35% of the car's price). The qualifying level will gradually gets reduced, as new cars become more fuel-efficient.

Cars without an approved CO2 emissions figure are charged according to engine size

	0-1400cc tax charged on 15% of cars price
	1,401-2,000cc tax charged on 25% of cars price
	2001cc + tax charged on 35% of cars price

Diesel cars are subject to an additional 3% supplement, therefore the charge builds up from 18% of the list price. This supplement does not apply to clean diesel cars

Reduced Rates are to be made available to cars running on alternative fuel sources

	Electric Cars pay a reduced rate of 9% of the vehicles list price
	Hybrid Cars will get a 2% discount to compensate for the higher cost of the technology and an additional discount for every 20g/km their CO2 emissions are below 165g/km level.
	Gas driven cars will get a minimum 1% discount for their lower CO2 emissions, more for every 20g/km their CO2 emissions are below the165g/km level.
	Bi-fuel Cars (that run on petrol and a road fuel gas such as LPG) if the car has an approved CO2 emissions figure for gas that is the figure that will be used to work out the car benefit. The discount is 1% plus an additional 1% of the price for each full 20g/km that the CO2 of the car falls below the qualifying level.

Freight Facilities Grants

To encourage the reduction of freight being transported on the road network the Government (DETR) offers freight facilities grants (FFG) to help meet the extra costs associated with moving freight by other more environmentally sustainable modes of transport.

Grants are available to any company wishing to move freight in Great Britain

Water Freight Facilities Grants:

are available for help with extra costs and to help offset the capital costs of providing inland waterway freight facilities. Money may also be available to help companies re-invest in existing inland waterway freight facilities.

Details of eligibility and how to apply for the grant are available from The Department for Transport website

Rail Freight Grants: are available to help offset the capital costs of providing rail freight handling facilities. It is also available to help companies re-invest in existing rail freight facilities. A further Track Access Grant (TAG) helps goods service operators to meet the charges paid to Railtrack for access to the rail network.

Details of eligibility and how to apply for the grant are available from The Department for Transport website

Powershift offers grants worth from 40 - 75% of the additional cost involved in buying a clean fuel vehicle (CFV) or converting an existing vehicle to running on an alternative fuel.

All applicants seeking grant funding for CFVs must choose vehicles that are on the Powershift register (an impartial buyers guide to CFVs). The programme focuses on those alternative fuels that are viable in the UK including:

• Electricity/Hybrids

• LPG

• CNG or LNG

Powershift will also support demonstration projects involving running vehicles on fuel cells

Details of eligibility and how to apply for the grant can be found at the Powershift website.

Or phone the TransportEnergy Hotline on 0845 602 1425
Email: transportenergy@est.co.uk


TransportEnergy Clean Up

The Clean Up campaign offers grants of up to 75% of the capital cost of fitting emissions reduction equipment. Grants are only available for certain types of diesel vehicles including black cabs, lorries, buses, emergency vehicles and refuse trucks.

The Campaign will fund the following technologies

• Converting black cabs to run on LPG

• Converting diesel engines to run on natural gas

• Repowering - replacing older, dirty engines with newer, cleaner diesel engines

• Fitting emissions reduction equipment to the vehicle's exhaust, such as oxidation catalysts or particulate traps. For particulate traps, the grant contribution covers the capital and fitting costs, plus additional maintenance costs and back pressure sensor

For further information visit the TransportEnergy CleanUp website

Or phone the TransportEnergy Hotline on 0845 602 1425
Email: transportenergy@est.co.uk