Only last week the House of Lords Select Committee on Science and Technology suggested a number of tax changes to help reduce vehicle emissions. Today's measures deliver substantially on their recommendations. Before tax, ultra low sulphur diesel is more expensive than ordinary diesel. Although the tax on ultra low sulphur diesel will rise with other diesel at 6pm on Budget day, the proposed measure to reduce the duty as soon as possible after May will create a 1p per litre duty differential in favour of ultra low sulphur diesel, which should allow equalisation of the pump price with standard diesel. If the use of road fuel gases expands, those conversion costs can be expected to fall.
Vehicles using road fuel gases emit significantly fewer pollutants than petrol and diesel vehicles.
The Government has decided to introduce a VED incentive of up to 500 Pounds per year for lorries which meet a low emissions standard. Using an incentive to promote clean lorries, rather than regulations or increased taxes for dirty ones, helps the environment without penalising industry. The incentive will be introduced in early 1998 following a consultative paper on the technical details of implementation of the measure. Many particulate trap systems incorporate a catalyst which allows for continuous regeneration of the system without the need for cleaning. They cost around 2500-4000 Pounds, so the VED incentive will contribute substantially to this cost over the life of the trap.