WIREDGOV

Government extends tax incentives for 'Euro V' low emission buses and lorries

DEPARTMENT FOR TRANSPORT News Release (115) issued by The Government News Network on 6 September 2007

The Department for Transport today announced the details of a scheme to extend tax incentives to encourage hauliers and bus operators to buy vehicles that meet the latest European standard for air pollutant emissions, known as 'Euro V', before it becomes mandatory.

The incentive will help to improve air quality by encouraging the early uptake of more environmentally friendly, low emission buses and lorries.

The Reduced Pollution Certificate (RPC) scheme will be extended so that hauliers and bus operators first registering a Euro V compliant vehicle before 1 October 2009 can claim a discount of up to £500 a year on Vehicle Excise Duty (VED).

A vehicle will only be eligible for the discount if it meets the Euro V emissions standard and is fitted with the onboard diagnostic systems and torque control mechanisms that check and control emissions of nitrogen oxides. This will ensure the Euro V standard is maintained throughout the life of the vehicle.

Notes for Editors

1. The RPC scheme began in 1999. In the financial year 2006/07 8426 buses and 29,102 lorries had RPCs.

2. The extension of the RPC scheme to Euro V vehicles was announced by the Chancellor in Budget 2007.

3. An RPC entitles the keeper of the vehicle to a reduction in Vehicle Excise Duty of up to £500 a year depending on the weight and axle configuration of the vehicle.

4. The VED discount rates and administration process for the Euro V RPC scheme remain the same as those for previous RPC schemes.

5. The original RPC scheme was intended to reduce emissions of particulate matter (PM10) which have, among other effects, a negative impact on health. The scheme tracked the tightening European PM10 limits but the most recently agreed limits (Euro V) are the same as those under the Euro IV standard. The Euro V scheme will therefore require vehicles to meet the full Euro V standard. The effect will be to reduce emissions of oxides of nitrogen (NOx).

6. Eligibility for an RPC has been limited to those vehicles that meet the full technical specification of the Euro V Directive. This Directive requires vehicles type approved from October 2007 to be fitted with on-board diagnostic and torque control systems. These systems ensure the Euro V standard is maintained throughout the life of the vehicle.

7. Vehicles that are currently entitled to an RPC and VED discount under the existing particulate-based schemes will continue to be eligible for them subject to meeting the required particulate emission levels.

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