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Coronavirus (COVID-19) Update – 26/03/2020 Get a quote

Help Climate Change by Increasing Vehicle VED

UK government advisers are suggesting new and used car tax (VED) should be increased to help tackle climate change by bringing forward the date for selling of new conventional cars from 2035 to 2032, whilst increasing taxes on some vehicles as part of a green recovery.

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Following a report from the Committee on Climate Change (CCC) who have proposed increasing Vehicle Excise Duty (VED) on the most polluting cars to help encourage a consumer switch to cleaner fuels.

The CCC annual report are seeking for ministers to seize an opportunity using Covid-19 as a defining moment in the fight against climate change.

The report from the CCC identifies key policy areas in getting around to achieve the government’s ambition to reduce the number of new and used car journeys, for example, making it easier for people to cycle and walk and cycle, and networks need to be stronger to support electrification of transport.

The report also suggests that the type of policy package targeted in the motor trade must also be extended to all vehicles, highlighting how company car tax reforms and purchase grants are incentivising consumers to purchase new low-carbon vehicles.

CEO of Engenie said, “Electric vehicles can be the driving force behind our economic recovery, but the government must act on these recommendations immediately to avoid being left behind.”

The report says: Greater use of carbon taxes can support the public finances and strengthen incentives to reduce emissions. They are particularly attractive when global oil prices, and therefore consumers’ energy costs, are low, as they are now.

Lord Deben, CCC chairman said it makes sense to raises fuel prices when the cost of oil is low and then use the proceeds to subsidise low-emissions vehicles, he said: “The UK is facing its biggest economic shock for a generation. Meanwhile, the global crisis of climate change is accelerating. We have a once-in-a-lifetime opportunity to address these urgent challenges together; it’s there for the taking.”

He said: “It seems perfectly clear that we should increase the tax on the very low oil prices we have at the moment. We need to make people who choose the right way to do so cheaper than those who choose the wrong way.”

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A Government spokesperson said: “We agree that tackling climate change should be at the heart of our economic recovery. We were the first major economy to commit to achieving net zero emissions by 2050.

We believe that the actions we need to achieve that target can help to deliver a stronger, cleaner, more sustainable and more resilient economy after this pandemic.”

From the motor trade sector, ‘The British Vehicle Rental and Leasing Association’ (BVRLA) is calling for a more segmented approach that considers what is realistic for all vehicle types.

Toby Poston, from the BVRLA added: “It is too early to say whether 2032 is a realistic target date for the entire new car and van market to go zero-emission. In the fleet sector, the zero emission vehicle outlook varies considerably depending on what type of vehicle you are using and what your operating model is.”

79% of Climate Assembly said the government should support changes which help meet the UK’s net zero emissions target.