Raise diesel car tax to boost air quality, Treasury urged

Call from think tank Policy Exchange comes ahead of the Chancellor’s 2016 Budget announcement next week

The government should raise the first year Vehicle Exercise Duty (VED) rate for new diesel cars by up to £800 to “reflect the higher levels of air pollution they cause compared to petrol cars”, according to think tank Policy Exchange.

This could generate as much as £500 million a year of additional revenue — the equivalent of increasing fuel duty by 1p per litre — which could then be used to fund a new diesel scrappage scheme, it claimed.

Along with additional matched funding from car manufacturers, such a scheme could provide drivers with £2,000 grants to encourage them to trade in their old diesel car or van for a new lower-emission vehicle, the think tank explained.

The proposed VED increase would only be applicable to new diesel cars, not to existing diesel cars or other vehicles such as vans, Policy Exchange said, so as not to penalise existing diesel drivers who have “bought their vehicles in good faith”.

The recommendation comes as the Chancellor George Osborne prepares to announce his 2016 Budget next week (March 16), and also ahead of a wider report on air quality set to be published by Policy Exchange in April.

Diesel uptake

Due to previous fiscal schemes aimed at driving uptake in vehicles with lower carbon emissions, diesel cars have increased from 14% of the UK’s car fleet in 2001 to as much as 36% today, according to the think tank.

But it said evidence showed petrol cars now match diesel cars in terms of CO2 emissions while causing “substantially less air pollution”, and believes encouraging a move to petrol, hybrid or electric cars would “lead to a dramatic improvement in air pollution levels”.

In London alone, the think tank said, diesel cars and vans cause 70% of nitrogen oxide (NOx) emissions, but car manufacturers have “systematically failed” to control these emissions , with evidence suggesting the latest diesel cars still exceed emissions standards by four times on average.

It follows a joint report last year by Policy Exchange and King’s College London which found that 12.5% of London’s total area — containing 3.8 million workers and 979 schools — exceeded legal EU limits for nitrogen dioxide (NO2) in 2010 (see AirQualityNews.com story).

Richard Howard, head of environment and energy at Policy Exchange, said: “If we are to clean up air pollution, then government needs to recognise that diesel is the primary cause of the problem, and to promote a shift to alternatives. This needs to be done in a way which does not unduly penalise existing diesel drivers, who bought their vehicle in good faith, and gives motorists sufficient time to respond.

“Instead of increasing diesel fuel duty or banning diesels from city centres, the government should look to increase taxes on new diesel cars and offer scrappage grants to take old polluting diesels off the road.”

ClientEarth

ClientEarth, which has separately threatened the UK government with further court action over air pollution levels (see AirQualityNews.com story), welcomed the think tank’s recommendation.

Alan Andrews, lawyer at ClientEarth, commented: “With tens of thousands of early deaths a year in the UK caused by air pollution, reducing traffic pollution — especially from diesel vehicles — must be a priority.

“This recommendation should go hand in hand with a national network of clean air zones that keeps the dirtiest diesel out of our polluted town and city centres unless car manufacturers can guarantee they meet the strictest emissions standards on the road.”

RAC

However, automotive organisation RAC has dismissed the idea, arguing instead that measures should focus on encouraging owners of older vehicles to switch to cleaner models.

RAC public affairs manager Nick Lyes, said: “This could include new, cleaner diesels as a Euro 6 diesel vehicle emits significantly lower NOx and particulate emissions than a Euro 5 diesel. Cleaner diesel vehicles also have an important role to play in reducing CO2 emissions, which are the primary cause of climate change.

“It also important to note that poor air quality is predominantly a local issue. The RAC feels that clean air zones, which specifically target areas where emissions are high, could be part of the solution to discourage older, dirtier vehicles from entering areas where nitrogen oxide emissions and particulates are at problematic levels. Efforts should also be made to clean up all vehicles that contribute to the problem, including older buses and taxis.”