Chancellor urged to use Spending Review to catalyse transition to net zero road transport

Industry alliance urges government to consider a raft of tax measures and financial incentives in support of new target date to phase out of diesel and petrol cars from 2030 Fifteen UK transport businesses and organisations have called on the government to back up its 2030 phase out date for the sale of new petrol and diesel vehicles with a slew of financial and tax incentives that accelerate the transition to cleaner vehicles, ranging from VAT rebates for zero emission cars to incentives for drivers that scrap polluting vehicles. Micromobility start-up Lime, leasing firm LeasePlan, parcel delivery service DPD, and environmental law firm ClientEarth are among the organisations that have this week signed an open letter to Chancellor Rishi Sunak calling for the introduction of funding streams and incentives they believe will incentivise the development and roll out of the clean technologies, solutions, and infrastructure crucial to slashing emissions across the road transport sector.

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"Children should not have to wait another 10 years to breathe clean air and we stand ready to work with government now on a detailed roadmap that will help position the UK to 'lead the world in zero emission vehicle technology'," the letter urges.

Wednesday's Spending Review is a "crucial opportunity to begin turning ambition into reality" and catalyse the phase out of fossil fuel vehicles that contribute to nearly 40,000 early deaths a year in the UK, according to the group. The government last week confirmed that it would pull forward the date for ending the sale of internal combustion engine cars and vans from 2035 to 2030 as part of its new 10 Point Plan for a Green Industrial Revolution. Under the plans sales of plug-in hybrid vehicles would be permitted through to 2035, but only if they can demonstrate a substantial range in zero emission mode. 

Prime Minister Boris Johnson also announced plans for increased investment in electric vehicle (EV) charging infrastructure and supply chains, including proposals for the UK's first battery gigafactory. The plans were broadly welcomed by green groups, energy companies, and auto manufacturers, but there were also warning that a more ambitious policy framework would be required to rapidly increase the supply of EVs, improve battery range, and pull forward the projected date at which zero emission cars and vans are less expensive than conventional cars. As such the alliance, which also includes Octopus Electric Vehicles, UPS, and waste lorry manufacturer Dennis Eagle, has put forward a series of policy proposals designed to accelerate the switch to EVs.

For example, the group suggested the government introduce a 'mobility credit scheme' that would provide people and businesses scrapping polluting vehicles with credit that can be redeemed on the purchase of a zero emission alternative, or on cleaner modes of transport, such as an e-bike or public transport. The letter also calls on the government to update its tax policy to drive the uptake of cleaner vehicles until they reach cost parity with petrol and diesel counterparts. Measures could include extending the zero per cent company car benefit in kind (BIK) tax; delivering a time-limited VAT rebate or exemption on the cost of purchasing zero emission vehicles; and extending the Plug in Car Grant to include large vans and trucks, it states.

In addition, the group called for increased funding to be provided for businesses developing technologies that support a zero emission transport system, and for the government to back up its pledge to spend GBP1.3bn on electric vehicle infrastructure with a dedicated plan for the delivery of projects that can provide "clarity and support" to investors.   Dominic Phinn, business engagement lead at ClientEarth, argued that a clear roadmap founded on these priciples would allow businesses to "invest in cleaner forms of transport with confidence" in the period between now and 2030. "We need to be honest: some businesses are opposing the inevitable direction of travel," he said. "But there is also broad appetite in the UK business community to fight against the negative impacts of air pollution.

This action plan has real teeth and if the government takes it up, businesses will have the clarity they need to move forward with the transition."

When approached for a comment on the coalition's request for a roadmap to back up the new 2030 phase out date, a spokesperson from the Treasury pointed BusinessGreen to the electric vehicle sector promises set out in the government's 10 Point Plan.

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