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					     Summary of responses to the Consultation on the
    TransportEnergy Clean Vehicle Grant Programmes

Introduction ....................................................................................................................2
Summary of responses ...................................................................................................2
   Executive Summaries............................................................................................................... 2
Responses to Specific Questions: ................................................................................12
   Response to Question 1 .......................................................................................................... 12
   Response to Question 2 .......................................................................................................... 23
   Response to Question 3 .......................................................................................................... 33
   Response to Question 4 .......................................................................................................... 40
   Response to Question 5 .......................................................................................................... 46
   Response to Question 6 .......................................................................................................... 52
   Response to Question 7 .......................................................................................................... 58
   Response to Question 8 .......................................................................................................... 65
   Response to Question 9 .......................................................................................................... 69
   Response to Question 10 ........................................................................................................ 75
   Response to Question 11 ........................................................................................................ 81
   Response to Question 12 ........................................................................................................ 88
   Response to Question 13 ........................................................................................................ 92
Other Comments ........................................................................................................103
Annex A - List of consultation respondents .............................................................109

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On 28 June 2004 the Department for Transport together with the Scottish Executive and the Welsh
Assembly Government consulted on the TransportEnergy Clean Vehicles Grant Programmes -
Building the programmes' Strategic Role in Delivering the Government's and Devolved
Administrations' Transport, Energy and Environmental Objectives. The consultation ended on the 29
October 2004.
There were 51 responses to this consultation. The following is a summary of the responses, with the
exception of respondents who requested that their responses were not made publicly available.
The original consultation paper can be found at:

Summary of responses
Executive Summaries
Toyota Motor Europe, London
Toyota fully supports the Government's efforts to encourage the development and take up of cleaner
vehicles. We welcome the commitment to continue to fund cleaner vehicles and agree that a
mechanism needs to be in place as soon as possible to encourage this in the most efficient and
effective way.
Toyota firmly believes that government funding should continue to be directed at the cleanest vehicles
on the market and those vehicles which have the prospect of being taken up by an increasingly
informed and demanding consumer. It is not a matter of 'picking winners' but rather setting standards
in terms of both CO2 and air quality. Clear, transparent and consistent standards will help build
consumer and industry confidence.
There is scope for improving the current system both in approach and administration. The amount of
   budget is limited so must be used in the most efficient and productive way. Toyota therefore
   supports the LCVP 5-step model which should provide clear guidelines and reduce the
   uncertainty currently inherent within the funding system.
In addition, Government should consider all other opportunities to encourage cleaner vehicles and
    ensure new incentives are introduced in a co-ordinated and coherent fashion. If this is achieved,
    the UK could ensure it remains at the forefront of international efforts to encourage the take up of
    the cleanest vehicles.

We cannot continue to emphasise just how imperative it is to offer clear signals to vehicle end users
and the fuel industry to offer them confidence to invest in vehicles, technology and refuelling
infrastructure. We provide in our reply detailed reasons why we believe the programmes objectives
and the manner in which they have been delivered have dented our Members support. It is hoped that
with our constructive comments and suggestions, lesson can be learnt, and that decision makers will
continue to work with industry to help secure an effective and successful scheme in the years ahead.

Carbon Trust
To deliver a material reduction in emissions from transport, the UK must work to influence both the
supply and demand sides. There are various instruments which the Government could use to do this
including, for example:
Fiscal measures including fuel duty, Vehicle Excise Duty and car tax;

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Grants to accelerate the take-up of new and emerging vehicle technologies and fuels - e.g. RD&D
   grants; or grants to offset the capital premium associated with new and emerging low carbon
Regulatory measures to set upper limits for carbon emissions going forward;
Public sector procurement policy;
Voluntary agreements for carbon emissions reduction - e.g. the EU voluntary agreement between the
   European Commission and the auto-manufacturers;
Exemptions to or differential taxes for low carbon products.
Each instrument has its place to incentivise investment and change behaviour. For example, grants
work best for a limited period only whilst technologies progress down the cost curve through RD&D.
However, grants are inherently expensive. They rely on changing behaviour individual decision-
maker by individual decision-maker. They should not be the instrument of choice for changing mass
purchasing behaviour in respect of new/mature products. Fiscal instruments work best when the aim is
to change mass behaviour - e.g. the shift from leaded to unleaded fuel - and where grants would be
inappropriate and expensive. The ideal arrangement is where grants, fiscal and other measures are
sensibly blended to provide a complementary and stable support framework for innovative low carbon
technologies. We therefore consider that Transport Energy and its programmes should be assessed in
the context of a wider support framework designed to deliver a step change reduction in carbon
emissions from the road transport sector.
The Transport Energy programmes - Powershift, Clean-up and the New Vehicle Technology Fund -
rely mainly on grant incentives to change behaviour or bring forward new and emerging technologies.
For the reason given above, grants may be the instrument of choice whilst markets are immature or
niche. However, the risk is that if these incentives are not strategically designed for the actual state of
the market they risk creating a "grant dependency" culture and divert manufacturers' attention from
finding ways to reduce the cost premium for new products. The cost/tonne abated for Powershift in
2003-2004 is estimated to be £118/tonne of CO2 on a lifetime basis. Compared with the cost/tonne of
CO2 via emission trading of circa £5/tonne of CO2, it is an expensive measure just in terms of
reducing carbon emissions. Given the progress which the automotive sector has been making in
bringing new low carbon products to market, we consider that the time has come to examine whether
the products which Powershift incentivises are really still at the "emerging" stage - in which case
continuation of the grant instrument to offset a purchase premium may well be appropriate - or
whether the products are ready for mass market penetration - in which case grants should be replaced
by new instruments designed to build scale and encourage manufacturers to find ways of reducing
costs. Over the past few years we have seen the start of a transformation in the car market place in
terms of the availability of mass market low carbon vehicles e.g. Honda Civic, Toyota Prius. Our
view is that hybrid manufacturers will deploy their vehicles in the UK irrespective of Powershift.
Ways should be found to work with the grain of the market to accelerate take-up of these vehicles. In
our view other instruments as outlined below should now be used instead of grants to accelerate
deployment of commercially available low carbon vehicles.
The "Clean-up" programme is a clean air measure not a carbon savings measure. We have no locus to
comment substantively on the measure from a clear air perspective but, as we understand it, the
programme incentivises retrofit of devices that do not in many cases bring vehicles up to existing best
practice. Therefore, there does not seem to be a strong case for continuing the clean-up programme.
We think regulation/minimum standards approach would be a more appropriate and cost effective route.
On the New Vehicle Technology Fund (NVTF), the question has to be whether a programme on this
relatively small scale can ever be material. Whereas the NVTF may have a role to play in
demonstrating niche vehicles in the UK market place - e.g. low carbon taxis, fuel cell buses, we do
not consider it can be material and influential at scale e.g. cars. For niche vehicle demonstrations, a
careful assessment needs to be made on a case by case basis as to the cost, benefits and materiality of
this type of grant aided activity.

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If funds are diverted from the above programmes we believe that there is a good case for channelling
them into targeted awareness raising and information provision activities.
In order to deliver emission reduction targets consistent with the Energy and Transport White Papers,
effort needs to be focused on areas that will deliver significant emission reduction. Below are some of
the key measures we think should be considered:
Fiscal measures including fuel duty, Vehicle Excise Duty and car tax;
Voluntary agreement with vehicle manufactures or regulatory measures to set upper limits for carbon
   emissions going forward if the voluntary approach is not successful;
Using public procurement to show Government leadership in the deployment of low carbon vehicles
   and approaches;
Including aviation in the EU emission trading scheme;
Exemptions to or differential taxes for low carbon products.

Energy Saving Trust
NVTF has played a valuable role in enabling the demonstration of new, cleaner, lower-carbon
successful recent demonstrations include a hybrid taxi, an electric delivery vehicle and a fuel cell bus.
the current core function of demonstrating individual vehicles should be retained with projects
    grouped under a "Proof of Concept" programme. However EST believes that funding should be
    focussed towards those demonstrations which have the highest potential for market introduction.
a new "Demonstration Fleets" programme should be developed, to work primarily with Public Sector
    partners to demonstrate small fleets of very low carbon vehicle technologies such as Low Carbon
the programme should not be limited to projects developed in the UK, but should actively seek to
    fund the UK market demonstration of vehicles developed through European and global vehicle
    technology demonstration programmes.
PowerShift has been successful at meeting its objectives as originally defined- i.e. the reduction of air
   pollution as well as CO2 emissions and the promotion of alternative fuels and technologies.
EST believes that PowerShift should be replaced, through a smooth transition to a new Low Carbon
the Low Carbon Programme would play a vital role in delivering the lowcarbon transport agenda. It
    would be structured to help deliver the Powering Future Vehicles (PFV) Targets for Passenger
    Cars and Buses, and also to incentivise low-carbon vehicles of other types.
the programme should be technology and fuel-neutral;
the programme should be CO2 based with an Air Quality Threshold;
CO2 emissions should be tailpipe, with the aspiration to move to Well-to-Wheel in the future;
emissions criteria should be regularly reviewed.
road transport CO2 emissions have remained static in recent years and are forecast to increase over
overall average CO2 of new cars has steadily decreased. However analysis for EST indicates that in
    the last year, average CO2 for private cars has actually increased

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EST analysis of existing policy measures and voluntary agreements concludes that, while many are
   successful in reducing average CO2 from new cars (e.g. Company Car Tax, Voluntary
   Agreements), they are not helping deliver the Government's PFV targets for 10% of new cars sold
   to be lowcarbon by 2012.
EST analysis indicates that VED is not having the desired impact and should be reformed.
   Improvements for VED and other policies are proposed.
Purchase grants are a necessary instrument to overcome the market adoption barriers for very low
    carbon vehicles. Other policy instruments are then necessary to generate high volume sales.
Air pollution from road transport is a major threat to public health, and the UK is in danger of not
    meeting European targets to reduce air pollution.
EST analysis of current heavy and light goods vehicles and bus fleet turnover rates, and forecasts of
   future vehicle age, indicates that retrofits are needed to reduce air pollution, although the case for
   retrofits appears to be stronger for buses.
CleanUp has played an important role in kick-starting the market for retrofit equipment, and has
    achieved cost-effective emissions savings, particularly when external costs of pollution are taken
    into account.
EST proposes to introduce emissions based grants, rewarding the cleanest equipment.
grants and other activities should focus on the most polluting vehicles, and the most polluting areas.
Grants can only ever be available for a limited number of vehicles, and in the longer term, mandates
   or other incentives will be needed to require or mandate large numbers of retrofits.
EST analysis of existing policy measures (e.g. Reduced Pollution Certificates- and mandates (e.g.
   Low Emissions Zones) indicates that currently grants provide the only real incentive for the
   fitment of retrofit equipment.
EST has made recommendations as to how these policies or mandates could be reformed or
   introduced. For example, if Bus Service Operators Grant were reformed to a mileage subsidy, this
   could increase bus fleet turnover.
Without EST activity (grants and accreditation) it will be hard to introduce large-scale mandates for
   retrofits in the future, as there may not be sufficient supply of cost-effective, approved equipment.
   Therefore EST believe grants should be made available until such measures are implemented.
EST delivers a variety of activities for Government under the TransportEnergy BestPractice
   programme, such as Workplace Travel Plans and Fleet Management advice.
EST will build a Business Advice team to provide independent advice at a national level to large
   businesses operating across the UK.

There has been much debate on whether the focus should be on low carbon or low emission vehicles.
While both requirements need to be met it is easiest to consider the two factors separately in that all
vehicles have to meet EU legislation with regard to Carbon Monoxide, Hydrocarbons, Nitrogen
Oxides and Particulates. Currently Carbon Dioxide is not included in these regulations so it is
reasonable to set separate targets for the reduction of greenhouse gases. For groups like the LowCVP
it is more productive for them to focus on carbon and other greenhouse gas reduction than to try and
better European emission standards. This gives clarity and focus because it is not as if other emission
standards can be ignored in the drive to reduce carbon because in order to operate on the road any
vehicle must also comply with Euro 3 or Euro 4.This does not mean that we do not support the current
clean up campaign, merely that we would not wish to see requirements intermingled at this stage of

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We think that talk of a hydrogen economy is premature and that grant aid should remain technology
neutral. The alternative strategy is to use grant aid to try and back winners but we do not believe
government is best placed to do this. In the final analysis it is the market that will decide on the
technology it wishes to see perfected. (Like VHS & Betamax) As mentioned elsewhere any
comparison needs to be on a well to wheel basis, it is not sufficient just to consider street level
It is recognised that grant aid will only be used for pump priming. Taking the analogy a little further
there is a considerable risk that having spent a great deal of effort priming the pump the scheme will
fail to function for the sake of a little more effort and all the work to date will prove nugatory. Pump
priming is a concept geared towards overcoming initial hurdles or market hesitation. Running low
emission vehicles is likely to be a costly activity for some time in the future and pump priming alone
is unlikely to generate a sustainable market. Leaving aside the high cost of fuel cells and installing a
hydrogen infrastructure, no new technology is likely to be competitive with the internal combustion
engine. Petrol /diesel vehicles have been developed and optimised over the last century. Parts are
made in volume and economies of scale are a major factor in the industry. Any new technology is
likely to be immature, relatively low volume and hence expensive. Most alternative technologies,
even when developed, will involve a higher parts count than a conventional engine and can not be
expected to compete with conventional technology on price alone for many years.
Other than the fact it does not apply to new vehicles there were a number of factors in the CleanUp
programme, which with hindsight are to be commended. We have to admit to being initially
somewhat cynical about the scheme when first launched, when we calculated that it would take 26
years for the VED reduction to pay for the exhaust after treatment device. However, as an example of
pump priming, it clearly worked as with increased volume and competition the price of the units has
dropped markedly. Without CleanUp there would have been virtually no market for this equipment
and as a consequence no economies of scale or competitive market forces.
In principle we see little wrong with the existing grant structure. Projects of this type need support at
every stage of their development if they are to succeed. Although slightly outside the remit of this
consultation we see an important role for the universities in generating the enabling technologies. We
see a role for collaborative programmes like Foresight to take up these ideas, which may still be 20
years away from production and develop them. The introduction of the New Vehicle Technology
Fund provides a means of offsetting some of the cost of developing such concepts to the
demonstration phase and the Powershift programme can be used to support the purchase of early
production vehicles.
The CleanUp programme, whereby grants are available to fit emission abatement devices to existing
vehicles, sits rather to the side of the above development cycle.
Alexander Dennis would like to see grants available for factory fitted devices of this kind. This would
bring their fitment inside the certification process and thus improve quality and consistency. We are
however aware of the legal difficulties this presents and understand why the grant had to revert to
only being applicable to devices fitted in the aftermarket.
One of the major problems with grant aid is sustainability and predictability. As the time taken to
design and produce a car or bus which embodies some level of new technology can be anything from
5-10 years it is not sufficient to have a 1-3 year planning cycle as far as grant aid is concerned. It is
absolutely essential that manufacturers and customers have a clear view of the market incentives in
front of them.
The size of the grant pot is very small in relation to the size of both the problem and the industry.
Compare total funding of around £27m with revenue of £26,374m generated through road tax and
fuel duty. How the allocated £27 m should be divided between the various programmes is very
subjective and we do not feel able to comment meaningfully.
A number of simple steps, which could reduce pollution do not involve high technology: -

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    Reduce idle time, for some reason drivers with heavy-duty diesel engined vehicles tend to allow
       them to sit at idle for excessive periods. As this occurs in summer as well as winter it is not
       just to assist the vehicle heater. This practice may date from when diesel engines were more
       difficult to start but with modern starters and efficient batteries this should no longer be
    Reduce traffic delays; in the case of buses introduce more bus lanes. This would also reduce bus
       journey times and encourage a modal shift towards buses. This alone would reduce emissions
    Discourage the sale of high performance and large 4 by 4 vehicles. In 1902 car buyers looked for
        little more than one horsepower per passenger. A modern bus manages very effectively with
        about 21/2hp per passenger while a high-speed coach may have 6 or 7. Few so called
        executive cars offer less than 40 hp per passenger and many are capable of double the national
        speed limit. Education and taxation could reduce this excessive consumption with no marked
        downside. (Slower off the lights!)
Government funding is unlikely to be sufficient to support a market for low carbon vehicles in the
long term. As carbon emissions are of global concern operators would have to be surprisingly
altruistic to absorb the excess costs to run more than a token fleet of low carbon buses. It is
anticipated therefore that other measures will have to be put in place before grant aid can be
suspended: -
    Fiscal measures such as favourable taxation for low emission vehicles.
    Market education and awareness to ensure there is public pull as well as government push.
    Mandatory requirements, the ultimate government or local authority push. Vehicles that fail to
       meet certain emission standards may be excluded from environmentally sensitive areas.

Shell International Ltd
We believe that bringing together the currently separate grants for road fuel gas, hybrid and electric
vehicles into a "Low Emission Vehicle Programme" is very sensible. It supports the use of the
cleanest and lowest-carbon emission vehicles on the basis of their performance in delivering
environmental objectives, rather than being defined in terms of a particular fuel or technology used
("Outcome" instead of "Pathways").
It should also be noted that this approach carefully balances between local pollutants and associated
CO2 emissions. This is a very powerful decision tool in a holistic approach to tackle environmental
issues. A definition of a single hurdle for local emissions, e.g. EURO4 or EURO5 when it emerges
could simplify the programme in focusing on the reduction of CO2 emissions.
Within the very limited budgets that are currently available for Transport Energy Programmes, the
balance of support provided to the PowerShift, CleanUp and New Vehicle Technology Fund should
be based on cost-effectiveness considerations of the programmes in terms of £ per tonne CO2 or
pollutant saved. Support for research, development and demonstration fleets and supporting
infrastructure should be a high priority on the path to developing leading edge expertise in low
emission/low carbon technology. In that context we have some reservations about the CleanUp
Programme and whether it is right to incentivise retrofit devices that do not clean exhausts to the same
standard as current production vehicles whilst not providing similar support for the purchase of new
In our view there is a strong preference for certainty over grant availability for a set period of time. It
should be made clear at the outset what the Government's support plans are and how long the financial
support would be in place in order to enable the industry to plan properly and accordingly. It is also
essential that the practical processes for the planning and administration of applications are improved,
to ensure that funds do not run out before the end of any given year. Consideration should be given to
ring fencing different fuel and vehicle technology options in the first instance, by starting with a

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baseline quota. These quotas could then be reviewed at appropriate time intervals to ensure that the
take-up of funds is being managed to deliver the environmental objectives.
A scheme that supports the development of a fleet of clean, low carbon vehicles should ensure that
more NVFT projects result in the supply of commercially available vehicles typically applied in fleet
operations such as service vehicles, delivery vans, buses and medium/heavy duty trucks. In the
transition to full commercialisation, fleets can be managed more efficiently. In addition both new
vehicle and new fuel technologies can be tested simultaneously.
While the New Vehicle Technology Fund in our view should predominantly attract new vehicle and
fuel technologies that are in a pre-commercial stage, the PowerShift grants should serve to accelerate
the transition of successfully tested technologies from demonstration to commercialisation. Only
those technologies should be supported where a road map towards full commercialisation has been
identified, that medium to long term will be economically viable without further ongoing
incentivisation. To improve the success rate of the PowerShift grants, focus should be on those
options that qualify through advantageous cost-efficiency of pollutant/CO2 reductions. Cost-
efficiency is the sum of both investments in the vehicle technology and the fuel infrastructure. For
that reason we feel that the majority of the grant money should be applied to those options that can
make use of the existing diesel, gasoline and LPG infrastructure.
The current version of the paper does not touch the improvement potential of both local and global
(carbon) emissions by increasing the share of diesel vehicles. Dieselisation integrating advanced low-
emission diesel engine technologies with clean diesel concepts is a very cost-efficient way of
achieving the desired emissions targets. New clean diesel concepts could also include synthetic
blending components such as Gas-to-Liquids, which is a sulphur free, high-cetane fuel which
improves fuel combustibility and therefore reduces emissions.

Foden Trucks
The Natural Gas Vehicle (NGV) market in the UK is in its infancy and requires a significant and long
term commitment to funding, taxation and financial incentivisation from the Government to establish
Natural Gas powered heavy vehicles in the UK.
Foden Trucks has sold only 13 new 'Dual-Fuel' vehicles during 2004 (less than 1% of its truck sales),
following the sale of over 130 such vehicles in 2003. The reduction in PowerShift grant for 2004, the
late announcement of grant support and the short-term fuel duty differential period are all contributory
factors to poor market acceptance. This position is unlikely to change without the introduction of a
strong Government-backed initiative to establish NGV's in the UK haulage and road transport
The UK road transport industry has little interest in environmental benefit, haulage companies are
faced with trying to stay in business in the face of meeting continuously increasing overhead costs
outside of their control e.g. successive legislational changes relating to vehicles and vehicle operation,
national driver shortage, the proposed Working Time Directive and now rapidly escalating diesel fuel
However our customers do recognise the potential economic benefits of NGV's, but they currently
focus on the risks associated with them and as a result believe that the risks outweigh the potential
benefits, to the extent that any commercial advantage can be negated.
We therefore recommend the following: -
    The Government should make a very clear and very public statement defining its national
       environmental policies and targets.
    Natural Gas as a road transport fuel should be confirmed as playing an important part in that
       strategy, with relevant targets for NGV sales and NG fuel sales.

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    The Government, through its respective departments and agencies, should embark upon a
       significant support programme to ensure that a sustained NGV market is developed in the
    Grants for Natural Gas Vehicles and public access NG filling stations should continue. The
       emphasis should be to positively encourage Natural Gas heavy commercial vehicles and
       public transport vehicles. Duration to be a minimum 5 years and preferably for 10 years.
    Interest-free loans from government agencies should be made available to finance the initial
        higher capital price of NGV's such that the NGV cost premium can be offset or amortised
        over the whole vehicle life e.g. up to 10 years.
    The budgets available for both grants and interest-free loans should be adequate to meet the NGV
       sales and NG fuel sales targets.
    The current fuel duty differential enjoyed between Natural Gas and diesel as a road transport fuel
       should be extended to a minimum 10 year period. Successive governments should 'inherit' the
       period and should not be able to terminate it.
    Government support should be made available to manufacturers in the NGV and NG fuel sectors
       to finance the development of products to ensure that the market is continuously developed
       and sustained until commercially viable in its own right.
    Octel Exhaust System Ltd (trading as Adastra) and Octel Corp
    We believe that it is more effective for a grant programme to focus on emissions affecting health.
       Carbon emission should be addressed by demand management measures to reduce vehicle
       mileage and improve fuel economy.
    Emissions standards have not kept pace with understanding as to the elements of emissions that
       are most harmful to health. These standards require updating, notably in relation to ultrafine
    The current levels of support under the Transport Energy programmes appear to be based around
       the market prices of technology rather than the cost effectiveness. We believe that grant
       levels should be realigned to reflect the performance of technology both in abating emissions
       and secondary affects of increasing other emissions.
    Retro fitment of emissions control equipment represents a significant cost to vehicle operators and
        very few will adopt it voluntarily. Widespread adoption will come only if there is either
    a package of incentives, such as grants and fiscal benefits, giving a short (2-3 year) payback to the
        vehicle operator; or
    a mandate affecting substantial parts of the country
    Any incentive programme needs to be sufficiently funded to allow all eligible vehicles to be
       equipped. Current levels of funding allow fitment of emissions control equipment to a
       relatively small number of vehicles. At this rate it would take decades to equip all of the
       commercial vehicles on the road. Without a mandate - or a substantial increase in funding -
       the programmes will only make a very minor difference to air quality. .
    Emissions standards and incentive programmes should be expanded to cover off-road sectors such
       as construction plant and non-mobile machinery, particularly when operating in urban areas.

Royal Society for the Protection of Birds
The RSPB considers that human-induced climate change poses the biggest long-term threat to global
biodiversity. We therefore support policies and measures that reduce the anthropogenic greenhouse
gas emissions that cause climate change. The RSPB endorses the UK government's aim to cut

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emissions by 60% by 2050, an aim that we should try hard to overachieve. The transport sector
currently accounts for over 20% of greenhouse gas emissions in the United Kingdom.
Grants such as those provided under the current TransportEnergy programmes provide some help in
encouraging the uptake of low polluting vehicles.

LP Gas Association
It is appropriate that the main focus of TransportEnergy should be towards air quality. Much can be
achieved both through assisting technology and also working with Councils who at present wrestle
individually with this problem. There is the opportunity for the government to lead through
TransportEnergy to help develop consistent and integrated activities.
Given the aim of the Trust to help the market for clean and low carbon vehicles there is a case for
funding development projects through the New Vehicle Technology Fund (NVTF). However with the
emphasis on the market, this perhaps should be for technologies which can be viably brought to
market within say two years, rather than esoteric investment in longer term issues such as hydrogen
vehicles. This supports the Government's 2004 Powering Future Vehicles report which states "It is not
certain that a hydrogen economy will ever be realised"
Furthermore, we believe that when an application for grant funding is received, whether NVTF or
other, the whole proposal to the point of sustainability in the market should be considered and agreed
with the provider at the outset. In this way clear parameters are set for the level of grants and exit plan
for EST involvement. The same discussions and exit plan need to be developed with industries in
receipt of existing grants so that an exit plan for those technologies / fuels can be determined.
Such a basis would require a commitment beyond a twelve month period and this market place
requirement will need to be addressed and reflected in terms of longer term commitments by the DfT
to the EST programmes.

A clear Alternative Fuels for Transportation Strategy with specific development programs must be
defined. To accomplish this, the Government as a whole must assign priorities to their transportation
fuel objectives and separate the programs that help achieve these objectives and define short, medium
and longer term goals. With regards to Government policy for natural gas vehicles it should focus in
the short term on increasing commercial (including Government fleet) vehicles that operate in and
around city centres, including buses, together with heavy goods vehicles that can help to underpin the
development of filling station infrastructure. In addition, the short term also offers an opportunity to
grow natural gas penetration in the taxi and passenger car markets.
The Government should provide a clear signal to the market in the form of a differential between
natural gas and conventional fuels, beginning with a fixed £0.06 fuel duty to 2010. After 2010, if the
market has developed sustainably, any increase in duty should take place in a step-wise fashion to
avoid a "cliff effect" on vehicle demand.
To stimulate the demand for clean-air buses in urban centres, the Government must eliminate the
current fuel duty rebate for buses and replace it with a fuel-neutral duty along with a low-emissions
mandate for these fleets.
The development of a healthy natural gas vehicle market will provide the vehicles and filling station
infrastructure necessary to support growth in the use of biogas, which has significant advantages in
terms of both carbon dioxide and diversity.

Dr Stephen Finnegan, ECOtravel co-ordinator, Merseytravel
I feel that the existing CleanUp and PowerShift programmes should be combined to base grant
funding on a fuel neutral, emissions-based grant system using the complete well-to-wheel analysis.
This is the only way to assess the total global and local air quality impacts of fuels and vehicles.

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Whether vehicles use advanced technologies, fuel additives, exhaust aftertreatments, alternative fuels
or any other emissions reduction technologies, what really matters is the total pollution due to the
generation, use and disposal of that vehicle and fuel combination. I have developed a well-to-wheel
model for heavy goods vehicles (HGVs) that does this and I feel that this is the only practical way to
allocate grants in the future.

Lucy Robson
Effectiveness of current programmes
Doesn't always pushing for newer cars mean more waste on the scrap pile? How about pushing the
development of vehicles, which are greener in life cycle assessment terms? i.e. smaller cars that use
less raw materials and less energy to make?
On the subject of sustainability. What about the promotion of biofuels? Bioethanol and biodiesel
feedstocks. Local sourced fuels. Renewable energy sources. The government should be promoting
more sustainable technologies. lpg and cng promotion is short term - although cleaner, they still
produce carbon dioxide and are not inexhaustible in terms of supply.
Balance of funding
Funding should be directed to the heaviest polluters - larger vehicles, and also White Van Man. The
motor car produces far less pollution than HGVs. i.e. Cleanup should receive more money than
I think that it is good to promote different technologies and cleaner vehicles. And therefore support
the programmes in general. However, I think that the government can not rely on the take up of
newer, cleaner vehicles as the way to achieve air quality objectives. Need to reduce the amount of
people in cars, by reducing the need to travel and by improving mass public transport, and public
transport emissions. Houses are still being built far from public transport links and amenities so that
the car has to be used.
There also needs to be tax incentives for consumers to buy cleaner cars. Those with larger fuel
guzzling cars should pay more tax. Finally, there needs to be long term support by the government
for cleaner fuels. Is it not the case that the lower duty on lpg is not guaranteed? Therefore people are
reluctant to convert their vehicles.

From our perspective, Grant Monies would be best spent reducing the Whole Life Costs to levels
competitive with current low-emission diesel models.
In the spirit of environmental responsibility, we offer all of our company car drivers the option of
ECO-friendly cars. When a driver selects one, they receive a salary supplement equivalent to the
Whole Life Cost saving. The take-up is minimal. Company Cars are part of any company's tool kit to
attract and retain staff. Some of your funding might be spent effectively in promoting ECO-friendly
cars. If drivers want them, companies will buy them.

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Responses to Specific Questions:
Response to Question 1
The effectiveness of the current programmes in helping to make progress towards environmental

Low Carbon Vehicle Partnership
LowCVP believes Government funded grant schemes have a role in encouraging market
transformation and increased uptake of low carbon vehicle and fuel technologies. Grants can assist
companies to bring new products to market by supporting research, development and demonstration
vehicles (currently supported through the New Vehicle Technology Fund). Grants could also be used
to close the gap between demonstration and commercialisation by encouraging the production of
demonstration fleets. Grants to help towards the higher purchase cost for new low carbon technologies
(such as Powershift) can help increase market penetration.
However, within the very limited budgets that are currently available for TransportEnergy
Programmes it is unrealistic to expect grant schemes alone to stimulate a market transformation to low
carbon vehicles in the short- or medium term. Accordingly we suggest:
    Funds must be focussed at both the sectors and stages of development in which they are most
       likely to lead to long-term development of the market for low carbon vehicles rather than
       short-term carbon-savings. This will deliver optimum return in terms of £ per tonne of CO2
       saved over a 10 to 20 year horizon. The cost-effectiveness of the programmes in terms of £
       per tonne of CO2 saved as a result of supporting a single vehicle are likely to be very poor
       compared to other C-saving programmes in other sectors, such as industrial energy efficiency.
    Programmes must be integrated as part of a broader strategy of education and advice about low
       carbon vehicles, including such activity as: working with fleet managers, providing
       information for local authority fleets and public awareness. Grants must also complement
       regulatory, fiscal, economic, procurement and voluntary instruments to promote the purchase
       of low carbon vehicles. This will maximise the likelihood of investments delivering the
       desired market development.
    Schemes must be sufficiently resourced and structured in a way to ensure that suppliers can have
       certainty over grant availability for a set period of time. Recent experiences of the stop-start
       nature of the Powershift programme significantly undermined manufacturers' confidence in
       the scheme. Consequently, few companies are willing to take account of grant availability in
       decisions regarding supply of low carbon vehicles. This significantly undermines the
       effectiveness and credibility of the scheme. Schemes must also be administratively simple to

London Bus Services Ltd
There is no doubt that the TransportEnergy grant programmes have helped stimulate the uptake of
cleaner fuels and technologies into the UK which would not have occurred without the assistance of
grant funding.
Taking into account the emissions savings for NOx and PM10 from CleanUp and PowerShift in
2003/4 it is clear that overall, CleanUp is an extremely cost effective programme. Far greater
emissions benefits were delivered despite fewer vehicles being funded compared to the PowerShift
LBSL would therefore strongly recommend that DfT continue to support the CleanUp programme but
that more focus is given to aligning it with the Government's progress towards achievement of
national air quality objectives as stated earlier.

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The Powershift programme, despite the improvement introduced by the online enquiry and grant
reservation process, continues to prove to be administratively cumbersome and onerous.
Our Members are particularly concerned with the justification with the varying levels of grants being
dependent on the geographical location of the applicant. Not only does this seem to be discriminatory,
but can be open to abuse.
Equally to have the overall government fund split into monthly "pots" produces unnecessary ordering
"bottlenecks", which has created a disorderly vehicle market and created uncertainty for the
applicants. So, if the budget allocated for a particular month, has been distributed by the 3rd day of
that month, then our Members would either have to wait in the hope that they are successful in the
following month or monitor the web on a daily basis in the anticipation of a cancellation of a grant.
Our Members also advise that there is very little evidence to support the view that the funding
available is sufficient to steer customers into requesting cleaner vehicles.
The overall level of funding for the programmes and the balance of funding between the programmes
stability is key here. There is a need to ensure that the funds available are similar and remain at
consistent levels for the duration of the offer.

Environmental Industries Commission
The EIC believes there is a clear need and benefit for Government to support the uptake of cleaner
vehicles and technologies that can help lower pollutant and carbon dioxide emissions. Grant funding
has proven an effective policy instrument in promoting consumer demand for low emission
technologies and vehicles. This has, in turn, encouraged industry to invest in introducing new
vehicles and technologies to service this emerging niche market.
Based on their engine technology, size and duty-cycles, HGVs are comparatively higher emitters on a
gram per kilometre basis when compared with modern petrol and diesel passenger cars. The
technologies offered on the CleanUp register are highly effective at cutting HGV exhaust emissions.
This, combined with the longevity of diesel HGVs, makes the emissions reductions subsidised by
CleanUp both significant and sustained. Clean diesel technologies are therefore contributing mostly
to reducing urban emissions, where personal exposure would otherwise be greatest and air quality
management is at its most challenging.

Millbrook Proving Ground Ltd
The effectiveness of the grant programmes has varied greatly depending on the fuel/technology under
In the LPG market Powershift grants have contributed to meeting environmental objectives by
providing an incentive to purchase the cleanest vehicles. The Powershift programme has encouraged
OEM and kit manufactures to improve the emissions performance of their products to a point that UK
LPG vehicles are amongst the cleanest in the world.
Retrofit technology for diesel exhaust after treatment that reduces both NOx and particulate emissions
has been supported by and would not exist to the current extent without the existence of the CleanUp
All of the technologies/fuels supported by Powershift suffered when funds ran out 5 months into the
last financial year and grants were withdrawn. Recovery in all the affected markets has been slow and
the continued uncertainty as to future availability of grants has reduced the effectiveness of the
programme. A commitment to the availability of grants over a number of years similar to the 3 year
rolling commitment to fuel duty levels on road fuel gases is required to regain market confidence.

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Retail Motor Industry Federation
It is doubtful as to whether the measures reported in the consultation document provide a suitable
means of assessing the effectiveness of the current programme. If we take the PowerShift Programme,
for example, neither the number of vehicles grant supported, nor the estimated lifetime emissions
savings from those vehicles provides a measure of the effectiveness of the programme. The success of
the programme can only be determined by the number of vehicles which are subsequently sold
without grant aid. If the only way people will buy the vehicles is with a government subsidy then the
programme is of questionable value because it is not kick-starting a sustainable demand. Some
measure of kick-start must be used to determine programme effectiveness in addition to the extent to
which the success of a particular programme will reduce the priority objective emissions.

Greater London Authority
The effectiveness of the current programmes has been limited in the recent past by a number of
factors. However these programmes have the potential to assist greatly in reducing emissions from
road transport.
The unreliability and unpredictability of grants over the last year has damaged the sustainability of
cleaner fuelled vehicle and retrofit market. The unpredictability of the grant programmes affected the
business case for cleaner fuelled vehicles and retrofit devices, and therefore reduced the ability for
organisations to consider grant-eligible vehicles in their long term business planning processes.
The unpredictability of the grant programmes has also had a profound impact on our work, including
promoting cleaner transport options, and cleaning London's fleets. Many Mayoral proposals are
reliant on the provision of grant funding. The change in funding and processes has put much of our
work in jeopardy. This also applies to large quantities of local authority work, and has led to
significant amounts of wasted public funds.
In order to be cost effective, the grants must be focussed on areas of most need. The location of CO2
emission reductions from road transport makes no difference to their impact, but the impact of
emissions of local air pollutants are highly dependant on location. We have been advised that
focussing grants on areas of most effectiveness (highly polluted urban areas) can be justified under
EU State Aid rules as it should not affect trade between member states.
We believe that TransportEnergy could have made more progress towards their environmental
objectives if their marketing had been more appropriately focussed. The grants should be recognised
as part of the overall business case for cleaner fuelled vehicles and retrofit devices (other benefits
include fuel duty rebate and graduated VED), rather than as the main incentive. This single focus led
to the collapse of the markets upon withdrawal of the grants.

Scottish Water
Scottish Water consider the current grant structure would be more effective if it did not continue to be
   seen as separate from the tax structure applied to fuels. As a fleet operator, while committed to
   protecting the environment, it is difficult to make a commitment to new more environmentally
   friendly vehicles without knowing the longer term benefits of investing in fuels such as LPG. The
   purchase decision is more than one of the initial investments, and without confidence in
   continuing fuel tax advantage and hence residual values it is seen by many of those responsible
   for fleets as a financial risk.

Honda (UK)
Honda does not receive Governmental funding anywhere in the world and operate entirely
independently. On this occasion we participated in a Governmental funding scheme so that our
consumers could benefit from the grant funding. From May 2003 - Mar 2004 over 1000 customers of
Honda Civic IMA's benefited from a £1000 PowerShift grant. Applying the £1000 grant, a Civic
IMA was the same price of a Petrol 1.6 Civic Executive, which gave the consumer a choice to opt for

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an alternative fuel vehicle at no extra cost. Honda (UK) took it upon ourselves to administer all the
paperwork ourselves, so to allow the consumer to benefit from the reduced price at point of sale.
Whilst providing a 'no inconvenience' service to our customers we entered into an administrative
minefield. The amount of paperwork that was required for each vehicle was immense and the criteria
was incredibly rigid with no room for manoeuvre. As the discount was given at point of sale, Honda
(UK) was depending upon the Energy Savings Trust (EST) to pay the funds promptly. At one point
last year, we had been waiting for a material payment of over £0.5m for over 6 months. The Grant
Administration team had allocated one person to administer all Honda (UK) grant applications and
this proved an impossible task to accomplish single handedly.
In April of this year Honda (UK) reluctantly agreed to hand over the responsibility to the customer
(through the Direct Application Route) to apply for grant funding as head count was not available to
continue to process the grants internally.
Honda (UK) are not confident that the Managed Account System and Direct Application Route are
given the same priority when money is divided. It would be unjust if applicants of the Direct
Application route suffered at the expense of the Managed Account system.
In August of this year the online system was launched and Honda (UK) appreciate that this system has
made a significant improvement in the amount of administrative paperwork required of an applicant.
However, with the reduction in funding levels and a perception held by retailer/dealerships that to
apply for a grant involves numerous form filling and the process can take a considerable amount of
time (based on pre-online completion) there is a reluctance to involve PowerShift funding into a sales
conversation. This reluctance is a cause of concern to Honda (UK) and all efforts have been made to
educate our dealer network that the process has been made somewhat less arduous since the
introduction of the online system.
In terms of education, the EST has opportunities presented to them to educate both retail and fleet
customers of both their existence and the funding available. Whilst appreciating that fleet customers
are easier to target and fleet sales as a proportion of the total market is growing year on year, there are
many routes of marketing to a potential retail customer that EST have yet to explore. It is important to
use the consumer press in addition to the fleet press.

The Greenfuel Company Ltd
It is quite clear that the Transport Energy programmes are wholly inadequate to make any meaningful
influence on a challenge such as climate change. Equally, legislation such as Euro standards, though
imperfect, have more capacity to influence change than grants forming the tiniest fraction of
Exchequer's transport revenue.
The growth of the use of alternative fuels, particularly LPG, in the UK in recent years can be used as a
case study for the requirement for market stability required to allow new or different technologies to
flourish with government help. The repercussions of the threatened or perceived intention of the
Government to perform an about turn on alternative fuel duty has set the industry back significantly
and has persuaded the major car companies that investment in this area is too fraught with political
instability. Rebuilding consumer and industry faith after such periods of uncertainty is both expensive
and wasteful.
Money spent on initiatives where there is no potential for financial saving such as the installation of
particulate traps is well used when creating and demonstrating user acceptance but must be followed
by legislation to ensure broad enough uptake to actually make a difference. Making a difference by
improving urban air quality and reducing carbon emissions must remain the objective.

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Foden Trucks
The TransportEnergy grant programmes have failed to stimulate interest in and development of the
natural gas vehicle market or the NG fuel supply infrastructure to the degree required to make it a
serious consideration for the UK road haulage industry.
The reduction of the EST grant support for England (at a similar time to one OEM withdrawing NG
vehicle development) did not provide a positive message to the UK truck industry.
The significant vehicle fleets are probably disinterested when faced with a grant process which limits
them to 20 vehicles, when they may operate a fleet of several hundred, with a fleet replacement
programme of 100-150 vehicles per year and a 5 to 7 year vehicle life expectancy.
The road haulage industry is untrusting and sceptical about the freeze on NG duty and the fact that
this is only guaranteed for a short term of 3 rolling years.
The road haulage industry has little interest in the environmental benefits of NG fuels, its only
motivation is cost saving, faced with the continual need to meet ever increasing traditional fossil fuel
costs and ever increasing truck costs resulting from the need to meet the imposed bureaucratic
legislation on vehicles and their operation.
The magnitude of support funding to develop the NGV market in the UK bears no relation to the
opportunity or requirements to develop it. For example the HGV sector in the UK has approximately
400,000 HGV's. Whilst a 20% requirement for alternative-fuelled vehicles is suggested, only a five
percent penetration would have a meaningful impact within the sector in terms of environmental
benefits and development of markets. This implies funds for approximately 20,000 vehicles - over
twenty times more than current levels.

Octel Exhaust System Ltd (trading as Adastra) and Octel Corp
It is our view that the available grants are too limited to have any real effect on air quality. In the
absence of mandated legal requirements to fit abatement technology, there will be limited benefits.
To be effective, the current programmes need to be refocused to concentrate much more on cost
effective options for the reduction of the pollutants most responsible for respiratory diseases.

Lancashire County Council
Needs a better balance to encourage uptake as well as development through better balance of funds in
full life cycle.

The Hard Staff Groups
The current PowerShift programme has not generated sufficient encouragement to enable a large
uptake within the industry; therefore the environmental objectives have been minimal.

Royal Society for the Protection of Birds
It has been estimated that during 2004/05 approximately 5000 cars and vans will benefit from the
PowerShift programme. Although this is a small percentage (0.2%) of the 2.5 million new car sales
of 2003, the success of the programmes should be judged against the increase in car sales of the
vehicle types that were eligible for grants. There are, however, a number of factors, not least Vehicle
Excise Duty (VED) and the price of fuel, which could have a greater effect on consumer decisions to
purchase more efficient vehicles. It would prove difficult to assess the exact effectiveness of each of
these individual factors in helping to meet the Government's targets on reducing vehicle fuel
consumption and carbon emissions. For this reason, the RSPB supports the use of a range of
measures including taxation and grants.

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LP Gas Association
As far as LPG is concerned the actual grant and the environmental message its existence gave
regarding the fuel was a strong influence in kick-starting the industry. Subsequent changes to
streamline the basis of grants and application procedures have added further strength.
The grant system has also provided the incentive to encourage owners to purchase the cleanest
possible vehicles. This banding regime has also had the effect of raising the quality levels of the
technology. LPG vehicles in the UK are now amongst the cleanest in the world.
However, whilst the current Powershift grant does assist in steering some purchase decisions in favour
of LPG, the withdrawal of grants last year through lack of funds have totally undermined the
effectiveness of the scheme particularly within the vital fleet sector. Indeed speculation about this
consultation has further fuelled the uncertainty as to future grants.
There needs to be consistency of grant amount and availability over a number of years. A rolling three
years period of certainty in a similar way to the system implemented for fuel duty would be a good
way to achieve this.

Z Motors Ltd
Zed Motors supports the objective of providing encouragement for the cleanest and lowest carbon
emitting technologies including electric vehicles. Although the technology for these vehicles is well
established, there is a perception that there is not sufficient demand for them to be marketed
commercially. We believe that grant support has an important role in the transition to a market level
that demonstrates to customers that electric vehicles are a viable option.

NGVA and its members
In summary the TransportEnergy grant programmes are thought by NGVA members to have:
"failed to stimulate the development of the NGV market"
"had a mixed success"
"performed extremely inconsistently"
"set back progress (in the NGV market) by 2 years due to instability"
"had little impact on CNG cars due to growth in LPG which has taken the 'alternative fuel' space "
The programme has had little success with regards to developing the NGV market in the UK due to
the instability of the grant regime.
Grant programmes have failed to stimulate the development of medium and heavy-duty vehicles in
the UK natural gas market because of the existing grant applications process, which limits the number
of vehicles which can be funded by grants (20 per application). This does not fit with the life cycle
required by either the vehicle manufacturers or other vehicle operators and acts as a barrier to market
development. For medium to heavy duty vehicles the expected vehicle lifecycle is 5-7 years. Large
operators would expect to replace on average 100 - 200 vehicles per year.
It is also felt that existing funding levels are inadequate in relation to the size of the existing vehicle
parc. For example the HGV sector in the UK has approximately 400,000 HGV's. A five percent
penetration of alternative-fuelled vehicles would have a meaningful impact within the sector in terms
of environmental benefits and development of markets. This implies funds for approximately 20,000
vehicles - over twenty times more than current levels.

Vauxhall Motors
Transport Energy programmes have been instrumental in encouraging take up of cleaner vehicles over
the past 3-5 years. This has especially helped LPG/CNG and hybrid vehicles.

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Vauxhall believe that the Powershift programme specifically would have been more effective if there
had been a greater awareness of the scheme. A sense that the Government had made a long-term
commitment to its continuation and substantial funding when it was first introduced could also have
improved its performance.
Since the launch of the LPG programme Vauxhall has spent significant sums of money on LPG
communication and sales promotion. Vauxhall retailers have invested heavily in the programme
through technical and sales training as well as tactical promotions resulting in good customer service.
Yet anecdotal evidence showed that whist fleet customers are aware of the programmes, retail
customers where unaware of the grants before entering the showroom. This shows that different
means of communications need to be considered in the future in order to increase consideration of the
options available to customers.
In addition, the grant application process was seen by many customers, (particularly retail) as a barrier
as its was perceived as complicated. This issue has been remedied by the introduction of web-based
application and is to be commended. However, even this system still has intrinsic problems.
Again on a positive note, there is evidence that the grants have helped the shift toward cleaner
vehicles in the fleet market. However it must be noted that this is also linked with further incentives
such as reduced company car tax rates and significant savings on fuel costs across the fleet.

CNG Service Ltd
Cars - limited impact due to growth in LPG which has taken the 'alternative fuel' space that is
occupied by CNG in Germany, for example. Moving cars onto low carbon CNG can be
transformational. If CNG is coupled with hybrid technology (as used in the Toyota Prius), then there
is even greater advantage.
Buses - impact of grants can be counter-productive in that old diesel buses with particulate traps
remain on the road. CNG for public transport is the reason for Delhi and Paris having much cleaner
air than London.
HGVs - meaningful reductions in harmful emissions has been achieved by the grant programmes and
there now exists significant infrastructure for both CNG and LNG. The duel fuel Foden truck offers a
major reduction in CO2 compared to other trucks.

Over 10% of the total Merseyside bus fleet is fitted with particulate traps, resulting in a substantial
reduction in pollution. Grant-aid has also helped to develop the new trap from Pertec and the Eneco
hybrid bus. None of these initiatives would have been possible without Government grant aid.
Therefore the programme has been effective, although cash constraints and the inability of
Merseytravel to direct the bus industry to reduce pollution (in a way that Transport for London can do
as part of a regulated environment), hamper the efforts to clean up commercial services.

Norwood Consulting Ltd
There is little doubt that without the current, or as will be suggested, a refocused grant and support
programme, there would be no possibility of establishing any clean vehicle or emission reduction
policy or of achieving Government objectives.
The current programmes have started a process that has set a standard and a basis for growth without
generating the numbers of clean or cleaner vehicles required to deliver significant emission gains for
the foreseeable future.
In a previous submission to a consultation concerning road fuel duty and other related matters we
observed that only 100000 alternative fuel or "clean" vehicles had been introduced over about a 10

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year span in spite of gross investment in infrastructure, fuel duty support, vehicle grant schemes and
research and development of at least £300 million, possibly more.
Our response therefore to this section is that the delivery mechanism and support schemes are long
overdue an overhaul, but must continue in some form if the foundations laid to date are not to be

John Harwood
Cars: Vested interests on behalf of the car manufacturers and oil company's work together to
perpetuate the dependence of these vehicles on oil based products including LPG. Only continued
Government support for CNG cars may eventually produce a change of thinking. If there was positive
discrimination towards CNG cars as in say Germany, Argentina and India this would have a major
impact on air quality. The car and oil companies would react to customer demand, if the customer can
see an economic benefit in buying a CNG car.
Buses: The current diesel duty rebate system operated to subsidise public transport is counter
productive in that it encourages the retention of old diesel buses. If the rebate was switched to
subsidise the purchase of new natural gas buses and the current duty on natural gas maintained, I
would suspect that the fiscal impact on the Treasury would be neutral.
HGVs: This is the transport sector on which the current grant programme has had the greatest impact,
because the economics of operating natural gas trucks makes sense. Continued support is required to
encourage other truck manufacturers into the current market, which is dominated by Foden. Recent
changes to the grant aid programme resulted in the withdrawal of other interested OEM natural gas
truck manufacturers, which was not helpful to promoting the technology.
If Germany can give a 10 years commitment on natural gas fuel duty, why is it a problem for the UK?

DaimlerChrysler UK Ltd
The current schemes that are in place are dependant upon the provision of grants from Central
Government through the Energy Saving Trust. Whilst this provides all of the controls that are
necessary to ensure the funds are properly utilised it has created uncertainty in the market place as to:
    The current availability of funding and the cut off at the end financial year.
    The long-term availability of funding and how far into the future the scheme may continue.
    The level of funding and whether it is commercially viable for the vehicle to be operated.
    The uncertainty based on previous experience, that if the grants available are too financially
       attractive then the fund will be used up too soon and if they are not then the fund will be
       under subscribed.

Lubrizol Ltd
CleanUp has the potential to contribute to significant air quality improvements if handled correctly.
However its effectiveness is limited by the stability of the grant system, funds were fully allocated
early in 2003 and customer (existing and potential) confidence was severely damaged. The grant
system itself places additional burden on suppliers, in the short term this involves the complexity and
difficulties in handling the forecasting and grant allocation system. In the longer term there is a lack
of confidence in funding continuity, which does not encourage technology suppliers to invest in
developing solutions.
The current programme has a reduced level of funding. This lower amount has again sent a negative
message to the market and the purchase of aftertreatment devices has further been adversely affected.
Aftertreatment devices dramatically affect the amount of particulate, hydrocarbon, and carbon
monoxide emissions, this is apparent on the vehicles that are currently fitted. We estimate that there

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are around 10,000 heavy duty vehicles fitted with exhaust aftertreatment in UK. This is a very small
percentage of the total vehicle population.
The current CleanUp funding scheme requires vehicle operators to make a significant investment
themselves. There are no mandates or regulations to further encourage the retrofitting of
aftertreatment. Owing to the lack of mandates and regulations and the large investment to be made by
operators, most potential customers are choosing not to fit such pollution reduction aftertreatment
Those operators who chose to fit aftertreatment devices cannot justify the investment for older, more
polluting vehicles, and are fitting to more modern, less polluting, vehicles.
An increase in the overall level of funding would allow significant contributions to be made. The
current allocation of funds between technologies does not adequately reflect the air quality
improvement per £ of grant money given, as noted later.
The current system could be modified to provide greater funding relative to the extent of pollution

Iveco Ltd
Existing Transport Energy programmes are not adequately focussed. There are many studies showing
urban air NOx and Pm concentrations due to commercial vehicles and buses far exceeds the
proportion of such vehicles in operation compared to the number of other vehicle types. In order that
operators of commercial vehicles and buses make purchasing decisions favouring cleaner vehicles,
there must be a sound business decision to do so. Being clean does not reflect at all on a company
balance sheet. As far as retro fitment of exhaust after treatment devices is concerned, too much has
been spent in equipping the newer, cleaner vehicles in the parc rather than the gross polluting older
vehicles thereby providing poor value for money.

Biofuels Northern Ireland
The basic concept of the Transport Energy grant programme was ill-conceived. Air pollution, carbon
emissions and the depletion of energy resources are caused primarily by the fuels used for
transportation, not the vehicles that use them. There is no comparable grant programme offered for
the uptake of environmental fuels.

In our view the programmes have had a mixed success, particularly with regard to new technologies
that can offer significant environmental benefits. The Clean-up programme has successfully addressed
existing vehicles, whereas Powershift has only really impacted the LPG sector, and here it can be
argued that with 100,000 vehicles on the road and 1,000 refuelling points - the point of critical mass
has been reached and grant support should be withdrawn.
Within the natural gas sector, the instability for the grant regime has had an entirely negative impact.
Major vehicle manufacturers (such as Scania) have left the sector, and potential customers have been
frightened away. Progress has probably been setback by two years, and the current review, if poorly
managed may inflict further damage.
The New Vehicle Technology Fund is an excellent way of bringing near to market vehicles into the
marketplace, but has, on occasion spent money on concept vehicles that cannot be economically
introduced to market within the next five years. This means that its ability to bring a meaningful
impact to emission standards has been limited.
In relation to the size of the overall vehicle parc, the impact of the combined funds has been very
small. Petrol and diesel remain the overwhelmingly dominant fuels of choice and significantly higher
levels of alternative fuel penetration will be needed before there are raised levels of awareness within
the general public.

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Improvements in vehicle emissions have been primarily driven by changes in the taxation of company
cars and by the imposition of ever-tighter emission standards for HGV's. However, it should be
recognised that however high 'the bar is set' vehicle manufacturers will, by choice stick with the
existing technology platforms. If fuel diversity is a serious ambition then new fuels will need
significant and prolonged support.

First Group
The current programmes are limited in their effectiveness as they are based on fuel technology rather
than outputs, and hence have the potential to stifle innovation with conventional fuel.

Newport Transport
Reasonable effective in general. Needs further promotion, education, and explanation.

The proposal for a Low Emission Vehicle programmes that supports and encourages the cleanest and
lowest carbon emission vehicles on the basis of performance, rather than defined by a particular fuel
or technology, would appear to be sensible.

The good news for GoinGreen is undoubtedly the reduction in response time that the on-line system
provides. Although it has only been live for 10 weeks or so, it has made approval of grant applications
instant for us as a Managed Account and that is a very positive step forward. Congratulations on the
new site.
Likewise, the management of funds has proven more effective and it seems likely that we will not run
out of funds prior to the fiscal end (unlike last year which effectively killed our sales for 6 months and
almost caused the closure of our business).

We recognise that there is a gap between innovation and market acceptance. To be fully effective the
programme needs to bridge this gap.
In term of funding requirements across all three programmes the level of funding to date and its
application may not be sufficient, or consistent enough to generate the ongoing required confidence to
fully achieve environmental objectives.
In the future therefor consistent, focused and perhaps an enhanced level of overall funding will be
required to ensure that the gap between innovation and market place is achieved.

The Confederation of Passenger Transport
Total funding and current programmes - the current amount of funding is too small in comparison
with the total amount of tax collected from all sources of transport [e.g. fuel duty, vehicle excise duty,
insurance premium tax (car policies), VAT, etc.]. The total amount of funding should be increased
significantly, and be made available on first come first served basis from the beginning of the
financial year.

Severn Wye Energy Agency
We have welcomed the Transport Energy programmes, and value their effectiveness in improving air
quality and reducing carbon dioxide emissions from vehicles.
Our expertise relates mainly to schemes reaching out to the public rather than in technologies,
however it is satisfying to see the number of vehicles that have been improved via the 'CleanUp'

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programme. Likewise the demonstration vehicles we have seen through the 'New Vehicle Technology
Fund' have been impressive, and we hope this technology finds its way into production vehicles.
We believe that 'PowerShift' has also generally been successful but now, as you suggest, needs
significant revision. The figures in the consultation document show that PowerShift has focused
overwhelmingly on LPG conversions. Whilst LPG had significant benefits when PowerShift was
launched we feel that both the air quality and carbon dioxide advantages of LPG have now been
eroded by improved petrol and diesel technologies to the point where there is little case for supporting
LPG conversions.
There is also anecdotal evidence that some consumers have used the availability of LPG conversion
grants and the low LPG fuel taxation to purchase larger, more polluting vehicles than they otherwise
would, as an LPG conversion reduces the running costs.

MG Rover Group
We support the replacement of existing programmes by a single flexible Low Emission Vehicle
Programme aimed at promoting rapid customer acceptance of new vehicle technology while
providing limited palliative measures in problem areas and supporting rapid development and
introduction of new technology.

Ford Motor Company
Ford companies have mainly had experience of the Powershift grant system, and specifically the LPG
market. This scheme initially helped the viability of vehicles with lower environmental footprint, but
now has become more of exasperation than a benefit for the following reasons:
    PowerShift ran out of money in 2003, so grants were not available
    Grants reduced from April 2004, but allocation ran out again in June.
    The stop/start nature of the scheme has caused problems in consistent communication with our
       customers, leading to their confusion.
    Activities under-mining potential future vehicle programmes.
    Administratively burdensome access to grants; fleet company access

Cotswold Experience Tours
Current systems are not effective. For example: B100% Biodiesel is approximately the same price as
fossil diesel but carbon neutral, yet there is no measure to make the cleaner biodiesel cheaper than the
fossil fuel.

Volvo Trucks Ltd
Incentive schemes need to be focused on long-term viable solutions and consistency of funding.
Rather than grants, a long-term regime of enhanced capital allowances has the potential to offer a
more consistent and reliable form of funding incentives for future commercial vehicles.
For financial year 2004/5, Holland has introduced a scheme of enhanced capital allowances for
commercial vehicles, which meet advanced Euro emissions levels. This allows a full 100% allowance
on the purchase of a new vehicle, up to a maximum capital value of 45,000 Euro. This is in addition to
normal annual allowances based on a 15% capital allowance for the first year and subsequent years.
Provided that these incentives have known periods of validity and have reasonable known lead times,
industry can plan fleet replacements accordingly.
Volvo Trucks advocates that the UK Government adopt a similar enhanced capital allowances for
vehicles which meet advanced exhaust emission standards which would avoid the run out of funding
part way through financial years which has undermined the current Transport Energy funding.

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In addition any scheme, which intends to bring cleaner vehicles on to the market, should be based on
the exhaust emissions and not the fact that the fuel is an alternative to conventional fuels. New
vehicles using conventional fuels are becoming increasingly cleaner and until the UK and European
authorities declare a sustainable future for new fuels looking at the complete energy picture, the use of
conventional fuels should not be a hurdle to grants, or incentives for urban zones, which charge or
restrict access.

Police HQ,
The capacity of using alternative or cleaner fuel in South West and Mid Wales has hardly improved in
the last five years. The main reason is due to the lack of progress with commercial outlets being able
to supply alternative fuels such as liquid petroleum gas.

Toyota Motor Europe London Office
Concerns about the current administrative difficulties associated with the grant (which is undermining
confidence in low carbon technologies) and the technology-specific approach undertaken thus far.
This contradicts the stated Government aim in Powering Future Vehicles not to "pick winners". Such
a prescriptive approach has a number of flaws and can inhibit the introduction of new technologies
(hybrids still suffer in comparison with the "double incentive" of grant and duty incentive offered to
the environmentally inferior LPG).
There is an opportunity to establish a fair and transparent framework, which can be used to encourage
both the introduction and take up of new technologies.

Response to Question 2
The overall amount of funding for the programmes, and the balance of funding between the

London Bus Services Ltd
In 2003/4 the grant funding was split equally between the two programmes. This was disappointing,
given that there are far fewer financial incentives to retrofit diesel vehicles with exhaust aftertreatment
than there are switching to cleaner fuels. The only incentive to fit CleanUp technologies is that the
operator may be able to obtain a Reduced Pollution Certificate and subsequent discount on road tax,
ranging from £5 of £500 per annum. The RPC is however only issued for certain approved
technologies that deliver PM10 emission benefits, so is not available for NOx reduction technologies
for example. Furthermore the discount obtained varies according to vehicle weight, and for smaller
vehicles the discount is not worth the effort of applying for the RPC.
In comparison cleaner fuelled vehicles benefit from a number of financial incentives such as reduced
fuel duty, company car tax benefits, enhanced capital allowances, reduced VED and 100% discount
from the London Congestion Charge. Given these additional cost savings that actively encourage
operators to switch to cleaner fuels for financial reasons, there is no such opportunity for CleanUp
technologies. For this reason the CleanUp grant programme should be allocated a higher proportion of
the TE budget.
With regards the total budget allocated for the TE programmes, this is currently set too low to make
any real impact on improving air quality and combating climate change. Despite the theoretical
advancement of engine standards and emissions through the Euro standards, these emission reductions
have not always been observed under real world driving conditions. For example, double deck Euro
III buses tested under a typical London route have been found on average to have 15% higher NOx
emissions compared to a Euro II vehicle of the same type. Fewer single deck vehicles have been
tested but the results showed that NOx increased by over 50% on Euro III vehicles. The anticipated
emission reduction from Euro II to Euro III was 29% so clearly there is a large disparity between
predicted emissions and those observed under real world conditions.

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This means that government projections on future emissions from road transport may be
underestimated and that achievement of air quality targets may take longer. If emission reductions are
not being delivered through Euro standards then the government needs to take steps to reduce
emissions from the existing vehicle parc, and retrofitting vehicles with emission reduction technology
is a cost effective means of achieving this objective.

Our Members have reported to us that it was patently evident that towards the end of last year, there
was insufficient funding to meet the demand after which the scheme was effectively closed at the
beginning of November 2003. The Energy Savings Trust (EST) plan to split the pot into twelve parts
for this year, clearly demonstrated that they felt this year's allowance was insufficient and we suspect
that it wished to avoid a repetition of last year's embarrassment.
Whatever process is adopted, we strongly recommend that it is simple to understand and implement
and that the keeping of the grant allocation system is at a uniform level.

Environmental Industries Commission
The overall level of funding for the programmes is inadequate to cover the wide range of product
offerings now on the CleanUp and PowerShift registers, as well as the increasingly diverse range of
Government objectives against which these programmes can deliver. EIC members are concerned
that the present grant funding level for CleanUp technologies may reverse the previous positive trend
in consumer voluntarism.

Millbrook Proving Ground Ltd
The current markets for clean vehicle technologies are very sensitive to changes in the market
conditions, whether that is due to fuel duty, grant levels or other factors that impact on lifetime costs
of ownership such as residual values. For this reason we believe that any reduction to grant levels in
the short term, either due to changes in overall funding levels or redistribution of the funds, would
have major implications for many of the markets concerned.

Retail Motor Industry Federation
The maximum funding level will probably be decided by the Chancellor. How much of the funding is
actually used for the programmes should be decided on the basis of what can be achieved relative to
the cost of alternative methods to achieve the same environmental objective(s). For example, buying
old vehicles to scrap them, tightening up on the MOT test requirements, regulation.

Greater London Authority
There is insufficient funding to support the emerging market, especially in relation to CleanUp. It is
imperative that the government increase the funding for cleaner technologies as soon as possible.
In a climate of limited funding, focus should be on providing funding to desired solutions which
would not otherwise be cost effective on an individual basis. For example, funding should be focussed
at cleaning up the existing long life fleet, through CleanUp) grants for abatement equipment for long
life vehicles (such as SCR and traps on buses), in preference to (PowerShift) grants for vehicles which
are already attractive to the user through other benefits such as reduced fuel costs.
It is interesting to note that the CleanUp programme to date has, in addition to NOx and PM10
emission savings, delivered half as much CO2 emission savings as the PowerShift programme, even
though CO2 emission reductions are not a core target for CleanUp (unlike PowerShift).
Where a vehicle or technology is already a cost effective alternative, TransportEnergy should focus on
soft issues, such as information provision, market awareness and impartial accreditation. It is essential
that any reduction in grants be accompanied by an increase in the promotion of the other benefits.

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The level of grant should take into account both the additional cost of the vehicle or equipment, other
financial incentives and benefits, and what the ongoing cost is likely to be. The grant should be
adjusted according to a particular vehicle/technology type such that it takes into account the payback
period to the operator.

Scottish Water
As a fleet operator, Scottish Water would prefer more simplicity and clarity in the funding and
programmes and to avoid being presented with a complexity of alternatives. Fleet operators in
general seek clarity of direction on which to base plans which can involve significant funding and
Scottish Water believes there must be sufficient funding to deliver the full programme if the
commitment to energy clean vehicles is to be seen as serious. The funding should take account of
additional purchase costs and ideally would take into account some mechanism to offset loss on the
residual value as compared to a similar conventionally powered vehicle.

Honda (UK)
As Honda (UK) only has experience of the PowerShift programme, the following comments only
relates to that programme.
Given the targets set by the Government to reduce C02 and improve air quality it is critical that the
amount of funding is sizeable enough to influence a consumer towards supporting new technology.
Honda (UK) appreciates the difficult task presented to EST on how the annual budget should be
administered. When the funds 'ran out' towards the end of the previous financial year it did not aid in
either increasing consumer confidence in the programmes nor did it improve the credibility of the
EST. This year the EST has chosen to divide the annual budget into monthly amounts. The amount
of money which is allocated on a monthly basis is below that of the forecast for alternative fuel sales.
This inevitably means that the money could potentially 'run out' before month end. This situation
leads to problematic communication issues. This coupled with funds being allocated back into the
'pot' throughout the month (due to the ten day period which EST hold money on behalf of an applicant
until they place an order - lack of order means that the funds get placed back into the budget) cause a
constant communication challenge. Honda (UK) wishes to ensure that our retailers/customers both
retail and fleet are kept abreast of any changes. The lack of certainty inevitably leads to customer
inconvenience leading to customer dissatisfaction, possible 'no sale' and lack of faith in the EST and
Honda (UK) is not aware of the funds 'running out' since the monthly allocations commenced, but feel
that this is due to a lack of customer/retailer confidence in the programme and a lack of knowledge by
the public of the programme's existence as mentioned above. It is likely that confidence will increase
in the near future when knowledge of the improvements to administration that the on-line system has
delivered increase. It will be at this time that funds could potentially 'run out' before month end and
affect the number of consumers that would have purchased an alternative fuel vehicle had funds been
available. It will be at this time also, that vehicle manufacturers will be faced with trying to manage
the constant communication challenges with regards to available funds.
To prevent vehicle manufacturers and fleet companies having to manage communication challenges,
Honda (UK) propose the following;
EST to offer a grant commitment to vehicle manufacturers for a definitive amount of vehicles. This
enables the vehicle manufacturer/fleet operator to communicate one message to both its customers
and or retailers. It is understood that grant monies may not be available for all future sales of that
vehicle, so a threshold could be applied. This would then allow a vehicle manufacturer to operate a
'first come, first served' policy. The commitment offered by EST should where possible cover up to
three years worth of forecasts as this would aid vehicle manufacturer budgeting. This solution would
allow EST to forecast and manage budgets and also allow monies to be 'ring fenced' for new

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technologies coming on board. This in Honda (UK)'s opinion offers a better alternative to current
The EST definition of subsidy vs an incentive means that the date of order is the qualifying criteria for
grant eligibility. However, this creates complexity and uncertainty in forecasting and managing
budgets. Re-examining the definition to make registration date the qualifying criteria would increase
budgeting accuracy, provide a clear message to the marketplace and is consistent with existing
communication practises readily understood by customers and dealers and minimises EST budget
carry-over at the end of the financial year. In simple terms customers and dealers do not readily
understand that a grant offer must be made before a sale is made.

The Greenfuel Company Ltd
In the context of both the challenge faced and the £44bn per annum revenue from transport, the
overall funding is wholly inadequate. The Greenfuel Company would prefer that the Powershift
scheme were better funded and established along the lines of Autogas+, perhaps with a lower grant
There has been a clear focus on fleet vehicles. However, unless the consumer market is further
stimulated there is no onward market for these vehicles and consequent fear of low residual value is
thwarting this strategy.
A simple-to-administer scheme that provides £400 or similar for each conversion would translate in
funding for 17,500 more alternatively fuelled vehicles. Standards of conversion could be controlled by
a combination of the LPGA policing the quality of fitters and the equipment manufacturers
guaranteeing the suitability of systems for conversion. This would overcome the major barrier that is
uncertainty over the Government's position. People would reason that if the Government are giving
them a grant to do this then it obviously something that they are trying to encourage and will continue
to support at least in the long term. Exempting such pollution reducing technology from VAT would
send a similar positive signal. At the same time a real shift of funds spent on grants rather than
administration should be attempted.
Many people are persuaded of the benefits of LPG due to the cost advantage but put off by the initial
investment required. Perhaps the Powershift scheme should buy 10,000 systems from reputable
equipment manufacturers and lease them out? Alternatively providing interest free loans for
conversion would remove this barrier.
Snubbing people by broadcasting grants that the vast majority are ineligible for is not proving to be
very popular, or successful.

Foden Trucks
The availability of grant support for dedicated CNG stations (costing up to £750k) when the number
of vehicles which can take fuel from them is limited to batches of 20 or so seems to be a poor use of
The fact that grant support in Scotland is higher than in England is seen as biased and an indication
that England does not take it seriously.
The 'public' general use NG filling station infrastructure needs to be developed and expanded at a far
higher level than is currently the case. The fuel supply limitations make the financial benefits too
unreliable for the small to medium fleet operators.
A long (minimum 10 years) period of guaranteed reduced fuel duty on Natural Gas would be more
beneficial than the current grant programme. The key to developing a long term NGV market is that it
must be reliable and sustainable over a long term.
If a long term of reduced fuel duty for Natural Gas is introduced, the need to support NGV's directly
may be reduced and the funding could be used to provide interest-free Government or

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TransportEnergy finance for NGV's to negate capital expenditure concerns with vehicle owners and

Octel Exhaust System Ltd (trading as Adastra) and Octel Corp
The level of funding is inadequate to provide sufficient incentive to a large enough number of
operators to have a meaningful benefit to air quality. Furthermore the balance between the
programmes is such that too large a proportion of these limited funds is spent on relatively
speculative, long-term research programmes which have negligible benefit to current air quality. In
addition a disproportionate amount is spent on programmes which encourage technologies which have
negligible overall benefit on pollutants damaging to heath, and questionable effect on overall
greenhouse gas emissions.
To be effective,
    funding needs to increase; and
    it needs to be focused in the areas where the best return on investment can be achieved, in terms
         of reduction in emissions harmful to health per £ of investment.

Lancashire County Council
It seems that the level of funding is insufficient to meet the expressed level of demand. The reduction
in the level of grants to end users made to reduce the demand seems to be a crude measure, whereas
being more selective would perhaps be a better solution.

The Hard Staff Groups
The overall amount of funds available for PowerShift is insufficient to stimulate the growth in the
heavy-duty sector. The balance of funding between the two programmes requires review. We propose
future funding is allocated towards PowerShift new vehicles, which give longer-term benefits.

Royal Society for the Protection of Birds
The total funding for the TransportEnergy programmes is currently £29m per annum, this is broken
down approximately between the different programmes as follows:
PowerShift - the PowerShift fund for 2004/05 is £9.7m. Demand for PowerShift grants has risen very
rapidly over the past financial year, outstripping supply of grant money available. This may indicate
that the funding is insufficient. The total funding for PowerShift (or its replacement) should be based
upon estimated sales (probably over a 3-year period) and should be sufficient to ensure that
prospective purchasers of the cleanest vehicles are provided with an adequate incentive.
New Vehicle Technology Fund - the budget for 2004/05 is £5m. The Government should ensure that
it consults with vehicle manufacturers to ensure this is sufficient to incentivise the development of
new technology.
CleanUp - the budget for 2004/05 is £10.6m. The effectiveness of the CleanUp programme needs to
be given careful consideration to ensure it is targeted at those vehicles that will provide the greatest air
quality benefits over the longest period of time. However, it should be recognised that as the older
vehicle fleet is replaced over time with vehicles that meet more stringent emission standards, the need
for the CleanUp grant may diminish.

LP Gas Association
The amount of funding for the programmes will be led by demand and technology developments.
If the basis of agreeing levels of support from research through to market sustainability is followed,
then the level of existing commitments will be clear and the DfT could then set the budget for new
technology applications

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The DfT could then give specific direction to the EST as to strategy and overall amount, and the EST
could then prioritise which new technologies to support.

NGVA and its members
"It is felt that existing funding levels are inadequate in relation to the size of the existing vehicle parc"
"It is not necessarily the amount of grant funding or the balance but more importantly the future long
term commitment to support, which always seem to be in question"
"A step increase in grant funding, or a long period of low duty, is required to move the (NGV) market
and meet diversity and environmental targets"
The general perception is that funding is scarce, supported by the actual limitation imposed of 20
(HGV) vehicles per grant application. While limited numbers of CNG vehicles are seen on the roads,
potential customers and users will remain concerned about market viability and even ignorant to their
existence. Consequently they may not want to take the risk of participating in what might be
perceived as a 'risky' venture due to perceived unsustainability. Manufacturers will be reluctant to
invest where they are unsure of the return they will make e.g. Scania withdrawal from market in the
UK, Mercedes reaction. Similarly fuel suppliers/network developers are inhibited by the existing
grant process e.g. funding this year is restricted the maximum number of grant aided sites to three.

Vauxhall Motors
Vauxhall and other industry colleagues believe that the £27m funding given to the Energy Saving
Trust to support the grants was never enough to meet the desired outcome and would welcome an
increase in budget. However it is understood that this will not be forthcoming.
Thus, if the Government wants to make any headway in meeting its targets a radical overhaul of the
system is required and further measures need to accompany it. (See later questions for Vauxhall's view
on this issue)
The current system was in some ways a victim of its own success. In 2003 as the market for LPG
started to take off and move towards becoming sustainable, the fund ran out of money resulting in the
loss of customer confidence both in the scheme and the alternative fuel market, which was only
compounded by negative press coverage. Sales plummeted, showing that although customers are
willing to make the investment in alternative fuel technology they are looking to Government for
support not only financial but to also show their confidence in the market.
A long term funding commitment is needed if the Government are serious about clean vehicles clearly
stating overall funding per year for a given period (suggested three year minimum period)
Although the current programme is generally effective, there would need to be a careful transition
period from the current system to any change in the coming years so as not to disadvantage potential
purchasers from converting to clean vehicles, and ensuring that industry make a return on investment
in development, production and infrastructure.

CNG Service Ltd
A step increase in grant funding, or a long period of low duty, is required to move the market and
meet diversity and environmental targets.

Air quality is still a particular problem in Liverpool, with its declaration of two Air Quality
Management Areas, and an area of concern for the rest of Merseyside. The overall sum available for
Merseyside could be increased
Most grant-aid currently is spent in Greater London. While this area has the poorest air quality, the
current distribution is not fair on areas with poor air quality outside Greater London.

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Norwood Consulting Ltd
The funding available for existing programmes is significant in monetary terms, but in the face of
trying to influence a process of change in a market of 32million vehicles, growing at about 2 million
per year the funds presently available are quite modest.
In broad terms, PowerShift, CleanUp, New technology support and other schemes would appear to
distribute about £27 million per year or so.
It has been made quite clear that no significant new funds will be made available, and yet carbon
emissions and urban pollution are having an increasingly noticeable impact. A new approach might be
required as the present funding levels are demonstrably inadequate to promote significant change.
In that circumstance, the balance of funding within the various schemes is almost irrelevant. If the
entire scheme budgets were combined and focused on any one sector only some 7000 heavy goods
could receive particle traps, or some 30000 cars or light vans could be retrofitted to LPG, or 20000
new vehicles could be supported.
Since all of these sectors are a part of the problem, it is quite clear that changes are required. There
would appear to be little chance of meeting emission targets from transport by 2012under present
constraints. At the present rate of conversion using CleanUp, PowerShift or any other support
strategies, we would require to generate some 100000 cleaner vehicles per year to have 2% of our
fleets offering reduced emissions.

John Harwood
The amount of funding should increase with the success of the programmes. The allocation of the
funding should be based on well to wheel emissions, as this is the criteria that will give the greatest

DaimlerChrysler UK Ltd
Trying to get the balance between the availability of funding and the correct level of grants is, within
    a limited budget, an almost impossible task. A review of how new technologies can be
    encouraged and brought to market without the constant uncertainty of whether funding will be
    available needs to take place. Even at this stage of the financial year the EST is uncertain how
    much of the grants will be utilised, leading to concern over the levels of funding that may be
    made available in the next financial year. If further budget cuts were to be imposed due to the
    lack of take up this year, the message that would be sent to the market would be clear and
    unequivocal. That being Government is not serious in supporting the development of cleaner
    vehicles with lower emissions - clearly not the message it is trying to get across.
The use of Enhanced Capital Allowances (ECA's) could be a solution and a precedent has been set
   with Stationary Engines where 100% of the capital cost of the equipment is allowable against tax
   in the first year.
If ECA's were introduced to off set the additional costs involved then the necessity to balance funding
    between the various programmes would diminish. Remaining funds could then be more
    specifically targeted at areas such as new technology or infrastructure development.

Lubrizol Ltd
The CleanUp grant total for 2004/05 is £7 million as stated in EST grant levels press release 05 March
2004. While the release suggests the level of funding is the same as 2003/04 i.e. £26 million, the
amount allocated to CleanUp has reduced from £12.9 million as stated on page 10 of this consultation
document to £7 million. If a 12.9 million fund enables retro fittings to 4160 vehicles in 2003/04 (as
stated in page 10 of the consultation) then it could be argued that in the 2004/05 period only - 2250
vehicles will receive grant aid. Clearly, this 46% reduction significantly reduces the Governments
commitment to the environment.

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Secondly, the overall amount of funding available does not reflect the fact that new technologies to
address NOx are being introduced. This means that the same amount of money is distributed between
more technologies. In addition the newer technologies are subsidised to a greater level. Therefore,
established technologies, which are very effective at reducing particulate levels, are far more
expensive for the operator, and the takeup will thus be reduced.
Therefore, we would suggest a review of the balance of budget allocation between projects and
administration cost, to give the highest return, in terms of emission reductions, to the appropriate
Finally, it should be considered that PowerShift and CleanUp address two different spheres of
transportation and it could be beneficial to categorise them thus; PowerShift addresses CO2,
predominantly from gasoline powered vehicles, CleanUp addresses PM and NOx, predominantly
from diesel powered vehicles, therefore it is suggested that in future, PowerShift is for automotive
vehicles and CleanUp is for commercial vehicles.
Though the logic behind reducing grant levels under the CleanUp scheme, and to limiting the current
monthly fund distribution, is to enable the grant amount to continue throughout the financial year, this
practice actually devises the potential market size. For example if at the end of the financial year the
EST report that they were able to continue funding without running out of funds, it may be perceived
that the annual grant allocation was sufficient. Rather than identifying that more retrofits could have
been achieved if further funds were available.

Iveco Ltd
It is important to evaluate the cost of emissions reduction achievable by the implementation of a
technology and the vehicle application for which it is targetted. It is unlikely that such a strategy has
been used to fund the number of lpg applications, many of which have been on new petrol engined
cars which, in terms of tail pipe emissions of pollutants, are very clean any way. A great deal of the
Cleanup budget has been spent on catalysed exhaust filters. While removing particulate matter very
effectively, they actually increase the quantity of NO2 emitted and the major UK pollutant is in fact
NO2. The New Vehicle Technology fund is involved in very high cost programmes and many of these
will never be realised into production. It is very unlikely that a vehicle manufacturer will ever produce
a series hybrid commercial vehicle power train. The technology is simple but the resultant vehicle
very limited in its application, but such products are funded. In terms of the amount of funding, it is
clear that a budget is necessary but operationally, the funding mechanism should not run out of money
and not proceed through the year in fits and starts. The funding for the programmes has been poorly

Biofuels Northern Ireland
Funding is never enough to meet objectives. However, it is felt that the existing level of funding
could be better directed to achieve higher results. The brief given to EST is too narrow, leading to
their conclusion that they do not have the resources to do anything but to keep a watching brief on the
biofuels issue.
There is already government subsidy to vehicle purchasers in the VED reduction.

Existing funding levels are inadequate in relation to the size of the existing vehicle parc. Clearly any
programme has to compete for scarce resources, but given the large number of premature deaths being
attributed to poor air quality we believe that significantly more money should be spent on delivering
tangible improvements in air quality.
Taking the HGV sector as an example, there are approximately 400,000 HGV's on Britain's roads. A
five percent penetration of alternative-fuelled vehicles would have a meaningful impact within the
sector. This implies funds for approximately 20,000 vehicles - over twenty times more than current

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levels. The size of the gap between reality and ambition suggests that existing policy objectives are
being driven by wishful thinking, rather than serious intent.
We believe that the balance between funding programmes should be shifted more towards new
vehicles and new technologies, rather than cleaning up existing vehicles. This is because tighter
emission standards will, over time clean up emissions significantly, but will do nothing on their own
towards introducing new technology platforms, capable of delivering longer-term sustainable change.

First Group
We are concerned to ensure that the funding for CRT treatment remains in place.

Newport Transport
More cash always welcome. Current balance acceptable but some restriction should be placed on
larger operators mopping up funds at expenses of smaller operators.
Also restriction on "grant money" spent on vehicles in Wales being shipped out to England and
similarly money spent in England being shipped out to Wales. If devolved administrations are to
decide levels, then grants should be restricted to their devolved area.

Whilst the availability of a £1000 grant has helped sales to kick start, the reduction in grant value to
G-Wiz purchasers of 70% versus the previous year made it very difficult for GoinGreen to establish
the electric car market. After the events of last fiscal this was another blow to our business and so to
the sector. Many prospects who had delayed their purchase decision for up to 6 months as a result of
the grant being used up half way through the 2003/04 fiscal then chose not to purchase at all because
the grant for a G-Wiz had been reduced by £2125. For G-Wiz prospects this sent out a strong signal
that the government did not support electric cars as much as it had done previously, causing us real
difficulties to convince them otherwise.
This led to a reduction in our sales, which reduced our willingness to invest in stock, which resulted in
longer lead times for customers, which in turn resulted in fewer sales. And so the electric vehicle
market stalled rather than took off as it could have done in 2004.

It terms of the individual programmes we would comment as follows:
New Vehicle Technology Fund: The issue here is support for new vehicles technology between
innovation and testing and introduction to market, the issue being the so-called "valley of death". This
we understand as being the gap between prototype running and brining to market. This can be bridged
by the running of a fleet of say 20 to 30 vehicles to test and analyse market acceptability. If further
funding cannot be funded then central government, through their own fleet purchasing activities
should have a role to play here.
CleanUp: This programme, to support the introduction of equipment in the aftermarket, to improve
the air quality performance of vehicle challenges some of the low carbon strategies of the rest of the
Air quality target and thresholds for new vehicles are constantly being raised and the focused should
very much remain on the encouragement of commercial operators to move towards new vehicles,
potentially supported by Capital Allowances, the early adoption of new standards could be
encouraged in this way. Could this objective be better achieved outside the Transport Energy
PowerShift: Given the size of the new car market the overall grant level, to be effective in
encouraging purchasers (private and fleet) to move to lower carbon vehicles, funding will need to be
reliably available and applied in a technology neutral, longer term basis.

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We believe there is a minimum funding level per vehicle which will be effective in encouraging
consumer to support new technology. We also consider that a clearer agreement and understanding
with manufacturers at the point at which market support is no longer required or available would help
the strategy.
A longer term, three years budget plan, would be of help here.

The Confederation of Passenger Transport
See our response to question 1

MG Rover Group
We encourage increasing total funding available through a combined Low Emission Vehicle
Programme over that provided through existing programmes.
In the short term we would encourage similar funding to PowerShift (c£8M) directly supporting the
sales of low emission vehicles with significantly reduced funding (c£4M) for selected palliative
measures aimed at addressing worst polluters in air quality problem areas (supported by stricter in-use
legislation and testing).
We would support significantly increased funding (£15-20M) for selected product introduction and
development programmes.

Cotswold Experience Tours
It is best to make enough funding available which ensures the switch to carbon neutral transport will
be cheaper for them personally - even if this means that less grant are made! When relating to electric
vehicles there should be a condition that the electricity supplied comes from a company which deals
in 100% renewal energy (e.g. Good Energy, Ecotricity old energy see
otherwise to charge batteries from a power station producing carbon emissions defeats the object.
(Proof could be attained by having a bill to same address of applicant).

Volvo Trucks Ltd
The funding has been unsatisfactory and inconsistent. For commercial vehicles a capital allowance
scheme as indicated above could be more appropriate and secure, as it does not involve grants but an
 Any funding needs to be available to suit normal purchasing decisions through the complete year; not
in a mad scramble at the first release of a new trench of funding. Sensible planning of new
commercial vehicles cannot work on such a pretext and if one large order suitable for funding takes
the remaining funds, then it is not surprising that later failed applicants no longer have any faith in the

Police HQ, Dyfed & Powys
The funding for alternative fuel has to improve, as the retail availability is not here, for example, on
the last survey they undertook there were no retail outlets for LPG in the whole of Ceredigion and

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Response to Question 3
Whether the Government should make grants available to encourage vehicle owners to purchase
vehicles that are cleaner than the regulatory requirements.

London Bus Services Ltd
It is a little unclear what this question is referring to, but it is assumed that it refers to whether the
funding should be focussed on encouraging OEMs to bring forward the production of vehicles
meeting future Euro standards as opposed to focussing on cleaning up existing vehicles.
For CleanUp, the focus should remain with cleaning up existing vehicles, particularly those which
give rise to the majority of emissions since a large proportion of commercial vehicles remain in the
vehicle parc for much longer than for cars and light commercials. This is particularly true for buses
where vehicles can be kept in operation for at least 15 years.

In general, any fiscal incentives that are carefully targeted at encouraging vehicle owners to purchase
cleaner vehicles, over and above the existing legal requirements can only be welcomed. We also feel
that Government policy should be further targeted to penalise those who pollute beyond the standard
set. We say this because we strongly suspect that it is of no consequence to a "polluter" if another
motorist has received a small grant for driving a less polluting vehicle, when in reality there is no day-
to-day fiscal penalty imposed for driving a more polluting vehicle.
There is scope for a standard emission level to be introduced and a far more "responsive" scale of
Vehicle Excise Duty (VED) to help ensure that the charge is more closely aligned to the level of
emission emitted by a vehicle.
In addition, the price practicality and sustainability, together with ease of access to service repair and
maintenance would be key factors that fleet purchasers and users would take into consideration when
selecting a vehicle.

Environmental Industries Commission
The Government should make grants available to encourage vehicle owners to purchase vehicles that
are cleaner than regulatory requirements.
The EIC is not aware of any environmental technologies that have achieved a level of sustainable
sales in a free and deregulated market. Demand for environmental products and services is an
outcome of a recognised societal need, combined with policy intervention on the part of Government,
at a national or local level, made on behalf of society. In the sphere of environmental policy, this
intervention commonly takes the form of regulations applied to the public and private sectors.
However, we have seen the emergence of a voluntarism based on Corporate Social Responsibility
(CSR) and shaped by the availability of financial and other incentives. It is this voluntarism that the
Government should foster because without it this Government will lose the basis of support for
progressive environmental performance improvements and thereby lose support amongst stakeholders
for tougher regulatory requirements.

Millbrook Proving Ground Ltd
Where possible programmes need to encourage the early adoption of technologies that meet future
regulatory requirements.
For conventionally fuelled vehicles the regulatory requirements differ for gasoline and diesel vehicles.
Encouraging the purchase of vehicles that are cleaner than regulatory requirement may therefore have
greater potential benefit when applied to diesel than gasoline vehicles.

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We support the European Union view that future funding should be focussed on meeting either future
regulatory requirements for a particular vehicle type or meeting the regulatory requirements of other
vehicle types that have lower emissions limits.
As there are currently no regulatory requirements for CO2 an incentive to maintain or improve CO2
emissions needs to be added.

Retail Motor Industry Federation
DfT should not attempt to re-invent the wheel. Such programmes will have been tried in other
countries. The results of such programmes will give a good idea as to their effectiveness.

Greater London Authority
Given the limited funds available, the Government should not make grants available to encourage
vehicle owners to purchase new vehicles that are cleaner than the regulatory minimum.
The Government should instead increase the differential VED rate to incentivise cleaner new vehicles,
i.e. reduce VED further for the cleanest vehicles and increase further for the most polluting. This
would have the additional benefit of encouraging the use of smaller and more fuel efficient vehicles,
and discouraging the use of larger than necessary vehicles, such as SUVs.
The only possible exception to this would be to provide an "upgrade grant", which could be used to
trade-in very old and polluting vehicles for a new clean vehicle. This should be focussed at the sectors
of society who could not otherwise afford to upgrade their existing vehicles.

Scottish Water
Scottish Water believe this approach of 'fine tuning' could have merit - but the initial and main thrust
must be towards known current and imminent targets. It may also be relevant to review the
appropriateness of the current targets.

Honda (UK)
The objectives of the programme need to ensure that customers are encouraged to purchase best
available 'environmentally friendly' technology.
Vehicle manufacturers when marketing vehicles with new technology focus on ensuring the consumer
feels confident in this technology. Honda (UK) has ensured residual values of the Civic IMA are
relative to a petrol civic. If the grant is the right amount it could potentially alleviate any fears held by
the consumer and assist in increasing confidence in the products.
The research, design and engineering costs to a vehicle manufacturer when they design a new vehicle
can be colossal. The vehicle manufacturer must decide whether to absorb these costs (as in the case
of Honda and the Civic IMA) or pass them onto the consumer. When costs are passed onto the
customer this invariably means that the technology is more expensive to a consumer than existing
technology. The grant can help bridge this gap.

The Greenfuel Company Ltd
If these are mainstream vehicles then the funding would be dissipated to being irrelevant sums per
purchase unless there were a huge increase in funding. There would also be a danger of providing
grants to people who were always going to purchase such a vehicle and not in any way influencing
those that continue to place environmental concerns at the bottom of their buying considerations. In
other words there is a very real chance that such a scheme would make no material difference at all.

Foden Trucks
The road haulage industry and vehicle manufacturers have a social responsibility to take better care of
the planet and our living environment than has been the case. Recent advances in technology based on

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traditional fossil fuel engines (petrol & diesel) have undoubtedly resulted in reduced carbon and other
harmful emissions. However this is no reason not to progress alternate fuel technologies, where even
greater advantages can be maximised. The UK government having made a commitment to the rest of
the world's nations to reduce carbon output, should provide consistent grant support, taxation benefits
and reduced fuel duty to a maximum level over a longer time period (minimum 10 years). In this way
the real environmental advantages can become effective, whilst the road haulage industry gains
financial benefit to make it worthwhile for them to operate alternate fuel vehicles.
The government does nothing to promote the currently available alternate fuels and the vehicles
which can use them. They remain a 'best kept secret'. Public awareness and understanding of the
benefits they bring is most important. Note the move to organic products in the food industry brought
about by public preference and demand.

Octel Exhaust System Ltd (trading as Adastra) and Octel Corp
We believe that grants should be based on the effectiveness of the technology at reducing emissions
that are harmful to health - that is the rate of grant should be directly related to the quantity of
pollutant reduced. The rate of grant can also include corresponding debits related to increases in other
emissions harmful to health.
On this basis, the existing emissions performance of a vehicle becomes irrelevant, because the test for
attracting grant funding is quantity of pollutant saved. It should not matter whether that saving comes
from treating vehicle that is 'old and dirty' or one that is 'new and clean'

Lancashire County Council
Yes where this encourages innovation in developing even cleaner vehicles, and where the incentive
for innovation is otherwise limited. As highlighted in the consultation document, development of car
technology is progressing well under voluntary agreements. Therefore it is felt that this is more
relevant to other vehicle types.

The Hard Staff Groups
Yes, but grants alone are insufficient to encourage the move to cleaner vehicles. Uptake of clean
vehicles has to be driven by other fiscal benefits, policy pressure, education of operators and fuel

Royal Society for the Protection of Birds
To ensure that future grant funding is targeted at the most pressing issues, and in order to monitor the
future effectiveness of the programme in addressing those issues, it will be helpful for the whole
programme to have greater clarity about its objectives. In particular, there should be greater clarity
about the balance of emphasis between carbon reduction on the one hand, and air quality on the other;
and between the goal of getting more low-carbon vehicles on the road, and the goal of effecting
market transformation.

LP Gas Association
This would appear to be an important feature for new technologies to achieve the point of market
sustainability, but the need or extent will vary with each case. The level could be agreed with the
technology provider at the outset.

NGVA and its members
Government policy and support should focus clearly on the initial development and progress to
sustainability of technologies which contribute most immediately to Government and local authority
targets. Existing natural gas technology would allow achievement of Euro 5 levels today which should
be incentivised. In addition, a commitment from the Government to include natural gas vehicles in its

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own fleets (both central and local) would provide a significant incentive to OEM manufacturers and
for network development.
Grants should focus on transforming the market in terms of both diversity and environmental impact.
It may be appropriate to reward technology that moves along that path. The key test should be - 'is this
grant making a positive contribution to long term objectives?'

Vauxhall Motors
Vauxhall believes that grants should continue to be available to vehicles that go well beyond
regulatory requirements (including CO2, HC and Nox) and use alternative fuel technology. For
example, Vauxhall's LPG vehicles exceed the Band 4 Powershift standard, which is Euro4 - 40%.
Grants need to be available as long as the technology offers a viable alternative, which are proven to
be cleaner than conventional fuels. Such technologies need to be promoted and this, in turn, involves
convincing purchasers that the technologies are viable. Using incentives is a successful way of
achieving this.
It is important to take into account that national regulatory requirements are instigated mainly by
Europe, and that local requirements, e.g. CO2 levels and air quality, may differ. Grants can help to
change the mindset in order to achieve these objectives and reduce vehicle pollution. However other
measures are necessary - there is a need to increase education and understanding to allow customers to
make an informed choice

CNG Service Ltd
Grants should focus on transforming the market in terms of both diversity and environmental impact.
It may be appropriate to reward technology that moves along that path. The key test should be - is this
grant making a positive contribution to long term objectives?

Government grants should not be available to meet existing regulatory standards. However they
should be used as trailblazers to pioneer new technology that improves on standards, or to ensure
proven technology (such as particulate traps, alternative fuels) gain widespread usage and acceptance
by the public and transport industry.

Norwood Consulting Ltd
Yes they should, within a planned and publicised long term strategy with stated objectives up to 2012
as a waypoint towards meeting low emission objectives.

John Harwood
Yes. The Government could also encourage this by having a vehicle purchasing policy, which
positively discriminated in favour of clean vehicle technology.

DaimlerChrysler UK Ltd
    Yes, Government should encourage this type of policy. If Government were, for example, to
       encourage the early introduction of Euro 5 technology (emission levels only) then it is
       feasible that we could have Euro 5 vehicles introduced two years ahead of the deadline. Not
       only would this reduce the levels of regulated emissions the new technology should also bring
       a reduction in Carbon Dioxide emissions as it is expected to be more fuel efficient that the
       current Euro 3 engines in use today. In view of the Kyoto agreement any reduction, however
       small, should be welcomed and positively encouraged.
    The main criteria should be for assessing the market sustainability of a particular low emission
       vehicle or technology.

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Vehicle manufacturers need Government to provide a clear, long-term strategy. This will enable them
to develop technologies that best suit the marketplace, the customer and the environment. Without
this the uncertainty created leaves the consumer backing the safe bet and using traditional and
consequently less environmentally friendly technology.

Lubrizol Ltd
There should be no grant available for vehicles cleaner than the current Euro standard.
An alternative to grant funding could be considered as is implemented in other countries via tax
breaks for cleaner vehicles. This is a far simpler method than a grant system for new vehicles. Grants
could then be targeted towards retrofitting under the CleanUp scheme.
As previously suggested, the grant amount should increase relative to the effective reductions in
emission from the standard vehicle. Therefore an operator that fits exhaust aftertreatment to a Euro2
vehicle should receive a higher grant than if fitted to Euro3 vehicle. In addition, an operator that
chooses to re-power a vehicle he should be encouraged to exchange a Euro1 engine for a Euro2 or
Euro3 engine.

Iveco Ltd
If the purpose of the funding mechanism is to address air quality or other strategic measures then it is
right and proper that Government should provide purchasing incentives for all types of vehicle. The
level of funding should, however relate to the actual emissions reduction. Care should be taken with
fully electric powered vehicles - an electric scooter compared with a petrol engined scooter will not
significantly effect urban air quality due to the short distance travelled by a scooter irrespective of the
power train.

Yes. There should be recognition that the process of 'greening' the vehicle parc does not have a finite

First Group
In terms of meeting or exceeding targets, this is not a primary concern. Of greater import is that the
funding available bridges the gap between the overall life costs with and without adoption of a
particular solution. However, as the adoption of Euro IV is forecast to result in increased capital costs
of vehicles, and we can confidently expect Euro V to have a similar effect, there will need to be an
incentive to accelerate uptake in advance of any mandatory requirement

Newport Transport
Again grants always welcome but only if environmental objectives are not being met.

A higher grant level for the next 12 to 24 months in the region of £2000 per car, and a 3 year plan of
A guaranteed grant up to an agreed volume level during this period (1 and 2 will provide us with
enough certainty to continue to invest). I estimate 500 cars in 2005/06, 2000 cars in 2006/07for the
sector if supported. In 8 years the sector could be selling in excess of 50,000 cars per year, or 20% of
the PFV target. London alone has circa 70,000 cars per day commuting in to Westminster and the City
in the morning peak. Costs for EVs will be much lower than any ICE (Internal Combustion Engine)
equivalent, performance will be high (electric cars will be providing 100 mile plus ranges and top
speeds in excess of 100 mph) and they are and will remain unbeatable from an environmental
perspective. They are also the technology closest to hydrogen fuel cells, which it is commonly agreed
are the fuel/battery of the future.

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A £200k grant to test the introduction of on-street charging points in London. As some 80% of the
housing stock does not have off-street parking facilities, on-street re-charging points will greatly assist
the uptake of this new transport technology. I have several London councils interested in taking part
in such a test. Electric cars are the ideal choice as a close to market product and meet all the criteria
for selection.

In order to achieve the objectives of the programme the grants need to apply to encourage drivers to
move toward best available technology. In some cases there is, prior to market sustainability and low
production volumes, additional cost for the provision of very low carbon technology. The grant
therefore can help overcome confidence in additional costs at the point of purchase and support
confidence in a product that may initially have an unknown re-sale value. The dynamics of the grant
process needs to recognise this and understand at what point grant levels can be adjusted.

The Confederation of Passenger Transport
CPT believes that fleet operators should get a significant proportion (say 80%) of the total funds
available under each grant heading. Fleet operators are best placed to get more reduced pollution
vehicles per £ spent as a result of their buying power, thus the limited funds each year will achieve

Severn Wye Energy Agency
We believe that future TransportEnergy programmes should focus mainly on reducing carbon dioxide
emissions from transport, supporting the Government's two main objectives set out in the Powering
Future Vehicles Strategy, namely:
    That by 2012 10% of new car sales will be vehicles emitting less than 100g/ km of CO2 at the
    That by 2012 600 or more buses coming into operation per year will be low carbon (30% below
       average carbon emissions)
However, whilst CO2 objectives should be the main aim of the revised TransportEnergy, we think that
the issues of commercial vehicles and local air quality should also remain as secondary objectives of
the programme.
We therefore feel that a new TransportEnergy programme should develop to become two distinct
schemes. The first should be encouraging research and development into low carbon technologies for
all types of vehicles. The second should be to encourage the take up of low carbon car, bus and goods
vehicle technologies where market penetration is currently low.

MG Rover Group
Current UK taxation based on CO2 emissions already encourages the purchase of vehicles with good
fuel economy and low fuel costs, however Low Emission Vehicle Programme grants should be
available to support the additional cost associated with CO2 and emissions reduction technology
providing it achieves significantly better than 'class average' CO2 and emissions performance (these
vehicles should also attract significantly reduced congestion charging). Government policy should
also dictate the purchase of low pollution and energy efficient vehicles by all National and Local
Government Departments.

Cotswold Experience Tours
Yes, especially electric ones.

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Volvo Trucks Ltd
Yes, provided that the complete well to wheel picture is included in the process; electric vehicles
might have cleaner exhausts but the overall emissions to produce the electricity need to be included.
However grants could be replaced by other more consistent means of incentives - see points above
about enhanced capital allowances.
Incentive schemes need to be focused on long-term viable solutions and consistency of funding.
Rather than grants, a long-term regime of enhanced capital allowances has the potential to offer a
more consistent and reliable form of funding incentives for future commercial vehicles.
For financial year 2004/5, Holland has introduced a scheme of enhanced capital allowances for
commercial vehicles, which meet advanced Euro emissions levels. This allows a full 100% allowance
on the purchase of a new vehicle, up to a maximum capital value of 45,000 Euro. This is in addition to
normal annual allowances based on a 15% capital allowance for the first year and subsequent years.
Provided that these incentives have known periods of validity and have reasonable known lead times,
industry can plan fleet replacements accordingly.
Volvo Trucks advocates that the UK Government adopt a similar enhanced capital allowances for
vehicles which meet advanced exhaust emission standards which would avoid the run out of funding
part way through financial years which has undermined the current Transport Energy funding.
In addition any scheme, which intends to bring cleaner vehicles on to the market, should be based on
the exhaust emissions and not the fact that the fuel is an alternative to conventional fuels. New
vehicles using conventional fuels are becoming increasingly cleaner and until the UK and European
authorities declare a sustainable future for new fuels looking at the complete energy picture, the use of
conventional fuels should not be a hurdle to grants, or incentives for urban zones, which charge or
restrict access.

Police HQ, Dyfed & Powys
Whilst agreeing with the principles of using cleaner fuel, avenues of purchasing such fuels should be
made available throughout Dyfed and Powys.

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Response to Question 4
What the main criteria should be for assessing the market sustainability of a particular low
emission vehicle or technology.

The main criteria are very three dimensional and we suspect market sustainability of a particular low
emission vehicle or technology would be largely dependent upon the logistics available to support the
product and which ultimately will relate to the ease of use.

Environmental Industries Commission
There are four main criteria that the EIC recommends should be used to assess the market
sustainability of low emission vehicles or technologies. They are as follows:
    proven demand during the market introduction phase when grant funding is available
    no significant barriers to the uptake of the technology, as in fuel availability or a resistance
        amongst customers based on reservations as to technical performance and reliability
    competition in terms of the availability of suppliers of the same or similar technology
    the existence of, or willingness to implement, policy mechanisms capable of supporting the sale
        of these products by means other than grant funding
Once the right policy instruments are in place a market will be judged sustainable by a steady and
established demand, with new and return customers.

Millbrook Proving Ground Ltd
The criteria for assessing sustainability needs to be specific to the vehicle technology and should be
agreed at the outset when funding is agreed. It must be understood that some technologies may never
reach sustainability unless there are either regulatory changes or other mandates that force adoption.

Retail Motor Industry Federation
Particularly with regard to alternative fuels, the Federation has concerns about the ability of some
technologies to be extended into public use. Remember the proposals to use methanol as a fuel, either
directly for combustion in engines or as a feedstock for fuel cells. It was astonishing how much
development effort was put into that fuel in Europe and USA, yet a teaspoonful of methanol would
kill a child. The public safety issues associated with hydrogen, CNG, and even LPG are such that
universal use is highly questionable. There may be niche markets for these fuels but are they so
effective environmentally that they warrant a funding programme?

Scottish Water
Fleet operators cannot afford to take chances on unproven and unreliable technology - historically
well meaning initiatives in areas such as LNG have cost operators dearly in terms of reliability and
long term availability, with many manufacturers no longer involved in such technology. The criteria
applied by fleet operators are as below, and Scottish Water believe these should be reflected by
    Capital cost
    Fuel costs
    Fuel availability

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    Maintenance costs

Honda (UK)
It takes a considerable amount of time for a new technology to establish itself in a market and gain
consumer confidence. Whilst grants can aid in increasing the amount of consumers who purchase
new technology, it is imperative that any grant programme runs parallel with Government
programmes to increase awareness of global/local environmental issues. Government should be seen
to actively encourage purchases of alternative technologies and be seen to embrace a low C02 and air
pollutant world by promoting alternative fuel vehicles with confidence.

The Greenfuel Company Ltd
Emissions and pollution tend to be economic externalities. In other words, free markets do not
adequately take into account the true cost. Were this otherwise, such pollution would have priced
itself out of the market long ago and we would not be confronted with the problems we are today.
One way governments can assist is by providing programmes such as within Transport Energy which
assist the market demonstration of innovative technology, vehicles, fuels or processes whilst longer
term support is provided through the stick of taxation. The Alternative Fuels Framework, although
existing purely as a figment of Budget speeches, purports to be such a tool. Again success can only be
measured in making a difference and that tends to require volume. Therefore the first criteria must be
the potential for widespread application over a meaningful length of time.
Contrary to the constant 'happy talk' of conferences Britain does not lead the way in vehicle
technology. This tends to be the domain of countries that have major car companies such as USA,
Japan and Germany. This can be used to the UK's advantage; criteria number two can be whether
technology or such already works in more advanced countries. An example might be Japan's almost
exclusive use of mono-fuelled LPG taxis.

Foden Trucks
The viability and long term availability of a safe and reliable fuel source from politically stable
Grant support and taxation benefits for the vehicles and technology which will provide the achievable
and sustainable use of alternate fuels. The vehicles and the technology should be available at a
commercial cost level which is acceptable to the buyers and users (with or without grant support)
through the expected life of the fuel involved.
Grant support for high-tech / high-cost solutions (e.g. hydrogen) which will never be commercially
viable should be avoided.
Sustained grant support and taxation benefit should remain available until such time as the vehicles
and technologies become self-sustaining at commercially acceptable levels by vehicle

Octel Exhaust System Ltd (trading as Adastra) and Octel Corp
In our view the market for low emission vehicles and technologies will never become sustainable
without either sustained real financial incentives or a mandate. The additional cost of low emission
technology is too high for all but the most committed 'green' vehicle operators to adopt it voluntarily.
The reduction in the rate of grants funding under CleanUp increased the lifetime cost and has resulted
in a very substantial drop in demand from the private sector, thereby demonstrating the sensitivity to

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incentives. At the same time, we have experienced significant growth in demand from the public
sector as local authorities seek to comply with their air quality obligations.
Differential rates of vehicle excise duty potentially provide sufficient economic incentive for vehicle
operators to adopt low emissions technology, but the scale of differential needed is likely to be so
high as to amount to a de facto mandate.
In the longer term the only viable route is through a mandate, and in this environment, the market will
determine the sustainability of particular technologies on the basis of availability, durability in service
and lifetime cost of ownership.
This is precisely the route followed by the adoption of three-way catalytic converters in gasoline
engines. All forms of technology were unsustainable until legislation was passed. A parallel exists in
Germany, where recent announcements will mandate use.
There is no model under which the technologies can be made commercially viable and sustainable
based on the environmental conscience of a few operators.

Lancashire County Council
The ultimate determinant of long-term market sustainability will be whole-life cost to the end user, in
comparison with alternatives. This is very difficult to assess in advance of large-scale production. The
first vehicles will need a lot of financial support but production buses could be self-funding (fuel
saved pays for extra costs once vehicle in full production). Therefore funds need to be targeted at a
few good projects.

The Hardstaff Groups
Actual and immediate product availability, market related customer service and support, degree of
risk in viability of technology application, availability of fuel (strategic infrastructure, contractual,
sourcing), Air Quality contribution through legislation (Euro IV/V engines) and areas in which
vehicle utilised (such as LEZ's).

Royal Society for the Protection of Birds
Climate change represents one of the biggest long-term threats both to humans and to biodiversity.
For this reason, the RSPB recommends that the emphasis of funding should be moved towards a
programme which provides the greatest benefits in terms of carbon saving. This would mean moving
towards a Low Emission Vehicle Programme (LEVP) to replace PowerShift and gradually moving
funding away from CleanUp towards the LEVP. In addition, there are already European regulations
in place which are bringing about an improvement in the air pollutant emissions from vehicles,
therefore, there is less need for grant support in this area.

LP Gas Association
This will be different in each case and could be agreed with the technology provider at the outset.

NGVA and its members
"Understanding the Industry the particular vehicles are in and the motivations of that industry".
"UK Government should consult with its European partners to ensure that any grant support is for
sustainable technologies. What is happening in the other major transport economies in Europe -
Germany, France, Italy"
The measure of sustainability will differ according to technology, but should take into account the
    Potential size of market

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    Range of available vehicles from different suppliers and their cost
    Availability of fuel from a range of suppliers
    Existence of maintenance programmes
    Scope for economies of scale in delivering the technology and replacement vehicles
    Long term fuel availability
    Support structures e.g. duty differentials and grant aid.
With regard to natural gas vehicles once established, the natural gas market is likely to reach
sustainability within 2 - 7 years with timeframe for significant change around 10 years. The critical
factor for this timeline is the encouragement of progressive network development rather than a
stop/start approach.

Vauxhall Motors
For a given market to be sustainable and successful, there needs to be:
    Availability of a variety of products
    Customer acceptance and confidence in the future of the market
    Competitiveness in the market
and most importantly
    A defined policy commitment from the Government
The combination of these elements results in confidence from both consumers and manufacturers and
has been demonstrated that without clear commitment for both the Government a growing market can
be significantly damaged.

CNG Service Ltd
The UK Government should consult with its European partners to ensure that any grant support is for
sustainable technologies. What is happening in the other major transport economies in Europe -
Germany, France, Italy?

Bus regulatory environment outside London is hostile to low emission vehicles and technology.
It is probably necessary to have two grant regimes as it is so much more difficult to persuade de-
regulated operators to adopt higher standards (in Greater London all buses will be Euro 2 with traps
fitted by 12/04 - in Merseyside the target in the LTP is to have 55% environmentally friendly buses by
2005/6. Currently only 42% are Euro 2 and better and appx 30% of those have traps fitted (equating to
10% of total fleet)
EST should consider lobbying Government for re-regulation if they are serious about reducing

Norwood Consulting Ltd
As far as any actual vehicles are concerned some basic questions should include the following. Is the
vehicle practical, economically viable and does it produce a real or developable gain in emissions or
does it create new technology? Consideration must be given to the total carbon impact of the vehicle,
its construction, fuel, emissions, lifetime carbon cycle and the eventual impact of its disposal, or the
replacement of carbon based major components such as batteries. How durable is the vehicle. Is there

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a thriving aftermarket sales demand for these vehicles? Have the motor trade and end users accepted
them and do they seek them out?
New technology should be looked at with at least the following in mind. Is there a suitable and
economically sound long term fuel source for any new technology and is the emission reductions
claimed sustainable over the life cycle of the equipment or the vehicle? Are any claimed emission
reductions based on the real drive cycle of the vehicle under realistic conditions? Is any equipment
safe and capable of being serviced, installed or repaired by trained operatives within the transport
sector? Does it fit into the objectives of the 2012 program?
EU115 regulations will address some of this, when implemented. These regulations require that
equipment is warranted to produce stated CO2 and other emission levels for any given vehicle. Retro
fitted equipment will therefore be obliged to meet certain standards, making it practical to extend the
scope of schemes to clean up older vehicles.
The various types of equipment, fuel derivatives and developing new variations for powering both
petrol and diesel internal combustion engines are already known. These mainly involve road fuel
gases either as a single fuel or used as a bi-fuel or dual fuel option for current engines. Hybrid,
electric, solar, hydrogen gas, fuel cell and alcohol and vegetable oil variations are also "on the radar"
The main criteria should be that support is only given to genuine gains over the industry norm for that
type of vehicle. Even Euro4 vehicles can benefit from emission reduction processes. Some examples
    Fitting particle trap or diesel catalyst systems.
    Fitting NOx reduction exhaust systems.
    Converting petrol systems to LPG or bi-fuel.
    Converting Diesel engines to dual fuel.
    Promoting mono or bi-fuel gas OEM variants of standard production vehicles.
    Promoting hybrid, electric or other innovative new vehicle types.
    Converting petrol or diesel engines to use CNG/LNG
These examples show some of the known options and offer an indication of the scope for support to
improve emissions within Euro bands.

John Harwood
This will be market led as people will only buy vehicles that are as easy and economical to operate as
the vehicles they replace. The Government can influence this by consultation with EU partners to
identify the most sustainable technologies, which can then be given grant support allowing easy trans-
European travel.

DaimlerChrysler UK Ltd
As previously discussed the transport industry would benefit from a clear long-term policy in respect
    of incentives that encourage the early introduction of new LEV or reduced emission level
    technology. To this end ECA's could do this if there was a firm commitment for the future
    combined with, for example, availability for the next level of European emission levels, currently
    Euro 4. This would mean that as Euro 4 becomes mandatory the ECA's cease to be available for
    Euro 4 but continue to be available for Euro5 / 6. This would give a clear policy for the future and
    with little impact on the Exchequer.

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Lubrizol Ltd
 For CleanUp, the market sustainability is simply a factor of the willingness of operators to purchase
and install such technologies.
There are technologies available like diesel oxidation catalysts, particulate filters and water diesel
emulsions that can provide significant reductions in the emissions of PM and NOx, however, without
fiscal incentive or mandates their 'take up' will be limited. The vast majority of operators in a highly
competitive industry will only install if they are required by law or regulation to do so, or if it is cost-
beneficial or cost neutral but gives them a competitive advantage.
There is no market for voluntary, non-funded improvements.

Iveco Ltd
This is quite difficult but, as a guide, if a large vehicle manufacturer is promoting the technology, then
it is likely to be sustainable in production volume terms. If Brillo Ltd. promotes the technology for an
exhaust filter, then it is unlikely that the filter will ever enter into production unless a vehicle
manufacturer backs it. Similarly, an SCR system using ammonia as a reductant would not enter into
production since vehicle manufacturers have clearly stated that on board ammonia is not acceptable.
There should be an advisory committee involving vehicle manufacturers because it is the vehicle
manufacturers that have responsibility for tail pipe emissions and they have the expert knowledge
regarding which technologies can be type approved and which cannot.

We suggest the following criteria:
    Availability of fuel form a range of suppliers
    Availability of a range of vehicles from different suppliers
    Scope for economies of scale in delivering the technology

First Group
The criteria for market sustainability should be founded on both capital cost and annual revenue costs.

Newport Transport
Difficult to assess without significant research and development to provide a cost benefit analysis on
various projects.

Don't forget international sales impacts on development programmes and cost. The UK strategy
should be to have all the best low carbon vehicles available in the UK. However, this should then give
consideration to sustainability in an international context. The development of sustainability in
international markets should be considered by the programme and seen in the light of the United
Kingdom. This could be achieved by ongoing dialogue with vehicle manufacturers in the context of
their longer term market planning.
With UK developed vehicles enhanced support through the purchasing power of national and local
government could make transition to market sustainability more fluid.

Immediate assistance with the development of consistent policies and incentives for electric cars with
regard to congestion charging, parking and on and off-street charging, with councils around the
country. This will enable us to create momentum, consistency and certainty in the market place

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Severn Wye Energy Agency
As previously stated we believe that grants for private vehicles should focus on encouraging vehicles
with emissions of 100 g/km or less, and work via the purchase rather than conversion of vehicles.
However when setting grant levels the current state of technologies and models available should be
At present the only vehicle on sale in the UK with emissions of less than 100 g/km is the small two-
seat hybrid Honda Insight, which sold just 3 units last year despite the availability of PowerShift
grants. Vehicles that come close are small diesel vehicles from several manufactures and the hybrid
Toyota Prius, a larger 'family sized' vehicle.

MG Rover Group
This should be reviewed on a case-by-case basis with attention to:
The development costs to apply the technology
The overall cost per mile of the technology
Unit costs of a new technology
The infrastructure requirements (for new fuels etc.)

Cotswold Experience Tours
Market sustainability is irrelevant, environmental sustainability is the issue. The judgement
(assessment) should be made on the carbon impact spread over the life cycle of usage (not production
or disposal of vehicle -as that would inhibit progress at this stage).

Volvo Trucks Ltd
Sustainable low emissions vehicles and technology will be those which the vehicle manufacturing
industry believes can be sold long term without incentives for both vehicle and fuel. In the ultimate
case, the only sustainable technology will be that which is financially sustainable in a normal
economic market without grants for limited periods of time.

Response to Question 5
What the duration and extent of grant support should be, as the market for low emission vehicles
and technologies becomes more sustainable

London Bus Services Ltd
Consideration again needs to be given to linking the grant programmes with achievement of
international, European and national objectives for air quality and climate change. As EU air quality
limit values have been set for 2010, the TE grant programmes should remain in place until these
objectives are met in order to ensure there is sufficient financial incentive to achieve the emissions
reductions required.
The government's Powering Future Vehicles Strategy also sets a target of 600 new buses a year to be
low carbon from 2012 but without financial support to stimulate the production of the vehicles and
reduce the premium of the vehicles (currently around £80,000) this target is unlikely to be met. Grant
programmes therefore need to be in place for as long as is required in order to achieve this target.

The duration of the scheme should be for a minimum of six months, with grants ideally applicable
based upon a vehicle's order date. Processes would otherwise become very complex to administer,
causing widespread confusion.

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Environmental Industries Commission
For grant support to be effective it must deliver an adequate financial payback to the investor. The
combination of grants and other financial incentives need to provide a neutral cost of investment
within 3 to 5 years. Grants should last as long as they are needed and are contributing cost-effectively
to meeting the environmental objectives for which they were established. Grants should be phased
out when an alternative policy instrument, like differential vehicle taxation, can achieve the same
sustainable market sought by grant funding

Millbrook Proving Ground Ltd
If the criteria for sustainability and funding levels are agreed at the outset then both the duration and
extent of grant funding will depend on whether these criteria are met.
For technologies that are currently supported by the programmes funding needs to continue while
environmental benefits are being realised.

Retail Motor Industry Federation
Clearly, this depends on the relevance of the vehicles and technologies to the environmental
objectives being pursued at the time and how rapidly such technologies could by kick-start make a
significant contribution to meeting those objectives.

Greater London Authority
The duration of the grant programme should be at least up to 2010, to assist with meeting the UK's
European commitments on air quality.

Scottish Water
Scottish Water believes that sustainability is very much dependent on the parity of operating costs for
differing technologies. Low emission vehicles and technology can only be regarded as 'sustainable'
once parity is achieved - or a migration back may occur. The duration and extent of the grant should
therefore reflect this.

Honda (UK)
Any grant system needs to be focussed on bringing new technology to the marketplace. Any grant
programme needs to be clear to consumers. The amount available and any applicable expiry dates
need to be communicated clearly and accurately and must be delivered.

The Greenfuel Company Ltd
Too short is when the market for said low emission vehicle or technology collapses on removal of
grant support. This is also intrinsically connected to other incentives, such as low duty fuel or parking
privileges. It must be emphasised that government money will be wasted if is used for unsustainable

Foden Trucks
Generally grant support or tax/duty benefits should be put in place for a longer guaranteed term of up
to 10 years to ensure that the alternate fuels and vehicles which use them become attractive to vehicle
operators and allow them to mature and become self-sustained as the take-up and volume grows. At
current growth levels of several hundred vehicles per year in ten years time is only several thousand
and such a rate of change is inadequate to have any real overall effect on the environment and air
quality, based upon the current UK vehicle parc.
A significant factor in urban traffic pollution is the operation of large fleets of public transport
vehicles. Many of these use out-dated diesel engine technology and many others have engines and
equipment in varying states of wear and deterioration. As a result their contribution to air borne

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pollution can be high. There is no incentive to change from the operation of such diesel-powered
vehicles whilst the diesel fuel rebate is in place from government to subsidise the operation of public
transport vehicles. The fuel rebate for diesel-engined (and particularly older diesel engines) should be
reduced or eliminated and there should be grant support or rebate which strongly favours alternate
fuelled vehicles which provide real environmental benefit.

Octel Exhaust System Ltd (trading as Adastra) and Octel Corp
As already stated, we believe that without grant support, the market will only be sustainable with an
actual or de facto mandate. Once a mandate programme is announced, maintenance of grants until
full implementation of the mandate will encourage early compliance.

Lancashire County Council
Grant support should be sufficient to enable vehicles/technologies to become sustainable, i.e. when it
is established that the whole-life cost to the end user is comparable with alternative, non-suitable

The Hardstaff Groups
The duration should be longer with a 3-year statement to be linked to the taxation policy for Natural
Gas and grant support should be reviewed annually and reduced as vehicle gain sustainability (OEM
mainline production).

Royal Society for the Protection of Birds
In making this move towards grants for vehicles that provide the greatest carbon benefits, there does
need to be a minimum air pollutant emission standard incorporated into the scheme. At this stage, the
current PowerShift Band 4 requirement for LPG vehicles should be minimum standard to be achieved
before a grant is made available. This standard can be increased when future Euro standards are

LP Gas Association
This will be different in each case and could be agreed with the technology provider at the outset. The
DfT should also consider that market sustainability can be achieved by mandatory instruments (local
and national) rather than grants. This process has been used in other countries and for instance could
apply to restriction of vehicles into cities which do not meet certain exhaust emission criteria.

NGVA and its members
"The existing duration of Government support is wholly inadequate. Realistically, the timeframe for
significant change is 10 - 20 years."
It will take time for benefits of scale and advances in technology to really make an impact but within
5 - 7 years of the natural gas market being established, with the right incentives to support it, the
market would reach sustainability. Elements to ensure this is achieved would include:
    Confidence that the fuel duty rebate difference would continue over this time;
    Adequate funding to ensure the market would come into being e.g. vehicle grants, provision of
       funding for the development of new technologies, and own Government targets for the
       conversion of the Government fleet to new technology;
    Grants and/or extended periods of low duty specifically to encourage private sector investment
    Removal of barriers for change e.g. fuel duty rebate and existing block on access to the public
       transport sector e.g. BSOG.

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    Stated objective for the penetration of low-emission vehicles (e.g. 10%) to underpin emerging
        markets rather than a defined duration and extent of grant support. Once a certain market
        share has been reached, grants could be withdrawn and fuel duty benefit can start to be

Vauxhall Motors
When a market becomes more sustainable sales volumes increase, opportunities arise to reduce the
costs to a more competitive level, and this in turn will reduce the need for grants to assist the purchase
of such vehicles. A time scale of around 5-7 years of SUSTAINABLE growth with government
commitment over this period. There would also be viable growth in the second hand car market,
which in turn generates demand for new vehicles. Over this period, it would be expected that grant
funding would reduce as the technology becomes more widely accepted. However, this can only be
achieved by government showing medium to long-term commitment, not on a year-by-year basis as
currently takes place.
Over the last 3-4 years technologies like LPG have started to become more acceptable in the market
place. This has been the result of large scale investment by Original Equipment Manufacturers
(OEM's) in bringing alternative fuelled vehicles up to the same production quality standards as
conventional petrol and diesel vehicles. Government has also helped by supporting these fuels with
fiscal incentives. However, each time technologies like LPG seem to be moving towards a sustainable
position, uncertainty about future Government policy has had a detrimental affect on consumer
confidence, and hence the market declines. Rebuilding market confidence takes time. During 2003,
sales were rising and the fuel was accepted as a viable alternative, but this growth was damaged in the
2nd half of the year because of uncertainty of both fuel duty and Powershift funds.

CNG Service Ltd
Grants and/or extended periods of low duty should be used to encourage private sector investment in
order to transform outcomes. Once a certain market share has been reached, e.g. 5%, grants should be
withdrawn and fuel duty benefit can start to be reduced.

It is essential that there is continuing commitment to simple, core technologies like traps - EST
running out of funding part of the way through 2003/4 caused serious problems for areas where public
authorities can only encourage bus operators to fit pollution reduction equipment.
Local Authorities and transport operators need certainty of funding. Annual review of grant-
availability makes it impossible to plan properly and stops many operators fitting pollution reduction
The comprehensive spending review has now established budgets for 3 years. Grant programmes
should also be confirmed for a minimum 3 years.

Norwood Consulting Ltd
Grant funding is a tool that is used to kick start a market or persuade end users to embrace new
technology, fuels or vehicles. Past experience indicates that this is a very slow process in the case of
transport in any form. We will offer some thoughts on a programme that offers support that reduces
progressively each year up to 2012 by which time the new vehicles built and delivered each year up to
2012 will have had a significant impact on emissions in general. Euro 4 and Euro5 vehicles and the
changes in diesel fuel composition, coupled hopefully with exhaust management technology
introduced by vehicle manufacturers from 2005 will progressively improve air quality and CO2
The actual levels of support depend on many factors, but to have any appeal to motorists, must offer
an attractive "gain" to end users, at least in the early stages of any programme.

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John Harwood
From discussions with various sectors of the natural gas vehicle industry over 20 years, the consensus
is that once the total number of NGVs reaches 10% of the vehicle population of any country then the
market will be sustainable. I would say that low fuel duty rather than grant is more beneficial to
maintaining sustainability.

DaimlerChrysler UK Ltd
Yes, funding should be made available for all vehicles irrespective of other mandates. However, only
   European emission levels should be the mandated levels and not independently derived levels set
   by local authorities as previously stated.

Lubrizol Ltd
The duration is a factor of the speed of introduction of emissions legislation and the working life of
older vehicles. As new low emission vehicles are introduced via emissions legislation, older, dirtier
vehicles will contribute a disproportionate amount to air quality problems. However, it is also
recognised that the older, more polluting vehicles, e.g. London Taxis and Buses are sold, or moved by
the operator, to other areas of the UK where they still be used to generate revenue, 15 year old
vehicles are not uncommon, therefore, the market for retro fittings after treatment devices and the
opportunities for the use of water diesel emulsions will still exist hence CleanUp will continue to be a
cost-effective way to improve air quality for several years.

Iveco Ltd
As far as new vehicle incentive programmes are concerned, this is clarified in the exhaust emissions
directive. Basically, engines/vehicles certified to an emission standard can be incentivised only while
such a standard is not mandatory. For permissive standards, such as EEV for heavy duty vehicles, the
incentive programmes should exist as long as Government thinks there is some air quality benefit
afforded by the certified emission standard.

Biofuels Northern Ireland
It would be constructive to issue more widely to government and QUANGO employees alike the
definition of the word "sustainable" - for ever and ever, amen.
Hybrid vehicles, particulate traps and LPG conversions do not satisfy this essential criterion.
Grant support should be maintained until such times as sustainable fuels become cost-competitive
with fossil fuels.

Whilst having a defined duration and extent of grant support is desirable from a Government
perspective, it does little to underpin emerging markets themselves. It would be better to have a stated
objective for the penetration of low-emission vehicles (i.e. 10%) and to flag reductions in support
once specific milestones are reached.
The existing duration of Government support is wholly inadequate. Realistically, the timeframe for
significant change is 10 - 20 years.

First Group
The duration and extent of grant funding should be reviewed annually looking forward 12 months, i.e.
decisions on 2006 funding programmes should be taken by December 2004. The difficulty at present
is prediction of the closure of the cost differentials.

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Newport Transport
Funding should be increased and maintained until carbon reduction levels are achieved.

Allow us to use grant monies for the purchase of electric cars from the manufacturer as long as the
funds were passed on to the customer. This could easily be monitored. An agreed time limit could be
placed for the resale of these cars to customers. This could have a very beneficial effect on the build
up of supply and stock pressure would further push us to get the cars in to the market place. I do
believe that in the case of electric vehicles the argument to do this is a rational one.

The grant process is already under constant review. Unfortunately at present time this entirely budget
driven, not technology driven. This focus needs to change. Dialogue and agreement with business as
to the extent of funding, which could be unit limited, would help in the relationship between the
producer and the consumer. The consumer could then understand the limit of the grant (say first 2,000
customers) and understand when the grant expires.

MG Rover Group
Ongoing grant support should be available to encourage the introduction of new technology provided
it continues to achieve, reducing, 'significantly better than class average' CO2 and emissions
performance, the limits should be reviewed and set on an annual basis.

Severn Wye Energy Agency
More vehicles with emissions of less than 100 g/km are likely to enter the market over the next few
years. These are likely to be small diesel vehicles and petrol/ electric hybrids. Here we think that a
technology neutral approach should be taken and grants awarded to all vehicles. We also think that a
higher grant level should also be introduced for vehicles with very low emissions of CO2 (less than 80
g/km). Although there are currently no vehicles on sale that would qualify this measure would
encourage manufactures to bring future ultra low carbon vehicles to the UK.
Grants should also be awarded to vehicles that emit more than 100g/ km to recognise the fact that
many people need a larger vehicle than can currently be made to emit less than 100 g/km. However,
here only some technologies should be supported to recognise the difference between mature
technologies such as diesel and upcoming technologies such as hybrids and the engine 'stop/ start'
technology set to enter the market later this year. A limit of 120 g/km should however be used for
grant funding to avoid funding large and/ or high performance vehicles.
A rough idea of how this could work in practise is shown in the table below. However it is obviously
essential to annually review the grant levels to ensure that important new technologies are encouraged
whilst funds are directed away from those that have become 'mainstream'. The point at which a
technology is seen as being 'mainstream' would be when it had captured more than a set percentage of
the market for vehicles of a particular size and type.

CO2 Level                          Technologies Supported                 Grant Level
Less than 80g/ km                  Any                                    High
80-100 g/km                        Any                                    Medium
100-120 g/km                       Petrol or diesel stop/ start           Low
                                   Petrol/ electric or diesel/ electric

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                                   Natural Gas
                                   Electric Vehicles (based on
                                   generation emissions)
We feel that uptake of grants may be held back if the application process is seen to be difficult. We
therefore think that for private low carbon vehicles TransportEnergy should identify manufactures of
eligible vehicles and make arrangements with their dealer networks to pay grants directly. This
ensures that the consumer can easily assess the lower grant aided price and removes the need for
bridging loans if the vehicle is purchased on finance.

Cotswold Experience Tours
Commit to the funds indefinitely or realistically until such time when the clean alternative is cheaper
in 50% of all new transport purchases.

Volvo Trucks Ltd
The duration of incentives need to be well known in order that industry can plan to implement cleaner
vehicles into their fleets and for suppliers to plan to meet potential demand.
Whilst air quality levels need to be improved then incentives should be planned to apply to vehicles
meeting the more advanced European exhaust emission limits than that mandated for at that time.

Dyfed-Powys, Police HQ
In terms of funding being made available to encourage the use of alternative fuels, once the grounding
is established the funding should cease.

Response to Question 6
Whether funding should be provided for vehicles that are required to be low emission by other
mandates (e.g. low emission zones)

London Bus Services Ltd
It is appreciated that government funding is constrained and there is unlikely to be sufficient budget
available to fund all vehicles that would need to be replaced/retrofitted in order to comply with LEZ
standards. However, since the main objective of introducing an LEZ is to improve local air quality,
some financial resource should be made available in these areas as this ensures that funding is used to
deliver air quality improvements where they are most needed.
LEZs will most likely be announced with at least two years lead-in time during which period grant
funding should be made available to assist operators to retrofit or replace their vehicles in order to
meet the required standard. Consideration needs to be given to how funding can be used to greatest
benefit and fund as large a number of vehicles as possible. A higher grant level could for example be
given to those vehicles which do not have any choice but to operate in the designated LEZ, such as
buses on contracted routes.

As a direct result of uncertainty and bureaucracy surrounding the scheme, our Members have
highlighted their disappointment with the scheme. This unfortunately has had an inevitable negative
impact on their confidence on the future operation of the existing scheme. There is certainly a strong
voice suggesting that the grant system is abolished and instead the allowances are provided for
through the existing vehicle taxation and duty structures.

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Furthermore, we would in any event suggest that the scheme is aligned to the vehicle's 'clean'
performance and not to other mandates.
Applying the above principle would mean a level playing field approach whether there is a low
emission zone or not. Whilst the advantages to be achieved are obvious, the practicality of managing
such a grant allocation would be immensely problematic, particularly where vehicles move around
various regions on a regular basis.

Environmental Industries Commission
The EIC believes that grant funding is for technologies and vehicles rather than for specific customers
or regions. It should be made available to vehicles that are required to be low emission by other
mandates but that this should be on the basis that grant funding is gradually phased-out as the mandate
is established.
Local authorities voluntarily mandating demand for clean vehicles would feel justifiably penalised if
their service providers were unable to access grant funding, at least for some defined period after the
mandating policy was implemented. There are currently no LEZs in the UK and this policy
instrument is less likely to flourish if those who implement it are penalised by having assisting policy
support removed. Furthermore, it will be difficult to police the allocation of grants to some and not to
others based on whether vehicles may or may not travel into LEZs or other areas where environmental
performance is regulated.
The UK Government has devolved air quality management to a local level. In doing so it put in place
a framework of policy instruments to assist local Government, including grant funding via
TransportEnergy. The availability of grant funding is symbolically and politically important for local
Government for whom mandating clean technology and vehicle use represents a voluntary measure.
Penalising rather than rewarding local Government for creating local initiatives in support of low
emission vehicles represents a retrograde step that will only discourage local Government from
making bold environmental initiatives.

Millbrook Proving Ground Ltd
We are concerned that the management of the process for identifying the vehicles affected will exceed
the cost benefits of excluding these vehicles from funding. That said if it is achievable both effectively
and efficiently then funding should not be provided for vehicles that are required to have low
emissions by other mandates.

Retail Motor Industry Federation
We do not see a distinction between funding for the vehicles for use in the country as a whole or
for use in low emission zones. It is still kick starting the establishment of the technology. There may,
however, be a case for a contribution from the local authority to such grants if the low emission zone
levies a congestion charge.

Greater London Authority
Funding should be provided to vehicles that are required to be low emission by other mandates,
including Low Emission Zones. LEZs are being proposed in the areas with worst air pollution, so
restricting funding where LEZ mandates occur will bias funding away from the areas with most need
for cleaner vehicles.
On the contrary, it would be better to focus grants where there are LEZs, as these are the locations
with the worst traffic air quality problems and where authorities have demonstrated a willingness to
take radical measures to tackle these problems. The grants could be at a lower level, or limited to a set
number per organisation (this could be especially useful, as it is the small operators that will be
particularly affected by any LEZ). London and other cities are considering LEZs, and sustaining grant

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funding would also encourage other cities to use LEZs (which many studies have found that to be the
most effective tool for reducing road transport emissions).
The enforcement of such an exclusion would also be difficult, for example a large proportion of the
UK HGV and coach fleets travel into London at some time, and would therefore be affected by the
proposed London LEZ. Any funding programme which was unavailable for vehicles operating within
any LEZ would be very difficult to enforce, as it would require operators to prove that their vehicle
would never enter any LEZ.

Scottish Water
Scottish Water supports incentivisation rather than imposition and consider it unreasonable to expect
individual businesses and operators carry the cost of such programmes imposed on them.

Honda (UK)
Honda (UK) supports the SMMT viewpoint on this question.

The Greenfuel Company Ltd
If the vehicles have to be low emission anyway it infers that the Transport Energy funding would be
totally irrelevant to the purchaser's decision making and consequently be affecting no change
whatsoever. This would appear to be failing in the presumed objectives of the funding.

Foden Trucks
Low emission zones (e.g. London Congestion Charging zone) do provide a cost benefit to clean
vehicle operators and as such zones grow and develop (as they will) there will be a tendency to reduce
the level of cost benefit for clean vehicles to secure fiscal revenue. This must be resisted, in fact the
permission from central government to local authorities to establish such zones should be conditional
to exemption for 'clean' vehicles.
There should be a policy instruction issued by central government to all local government bodies that
'clean' vehicles should be specified for local authority operation. Failure of the local authority to meet
the targets would result in penalties being applied by way of reduced central government subsidies or
by providing additional funding to enable such a programme. This should also embrace all third party
transport providers and contractors to local government.

Octel Exhaust System Ltd (trading as Adastra) and Octel Corp
We favour reverse economics in these cases: all vehicles entering the low emissions zone pay a levy,
unless they are fitted with suitable technology. Far from requiring subsidy, this generates cash for
continued investment in other schemes. This has been seen to work in London with the congestion
charge (where there is a waiver for LPG vehicles).
Whilst, in theory, this allows access by all vehicles, regardless of environmental performance, it
creates a financial and administrative incentive for technology adoption.
We also see a number of significant practical obstacles to removing grants where mandates exist:
    The removal of grants will act as a powerful disincentive to local authorities to establish low
       emission zones as there will then be a cost penalty affecting the authority and its many
       contractors, as well as other public sector bodies such as emergency services, health service,
       government departments.
    Vehicles are inherently mobile and differential subsidies may provide incentives for vehicle
       operators to exchange subsidised and non-subsidised vehicles. Whilst compliance measures
       could be introduced, these are likely to further burden operators at a time when government is
       seeking to reduce regulatory burdens on business.

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    We believe that there are considerable practical difficulties in defining those vehicles required to
       comply with the mandate and therefore ineligible for subsidy.
In the light of these, we believe that grants should be available irrespective of any local mandates. At
such time as mandates become universal, it would be reasonable to remove grant funding.

Lancashire County Council
No. If LEZs etc. are established correctly, then the market should be sufficient to enable the necessary
changes to take place.

The Hardstaff Groups
Yes, otherwise uptake from the various sectors will be slow, grants are necessary to stimulate the

LP Gas Association
The aim of grant support is to encourage the uptake of cleaner vehicles to a level where market
sustainability is achieved. Theoretically grant funding would not be necessary where mandatory
instruments are in place, but to achieve the same uptake they would need to be on a nationwide basis.
As this scenario appears to be entirely hypothetical, grant funding for the cleanest vehicles should

NGVA and its members
Clearly the costs associated with the congestion charge or low emission zones do provide some
incentive to switch to cleaner vehicles, however regulatory sticks alone will not be sufficient to
develop a sustainable market, grants may still be needed.
Government commitment to the introduction of appropriate technology within their own fleets,
funding to develop other technologies, and funds to encourage operators to change, are critical to
ensure the appropriate environment of confidence, and achievement of Government policy objectives.
Alignment of policies on congestion charges is also clearly desirable.

Vauxhall Motors
The idea of funding should be based on the environmental credentials of a vehicle or technology, not
based on local regulatory requirements. Requirements are set to achieve stated reductions over a
period and it would be difficult to develop vehicles for use in certain environments. It would therefore
be very difficult to differentiate how to use particular vehicles under these restrictions. It is also likely
that local restrictions/requirements will increase, but vehicles are not static and need to be accepted
wherever they travel.

CNG Service Ltd
No. Such mandates, by definition, do not require additional funding. However, there are no examples
of mandates in place in the UK.

Funding should be provided - otherwise in de-regulated areas this money will have to come from
higher fares or fewer services, or increased general service contract prices
In areas outside Greater London, the absence of grants would increase opposition to LEZ, especially
from bus operators who in theory one would expect should support LEZs (because they promote
public transport).

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Norwood Consulting Ltd
Yes, but focused using the kind of strategy outlined later in this paper. If motorists are to adjust to low
emission zones and all that they mean, some of them must have an option, supported by grants, to
alleviate the zone use constraints. They might otherwise move their operations or business base to
other areas with significant financial implications for rate-payers and residents. Our "environmental
impact" revenue raising suggestion would provide funds for a very broad based programme and might
take the heat out of the debate about restricted traffic areas and congestion charging zones.

John Harwood
No. There can be no justification for this as low emission vehicles can be funded under the current

DaimlerChrysler UK Ltd
No, by incentivising the next European emission level up as described previously it will give a clear
    and easily understandable policy. This will enable vehicle operators to plan their vehicle
    replacement policies with confidence and make the best possible decisions for their company and
    the environment.

Lubrizol Ltd
If a vehicle is required to be low emission to operate in a specified low emission zone and the vehicle
is new then no additional funding should be provided.
If, to comply with the mandate, a vehicle has to be modified or retrofit with a device to reduce
pollution, then a proportion of the cost associated with this modification should be funded.
It is not possible to differentiate on grant levels relative to geographic areas as vehicles will change
locations regularly, and if operating Nationwide, they will chose to have the modification completed
in an area with a higher grant.

Iveco Ltd
No. This would distort the market. If supermarket 'A' uses vehicles always less than 3 years old and
supermarket 'B' uses vehicles up to 10 years old, their respective strategies are probably cost based
according to repairs and maintenance versus vehicle holding cost. If supermarket 'B' needs to modify
the older vehicles in order to access a LEZ but supermarket 'A' does not because the vehicles are
newer, providing funding to supermarket 'B' would be unfair.

All vehicles should be assessed and rewarded (or penalised) against a common baseline, irrespective
of the specific mandate.

First Group
Funding should be available towards additional costs of vehicles to be used in low emission zones

Newport Transport
Definitely. "No go zones should be being planned". Local Authorities should be encouraged to use
their existing powers to create more low emission zones. (Mind you evidence on QBP's suggest they
are unlikely to progress!!)

Improved air quality and emissions standards are being driven by regulation on an ongoing basis. The
early adoption of this technology should be encouraged and supported.

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A flexible approach, albeit it constrained, should be employed here, with reference to the following
    The social implication of limiting lower income groups mobility in the context of the car fleet.
    The business implications of limiting single, owner-operator commercial vehicle users in the
       context of larger publicly owned fleet operators.

The Confederation of Passenger Transport
The government's stated policy is to reduce emissions and congestion. Preferential treatment towards
public transport rather than individuals (and their cars) would reinforce the message to encourage
modal shift and reduce the use of cars.

Severn Wye Energy Agency
Our knowledge of current issues on emissions from commercial vehicles is limited, and therefore we
can not give opinions on the future of the CleanUp element of TransportEnergy.
We feel that encouraging cleaner exhaust standards for private cars and vans is best encouraged by
methods other than purchase or conversion grants. The current company car tax rules are good
examples here - favourable treatment of Euro IV compliant diesels has sped their introduction by
manufactures and consumer take up. This could perhaps again be used if Euro V standards are
introduced for diesel and/ or petrol vehicles.

MG Rover Group
Limited funding should be available to support selected palliative measures aimed at addressing worst
polluters in air quality problem areas (supported by stricter in-use legislation and testing). NVT grant
funding should also be provided to promote the development of telemetry systems to monitor and
regulate the operational modes of vehicles in urban areas; this could be used to restrict vehicle
performance and dictate energy type used in hybrid or flexible fuelled vehicles.

Cotswold Experience Tours

No, unnecessarily complicated (rather put all funds to making overall package better).

Volvo Trucks Ltd
Yes in the case of purchase for new vehicles. It could easily be that LEZs could impinge on a large
proportion of the commercial vehicle fleet depending on the scale of adoption of LEZs. To
differentiate between those which will enter a LEZ at one moment in time and others that might at a
later time but not known at the time of purchase would be impractical to administer.
However, NO, in the case of paying for existing vehicles to be retrofitted with cleaner technology.
This could penalise competitors who had purchased new vehicles which comply with the LEZ entry
standards but did not meet more advanced standards of exhaust emissions to qualify for any incentive,
whilst another operator gained from retrofitting older vehicles which meet less demanding exhaust
emission standards to be cleaned up to the level of the competitor who had paid for newer cleaner
This is another reason why incentives for cleaner vehicles should be targeted more at the purchase of
new vehicles rather than retrofit bolt on clean up technologies.

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Response to Question 7
Whether, and if so, how, the CleanUp and PowerShift programmes could be developed in future to
focus on local or regional areas where the benefits for local air quality are higher

London Bus Services Ltd
LBSL would welcome the introduction of TE grant programmes that focussed on those vehicles
which operate in Air Quality Management Areas as designated by local authorities, particularly for
the CleanUp programme. Targeting vehicles in such a way would ensure maximum air quality
benefits are delivered by the limited budget available. Consideration should also be given to targeting
those vehicles operating in AQMAs which give rise to the greatest risk of exposure in terms of
proximity to members of the public.

We do not feel that the scheme should be targeted to improve localised areas, especially as this would
not only be prone to abuse, but we are concerned that the success (which would be difficult to
monitor) would be marginal, given the inability for the scheme to co-ordinate and deliver the benefits
to a specific area.
We therefore recommend that a standard national system be adopted which is clear and
understandable and one that does not create any additional layer of administration.

Environmental Industries Commission
Ideally grant funding could be targeted to vehicles operating in the areas with the worst air quality and
therefore the greatest need. In France, applications for funding are made to local offices rather than a
central administrative centre. In this way funding could, in theory, be allocated such that regions
with worse air quality have more funds for grants when compared with those whose air quality targets
are being met. The DfT and EST have the opportunity to consider this type of approach, as the EST
has the network of regional offices to administrate grants in this way or to focus grants in combination
with area-focused air quality management plans similar to the State Implementation Plans seen in the
United States.
However, the evidence already points to consumers directing CleanUp funding toward local or
regional areas needing better air quality. As grant funding only covers part of the initial investment
cost for environmental technologies it is insufficient in itself to make private companies or public
authorities invest. Other factors come into play in customer decision-making, including concern for
the health and environment of the communities in which vehicle fleets will operate. For CleanUp, the
grant application evidence clearly points to the fact that a majority of HGV operators applying to the
scheme have been seeking grant support to fund investments to reduce emissions from vehicles
operating in local or regional areas with established air quality problems or where the general public's
exposure to pollution is high. This is particularly the case for city buses and local authority vehicles
but is also apparent for the distribution fleets of Supermarket and other retail chains that service town
and city centres. In contrast, the uptake of clean vehicle technologies for both contract-hire long-haul
distribution and coach services has been minimal. These categories of vehicle spend the majority of
their time on motorways and have no local community to respect.

Millbrook Proving Ground Ltd
For the programmes to be effective it is essential that consistent criteria be used for assessing the air
quality benefits of a particular technology/fuel. It would be advantageous if the same criteria were
also used for other mandates such as low emissions zones or congestion charging.
The potential added complexity of regional funding for cleaner vehicles would hinder their take-up.

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Retail Motor Industry Federation
See our responses to question 6, 9 and 10.

Greater London Authority
The CleanUp and PowerShift programmes should be focussed to local or regional areas where the
benefits for local air quality are higher. Allocating grants to vehicles which operate in areas with no
air pollution problems is not cost effective when the same grant tied to polluted urban areas could lead
improvements in air quality. Any climate change benefits from the grants would occur regardless of
the location.
This may be justifiable under State Aid rules as it would not affect trade between Member States
Focussing the grants on London and other large urban centres (the most polluted areas) compared to
rural areas (where there is no air pollution problem) will not distort competition in such a way as to
affect trade between Member States. The same amount of grant will be distributed regardless of where
in the UK they are allocated.
The European Commission has been actively encouraging member states to talk to them about how
grant programmes can operate effectively within the state aid rules.

Scottish Water
Scottish Water considers a national scheme with national leadership would be more effective and
would avoid inconsistencies and differing practices across local authorities. It is difficult, operating
across numerous local authority areas, to plan to satisfy these potentially varying demands. If a set of
standards were set nationally, it would also simplify the administration of grants.

Honda (UK)
Honda (UK) sees these programmes as national programmes and feels that they need to remain as so,
as they will add more value in ensuring that new technology is introduced.

The Greenfuel Company Ltd
The effectiveness of any government programme to encourage markets is largely based on how well it
is communicated. Communication is more than a large advertising budget. Simplicity is a valuable
ally when trying to get a message across. Already there is a danger of there being too many schemes
and market confusion. How many people use the Internet to find out more about an LPG conversion,
see Powershift advertising grants and are consequently totally put off changing because they are one
part of the 93% that do not qualify for said grant. Several such people contact the Greenfuel Company
every day. How much worse if grant qualifying criteria is even more complicated yet broadcast
Since so many urban areas are failing air quality standards there would be a requirement for a plethora
of schemes. The conclusion is that Transport Energy should continue national campaigns.

Foden Trucks
No the Transport Energy should focus on a consistent national policy available equally to all. Air
quality is a fundamental right for everyone and on an equal basis. Any local or regional needs should
be addressed through local government by way of Clean Air zones; congestion charging;
penalties/additional funding to local authorities to enable them to introduce cleaner public transport;
emergency service; police; refuse and local authority support vehicles (cars and commercials).

Octel Exhaust System Ltd (trading as Adastra) and Octel Corp
The CleanUp programme in Wales, although still sadly lacking in funds, has attracted the attention of
local authority operators. We believe that CleanUp could be structured to provide more focus for

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local council or municipal vehicles. This could be achieved through a differentiated grant scheme to
provide a higher level of grant funding for purely council operated vehicles located in urban areas.

Lancashire County Council
The programmes should be concentrated on urban areas: this is where it will be most beneficial to
reduce local air pollution. The location of vehicles with reduced CO2 output is not relevant, but most
vehicles/technologies will reduce both local and global pollutants. It might be possible to restrict the
programmes to defined urban areas, e.g. at District level, but it is important that the intended usage of
vehicles is taken into account. Private cars are likely to operate throughout an extended area,
including rural and interurban areas. This may also be true for some HGVs, e.g. those used for trunk
hauls. Conversely, it may possible to determine very accurately the intended operating area of a bus.

The Hardstaff Groups
By offering an adaptable solution through specific programmes.

Royal Society for the Protection of Birds
In making this move towards grants for vehicles that provide the greatest carbon benefits, there does
need to be a minimum air pollutant emission standard incorporated into the scheme. At this stage, the
current PowerShift Band 4 requirement for LPG vehicles should be minimum standard to be achieved
before a grant is made available. This standard can be increased when future Euro standards are

LP Gas Association
As outlined in the introduction, we believe this is where the focus for TransportEnergy should be. The
grant programmes could focus on technologies / fuels that bring benefits to these areas.
There significant benefits could be obtained by working with Councils to help develop consistent and
integrated activities.
This whole area is one of much potential, from supporting the appropriate technologies to providing
blueprints for schemes which bring in local mandates (e.g.: congestion charging)which in turn would
reduce the need for cash grants.

NGVA and its members
"An artificial splitting of support to achieve Government policy objectives may prove detrimental"
In the short-term existing programmes should not be 'regionalised' in any way whatsoever. This would
merely create another barrier to entry. The introduction of congestion charging in other cities should
financially encourage the adoption of cleaner vehicles and alignment of policies on congestion
charges is clearly desirable.

Vauxhall Motors
It would also be very difficult for manufacturers to justify investing in vehicles for specific areas of
use, based on air quality zones around the country. To help meet these targets, specific criteria should
be agreed as at present to meet the objectives.
There could be a case that the programmes benefit clean vehicles which help meet local air quality
objectives and targets and this could be done by ensuring that the vehicles are used for a specific
timescale on a percentage basis within the zones. However, this would be difficult to administrate and
would be very time consuming. With this in mind, existing funding schemes should remain stand-
alone to support overall government targets.

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CNG Service Ltd
Key issue is the balance between the strategic objectives of diversity and greenhouse gas reduction
and local air quality drivers. Given the Euro IV and Euro V programmes it may be that strategic
considerations are more important.

Grants should be offered only in areas that are designated Air Quality Management Areas. AQMA are
the areas where poor air quality increases health risks, and where the limited funding available to EST
will have the most beneficial effect on quality of life.

Norwood Consulting Ltd
CleanUp or PowerShift could quite easily be more focused into, for example, CleanUp Taxi or
CleanUp Bus. PowerShift could be regionalised to, for example PowerShift Scotland, PowerShift
Wales or PowerShift Ireland and so on, allowing a spread of targeted funding to be applied to better
suit the requirements of each region. More direct links could apply to actual cities. PowerShift
London might offer solutions for a specific transport related air quality problem there. The "autogas
+" scheme in Scotland is a good example of this, and both end users and equipment suppliers are
enthusiastic about it and what it is doing. We feel that some of the present programmes seek to
distribute insufficient funds in a variety of ways. The evaluation of eligibility for support is sound, if
somewhat complicated in some cases, but the whole process is compromised by not having sufficient
money to deliver Government objectives.

John Harwood
This might be acceptable if the focus was on "captive" fleets in that area such as buses, taxis, refuse
collection, etc. Who would adjudicate on say an application from a fleet of delivery vans that travel in
and out of the region?
It would be useful to consult the French Government on this proposal as Gas de France has a rolling
programme, which focuses on individual towns and cities to build a sustainable natural gas vehicle
market. In each location, the bus fleet is the first to be changed to natural gas fuelling.

No, by incentivising the next European emission level up as described previously it will give a clear
    and easily understandable policy. This will enable vehicle operators to plan their vehicle
    replacement policies with confidence and make the best possible decisions for their company and
    the environment.

Lubrizol Ltd
There should be no focus on local and regional areas, the benefits of cleaner vehicles should be
available to the whole nation.
It is not possible to differentiate on grant levels relative to geographic areas as vehicles will change
locations regularly, and if operating Nationwide, they will chose to have the modification completed
in an area with a higher grant.

Iveco Ltd
Once more, any incentive funding should reflect the cost per unit reduction in pollution caused and its
effect. Clearly vehicles making the greatest contribution to poor urban air quality are refuse vehicles
and local buses. Large tractors using mainly motorways make a very small negative impact on urban
air. Government should focus specifically on vehicle type. However, where other strategic factors are
considered, such as promoting a Urea distribution network, all SCR equipped vehicles meeting the

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required emission standard should be incentivised in line with the provisions in the relevant exhaust
emissions Directive.

Biofuels Northern Ireland
There are many advantages attached to the use of electric vehicles1, including zero emissions at the
point of use and the ability to utilise "waste" electricity - that is, caused by the inability to run turbine
and generators down overnight. However, there are two significant barriers to adoption -
    The up-front cost (or on-going rental costs) of the power pack. This has effectively been
       addressed by the Powershift grant programme.
    The insecurity felt by the user not on a fixed route programme, caused by the usually perceived
       low operating range of the vehicle. This could be supported by the Powershift programme by
       the subsidising of the installation of day-time top-up charging points at car parks, etc.
Hybrid vehicles are an expensive means of achieving a higher mechanical efficiency - more miles per
Whilst this results in lower emissions, more has been achieved by the Vehicle Excise Duty scheme of
reduced annual payments at a superior cost-effectiveness rate. Users have simply elected for smaller
vehicles, thus achieving better fuel efficiency.
This scheme should be run down and the savings put to better use as already suggested.
The scheme should be re-directed to urban vehicles; in particular, public transport - already subsidised
by the Public Transport Fuel Duty Rebate scheme - and registered taxis.
Cleanup is an effective means of reducing pollution although, again, not targeted where the reductions
are needed most - inner cities. In addition, the equipment lasts only as long as the vehicle and public
funds would be better put to use by subsidising more sustainable environmentally beneficial fuels.

In the short-term we do not believe that the existing programmes should be 'regionalised' in any way
whatsoever. This would merely create another barrier to entry. The introduction of congestion
charging in other cities should financially encourage the adoption of cleaner vehicles.

First Group
There should be one standard programme of grants based on outputs. It would be almost impossible
to adopt any geographically based distinction and in any event, adoption of lower emission
technology will be of benefit wherever it is employed. Furthermore, some emissions e.g. carbon
dioxide have a global rather than a local effect.

Newport Transport
Probably concentration in major urban areas, motorway corridors, and residential areas. VOSA to
check vehicles (possible assimilation to congestion charging - emission charging)

Cardiff Bus
PowerShift This is an area, which I believe needs strengthening and controlling. Trials should be
undertaken under the auspices of the DfT, Scottish Executive and the Walsh Assembly Government.
It may well be that different areas require different solutions. I believe that areas that need to be

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targeted are those cities and towns that have already identified air quality problems (e.g. Cardiff).
Similarly with different trials in different cities some comparisons between the various forms fuel can
be assimilated. Fundamentally I believe that unless the current programmes are married to known air
quality problem areas, little will be gained in understanding benefits. If the programmes were driven
by the requirement to reduce known problems, grants could then be made available to encourage
operators to join in trial in order to provide even cleaner vehicles rather than merely meeting
legislative requirements.

Electric cars are the cleanest, most energy efficient, and most cost effective cars available in the UK.
The environmental, energy and economic credentials of the sector are superior to any other today and
are set to improve further over the next few years. They go way beyond the regulatory requirements
and for this reason we believe the Government should make additional grant monies available for the
purchase of electric cars, on the principle that all car emissions are not equal, nor therefore should
grant monies be.

We see both these as national programmes, which will encourage widespread sustainable support.
Local and regional initiatives in the PowerShift programme for example will not generate the
necessary gravities to support the introduction of new technology.
Local programmes on air quality can be achieved through greater local monitoring of air quality and a
reduction in the use of vehicles that do not conform to legislative requirements.
High quality road design and development is instrumental in improving local air quality and this is
something that should be encouraged.

MG Rover Group
It would appear that local air quality issues are best met by tighter in use legislation on existing fleet
and limited grants to support selected palliative measures aimed at addressing worst polluters in air
quality problem areas. Selective congestion charging could also be used to discourage the use of less
environmentally friendly vehicles in these areas.

Severn Wye Energy Agency
Reducing carbon dioxide emissions is a national problem and therefore action needs to be taken on a
national level. It is also essential for the programmes continued success that grants schemes are easy
to understand and access. We therefore feel that grants for low carbon vehicles should be available
nation wide rather than targeting them at specific geographic areas.
Air quality issues in specific urban areas can be addressed in the marketing and outreach activities
carried out for TransportEnergy, i.e. marketing the schemes more heavily in specific areas.

Cotswold Experience Tours
Not necessary but targets the worst areas by making them aware of the alternatives and the grants
under discussion.

Volvo Trucks Ltd
No. It would be impractical to differentiate between vehicles that only travel in some urban areas and
those that do for part of the time or might be deployed to such an area at a later time. This is already
an issue with English, Scottish and Welsh schemes.

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Police HQ, Dyfed & Powys
The 'CleanUp' and 'PowerShift' programmes should and could be developed to target particular
regions. This could be carried out after a region has been surveyed and sufficient retailers can supply
alternative fuels to the motorist.

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Response to Question 8
Whether particular technologies or vehicle types should attract an additional proportion of the
available funding

Low Carbon Vehicle Partnership
Amongst the diverse membership of LowCVP there are, understandably, conflicting preferences for
how funds should be allocated between schemes and sectors. There is nevertheless broad consensus
that support for research, development and demonstration fleets and supporting infrastructure (such as
refuelling stations) is a high priority if the UK is to develop leading edge expertise in low carbon
LowCVP supports the ongoing changes to the operation of the NVTF that we believe will improve an
already broadly effective programme. The Ultra Low Carbon Car Challenge (ULCCC) is considered a
particularly effective vehicle through which technological developments with a clear potential route to
market will arise. LowCVP encourages the Department to initiate more "challenges" of this type
instead of open calls, where permissible under State Aid rules.

London Bus Services Ltd
Higher levels of funding should be given to those vehicle/technology combinations which are
considered to deliver the greatest emissions benefit, both in terms of air quality and carbon emissions.
DEFRA has commissioned a number of source apportionment studies to assess which vehicles give
rise to greatest emissions in areas of poor air quality, and which vehicles would be the most
appropriate to target in terms of reducing emissions. To ensure the grant programmes deliver the
greatest emissions benefits, recommendations from these studies need to be taken into consideration.

No. The only criteria should be the pollution level. We do not feel that the schemes should attempt to
chase the technology most likely to deliver the scheme objective. It would seem far more sensible to
leave the deliverance of the technology to achieve the targets set to the motor manufacturers as the
technical experts.

Environmental Industries Commission
The EIC supports the idea of graduated levels of grant funding, such that better performing
technologies receive a higher level (percentage) of funding per technology installation or vehicle than
lower performing technologies.

Millbrook Proving Ground Ltd
Any technology that is considered for funding under any programme must be subjected to a review
that is both technically and economically robust prior to any funding being agreed. For any
technology that meets the requirements of this review we would advocate a technology neutral
approach that bases funding levels on the environmental benefits.

Retail Motor Industry Federation
The extent of the funding should reflect the extent of the technology's or vehicle's contribution to
achieving the environmental objective, bearing in mind the overall objective of widespread utilisation.

Greater London Authority
As we mentioned previously, focus should be on providing funding to desired solutions which would
not otherwise be cost effective on an individual basis. For example, funding should be focussed at
cleaning up the existing long life fleet, through grants for abatement equipment for long life vehicles

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(such as SCR and traps on buses), in preference to grants for vehicles which are already attractive to
the user through other benefits such as reduced fuel costs.
After this has been taken into consideration, the proportion of funding should be related to the
emissions improvement, in terms of both local air pollutants and CO2 emissions.

Scottish Water
Scottish Water believes this should only be considered once a technology has been proven.
Manufacturers have made claims in the past, made sales and left operators to bear the costs. Once the
technology is proven it would be reasonable to apply additional funding.

Honda (UK)
Funding should be technology neutral. The majority of vehicle manufacturers believe the future lies
in fuel cell, but until that time there are currently many differing short - medium term plans to produce
cleaner vehicles in operation. It would be unjust to favour one technology type to the detriment of
another. Funding should be given to the very cleanest, lowest carbon vehicles that not only emit low
CO2 levels but which also emit the low levels of pollution required by regulation and where
appropriate and quantifiable, forthcoming regulation.

The Greenfuel Company Ltd
Anything that has current or near market acceptability with the potential to make a real difference
should attract funding. Within that, the allocation becomes political. The Greenfuel Company's
position is that LPG represents the most marketable alternative to mainstream fuels and there is a
solid body of international evidence to support its environmental credentials. Consequently it has the
greatest chance of making a real difference to our air pollution problems and benefit from the majority
of funding.

Foden Trucks
The availability of funding should be directed towards and favour those vehicles/technologies which
are readily available; commercially viable; achieve specific environmental targets and which are
generally market and operator acceptable. The proportion of funding available should be consistent
with and prioritised in accordance to meeting these requirements.

Octel Exhaust System Ltd (trading as Adastra) and Octel Corp
We believe that funding rates should be based on cost effectiveness at reducing emissions harmful to
health - that is £ of subsidy to quantity of pollutant saved.
The grant could be based on a scale credit for quantity of pollutant with corresponding debits should
the system have detrimental environmental impacts. This would allow grants to reflect the overall
environmental performance of a technology
This approach has the advantage of being entirely technology neutral and focuses solely on the
benefits. The challenge is likely to come in defining the pollutants to be included and in determining
appropriate scale charges for each pollutant, but we believe this is entirely achievable.

Lancashire County Council
The available funding should be concentrated where it is likely to have greatest effect, for example:
    buses and HGVs rather than cars
    technologies that are close to market sustainability but are not yet established.

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The Hardstaff Groups
Yes. Dedicated engine technology prior to being OEM supplied should receive a higher grant due to
initial costs. Overlay technology (dual fuel) that is substantially cheaper should receive a lower
proportion. Where vehicle type offer a benefit to air quality but do not have the monetary gain from
fuel savings due to low annual mileage (in urban areas) require a higher grant.

LP Gas Association
If the level of funding is agreed with the technology provider at the outset, then there is not a decision
to be made as to a proportion of available funding.

NGVA and its members
Consideration could be given to the following criteria:
    Impact of the technology on the achievement of the Government's policy objectives;
    Provision of significant improvement to air quality in urban areas i.e. the relative immediate
       health benefits this could provide
    Near to market and realistic timeline for introduction;
    Energy security of supply and fuel diversity

Vauxhall Motors
Vauxhall believes that vehicles that are clean, safe, competitive in cost to conventional technology,
desired by the market and that are clearly identified with long-term objectives should receive grants.
The current system of Powershift has favoured certain types of technologies and vehicle types mainly
gaseous fuels, hybrids and electric vehicles. It may be difficult to differentiate which technologies
would carry a premium unless the emissions criteria are well defined. These need to be based on the
main objectives, CO2, air quality or both.

CNG Service Ltd
Yes, based on energy security of supply and fuel diversity. On this basis, natural gas vehicles
represent an attractive option. In addition, a good test is asking the question - "what would happen if
the grant was not there?". OEMs are making cleaner engines to meet Euro IV and Euro V standards,
what they are not doing is making engines that look beyond 2008 (with the exception of CNG cars in
Germany which may be as clean as Euro VI.

Grants should be concentrated where they are most effective. In stark terms there should be a table of
£ grant-aid per kilo of pollutant and carbon saved. Where pollution reduction leads to more carbon
(through increased fuel use) there will need to be a clearly stated trade off.

Norwood Consulting Ltd
Our suggested refocusing of all activities relating to emission reduction in order that an agreed
objective is met by 2012 would imply that a clear policy also be evolved that seeks the best value for
money against emission reduction gains. One such objective would be to balance the available funds
within the scheme against the emission benefit for each sector. For example, should a large
commercial vehicle receive a particle trap costing £4000 or should 5 or 6 cars be retro fitted to LPG
bi-fuel? There are and will be certain technical innovations or developments in fuel cell variants that
will require grant support to allow trials, evaluation and viability studies to be made. It may be that a
research and development fund is ring fenced for such purposes. Proper and professional evaluation of
each fund recipient should continue to be carried out as at present.

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John Harwood
Yes. Security of supply and fuel diversity should be the main criteria. Natural gas produced from
biogas sources should be considered an important sustainable technology. It would be prudent to
favour natural gas vehicles as this would possibly lead us into the hydrogen economy in say 20 years

DaimlerChrysler UK Ltd
Again this should be dependant on the European emission standards, however there may be a case to
allow special cases for specialist technologies where normal funding would not be appropriate.

Lubrizol Ltd
Yes, if they are more effective. The factor should be air quality improvement per £ of grant. This
should not, however, apply just because they are newer. For example oxidation catalysts are funded to
a lesser extent, but are low cost and better value in terms of PM reduction per £ of grant.
It is clear there are a number of solutions available to reduce vehicle emissions. Further consultation
should be conducted with regard to suitable technology and funding levels.

Iveco Ltd
No. All funding should be directed according to certified tail pipe emissions standards. Government
should never promote technologies. Governments should only establish performance standards.

Biofuels Northern Ireland
The New Vehicle Technology Fund: Again, it must be stressed that insufficient government support
has been given to existing but under-utilised potential fuels. Namely, biodiesel, bio-ethanol and
methane. These fuels could be made readily available, using existing fuel distribution systems, given
the overcoming of the barriers that exist.

No, funding should be technology-neutral.

First Group
Particular solutions or vehicle types should not attract a grant premium

Newport Transport
Definitely increase proportions for vehicles in areas quoted in 7 above and specifically urban and
motorway areas. (City buses, refuse wagons, local distribution vehicles).

Funding should be technology neutral. The road to the low carbon vehicle may take many different
routes; it would be inopportune of the programme to encourage one at the detriment to the other.
The programme strategy should be aware of and support an overall transport energy policy through
national and potentially European policies. The programme may need to adopt as for example strategy
on fuel distribution networks develops.

The Confederation of Passenger Transport
The grant should not be restricted to a specific technology, but should be available to any which meets
the emissions criteria (both pollutants and CO2) comprehensively and consistently at the tail pipe
irrespective of the operating conditions of the vehicle.

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Severn Wye Energy Agency
We believe that this research and demonstration element of Transport Energy should continue much
as it does at the moment. It is particularly encouraging to see funding spent on very public
demonstration technologies such as the London Fuel Cell Buses, and also UK engineering firms using
this funding to develop world class systems for new vehicles.

MG Rover Group
This will need to be reviewed on a time basis and should be based on CO2 and emissions metrics and
not on technology.

Cotswold Experience Tours
Yes, carbon neutral vehicles should be subsidised to the point where they are cheaper, whilst low
emission carbon vehicles could receive a helping hand but
Certainly should be less than half the value of the carbon neutral alternative. (Carbon neutral:
Biodiesel, electric vehicles charged via renewable energy company or directly)

Volvo Trucks Ltd
No. Funding should be based purely on meeting defined European exhaust emission standards and be
technology neutral.

Police HQ, Dyfed & Powys
Particular vehicle manufacturers have certainly been more proactive than others in promoting the use
of alternative fuels. In view of their initiative they should benefit from an additional proportion of the
available funding.

Response to Question 9
Whether the balance between funding new vehicles through PowerShift and cleaning up older
vehicles through CleanUp should be different

Low Carbon Vehicle Partnership
LowCVP believes that getting new, low carbon buses into service is more valuable than attempting to
retrofit devices to clean up emissions of regulated pollutants from the existing vehicle stock. There is
also preference for supporting R&D in preference to the Clean Up option. Retrofit should only be
encouraged if it can deliver savings cost effectively (in terms of £ per tonne CO2) or supports the
development of new technologies.

London Bus Services Ltd
In deciding what level of grant should be set under PowerShift and CleanUp it is not a simple case of
one should receive a higher level than the other. A range of factors needs to be taken into account
such as whether there are any financial incentives to encourage the operator to purchase the vehicle or
equipment. Cars and commercial vehicles currently funded under PowerShift benefit from a number
of incentives as outlined previously, whereas under CleanUp there is no such incentive for fitting
emission reduction technologies apart from the RPC.
Buses also need additional financial support. Alternative fuels are not currently economical compared
to diesel due to the Bus Service Operator Grant which provides an 80% rebate on the duty paid on
diesel and as a result there is little incentive to operate LPG or natural gas buses. The premium for
these cleaner buses is also extremely high as a percentage of the total cost of the vehicle. The
premium on a diesel-electric hybrid bus for example is about 40%, compared to 5% for a hybrid car.

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Another consideration for CleanUp is that maintenance costs are generally much higher for vehicles
fitted with emission control technologies so there is an ongoing cost to consider. The level of grant
should therefore take into account both the additional cost of the vehicle or equipment, other financial
incentives and benefits, and what the ongoing cost is likely to be. The grant should be adjusted
according to a particular vehicle/technology type such that it standardises the payback period to the
operator and does not disadvantage particular vehicle/technology types.

There are a number of other means by which the Powershift programme could be best delivered.
CleanUp does have a part to play, but we believe the emphasis should be turned away from improving
the polluting levels of older vehicles, which is an important area to tackle, but suspect there to be a
low take up, thus demonstrating the ineffectiveness of this tool.
It would of course make sense for the grants to be periodically reviewed to ensure it reflects
technological developments made in the sector. It would certainly offer a positive incentive to motor
manufacturers to be offered additional or higher proportion of the grant if the technology delivered
excelled the pollution target set. This may help stimulate improvements or enhancements on existing

Environmental Industries Commission
Firstly it is important to recognise that customers applying to the CleanUp scheme do so both for new
and for older in-service vehicles. For buses and local authority vehicles, the ability to upgrade the
performance of the existing fleet may represent a cost-effective alternative to buying new vehicles,
particularly for specialist vehicles that can be kept for up to15 years. This is important where these
vehicles are providing a service for which the public pays.
At the same time it is important not to disincentivise the purchase of new vehicles with emission
reduction technology as these vehicles are capable of providing air quality benefits throughout the
long life of the vehicle. The environmental implications for the UK HGV fleet based on a typical fleet
turnover of 10% pa. This shows the long duration of the older Euro standards and therefore the
continued retrofit opportunity for older vehicles.
However, for private fleet operators, the cost of investing in environmental technology is easier to
discount for new high value vehicles than it is for older vehicles with lower resale values. The
ownership of trucks in the UK (based on data for 2000) and clearly shows that less than 10% of fleet
operators have a turnover greater than £1 million per annum (pa) and less than 2% have a turnover
greater than £5 million pa. There remain a great many operators whose turnover is less than £100,000
pa and who operate between 1 to 5 vehicles only. These latter companies are most unlikely to invest
in environmental technology. Instead, the best way to get these operators to run cleaner vehicles is for
them to purchase them second hand from the bigger fleet operators.
The Commercial Vehicle Group of the LowCVP are developing proposals for an Econovate scheme
that would see the introduction of fuel economy improving (carbon reducing) technologies. This
scheme would fit naturally into a low carbon successor programme to CleanUp.
It is important to recognise that the Commercial Vehicle Group is comprised almost exclusively of
vehicle manufacturers whose focus is on the sale of new vehicles. This contrasts with the
environmental industries sector which has focused on servicing demand from vehicle operators and
therefore on retrofitting in-service vehicles. The environmental industries sector could contribute to
reducing carbon emissions to the commercial vehicle sector by marketing some of the Econovate
technologies to in-service vehicles.

Millbrook Proving Ground Ltd
Although CleanUp does focus primarily on cleaning up older vehicles Powershift has a much broader
scope than indicated above. The Powershift programme includes ongoing market support for

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established technologies that have not yet reach sustainability, support for the launch of new
technologies as well as cleaning up older vehicles.
Rather than considering just the balance of funding between the two programmes we would suggest
that it is more appropriate to consider the level of funding available to support the different phases of
development of a technology.

Retail Motor Industry Federation
This should be totally dictated by the environmental benefits if one programme is more
environmentally cost effective than the other then the least environmentally cost effective should be

Greater London Authority
CleanUp grant funding should take precedence over PowerShift funding, as it can have more impact
on emissions. Alternative fuelled vehicles (currently eligible for PowerShift funding) have other
incentives and may still be economical with less grants, however fitting abatement equipment to older
long life vehicles (CleanUp funded) is not economical without grants. Emission abatement equipment
does not currently have enough drivers or direct benefits to incentivise its fitting, yet it does need to
be fitted to help us meet our national and EU air quality objectives, and reduce the number of deaths
we are bringing forward due to poor air quality. Therefore there should be more funding available for
the CleanUp programme than the PowerShift programme.

Scottish Water
Older vehicles are far less 'environmentally friendly' than those built using the latest proven
technologies. Scottish Water believes more should be done to encourage change in this area.

Honda (UK)
As previously stated, the primary focus on any programme should run concurrently with existing and
any future Governmental strategies to reduce CO2 and air pollution figures.

The Greenfuel Company Ltd
A preference for more funding for Powershift to provide wider incentives such as Autogas+, or indeed
to emulate successful schemes in other countries.

Foden Trucks
Any fuel or power policy should focus on developing alternate fuelled vehicles for the longer term
and this is best achieved with new vehicles. The higher proportion of funding should be directed to
this. However there is a short term need to support the slow take-up of alternate fuel vehicles and
CleanUp should remain to cater for this, but at a lower proportion than for PowerShift as the benefits
are unlikely to be as good or for such a long term.

Octel Exhaust System Ltd (trading as Adastra) and Octel Corp
We strongly believe that the distribution of funds should be altered to favour CleanUp. This is clearly
supported by the DfT's own figures for emissions reduction cost effectiveness.
As noted above the balance of funding presently favours those technologies that reduce CO2 but not
necessarily total greenhouse gases and which have negligible effect on the toxic and carcinogenic
pollutants that are of concern in terms of air quality.

Lancashire County Council
The balance should favour new rather than older vehicles for the following reasons:

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    there is a very large number of older vehicles, several times larger than the number of new
        vehicles entering service each year (each vehicle has a typical life of 10-20 years); as
        identified in point (32) of the consultation document, large-scale grants are unfeasible
    there is little leverage effect in spending money on older vehicles as this tends only to be for
        pollutant treatment (external effect) rather than reduced fuel consumption (internal effect); as
        such the direct benefits to the end-user of this type of spending are limited, and there is little
        effect on future purchasing decisions
    spending on new vehicles which includes improved fuel consumption is more likely to develop
        the market for clean, low-carbon vehicles

The Hardstaff Groups
Yes, due to longevity of air quality from PowerShift funded vehicles.

LP Gas Association
We would question whether the overall funding should be split on this basis or more reflect the stage
in the cycle of a technology between research, demonstration and market support. This would be
consistent with a move to a technology neutral low emission technology programme (also refer to
question 10)

NGVA and its members
A greater proportion of funding should be directed to PowerShift shifting the balance of funding
programmes towards new vehicles and new technologies, rather than cleaning up existing vehicles
which will encourage new vehicles to market.
Tighter emission standards will, over time clean up emissions significantly, but will do nothing on
their own towards introducing new technology platforms, capable of delivering longer-term
sustainable change.

Vauxhall Motors
Vauxhall has been involved with the Powershift programme since 2000 and our customers have
benefited from the grant funding. It has been frustrating during the period uncertainty about future
funding has hindered growth in the LPG market. As the largest LPG OEM, Vauxhall would like to see
Powershift funded to ensure that all customers who would like to purchase vehicles benefit without
the "while stocks last" scenario.
In addition Vauxhall believes that there has been a lost opportunity to "clean up" the car parc. While
60% of new cars are purchased via the fleet market - only 40% of the total UK car parc is fleet based.
This presents an opportunity over the next few years to encourage retail customers to purchase cleaner
alternative fuel vehicles as their vehicles reach the end of their life cycle. Vauxhall would welcome
moves to this effect and outlines ways in which this could be achieved later.
Cleanup may be an important programme but Vauxhall is not familiar with all the criteria for this
programme. Nevertheless, Vauxhall appreciates that cleaning up older vehicles is necessary, but
believe that programmes must take into account the vehicles life expectancy. Old passenger vehicles
have a shorter lifespan than large commercial vehicles so monies spent on cleaning up these vehicles
must ensure a minimum term of further use. Vauxhall would prefer that customers be encouraged to
purchase newer vehicles as they are not only have better CO2 and air quality features but the added
benefits of improved safety and security.
Thus, Vauxhall would prefer money to be split with an emphasis on Powershift rather than Cleanup

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CNG Service Ltd
The Clean Up programme can be detrimental, for example, encouraging the use of diesel buses where
investment in new, clean CNG buses would be more attractive for passengers and air quality. The
examples of Paris and Delhi are important.

The league table (£ grant aid per kilo of pollution and carbon saved) should be applied to both new
vehicles and retrofit technology. New vehicles are cleaner, but cost more than retrofits. The balance
should be decided by their relative effectiveness.

Norwood Consulting Ltd
As PowerShift deals mainly with new technology, original equipment manufacturers and vehicle
manufacturer's products, it has a significant impact on the commitment by vehicle manufacturers to
new LPG and other emission technologies. That said the huge advances have been made by car
manufacturers in emission reduction to meet Euro4 and later, Euro 5 regulations mostly unsupported
by grants.
There are also 15 to 20 million pre Euro4 vehicles on our roads and cleaning up several hundred
thousand of these over a few years will have a far greater impact on air quality than the impact of say
the 5000/8000 or so new bi-fuel vehicles currently being sold annually. Any perceived weaknesses or
anomalies in the present schemes seem to be as a result of juggling with inadequate funds. We submit
that the skill, experience and expertise exist within the present delivery mechanisms for Government
policy, but that the sheer size and momentum of the vehicle market cannot realistically be influenced
within present funding levels. The balance of funding seems to be a compromise relating to funding
levels rather than an allocation relevant to the real impact of each sector or to a long term plan.

John Harwood
Yes. I feel that the CleanUp programme encourages the retention of older vehicles instead of reducing
the age of the countries vehicle fleet. Re-engining a bus for example does little to improve the
attractiveness of the vehicle. We need to have newer and smarter vehicles that can improve the

DaimlerChrysler UK Ltd
No, funding should be based on meeting the agreed European emission standards.

Lubrizol Ltd
Funding between PowerShift and CleanUp should be different in favour of CleanUp. There are many
thousands of high polluting diesel vehicles on UK roads and around urban areas that will benefit
people's health and the environment through retro fitting and/or using cleaner diesel fuel derivatives.
However, the CleanUp scheme can be improved further to give higher level grants for cleaning-up
older vehicles than the level of grant given towards cleaning-up a newer vehicle.
For example (assuming £X is an established fixed grant level dependant on technology and vehicle
weight as with current scheme) we propose the following formula could be adopted: -
    Euro4 vehicle - receives zero grant
    Euro3 vehicle = 20% of £X
    Euro2 vehicle = 100% of £X
    Euro1 vehicle = 140% of £X

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    When Euro4 becomes the regulated norm for new vehicles we propose that the following formula
      could be adopted: -
    Euro5 vehicle = zero grant
    Euro4 vehicle = 20% grant
    Euro3 vehicle = 100% grant
    Euro2 vehicle = 140% grant
    Euro1 vehicle = 150% grant

Iveco Ltd
Most certainly Power Shift should be the dominant programme. There is very little in the Clean Up
programme which is sustainable in terms of reaching production and not depending on Government
grant. It must be 3 years ago that commercial vehicle manufacturers at SMMT met with officials from
DfT and EST to explain that the preferred Euro 4 and 5 technology was SCR and not EGR plus filter.
Even so, Clean Up is predominately spent on retrofit filters, even when vehicle mission and
component durability are questionable. Where Government funding is made available, there should be
a point at which funding can stop but production of the appropriate technology continue. Such is the
logic behind the incentivising of early introduction of mandatory emission standards.

Yes, a greater proportion of funding should be directed to Powershift, as this will encourage new
vehicles into market.

First Group
An emphasis on new vehicles is preferable to retrofitting, but the availability of funding for CRT
equipment for new vehicles is beneficial and should be included within an output led programme.

Newport Transport
CleanUp grants acceptable, but perhaps more incentives to scrap older vehicles.

As stated previously the introduction of new technology and also the early adoption of higher
legislative requirements early should be the focus of the programme.

MG Rover Group
We encourage increasing total funding available through a combined Low Emission Vehicle
Programme over that provided through existing programmes.
In the short term we would encourage similar funding to PowerShift (c£8M) directly supporting the
sales of low emission vehicles with significantly reduced funding (c£4M) for selected palliative
measures aimed at addressing worst polluters in air quality problem areas (supported by stricter in-use
legislation and testing).
We would support significantly increased funding (£15-20M) for selected product introduction and
development programmes.

Severn Wye Energy Agency
We feel that the current split of funding is about right. Obviously a greater overall level of funding for
all schemes is desirable, but may not be obtainable.

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We do however believe that the funding split should be changed over time and annually reviewed to
ensure that funding is being used for the programmes that secure maximum carbon emission

Cotswold Experience Tours
Focus on new production! That's what will change the world. Old vehicles will reach the end of their
life soon enough.

Volvo Trucks Ltd
The most sustainable future will be for those vehicles, which vehicle manufacturers will adopt as
main line production vehicles. Incentives that support advanced production models are advocated
rather than bolt on retrofit schemes.

Police HQ, Dyfed & Powys
The emphasis should be on funding new vehicles through 'PowerShift' rather than adapting older
vehicles through 'CleanUp' The latter is not cost effective, in particular on LPG conversions as the
vehicle runs at a higher temperature which causes engine problems and negates any manufacturer
warranty which may still be valid. We experienced this problem in this force some years ago.

Response to Question 10
How the programmes could best be developed in the future, including replacing PowerShift with a
technology neutral Low Emission Vehicle Programme

Low Carbon Vehicle Partnership
Some LowCVP members (including some automotive vehicle manufacturers) believe the number and
level of grants available through the current Powershift programme is too small to stimulate the
desired market changes for low carbon passenger cars. These members suggest that the resources
would be better deployed in other market transformation activities or focused upon lower volume
markets - such as buses.
Other LowCVP members do support the continuation of a grant programme, similar to Powershift, to
support purchase of low carbon technologies. However, recognising that budget constraints are likely
to be a feature of any new grant programme, it is essential the new programme is part of a broader
strategy of awareness raising to complement other fiscal, regulatory, procurement and voluntary
instruments to promote the purchase of low carbon vehicles.

London Bus Services Ltd
LBSL does not support the introduction of a technology neutral low emission vehicle programme. If
the funding was opened up to include petrol and diesel vehicles the grant funding would not be
sufficient to meet demand given the large volumes of vehicles that are likely to be purchased.
Furthermore the TE programmes have a key role to play in developing and encouraging the market
for non-fossil fuelled vehicles in order to reduce the UK's reliance on oil, both from the perspective of
security of supply and rising fuel costs as oil reserves diminish.
With regards other developments of the programmes, consideration needs to be given as to how
further incentives can be provided to encourage fleet based trials once new technologies have been
approved on the PowerShift or CleanUp Register. The programmes currently operate on the basis that
once a technology or vehicle has been approved via the New Vehicle Technology Fund it is
immediately placed on the CleanUp or PowerShift Register where it is then considered approved for
grant funding. Encouraging operators to be the first to fit new technologies or purchase new vehicle
types is difficult as many are not willing to take on the risk associated with using new technologies.

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There may also be additional infrastructure costs required, as well as additional project management
time which could act as a barrier to take up.
Development of a fleet trial funding package should therefore be considered under the TE
programmes to provide extra support for operators who will be the first to trial new technologies. This
might therefore include support for infrastructure costs, consumables, training and project
management as well as the grant for the vehicle/technology itself. Case studies on these fleet trials
would provide an excellent opportunity to demonstrate the performance of the technology in practice,
providing useful data on costs, reliability and maintenance that would assist other fleet managers in
their purchasing decisions. As the trials would be monitored by TransportEnergy, any problems
arising could also be identified before the technology was rolled out on a wider basis. Many problems
were experienced when DPFs were first fitted to buses for example due to the low exhaust gas
temperatures which resulted in poor regeneration of the filter and subsequent blocking. Larger
catalysts and extra lagging have largely overcome these problems, but had these issues been identified
at an early stage this would have saved a great deal of time and effort that was spent by the bus
operators in rectifying the problem.
More hands on support needs to be provided to operators to assist their purchasing decisions and to
ensure the vehicles perform well once in service. Although TE has Key Account Managers, these staff
focuses on relationships with the key suppliers as opposed to the customers. More effort should be
focussed on supporting the customer to provide advice and information beyond the grant
administration process. Projects are less likely to fail if this additional support is provided.

As indicated, it would make sense for the Powershift programme to be replaced with a technology
neutral programme such the Low Emission Vehicle Programme. This would be a sensible move and
would go someway to address the difficulties encountered with the current programme which was
sending confusing signals to motor manufacturers about certain technology, including LPG.
If this policy was recognised and adopted, we believe it would bring Government a step closer to
implementing a pollution tariff payable through other forms of vehicle taxation.

Environmental Industries Commission
The EIC broadly supports the LowCVP Passenger Car Group's recommendations for a technology
neutral programme for new car sales but does not believe that it is possible to combine both air quality
and low carbon (climate change) criteria within a single scheme targeting the vehicle types that
CleanUp addresses. To do so would be to create too complicated a system to effectively
communicate or administer. Instead the EIC recommends two schemes. The first offers grants based
on air quality improvements and the second based on reduced carbon dioxide emissions. Applicants
would then opt for whichever of the two schemes offered the best financial reward, based on the
performance of the core technology. As an example, clean diesel retrofits and natural gas engines
would fall into the air quality programme, with hybrids going into the low carbon programme.
Should the EST wish to focus its activities on carbon reduction, the creation of a separate air quality
programme would allow the administration of this latter programme to be contracted by Government
to an alternative service provider.

Millbrook Proving Ground Ltd
All three of the current programmes could be replaced with a technology neutral low emission vehicle
programme provided that support remained for:
    Market support

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Any new programme should consider the environmental performance of vehicles under real world
driving conditions to ensure that any potential benefits identified are realised.

Retail Motor Industry Federation
There is a great deal to be said for a technologically neutral programme and not being committed to
one specific technology. New options are emerging rapidly and the flexibility to react to changes
either to environmental priorities or technological solutions is consistent with 9 above

Greater London Authority
We strongly disagree with the suggestion that the Low Emission Vehicle Programme would only
require vehicles to meet Euro standards for local air pollution emissions. This does not provide a
sufficient signal to the consumer that air quality is still an important issue, and it will be inadequate to
encourage best practice among consumers.
There must be clear and easy to understand incentives that promote best practice in terms of local air
pollutant emissions, as well as CO2 emissions.
TransportEnergy should work closely with defra, with special regard to defra's work on source
apportionment, to identify where (in the fleet) the most cost effective emissions benefits can be

Scottish Water
Scottish Water would prefer simple access to funding through a single system with clear parameters
and believe this would be more effective towards achieving the overall aims of the Government in this
Scottish Water also believes that a quick response to requests along with, guaranteed funding when
conditions are met is essential.

Honda (UK)
Please refer to Question 8.

The Greenfuel Company Ltd
The programmes must be deployed to work with other incentives and disincentives to affect change,
to make a difference. This put more emphasis on deployment rather than research. The Greenfuel
Company believes that Autogas+ has the greater potential for success due to its simplicity to
Government funds spent on reinventing the wheel do not seem good value for money. There is a very
real danger that funding on seemingly innovative hybrid or other projects will do this through simple
ignorance of what is already commonly available elsewhere in the world. To this writer, perhaps due
to the Greenfuel Company being university-based, such parochial thinking seems outmoded, even

Foden Trucks
As suggested previously, providing that the support funding programme takes due regard for
environmental target achievement; availability; commercial viability; market acceptance and life
expectancy, and prioritises the degree to which these requirements are met, then there is no reason
why there could not be a single Low Emission Vehicle Programme to address support for the market.

Octel Exhaust System Ltd (trading as Adastra) and Octel Corp
We support the proposal to replace the current PowerShift programme, but assert that a
comprehensive assessment of the cost effectiveness of grant funding for such vehicles in respect of all

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round emissions performance, including the number of ultra-fine particulates emitted and the quantity
of greenhouse gases, should be carried out. Economic analysis of the real value of incentives should
be properly balanced against that provided for CleanUp applications.

Lancashire County Council
It is agreed that the LEVP should be technology-neutral; rather eligibility for funding should be based
on the cost-effectiveness of the (potential) results. We agree with the statements made at (39) in the
consultation document, but these apply equally to buses as to other vehicle types.

The Hardstaff Groups
Yes the two grants could be replaced with another programme so long as the two current engine
technologies are recognised for their values. I.e. dual fuel vehicles give substantial CO2 gain but
lower air quality gain especially in urban operation. Dedicated gas engines have a smaller CO2 gain
but very high air quality gain across all operations.

Royal Society for the Protection of Birds
The Low Emission Vehicle Programme should be both technology and fuel neutral and award grants
based upon tail-pipe emissions of carbon dioxide.
The funding for a LEVP should be sufficient to ensure that adequate grants are available to purchase
those vehicles that result in the lowest carbon emissions. As a minimum, grants should be made
available for vehicles that emit less than 120g/km of CO2 (VED bands AAA and AA). Based upon
2003 figures, this would represent approximately 3% of car sales in the UK. The carbon emission
threshold value can be adjusted in light of actual and projected vehicle sales in order to ensure that the
grants are available for approximately 3% of car sales.

LP Gas Association
It would be logical for all NVTF, Powershift and CleanUp to be replaced by a Low Emission Vehicle
Programme. If categorisation was required, then this could be more reflective of the cycle of a
technology between research, demonstration and market support.

Z Motors Ltd
The PowerShift programme is geared towards incentives for customers to purchase vehicles. Zed
Motors intends to market electric vehicles through rental agreements which will not only make them
attractive to customers, especially public sector and business customers, but is also environmentally
sensitive as it includes recycling of the vehicles after a three year period. We therefore believe that the
PowerShift scheme or any replacement programme should be adapted to give incentives for rental as
well as purchase agreements, for example by providing an equivalent level of subsidy for the first
year's rent subject to long term agreement being signed.

NGVA and its members
Any new vehicle technology meeting low emission requirements should be eligible for a grant,
subject to the following: calculated impact in reducing emissions and proximity to market.
All vehicles should be assessed against a common baseline measure that includes GHG emissions,
NOx, SOx, PM10 and noise, a WTW analysis being most appropriate.
It is important to note that Low emissions technology requires a costly technology input, which
generates economic considerations It is felt that technology must continue to be supported either at
source to allow R&D to be recovered through sales or through a grant process.

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Vauxhall Motors
Vauxhall understands that in the future, the programmes need to be flexible enough to support the
changing developments in vehicle technology to meet environmental objectives. To do this there may
be a need to move to a technology- neutral Low Emission Vehicle Programme. Such a programme
would move beyond conventional technology and fuels (petrol and diesel) and encourages a shift to
cleaner vehicles but also a transition to alternative fuels.
Any change would need a clear transition period from the current scheme to ensure the continuation
of cleaner vehicles, supporting government policy on gaseous fuels until 2007. This would still allow
time to support the objective of the Powering Future Vehicles Strategy which asks for 10% of
vehicles to be below 100gms/km by 2012. This would also give the confidence to owners and
potential purchasers of technologies currently supported by Powershift to grow these areas and make
them ultimately sustainable without further funding.

CNG Service Ltd
Any programme should also take into account strategic considerations in relation to fuel diversity, the
Euro V and Euro VI standards will improve the emissions from conventional vehicles.

Both carbon or air quality emissions are important, so the programme should focus on both.
For carbon emissions, the Government should be encouraged to look at the areas where most good
can be done. How does the programme affect aviation for example, an area where vast quantities of
carbon are emitted.

Norwood Consulting Ltd
While the existing programmes have set standards and begun the process of change, they have not
generated any real awareness of the impact of transport on our environment. Later in this paper we
outline our findings on the retail motor dealer network and their ambivalence to any new technology
fuels or vehicles. Added to that, the clear and quite unambiguous financial benefits of "reduced duty"
road fuel gases are not reflected in the numbers of vehicles being converted, sold or developed.
It is known that the Treasury and the Inland Revenue are looking at vehicle benefits, tax implications
for company car users and related topics in an attempt at simplifying and clarifying the benefits of
cleaner fuels and vehicles. That is very welcome and could remove some of the barriers towards
creating what some believe should be the third fuel.
Welcome as these and other changes may be we believe that they are not going to introduce a "culture
change" in the way motorists buy and run their vehicles and their perception of impact these vehicles
may have on us all.
That "culture change" is at the heart of what we consider is required if a significant move towards
cleaner fuels and vehicles is to take place. Without that, the experiences of the last few years clearly
indicate that motorists in the UK are just not interested in cleaning up emissions. That is supported by
the fact that only 100000 (one third of one percent of vehicles) is a Bi fuel or low emission type.
Whatever the various grant and support schemes are called, the implications of the "environmental
impact" of vehicles must be addressed.
A Low Emission Vehicle Programme that unites and develops the existing schemes, and that can
focus on hot spots such as taxi's and company cars would simplify delivery and make it much more
effective. Such a programme requires funds. If it is intended that a LEV Programme acts as the
flagship title for restructuring the existing support schemes perhaps along the lines outlined in this
paper, and supported by an increase of funds suggested here, then that is a sound concept. The
message is more easily understood and applied to the whole range of emission reduction options.

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Within such a programme existing schemes can be tailored to meet specific needs. The suggested new
"environmental impact" vehicle excise duty charge could be used to fund the programme which would
then operate the various regional, urban or national schemes. These schemes would require to be
restructured along the lines outlined here and perhaps giving consideration to other earlier
submissions relating to fuel duty, grant options and emissions.

John Harwood
This will encourage the development of diverse transport but will dilute the development of practical
technology for the future. On the basis of worldwide usage, natural gas vehicles represent the most
practical low emission vehicles. Hydrogen and electric vehicles require further development before
they compete with natural gas vehicles. An interim technology would be natural gas fuelled fuel cell

DaimlerChrysler UK Ltd
Programmes need to be sustainable and for most business operators ECA's would give an option that
is not dependent on the levels of grant remaining. New technology funding could remain within the
grant system.

Lubrizol Ltd
CleanUp funds should continue to be targeted towards older vehicles in terms of improvement per £
spent. New technologies should be subsidised based on cost-effectiveness of the improvements they
bring. In this way the cleanup funds available will give the greatest improvement for the least
Programmes must be developed that identify and provide adequate funding to reduce emissions from
vehicles in highly populated areas in the least time. In addition, funding should also be made available
to ensure research continues to identify and develop new cleaner technologies.
PowerShift should be re-branded and focussed on reducing CO2 emissions. The infrastructure of the
current PowerShift scheme allows it to be dedicated to the passenger car or automotive market.
Commercial Vehicles, Goods Vehicles and Public Transport Vehicles are predominantly larger diesel
engine powered, and air quality rather than CO2 is the issue in this sector. Therefore CleanUp should
focus on Air Quality and not CO2.

Iveco Ltd
Low emission vehicle funding should be exactly that - based on certified tail pipe emission standards.
The fuel in the tank is of no importance, provided that it is safe to carry, is sufficiently available to
operate the vehicle and is included in the reference fuel standards in order that the engine/vehicle can
be certified. The rules for such incentivisation are included in the exhaust emission directives.

All vehicles should be assessed against a common baseline measure that includes GHG emissions,
Nox, Sox, PM10 and noise. Given the linkage of PM10 to early deaths, we believe that this should
receive a relatively high weighting. The weighting of CO2 will be particularly problematic, but we
favour a WTW analysis as being most appropriate.

First Group
A technology neutral Low Emission Vehicle Programme is the preferred solution.

Newport Transport
LEVP acceptable provided accurate and consistent measurement of in-service tail pipe emissions can
be established for all component parts of exhaust gasses.

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It may be worth exploring the possibility that an increase in the percentage of the cost that the grant
would cover would increase the take-up by improving the economic case. There should be scope for
this, with the size of the available grant being increased to £1m in 2004/05. Failing this, the Low
Emission Vehicle programme may prove to be no more successful than the CleanUp programme in
getting existing vehicles fitted with systems to reduce emissions.

The Confederation of Passenger Transport
See our response to question 9

MG Rover Group
We support the replacement of existing programmes by a single flexible Low Emission Vehicle
Programme aimed at promoting rapid customer acceptance of new vehicle technology while
providing limited palliative measures in problem areas and supporting rapid development and
introduction of new technology.

Cotswold Experience Tours
Sell the actual cars ready subsidised!! Or get an agent to do it for you. (e.g. all the public have to do is
ringing a number and you direct them to a salesroom which does it all for them. Have at least 8 of
these sales outlets spread regionally around the UK.

Volvo Trucks Ltd
As advocated earlier we recommend that future schemes should utilise enhanced capital allowances as
described earlier.

The existing CleanUp and PowerShift programs should be combined to base grant funding on a fuel
neutral, emissions-based grant system using the complete well-to-wheel analysis. This is the only way
to assess the total global and local air quality impacts of fuels and vehicles.

Response to Question 11
Whether the focus should be carbon or air quality emissions, or a combination of both.

London Bus Services Ltd
The TE programmes should focus on both air quality and climate change since transport is a major
contributor to both problems. Whilst DfT's strategies have focussed quite heavily on climate change,
air quality should not be ignored given that road transport accounts for 49% of UK NOx emissions -
much higher than for CO2 which accounts of 25% of all emissions. If the air quality objective for
nitrogen dioxide is to be met, considerable action needs to be taken to reduce emissions from the
transport sector and the TE programmes have a key role to play in achieving that objective.
There is however a case for shifting the balance between air quality and climate change for CleanUp
and PowerShift. CleanUp was set up specifically to clean up existing diesel vehicles through
conversion to cleaner fuels or fitting exhaust aftertreatment in order to improve air quality. The
programme has been extremely cost effective in delivering this objective, and the focus of the
CleanUp programme should remain the same going forward. Technologies that offer CO2 benefits
could be awarded a higher grant level, but this should not be used as a criteria for whether a
technology is approved.
As PowerShift focuses primarily on the OEM market, there is greater potential to deliver CO2 savings
through this programme. Vehicles approved on the PowerShift Register should achieve greater CO2

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emission savings than are required at present, but whilst meeting a certain threshold for air quality
emissions. Tailpipe CO2 emissions are however only part of the equation, and consideration should
be given to approving the vehicles on a "well to wheel" emissions basis as this would more accurately
reflect the true environmental impact of the vehicle.

All pollutants should be accounted for. We do not believe that these two objectives should be blurred
as they are clearly quite distinct. We are continually seeing examples of how these are being
inappropriately confused, and as a result we suspect hindering the success of the pertinent schemes.

Environmental Industries Commission
The overall focus of TransportEnergy should be on both air quality and climate change. However,
over the next three to five years, the focus of TransportEnergy programmes should be on air quality
For the market introduction phase the funding should favour air quality up until 2008 and thereafter
adapt over time to favour low carbon technologies. This split suits policy timeframes, with air quality
targets to be met in 2005 and 2010, whereas low carbon targets are set for 2012 and 2020
The emphasis of NVTF has been on low carbon technologies and this is considered appropriate.

Millbrook Proving Ground Ltd
Although it is true in general that transport can contribute towards meeting both carbon and air quality
targets any particular technology may have benefits in only one area. It is important that
improvements made in one area are not achieved at the detriment of the other. We would therefore
suggest that for any particular technology to be eligible for support that it achieves:
    Improved air quality and be carbon neutral
    Improved carbon and be air quality neutral
    Improvements in both air quality and carbon

Retail Motor Industry Federation
It is up to Defra/DfT to decide the priorities.
The Federation accepts that the UK Government has the unenviable task of setting environmental
objectives and of steering public perceptions and actions so as to achieve those objectives. The
problem has always been with environmental issues that of setting priorities. If you ask
environmentalists to identify the environmental issues which need to be tackled they can give you the
answer. If you ask the same people to prioritise those issues in the order of importance you get the
answer that they are all important and all need to be tacked now. It is also impossible to get them to
identify relative worth such as, where does each issue come on a scale of 1 - 10. However, unless and
until the     environmental objectives are identified and prioritised relative to one another in this way,
it is very difficult for DfT to adopt a rational basis for sponsoring Transport Energy Clean Vehicle
Grant Programmes.

Greater London Authority
The TransportEnergy programmes should take both air quality and climate changes into account.
Local air quality is currently estimated to cause 12,000 premature deaths each year in the UK and the
government is required to reduce air pollution to safer levels under national and EU law (objectives
we are currently predicted to fail to meet in 2010). Road transport is a significant source of local air

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pollution and is responsible for 64% and 53% of NOx and PM10 emissions respectively in London
We believe that climate change is also a vitally important issue, and the UK system should promote
the use of road transport with less climate change impact and CO2 emissions. Outside
TransportEnergy, VED, fuel duty and company car tax are now related to CO2 emissions, and the
Powering Future Vehicles Strategy, the Energy White Paper focus on ways to minimise CO2
emissions, and the Low Carbon Vehicle Partnership is working to reduce CO2 emissions from
An argument has been made that air quality has already been dealt with through the Euro emission
standards, but although these raise the requirements for new vehicles, the potential benefits are not as
large in real world driving conditions as expected and are still far away (as they are dependant on the
natural turnover of the fleet). It is essential that parallel action is taken to improve the dirtiest vehicles.
There are far fewer organisations or mechanisms aimed to reduce emissions of local air pollutants
from transport than CO2 emissions, therefore it is essential that TransportEnergy do not reduce their
focus on air quality. It is crucial that improving air quality through fuel, technology and fleet
management initiatives is, and continues to be, a fundamental TransportEnergy objective.

Scottish Water
Scottish Water's preferred option is a combination of both, without losing sight of the 'bigger picture'
e.g. electric vehicles dependency on carbon fuels remains if hybrid or charged from a power station.

Honda (UK)
Honda (UK) supports the SMMT viewpoint on this issue. Low carbon should be the primary focus.
Vehicles with low CO2 output and a combination of at least best legislative air quality requirements
(plus a potential percentage improvement) should be supported by the programme.

Energy Saving Trust
EST believes that it is essential that air quality issues remain a key consideration in Government
transport policy.

The Greenfuel Company Ltd
Has to be a combination of both. Global warming is the more topical problem but urban air quality is
where such programmes have far more chance of making a difference.
One major initiative that the Greenfuel Company is trying to push is to offset the CO2 of the fuel
itself. For example, Climate Care will initiate projects that reduce CO2 emissions at the rate of £6.50 a
tonne (as opposed to the estimated cost of £314,000 per tonne of PM10 particulates in London).
Therefore making LPG/Autogas completely carbon neutral would add about 1.5p per litre to the
forecourt cost. This would take into account CO2 emissions produced in the extraction, refining,
transport and tailpipe emissions when used as a fuel for the vehicle. This, of course, is the same offset
argument used to promote (rightly!) bio-fuels.
Whilst transport is responsible for 20-25% of the UK's CO2 emissions, it is guilty of producing a far
higher percentage of urban air pollution. Conventional internal combustion engines are quite efficient
at converting fossil fuel into useable energy. Improving the efficiency of other sectors of our economy
will reap more reward in reducing CO2 (this is in no way to diminish the responsibility in this area).
Since the advent of smokeless zones no sector can make more of a difference in air quality - by being
cleaned up.

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Foden Trucks
Any programme in place should be sufficiently flexible to recognise the benefits provided in both
carbon reduction and air quality/pollution, although some form of 'loading' should be applied to
carbon reduction as there are specifically agreed government and world targets to meet on an urgent
basis. Specific considerations should be Carbon (GHG's) and NOx; SOx; PM10's. The higher the
level benefits in the greater number of areas, then there should be a proportionately higher level of
support funding available. A 'best value for money' or 'best return on investment' approach should be
adopted. With due consideration to the achievability and availability.

Octel Exhaust System Ltd (trading as Adastra) and Octel Corp
We believe that in the short and medium term, the primary focus of incentive programmes and
mandates should be on air quality. Carbon emissions should be addressed through demand
management measures to reduce vehicle mileage and improve fuel economy.
As stated elsewhere, we propose that support should be based on the cost effectiveness in relation to
quantity of pollutant saved. (see also response to question 8)

Lancashire County Council
A combination of both, however in quantitative terms, reduction in CO2 emissions is likely to be best
achieved through improving the fuel efficiency and fuel sources for private cars, for which voluntary
agreements exist and appear to be working effectively. Therefore perhaps reduction in air quality
emissions needs to be focused on.

The Hardstaff Groups
A combination of both with grant support attributed to utilisation.

Royal Society for the Protection of Birds
The funding should also be banded based upon carbon emissions i.e. a vehicle emitting 100g/km of
CO2 should receive a higher grant than one emitting 120g/km. The bands can be varied depending on
market share of low carbon vehicles.

LP Gas Association
As outlined in the introduction we believe that in view of the other government initiatives on CO2, the
focus should be on air quality.

NGVA and its members
All vehicles should be assessed against a common baseline measure that includes both carbon - GHG
emissions, and air quality - NOx, SOx, PM10, a WTW analysis being most appropriate.
Wider considerations should also feature such as noise and fuel diversity.

Vauxhall Motors
A low emission policy would need clear objectives and criteria for funding, and definition of how the
funding would be distributed in order to focus on carbon or air quality. Vauxhall would support a joint
approach combining both CO2 and air quality as the principal drivers for grant funding in the future,
creating the correct environment to help the government meet their objectives in these areas. It would
also support local authorities in improving air quality within the urban environment. Fuels like LPG
meet both criteria in lowering CO2 (similar to diesel) and improve air quality (better than diesel).

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CNG Service Ltd
Focus should be carbon dioxide, air quality and fuel diversity. In that way, we have joined-up
Government. It is vital that carbon dioxide is considered on a well to wheel basis so that we do not
create more pollution that we save.

See our responses to question 10

Norwood Consulting Ltd
The recent dramatic increase in the volumes and marketing of diesel engines is not matched by any
real growth in the fitting of diesel catalysts and particle traps. It is true that diesel fuel offers about
twice as many miles per gallon as petrol, thereby extending the life of our fossil fuel reserves, but at
what price in health terms. Some very alarming findings are being announced.
That said, diesel produces relatively low Co2 emissions and is on a par with LPG and better than
petrol. However petrol/LPG engines are hugely better than diesel in relation to NOx and particulates.
Developing technology can solve both problems, and so our submission is that all vehicle emissions
and carbon impact should be considered. It should be possible to band these improvements within a
Low Emission Vehicle Programme or at least quantify the "environmental impact" of each.

John Harwood
As the main problem is global warming, then carbon and air quality emissions need to be considered

DaimlerChrysler UK Ltd
The focus should remain on both. The Low Carbon Vehicle Partnership is working on carbon
emissions and the introduction of some new technologies will help to reduce these by improving fuel
economy. Aid should be give to these technologies and again one way of ensuring that a clear policy
is adopted would be to apply ECA's to the additional cost of these improvements. By encouraging the
early adoption of at least the next higher European emission levels Government could continue to
reduce emissions from the newer element of the national fleet that covers the highest proportion of
mileage travelled.

Lubrizol Ltd
Carbon is related directly to fuel consumption, which should be addressed by vehicle purchase and
annual taxation. For example the widespread use of sport-utility vehicles should be discouraged by
these means. Fuel taxation is another method, but this hits all motorists, including those with efficient
vehicles. The focus of CleanUp should remain on air quality issues, this will naturally introduce other
fluids and technologies enabling greater fuel economy benefits and maintaining the life of
aftertreatment devices consequently reducing the unacceptable incidence of pollution related deaths
and illnesses.
There is a trend to treat cars and commercial vehicles as similar when discussing emission reduction,
in addition there is increasing debate on the importance of CO2 reduction vs Air Quality
Improvement. There should be clear segregation between cars and commercial vehicles, cars are
predominantly gasoline (with the exception of taxi's) whilst commercial vehicles are predominantly
diesel. CO2 is more relative to cars than commercial vehicles, Air Quality (i.e. TPM, NOx, HC) is
more relative to commercial vehicles and taxis than cars.
There are two dominant Transport Energy programmes - Powershift & CleanUp. It would be
relatively easy to differentiate the two programmes so that PowerShift is a vehicle for CO2 reduction,
and CleanUp is a vehicle for Air Quality improvements, thus servicing their relative markets.

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Iveco Ltd
Tail pipe exhaust emissions having an effect on air quality should be the focus of Government
incentive programmes. As far as low CO2 emissions are concerned, Government should proceed with
caution. Currently, there is not a means by which commercial vehicles can be evaluated for CO2
emissions although this is a programme for review by the LowCVP. Car manufacturers are party to a
voluntary agreement to reduce average CO2 emissions. Some technologies available to reduce CO2
emissions such as mild petrol/hybrid produce significant reductions in CO2 emissions but, in the
scheme of things, only allow more of the larger CO2 emitters (e.g. SUVs) to be sold. Funding for low
carbon vehicles should be restricted to a given volume or period of time in order to whet the appetite
of consumers. An alternative system used to evaluate benefit in kind for company cars uses the
philosophy of stick rather than carrot and relates the value of the benefit to the CO2 emission. Because
CO2 is only to be declared and not subject to a mandatory limit, as is the case for regulated pollutants,
perhaps car VED is a better tool to encourage lower CO2 and incentives to encourage reduced tail pipe
emissions of pollutants.

Biofuels Northern Ireland
All biofuels achieve carbon savings, to a greater or lesser degree, and cause less air pollution. Greater
attention should therefore be paid to the adoption of biofuels by public service vehicles in inner cities.
There are no other regional considerations.
The bulk of funding should be focussed on treating the disease, rather than toying with the symptoms.
Electric vehicles (battery storage) should be categorised as being zero emission, due to the fact that
they are using a waste product with no additional load on carbon emissions.

See our response to question 10

First Group
Both carbon and air quality issues should be addressed, but account must be taken of the targets set by
legislation e.g. Euro IV and Euro V.

Newport Transport
Combination of both.

We believe a focus on both carbon and air quality is important. Carbon for the finite resources and
global warming impact and air quality for the high number of people that are adversely affected by
poor air quality (that the UK should have the highest recorded incidence of asthma in the world is
surely related to our climate and transport conditions).

The focus should be low carbon, with the rider that any technology introduced should achieve at least
best legislative air quality requirement (plus potential a percentage improvement) and where
appropriate and quantifiable, forthcoming regulation.

The Confederation of Passenger Transport
The focus should be on both carbon and air quality emissions, although with a bias towards the latter.

Severn Wye Energy Agency
See our response to question 7

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MG Rover Group
Focus should be on low carbon while retaining the current or enhanced emissions performance.

Cotswold Experience Tours
Focus on carbon only because whilst humans may suffer from other pollutants, when measured
against the enormity of species extinction globally due to massive climate change if we do nothing...
then that needs to be focus. Once global warming emissions have reduced to a level manageable by
the carrying capacity of the Earth's carbon sinks on an ongoing basis then switch to saving individuals
and communities within a generic species. Until that time you must prevent whole species extinction
as much as you can as that is irreversible.

Volvo Trucks Ltd
Government should continue to encourage the purchase of new vehicles, which meet advanced
European exhaust emission standards using the concept of enhanced capital allowances.
The Low Carbon Vehicle Partnership is currently working on developing a similar scheme for the
purchase of new commercial vehicles, which employ features with proven fuel economy and therefore
lower global warming emissions. Due to the complexity of commercial vehicle configurations this is
the most practical way of advancing commercial vehicles with lower global warming emissions.

Police HQ, Dyfed & Powys
Providing a cleaner air policy can be attributed to cleaner carbon and air quality emissions, the carbon
emissions have been significantly reduced through the use of catalytic converters, the legislative
powers of monitoring CO2 emissions on vehicles undergoing MOT Testing etc.

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Response to Question 12
Whether only the lowest emission vehicles in absolute terms should receive grants, or the lowest
emission vehicles in each class.

London Bus Services Ltd
Grants should be awarded to the vehicles producing the lowest emission vehicles in each class.

Tariffs should be purely on a pollutant level and no concession should be specially allocated because
the vehicle is the "best" in its class.

Environmental Industries Commission
The definition of lowest emission vehicles must take into account the differences between classes of
vehicles and the potential savings than can be gained. For CleanUp it is the relative gains that are
most significant, particularly given the long life and high mileage of vehicles. As an example, an
unretrofitted Euro 2 double-decker city bus might emit more than 14,000 mg/km NOx and travel
60,000 kmpa, giving rise to a NOx burden of 950 kgpa. Fitting an EGR system to this city bus could
cut NOx emissions by just over 450 kgpa and an SCR system might save over 800 kgpa of NOx. For
the EGR technology these savings are equivalent to taking over 180 Euro 2 petrol or 100 Euro 2
diesel cars off the road and for SCR the savings are equivalent to taking 340 petrol cars or 200 diesels
off the road.

Millbrook Proving Ground Ltd
We would suggest that grants are available for the best in class performers where the class is defined
by the capabilities of the vehicle i.e. passenger carry capacity or payload.

Retail Motor Industry Federation
It makes sense to consider the programme vehicles on the basis of total contribution to emissions
reduction. For example it does not really matter in terms of environmental benefit whether a
programme focuses on goods vehicles or taxis or rivate cars. It is how much nitrogen dioxide or
particulates the programme avoids that matters not the vehicle emitting it. If the greatest
environmental cost benefit is to be obtained by cleaning up lorries or buses because they do a higher
mileage and so emit more nitrogen dioxide or articulates per annum, rather than taxis or cars then so
be it.

Greater London Authority
The lowest emission vehicles in each class should receive a grant, in order to reduce emissions from
all parts of the fleet, including HGVs, buses, taxis and cars. However, the definition of the classes
should be reconsidered, with different existing classes being combined where they are both suitable
for the same use, e.g. SUVs and family cars.

Scottish Water
Scottish Water believes grants should be applied according to the class of vehicle - fleets operate
vehicles as tools for particular purposes and could find significant numbers of vehicles excluded if
applied on an 'absolute basis.

Honda (UK)
Any EST programme as previously stated should be in existence to assist Government in reducing
CO2 and air pollution figures, however, it is also important to reduce the CO2 levels across the entire
fleet. If PowerShift only fund vehicles with the lowest CO2 and best air quality vehicles, this would

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mean that only smaller vehicles benefited from the programme. It is essential that all differing classes
of vehicle are targeted to ensure a greater proportion of CO2 and air quality reduction.

Energy Saving Trust
EST proposes to introduce emissions based grants, rewarding the cleanest equipment. Grants and
other activities should focus on the most polluting vehicles, and the most polluting areas.

The Greenfuel Company Ltd
Lowest in class to affect change across a broader spectrum.

Foden Trucks
The balance needs to be struck between lowest absolute emissions and availability/achievability.
There is little gain in grant supporting the lowest emission vehicles in absolute terms, if such vehicles
are not readily available, cannot practically achieve the lowest emissions for operational reasons or
limitations and if these vehicles are not accepted in the market place.

Octel Exhaust System Ltd (trading as Adastra) and Octel Corp
We believe that approved technology should be afforded incentives on its merits in terms of all round
cost effectiveness, and the ability of that grant to deliver environmental benefits. This approach
ensures that, particularly in urban environments, the grant money delivers the maximum
environmental improvement.

Lancashire County Council
The lowest emission vehicles in each class. Otherwise larger vehicles are likely to be ignored and it is
these vehicles that have been shown to contribute most to the pollution that necessitates the
declaration of Air Quality Management Areas.

The Hardstaff Groups
No, neither will stimulate growth. Such a move could be considered when the supply market is mature
and sustainable. In the interim there should be a graduated grant system for an arithmetical value
calculated on the emission benefit of the engine, i.e. calculate the benefit of all tail pipe emissions and
not just regulated ones. This would then allow a vehicle to gain recognition and not be precluded just
because it did not meet one emission criteria.

Royal Society for the Protection of Birds
The LEVP should not provide grants to the lowest emission vehicles in each class. If this was not the
case, there is real possibility that a consumer purchasing a less efficient vehicle (but in a higher class
e.g. luxury saloon) could receive grants whereas a consumer purchasing a more efficient vehicle (in a
lower class e.g. super mini) would not. This does not make environmental sense. The purpose of the
grant funds should be to encourage consumers to purchase smaller, more efficient vehicles.

LP Gas Association
Support should be based on the greatest improvement of emissions in each class.

NGVA and its members
Broadly speaking, larger vehicles may emit up to fifty times more pollutants than cars so arguably
should receive more grant support, thereby creating a more even balance in the level of emission
savings per pound of grant spend.

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Caution should be applied if favouring support of differing vehicle classes. For example BSOG acts
as a particular disincentive to the adoption of cleaner vehicles within the bus sector and Government
has been unable to address this.

Vauxhall Motors
Vauxhall believes that it would be very difficult to support a scheme based only the lowest emission
vehicles in absolute terms. Purchasers buy vehicles for a variety of reasons or tasks and therefore need
a wide choice. Nominating only specific neutral-technology vehicles based on absolute limits will
restrict buyer choice. If the nominated vehicles were not chosen, the scheme would not be effective;
any support scheme must maintain customer choice in order for it to succeed.

CNG Service Ltd
Grants should go to vehicles that meet overall programme objectives

See our response to question 10

Norwood Consulting Ltd
With a market of 32million vehicles on our roads, many with 15 years of life left, whatever
programme is introduced must allow that significant parts of the UK fleet can only be improved to a
lower emission level using earlier mentioned methods. The lowest emission vehicles such as the
Nissan Micra 1000cc or others that are in the lowest categories do not enjoy a significant market
share. Market forces, however unpalatable in terms of emissions will always prevail unless draconian
penalties are introduced possibly with a severe impact on the car manufacturers. Best in class or best
per engine size or fuel might address this. For the foreseeable future our contention is that any
significant improvement in Euro 4 or earlier categories should be supported. Only time and changing
attitudes will move vehicle buyers towards smaller, clean vehicles. The "culture change" that this
entails is at the heart of our proposals.
Newer vehicles, new technology and changes in fuels will continually increase our options relative to
emissions and reduced carbon consumption.
We support the purchase of new vehicles with a variety of emission reduction systems or fuels. Other
schemes assist with the conversion of vehicles up to 6 years old. These schemes may require
updating, but the main problem is that not enough motorists think about the environmental impact of
their vehicles. That must change if fossil fuel dependence is to be reduced and Government targets are
to be met.

John Harwood
If by "lowest emission vehicles in absolute terms", well to wheel emissions are being considered then
these vehicles should receive the grant.

DaimlerChrysler UK Ltd
No, again, if a vehicle conforms to the required European standard then it should qualify for the
    incentive that is available.

Lubrizol Ltd
There should be no grant available for vehicles cleaner than the current Euro standard. The grant
amount should increase relative to the effective reductions in emission from the standard vehicle.
Commercial Vehicles: If an operator were to fit exhaust aftertreatment to a Euro2 vehicle the grant
should be greater than if he were fitting aftertreatment to Euro3 vehicle.

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If an operator were to re-power a vehicle then they should be encouraged to exchange a Euro1 engine
for a Euro2 or be given even more encouragement to fit a Euro3 engine.
Cars: Use absolute terms. People buy thirsty SUV's and high performance cars as status symbols, not
because they need them for a particular application.

Iveco Ltd
Incentive grants should only be available based on certified emission standards. The amount of grant
should reflect the incremental vehicle price and the contribution made to the urban air quality.
The important point is to improve urban air quality without penalising the urban economy and so
incentives applicable to differing vehicle applications may well result in differing emission standards
for different vehicle types due to technology availability, or the lack of it.

We do not favour differing levels of grant within differing vehicle classes. However, it is a pre-
requisite that all vehicles are compared on equal terms. The BSOG acts as a particular disincentive to
the adoption of cleaner vehicles within the bus sector and Government has been unable to address
Broadly speaking, larger vehicles that may emit up to fifty times more pollutants than cars should
receive fifty times more grant support, thereby creating a more even balance in the level of emission
savings per pound of grant spend.

First Group
The emissions targets should be set in order to facilitate making grants to the lowest emission vehicles
in each class, whilst ensuring that the credibility of the programme is maintained by setting these
targets at an attainable but challenging level.

Newport Transport
Assuming buses are a class (!) - lowest in each class.

We believe that the lowest emission vehicles in absolute terms rather than by class should receive
grants. This sends out a much clearer signal of the government's objectives and intent and more
closely links good behaviour to rewards. If the recent alarming figures for global C02 emissions (up
from 1.5 parts per million to 2ppm) are a trend rather than a blip then we are simply running out of
time and must react with renewed vigour.

Low emission vehicles need to be accessible to the majority of the car drivers, some specialist
vehicles, with a limited or restricted market (type or price driven) cannot always fulfil this objective.
Therefore the application of some form of constraint on class or price should be considered with a
preference for the programme to favour higher sale derivatives in absolute terms.

MG Rover Group
Grants should be available for vehicles with 'lowest in class' emissions of key exhaust gas constituents
(NOx, particulates and CO2).

Cotswold Experience Tours
Only the lowest in absolute terms - no question! Surprised you ask that question at all!!

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Volvo Trucks Ltd
Incentives based on meeting known European exhaust emission standards are the only practical way
forward for commercial vehicles.

Police HQ, Dyfed & Powys
The use of electric powered vehicles are more practical in the urban conurbation, whilst hydrogen is
being developed in Europe is a few years away. We suggest the best way forward to encourage the
use of alternative fuels, is to do rationally with due consideration to the availability of alternative fuel

Response to Question 13
Any other changes, including other ways in which the Government may achieve its environmental

Low Carbon Vehicle Partnership
Given the scale of the challenge in moving to a low carbon vehicle fleet, LowCVP believes that
additional resources and stronger policy signals are urgently needed to facilitate the market
transformation that the programmes are designed to encourage. Possible measures could include:
    Tax incentives to promote purchase of low carbon vehicles
    Larger fuel tax differentials to stimulate supply and demand for clean fuels
    Campaigns to inform the market of the benefits of low carbon vehicles and to stimulate demand
    Support for the introduction of low emission zone or congestion charging schemes that discount
       low carbon vehicles would provide important secondary incentives to encourage purchase of
       low carbon vehicles.
Government must start to develop a more attractive overall package of support to stimulate the market
for low carbon vehicles to which grants can make a contribution.
Programmes to support the introduction of energy efficient buses must address these barriers to
progress. Grants provide part of the solution but tax incentives such as ECAs and amendments to the
BSOG may be as, or more, effective.
In the short-term, the most effective way to reduce bus carbon emissions is likely to be through
increased use of biodiesel or other diesel substitute fuels. Fleets bunker their fuels for convenience
and security of supply and this makes supply of specialist low carbon fuels simple and effective. Tax
incentives to encourage the switch to these fuels should be increased.
Development of new low carbon bus technologies has been seriously setback by delays to the
introduction of the Low Carbon Bus Programme as a result of the failure to secure State Aid approval
for the scheme from the European Commission. We hope that it will be possible to launch a revised
programme very shortly and urge the Department to make resolving this issue a priority. LowCVP
would be pleased to assist the DfT to resolve these issues quickly.

London Bus Services Ltd
Continue to support the RPC scheme but include NOx alongside PM10 as one of the criteria for
technology approval. Vehicles which achieve both PM10 and NOx reduction should receive a greater
tax rebate.
Use the CleanUp register as the basis for approving technologies that would comply with required
LEZ standards, similar to how the PowerShift Register is used for identifying vehicles that are eligible
for a 100% discount from the London Congestion Charge.

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The EST should extend their role to cover accreditation of other fuels, additives and devices not
covered by either the PowerShift or CleanUp registers that have the potential to improve fuel
economy and reduce emissions.
Programmes do not currently take into account the environmental impact of noise yet it is clear that
this is increasingly becoming a major cause for concern. LBSL would welcome any opportunity to
encourage quieter vehicles or noise reduction technologies through the TE programmes.

Further automation of the claims process, which should be based upon vehicle order date, with a
clearly defined qualification criteria - the simpler the process the better.
The fleet sector has responded to the CO2 BIK taxation system and many fleets are switching to diesel
fuelled vehicles which fulfils the targets on CO2, but is extremely poor for local air quality issues.
The driving force for the change has been the fiscal motivation of company car drivers, not
Continued Government support would link with European objectives on air quality and should feature
in future consideration for urban emission controls.
There is a danger that given the rapid improvement in diesel technology and the potential to further
improve this area, then gas powered vehicles will have a limited attraction.
It should be considered that if Road Fuel Gases duty is increased at all, this should be linked to the
TransportEnergy PowerShift system. In other words if duty increases the fuel cost, the increase to the
fleet user should be counterbalanced by increasing the Band III - IV PowerShift banding levels, in
turn removing grants on bands I - II. The benefit of this is to maintain the advantage for the cleanest
vehicles while discouraging those that do not provide any environmental improvements.
Regulation should be introduced if possible, however fiscal changes would help this situation. As
previously mentioned a small Duty increase linked with increased PowerShift grants for band III/IV
vehicles would make the case for poor quality vehicles less attractive while strengthening the case for
the high quality, environmentally beneficial, vehicles.
The reduction funding, via the PowerShift Programme, for converting diesel vans to alternative fuel
systems would also inhibit the enthusiasm for converting diesel vehicles. Although certain
manufacturers are now introducing larger petrol cars that are more suitable for conversion, converted
vehicles are initially likely to be treated cautiously in the used market.

Environmental Industries Commission
Taxation: The EIC recommends the Government revisit its vehicle taxation policy. To achieve air
quality improvements, the most effective instrument available to Government is taxation based on
Setting different benefits for the best available technology: The Powering Future Vehicles Strategy
includes a target for the UK of 10% of vehicles having CO2 emissions less than 100 g/km by 2012.
The EIC supports the idea of manufacturers supplying the most advanced technologies, like fuel cell
vehicles, receiving credits against the sale of higher CO2 emitting vehicles. This approach copies that
of the Californian Zero Emission Vehicle mandate, where a true ZEV is classified as equivalent to
five Partial-Zero Emission Vehicles (PZEVs). This approach would slightly relax the overall target
but favour the early introduction of the most advanced technologies.
Advice: The EST has advised the environmental industries sector that it wishes to switch from being a
grant administrator to an organisation offering consumers impartial advice, thereby fulfilling the role
it performs in supporting energy efficiency and utilising its network of local offices to support
TransportEnergy objectives. The EIC has long lobbied EST to take on a leadership role and offer
advice at the Boardrooms of companies operating or contracting in transport-based services. The EST

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is uniquely placed to offer impartial and action-orientated advice on both energy efficiency and
environmental protection and can make partnership arrangements, as Carbon Trust does, to help
stakeholders manage down their emissions. However, advice to vehicle operators requires a high
level of technical expertise and practical experience to be credible and this would appear to favour the
cost-effective use of a centralised resource rather than the use of local offices. In addition, the more
marketing orientated advice traditionally associated with the EST's Energy Efficiency programme
would only be applicable to commercial vehicle operators if there were grants or other financial
incentives in place for the sector to access.
Early Introduction of Euro Standard: The EIC supports the use of vehicle taxation to promote the
early uptake of vehicles meeting the latest Euro standards but not the use of grant funding as currently
The early introduction of Euro 5 buses and trucks could be incentivised by differential vehicle
taxation. In contrast, grant funding is an inappropriate policy instrument to use to support the early
introduction of Euro standards. This is because grant funding is finite and could be too easily used up
if one or more vehicle manufacturers were to adopt a higher Euro standard earlier than regulations
Re-regulation of bus services in the main urban areas: There are only a few areas where the
Government could directly step in (over local Government) to secure regulate. The Government has
shown a willingness to do this for rail services and should also consider the option of re-regulating
bus services in the main urban and metropolitan areas with air quality problems. Experience from
London and elsewhere in Europe clearly shows that regulated bus services are moving toward low
emission vehicles, whether by retrofit, alternative fuels and new vehicle purchase, whereas
unregulated bus services have a poor environmental performance profile.
Expansion of the scope of proposed air quality programme to cover non-road vehicles: As pollutant
inventories from the transport sector have reduced, the contribution from other sources has
increasingly been highlighted. EIC members are actively supporting the newly formed Partnership
for Reducing Emissions from Construction Sites (PRECIS), which is investigating policy options to
cut exhaust emissions from Non-Road Mobile Machinery (NRMM).

Millbrook Proving Ground Ltd
The commitment last year of all funds that should have been available through the NVTF this
financial year has created a funding vacuum. We would suggest that in future funds are allocated to
calls for submissions held every 6 months.
The current programmes have generated benefits through the application of a variety of technologies
to road transport. These technologies may have wider application and we would suggest that in future
programmes look to support use in areas other than road transport.

Retail Motor Industry Federation
For the more highly polluted inner city areas has atmospheric scrubbing been considered?

Greater London Authority
Other ways in which the Government which may help achieve their environmental objectives include
the following.
    Larger tax differentials
    An extended and expanded RPC system
    A better accreditation system
    Promoting cleaner fuelled vehicles

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    LEZ compliance marked on TransportEnergy register
Larger Tax Differentials: Larger tax differentials (especially VED) for low/high emission vehicles
and fuels, through HM Treasury, would give a clearer signal to the public on the importance of
emissions from road transport and would be an easier system to operate. Such a system has the
potential benefit of being cost neutral, as the tax on the more polluting vehicles could compensate for
the lower tax on the cleaner vehicles.
TransportEnergy and DfT should present a clear business case to HM Treasury on all incentives for
cleaner fuelled vehicles.
An extended and expanded RPC system: The Reduced Pollution Certificate system should be
extended, to continue to help incentivise retrofitting of emissions abatement equipment on long life
heavy vehicles. It should also be expanded to include NOx abatement.
Accreditation: TransportEnergy should increase its accreditation role. Its nature as an impartial,
government funded organisation makes it ideal for providing impartial and objective information on
all cleaner fuelled road transport options.
Currently the accreditation system is limited to certain abatement equipment and alternative fuel
conversions. This should be expanded to include other abatement equipment devices, fuels and fuel
additives. These areas are in desperate need of an impartial adjudicator, as so many of the devices and
additives have negligible positive benefits, and prevent their users from finding more reliable and
emission reducing options.
The accreditation of cleaner transport options should continue regardless of the future of the grant
programmes, as a way of providing information on which technologies and fuels are safe, reliable and
durable, and which meet strict emissions criteria.
A more holistic approach to promoting cleaner fuelled vehicles: TransportEnergy are in the ideal
situation to promote cleaner vehicle options to the UK. They are impartial, expert and funded.
However, they must promote the overall business case for cleaner fuelled vehicles, and provide the
public (commercial and individual) with the information they require.
For example, we have previously worked with TransportEnergy to produce a series of Guides for
Fleet Operators with impartial information on the cleaner fuelled vehicles options. These were
developed following requests from fleet operators (it was always the first question asked at any fleet
conference). We were keen to update these following the changes in the tax regime and grant levels,
but TransportEnergy do not consider this a priority.
No market will ever be sustainable without grants if the promotion revolves around the main selling
point being those grants.
LEZ compliance marked on TransportEnergy register: We would like to see the TransportEnergy
register include a list of retrofit devices that would enable compliance with any LEZs, similar to the
current system which indicates which vehicles get a discount from the London Congestion Charging
Scheme. We would be happy to discuss this in more detail with TransportEnergy.

Scottish Water
Scottish Water considers that other ways of continuing to remove barriers should be pursued. The
barriers may be small sometimes e.g. some car drivers will not move to LPG as they go on holiday to
Europe and cannot take their cars through the Channel Tunnel. Good work such as increasing the
number of outlets for LPG should also be commended.
Scottish Water believes that long term commitment to concessions on tax is fundamental to achieving
the environmental objectives.

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Honda (UK)
As previously stated any programme set up needs to ensure that it clearly delivers the results needed
to satisfy targets set by the Government.
It is commercial reality, that if a grant or even a particular technology is seen as a hindrance by a sales
person within a dealership, they may well choose to divert the consumer to a different model.
Syndicated research has shown that due to the emergence of the internet, consumers are now likely to
do their research on purchasing a vehicle on-line. Whereas before customers on average made 4.5
visits to dealers to choose and ultimately purchase their new vehicle, this figure now stands at 1.8 on
average. With retailers operating in this type of climate it is of great importance that any grant system
is clear, easy to understand and easy to apply for.
Honda (UK) are committed to offering class leading vehicles with high fuel economy, low CO2
output and air pollutants to existing and future customers. This new technology will in turn assist the
Government in achieving targets set out in the Powering Future Vehicles strategy. To ensure that the
consumer mindset moves towards a more environmentally friendly thought process it is imperative
that programmes are not seen in isolation and any existing, future programme or strategy work in

The Greenfuel Company Ltd
Regulatory standards should be made uniform across fuels, as in USA and Japan. In other words the
UK should push the EU to make Euro V a transparent standard whereupon all vehicles attaining this
standard are achieving the same emission levels. Many people, including key fleet buyers, mistakenly
believe that Euro IV diesel is of the same standard as Euro IV petrol, or even Band 4 which is used as
the London Congestion Charge exemption level. A cynic might argue that this has been deliberate.
Company car tax should be made simpler, making incentives and disincentives easier to understand
and consequently more effective. If fuel is to be taxed upon environmental merit (Thursday, 28
October 2004Thursday, 28 October 2004the seemingly mythical 'Alternative Fuels Framework') so
should BIK tax. If BIK is to be solely based on CO2 it should be on a 'well to wheel' rather than a
tailpipe basis, which is entirely meaningless in a global warming context.
Other legislation that is prejudicial to alternative fuels should be dismantled. Examples include the
Fuel Tax Rebate for buses which renders the 'Alternative Fuel Framework' redundant and taxi
licensing requirements to carry a spare wheel which generally precludes use of LPG or CNG.
The Bio-fuels industry should be strongly supported by legislated blend targets for both diesel and
petrol as technology and supply allows. An initial target might be for all diesel sold in UK to be 1%
bio/99% mineral by 2005, rising to 5% bio by 2010. Greater efforts should be made to conduct similar
blending with petrol. This would enable farmers to plan with market stability and pricing guaranteed.
Transport Energy literature should be rewritten to reflect that Hybrid technology is not exclusively for
use with petrol engines.
Much more active use should be made of both technology and lessons from abroad. Examples include
Toyota's Probox CNG Hybrid, perfect technology for future Black Cabs and Hong Kong's recent
decision to convert all taxis and buses to LPG.

Foden Trucks
Reduced or exemption from excise duty for low carbon/low emission 'clean' vehicles.
Specific publication of and greater public awareness of the carbon reduction; pollution reduction and
air quality targets which the government has agreed or established, to meet international, national and
local targets and objectives.

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Pay particular attention to the establishment of an alternate fuel supply infrastructure with convenient
and continuous availability to the motoring public and the road haulage industry.
Only 3 new sites have been opened this year. Amendments to the grant aid structure to incentivise the
rapid development of a network should be considered e.g. In Germany a target of installing 1000
CNG filling stations being set by the Gas companies due to the German Government fixing CNG fuel
duty at the EU minimum until 2020. With approximately 20 to 30 kms between NG filling stations
across Germany, the use of NG cars, trucks and buses is now commonplace.
The current investigation into and development of electronic vehicle tagging and road use charging by
the Government should take into consideration the need to provide a financial benefit for alternate
fuel vehicles, including Natural Gas vehicles, so that in the event that this form of 'taxation'
supercedes current fuel duty and VED, then NGV's will still receive equivalent benefit.

Octel Exhaust System Ltd (trading as Adastra) and Octel Corp
(a) Taxation: We believe that taxation provides the most effective means of reducing carbon
emissions. Specifically, higher fuel taxes will tend to reduce vehicle mileage, promote more
economical driver behaviour and encourage sales of more economical vehicles.
It has already been seen that graduated vehicle excise duty and taxation on company cars encourages
take up of lower emission cars. This could be further extended by increasing the differentials to
penalise the highest emission cars.
Company car taxation could also be modified to be calculated on a combination of CO2 and PM. The
hard work of building an emissions-led process has been done, and the work to calculate a new "%"
ratio for each vehicle, on this basis, would not be onerous. Again, this would result in penalties to
those vehicles with the highest PM emissions.
Higher fuel costs often attract complaint from rural road users. Whilst air quality is primarily an
urban issue, greenhouse gas emissions are the result of all road use and all road users should be
responsible for reducing emissions.
(b) Off-road and non-mobile machinery: At present there are limited emission controls on
construction plant, agricultural equipment, generators, and so on. These should be brought within the
scope of emission controls and within any grant programmes.
(c) Mandates: Uptake of emissions abatement technology would be much quicker if legislation
mandating its use were to be introduced in the near future. This approach could make a real
difference to air quality in cities. The alternative is to spend possibly hundreds of millions of pounds
on incentive schemes.

Lancashire County Council
The amount of funding available should be a proportion of the additional costs above those of a
traditionally-powered/fuelled vehicle. It is considered that this proportion needs to high enough to
enable projects to proceed. This will only occur when the purchasing organisation sees a net benefit in
purchasing an alternatively powered vehicle, once additional costs and benefits, and the risks arising,
are taken into account. In the case of the CIVITAS project in which LCC is involved, the operator is
only likely to proceed once the vast majority of additional costs are paid for from external sources
(this will include any infrastructure required) due to the perceived unpredictability of the benefits that
may accrue to him from an untried vehicle, offset by the additional costs of operation that may apply.
So far 35% of the funding has been identified but there is a limited window of opportunity available
to identify the extra funding and allow the project to proceed. Investment is needed now to pump-
prime vehicles that should be self-financing in production.

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The Hardstaff Groups
The Government, through the EST (and associated environmental and commercial programmes
through DfT, DTI and FTA) to facilitate the forming of a group of stakeholders with the view to
create a demonstration programme to bring about more committed interest from the industry.

Royal Society for the Protection of Birds
In striking the balance between simply getting low carbon vehicles on the road, and effecting market
transformation, significant long-term benefit will obviously be greater if markets are permanently
Clearly, in order to achieve any of its objectives effectively the grant programme must create
confidence among potential users that funding will be available in sufficient quantities, in a timely
manner, to meet demand.

LP Gas Association
We believe that when an application for grant funding is received, whether NVTF or other, the whole
proposal to the point of sustainability in the market should be considered and agreed with the provider
at the outset. In this way clear parameters are set for the level of grants and exit plan for EST
involvement. The same discussions and exit plan need to be developed with industries in receipt of
existing grants so that an exit plan for those technologies / fuels can be determined.
Such a basis would require a commitment beyond a twelve month period and this market place
requirement will need to be addressed and reflected in terms of longer term commitments by the DfT
to the EST programmes.

NGVA and its members
The Government needs to clarify exactly what its targets/objectives are for the natural gas market e.g.
Aim for the market to be sustainable within a certain timeframe, agree a strategy that sets out a target
% of market penetration by a target date, maintain long term lower fuel duty on natural gas until the
market share strategy for natural gas is achieved, focus on air quality in urban areas, low or zero rated
excise duty.
Should the Government envisage limited funding availability for the grant aiding of vehicle purchase,
then strong consideration should be given to a New Technology Vehicle Introduction Fund to support
the funding for the first sizeable quotient of a new vehicle onto the road to support its market
development, to run in tandem with the development of low emission vehicles under the auspices of
the New Technology Fund.
There is also a significant imbalance in support of the development of the NGV refuelling
infrastructure e.g. only 3 new sites were opened this year. Amendments to the grant aid structure to
incentivise the rapid development of a network should be considered i.e. the German model. In
Germany, a collaboration between the vehicle manufacturers, Government and the German gas
industry to develop NGVs has lead to a target of installing 1000 CNG filling stations being set by the
Gas companies due to the German Government fixing CNG fuel duty at the EU minimum until 2020.
There are now around 15 OEM CNG cars that can be bought in Germany. This programme can be
expected to allow German cars to produce the lowest level of carbon dioxide in Europe.

Vauxhall Motors
Vauxhall would support fundamental changes to integrate the fiscal incentives, which could be used
to help Government meet their objectives. As Powershift and Cleanup have only limited funds and the
overall budget is not likely to increase, other opportunities need to be explored. It is important that
any change is transitional and is part of an overall government strategy. Cleaner technologies like
LPG may benefit from having the incentives in the form of reduced VED and incentives within the
company car tax system. However, this would only benefit fleet drivers. For retail customers to

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benefit, a move towards credits through direct taxation may be possible. One suggestion is to reduce
or remove VAT payments on retail purchases of alternative fuel technologies.
There has been large investments in vehicle development, production and infrastructure, and it is
important to protect this as well as future investment. If support is removed too quickly, the market
would yet again be undermined and we will again see customer interest severely damaged, hampering
future developments and further investment in this field.

CNG Service Ltd
As above, long term lower fuel duty on natural gas until a certain market share for natural gas is
achieved. Given the strategic imperative to diversify from 100% reliance on oil, the UK Government
must take some action.

A common theme to our comments is that the system of regulation of buses in Greater London makes
it far easier and cheaper for public authorities to insist on higher standards, and the limited amount of
public money is used in a far more cost effective way. In theory Quality Contracts can be imposed on
the bus industry now, but the system is unworkable and no Quality Contracts have been introduced
since 2000. Few outside central Government believe that the changes suggested by the Government
will work any better. Therefore to gain maximum value for money from their funds, EST should
lobby Government to allow areas outside Greater London to introduce franchising.
Various types of electric drive vehicles emit no pollution at street level and are very popular with
passengers (electric tram, train, trolleybuses, hybrids, etc). It is clear that using renewable energy
gives the possibility of being carbon neutral and low emission overall. However there seems little
incentive to purchase renewable energy. For instance Fuel Cell buses will have no overall benefit if
fossil fuel generated hydrogen is used. The Transport Energy programmes should ensure that
whatever electricity is used, is renewable.

Norwood Consulting Ltd
It is all very well offering suggestions that extend, simplify or improve the existing support
mechanisms, but unless there is a dramatic change in the buying and use habits of UK motorists, none
of this will have any impact.
We believe that future programmes should take advantage of past experiences and use them as a start
point for a new appraisal of the market. The changes that have taken place throughout the
"development" phase over the last few years have generated some very unexpected and fundamentally
significant reactions to "gas vehicles", and to ignore them is to put any future progress on clean fuel
options at risk.
To illustrate the extent of the problem we include our findings from a recent initiative.
We have developed a service network in Scotland for Millbrook Proving Ground. Their Vauxhall
specific equipment is now available to a wide range of after market vehicles there. The training and
certification of these installers is seen as a support service for the Dealer Network and we carried out a
survey throughout Scotland to try to assess the market.
We have already made the clear point that the "delivery mechanism" for LPG and probably CNG as a
vehicle fuel has failed to deliver a sustainable market. More importantly, our researches have
established that the traditional motor trade seems unable or unwilling to deliver LPG as a realistic
third fuel option.
The results are listed below as they highlight clearly why we propose a radical re-think on the whole
clean fuel and vehicle issue.

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    Most car dealers distrust LPG/gas vehicles and do not promote them. (verified by direct contact)
       Mercedes Sprinter LPG van developed for London Congestion Charges programme failed to
       sell acceptable numbers. (Mercedes LPG sales UK.) LDV bi-fuel vans only built in limited
       numbers and a head office LPG manager was very down-beat over market for their range.
       Poor take-up.
    The traditional motor trade seems to dislike the gas vehicle industry and adheres to the out-dated
       view that LPG vehicles just do not work and are a source of trouble. Few have any awareness
       of LPG and modern systems.(verified by tele-marketing and direct contact)
    The high turnover of motor mechanics in most retail outlets inhibits training and expenditure on
       non-core activities such as gas vehicles. (anecdotal from direct contact)
    Very few retailers, even those marketing well-established bi-fuel makes (such as
       Rover/Vauxhall/Proton/Volvo/Ford), know anything about gas vehicles and see it as a
       nuisance.(Verified by visit, questionnaires and direct contact with dealer principles)
    The only successful bi-fuel vehicle marketing programme, (Vauxhall 1998/9) had a huge impact
       several years before the rest of the vehicle service industry as a whole was technically able to
       deliver the promise. (Based on reported progressive fall-off of volumes following end of LPG
       Vauxhall campaign and subsequent sluggish Bi fuel vehicle demand.)
    Few major motor manufacturers Dealer Networks offer an LPG vehicle and there are virtually
       none advertised in any UK vehicle marketing tabloid papers and there are virtually none
       available through the closed sale systems for used ex-works vehicles.
    No one is buying LPG new vehicles simply because no one is selling them.

John Harwood
As mentioned a long-term low fuel duty for natural gas as per Germany would be helpful.
Currently it is not economic to inject cleaned up biogas into the UK gas grid even though the gas is
compatible with the natural gas in the grid. The reason for this is that under current legislation it
becomes "gas of a kind" when injected into the grid and loses all the financial benefits of being gas
from a renewable source. Biogas can make a major contribution to providing a strategically secure
transport fuel immune from the volatility of oil based vehicle fuels. It would therefore make sense for
the gas to be moved economically around the country by pipeline. The Government needs to review
this situation.

DaimlerChrysler UK Ltd
The responses in this paper have highlighted the potential that Enhanced Capital Allowances could
bring. It is hoped that Government can be sufficiently forward thinking to appreciate that this could
help to resolve the difficult issue of Grant Budgets either being over spent and exhausted before the
end of the financial year or being under spent and as a result reduced in future years. It could give the
transport industry the confidence that it needs to take full advantage of the different technologies
available, that best suit the individual sectors needs and most help to reduce the impact that transport
has on the environment.

Lubrizol Ltd
Firstly, to answer the question of other changes, Government must ensure that any funding and
funding administrator be transparent in its activities and processes. That the fund administrators
produce a publicly available yearly financial report, detailing distribution of funds through
programmes and technologies. It must also have clear procedures and processes to demonstrate
fairness in its allocation methodology and demand management processes. In addition, Government
could also consider making the process for obtaining research funding easier. Currently the perception
is that it takes seven to eight months from call for papers to allocation of funds before a project can

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start. In speeding up solutions to transport related environmental issues, objectives may be reached
sooner. The final part of this scenario is to ensure that when new technology is introduced, that
benefits Government environmental targets, it is either sufficiently funded or mandated to ensure its
Secondly, and with respect to the TransportEnergy schemes which cover Commercial Vehicles; there
is the CleanUp grant scheme, and there is also the VED Rebate Scheme. The VCA operated VED
Rebate Scheme appears to be operating very smoothly having soon rectified initial problems.
Conversely, many participants of the CleanUp scheme have experienced problems accessing EST
funds. It could be to the benefit of fund administrators and equipment suppliers to evaluate, through
consultation, the feasibility of moving the CleanUp administration to the VCA.

Iveco Ltd
In terms of air quality, Government must focus its attention on incentives to provide vehicles meeting
the appropriate exhaust emission standards and the type contributing the most to adverse air quality. It
should be aware that there is no penalty preventing operators using very old vehicles in sensitive
urban environments and so if Government wishes cleaner vehicles to be used, the business case
should be adequately addressed. For example, a refuse collection vehicle with an engine certified to
the Euro 5 exhaust emissions standard is beneficial from an AQ point of view in a city operation. An
incentive programme providing economic pay back after 150 000 miles is of little use since such a
mileage could take over 5 years to achieve. Operator payback within 2 years is essential.

The adoption of a common scale of assessing environmental performance could be used not only to
reward those vehicles that are cleaner, but also to penalise those vehicles that are not. Whilst
politically unpopular, faster progress could be made by increasing the effective costs of technologies
at the 'dirtier' end of the scale thereby creating a wider differential against 'cleaner' vehicles.

First Group
Principally, the potential to reduce emissions through a reduction in congestion, thereby allowing
vehicles to spend less time in a stop-start environment. One method of achieving the dual benefits of
less traffic (through modal shift) and freer movement is through more widespread bus priority, which
would be greatly welcomed.
Secondly, more consideration of the effects of HGVs should be included.
Finally consideration should be given to the offer of a "bounty" payment, providing an incentive for
the disposal of older vehicles that are more polluting.

Newport Transport
Use of agencies such as T.C's. VOSA, local authority air quality checks, Enforcement!

Cardiff Bus
I believe the Government should consider how it might achieve its environmental objectives of
reducing emissions of key air pollutants by offering incentives to operators in the form of grants.
Concurrently consideration should be given to SQBP funding arrangements in tandem with
congestion charging to improve the situation appertaining to the various known air quality hot spots.
This should assist the Government attain its aspirations with regard to modal shift which will be more
readily achieved if public transport can be seen to be not only more environmentally friendly, but a
REAL alternative to simply getting into car to drive to work or go shopping. Similarly, if attracted
capital grants were made for new vehicles with the requisite technology, operators could be persuaded
to replace the fleets on a faster basis with the added benefit of providing accessible vehicles on a fast
timescale than legislation currently outlines.

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Develop the CVLT (Clean Vehicle League Table) so as to maximise the uptake of low carbon
vehicles from a consumer perspective and in such a way that it will be understood by the public and
supported by the motoring media (as opposed to becoming a limited industry information source).
This means including a range of information that fully explain the benefits and costs of the cars
featured, for example no road tax, no congestion charge, free parking in central London etc. This
information is the real driver of the purchase decision rather than just (for example) tailpipe emission
data, in spite of what some industry representatives may tell you!

The SMMT supports a broad number of programmes through the Low Carbon Vehicle Partnership
and many other initiatives.
At the present time we are undertaking work at the SMMT to ascertain issues that impact the
environmental implications of vehicles, congestion for example, and ascertain what factors influence
this and who is responsible for them. We think that both CO₂ and air quality can be addressed by the
co-ordination of effort in these areas external to the product (vehicle) itself. This might include
improved traffic flow at "hot spots" for example.
We believe the opportunity to discuss with industry an initiative to promote the early scrapping of
vehicles. Careful consideration should be given to ensure that issues and opportunities from other
European states where such schemes have been in place are taken into consideration.

MG Rover Group
Define and commit to medium and long term planning with specific objectives to promote consumer
acceptance of new technology and to enable effective investment in new technology and products
(don't change the rules!).
Focus needs to be on technology development at OEMs and measured by delivery of 'cleaner' vehicles
rather than being 'funnelled' into particular technologies. It is key that the metrics promote the rapid
development of viable products that can be made available at an affordable (or subsidised) cost to the
end user.
Encourage the OEM development of retrofit technology and subsidise the upgrade of existing
Invest in an education programme for the general public at school level supporting government
environmental objectives.
Should also consider other actions to improve current fleet performance such as legislation to take pre
EU2 (closed loop) cars off the road (more stringent in-use testing, pay people to scrap older cars?).
Stationary engine-off legislation?
Development of EMS technology (integrated with telemetry) to control vehicle performance and use
in urban areas.
Focus on infrastructure to reduce congestion i.e. by use of congestion charging technology rather than
toll booths etc.
Permit 'undertaking' on M classified roads to reduce congestion?

Severn Wye Energy Agency
It is important to consider future programmes against the context of other initiatives that aim to reduce
emissions from vehicles, as TransportEnergy must compliment these programmes. The main
initiatives we see are:

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    CO2 based Vehicle Exercise Duty
    CO2 based company car taxation
    London congestion charge exemptions (and other cities where congestion charging is introduced)

Cotswold Experience Tours
If the government in serious about reducing carbon emission it must, very simply, tax the polluter to
the point where carbon neutral alternative is cheaper (you should even consider subsidising the
industries which make the carbon neutral alternative until such time that the alternative is more
readily available on the open market). Otherwise just keep on putting up the fossil fuel tax and make
carbon neutral road fuels tax free.

Volvo Trucks Ltd
Consistent schemes with known periods of applicability and known well enough in advance are the
only way forward so that incentives will remain attractive and sustainable for manufacturers and
purchasers of commercial vehicles.
The use of a scheme embodying the above principles using enhanced capital allowances are advocated
as a way forward for commercial vehicles, as this has the potential to avoid the discontinuities seen in
recent years with the EST Transport Energy grant funding.

Police HQ, Dyfed & Powys
Public Transport should be running on alternative fuels especially in the urban areas, as this is realistic
and practical. Additional public transport should be provided in the rural areas in order to reduce the
number of vehicles on our roads.

Other Comments
You will see that our Members have very particular interests in ensuring that Government not only
delivers a clear sustainable message on the future strategic role these programmes play to reduce
emissions from road vehicles.
Whilst the benefits to be reaped from a more focused and targeted programme are obvious, we would
recommend that the scheme is simplified and for specific steps to be taken to address the lack of
confidence and certainty the existing programmes have created. We would hope that the messages and
business case for a technology neutral approach has been clearly made, and that this would help
cement the rationale for the programmes and that they can be positively carried forward.
We welcome the opportunity to continue our constructive dialogue and do hope our Association will
be able to continue to add value to the shaping and development of initiatives aimed at reviewing
these programmes.

Foden Trucks
There is still insufficient take-up of natural gas vehicles in the UK - the biggest obstacles to
penetrating the UK heavy vehicle market with the 'Dual-FuelTM' Foden vehicle is mistrust in the
existing programmes, schemes and promises from central Government and government sponsored
There are great benefits to be gained, environmentally, economically and politically with the
widespread development of the NGV market, but it is a long way off its potential. The Government
needs to recognise that despite current support, the market is not growing and will not grow
significantly unless more confidence is established and more support is given.

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The Government policy for natural gas vehicles should focus in the short term on increasing
commercial vehicles that operate in and around city centres (including buses), together with heavy
goods vehicles operating on national distribution work so that the development of a NG filling station
infrastructure is realised. This will then lead to general acceptance for commercial vehicles and this
will be followed by the taxi; light van and private car markets.
Foden Trucks is aware of the responsibility it faces in meeting the legislative, environmental and
commercial demands of the UK heavy truck market and will continue to provide a platform for a
Natural Gas powered heavy vehicle on the basis that there is a demand for such a product and that it is
commercially viable.

Royal Society for the Protection of Birds
The RSPB supports the continued provision of grants as part of a range of measures, including fiscal
instruments, to reduce the carbon emissions of the vehicle fleet.
The emphasis of the grants programme should be on reducing carbon emissions and effecting market
transformation. To this end, the PowerShift programme should be replaced with a technology neutral
Low Emission Vehicle Programme.
Consideration should be given to phasing out the CleanUp programme as the vehicle fleet becomes
cleaner. As a minimum, the balance of funding should be directed in favour of the Low Emission
Vehicle Programme.
The New Technology Vehicle Fund should continue to be made available and the Government should
consult with manufacturers on the most appropriate level of funding.

NGVA and its members
There is still insufficient take-up of natural gas vehicles in the UK - little or no growth and no signs
that there will be any. The opportunity is being slow to be grasped and is a long way off its potential.
The Government needs to recognise that despite current support the market is not growing and will
not grow significantly unless more confidence is established
A clear Alternative Fuels for Transportation Strategy with specific development programs must be
defined. To accomplish this, the Government as a whole must assign priorities to their transportation
fuel objectives and separate the programs that help achieve these objectives and define short, medium
and longer term goals. With regards to Government policy for natural gas vehicles it should focus in
the short term on increasing commercial vehicles that operate in and around city centres, including
buses, together with heavy goods vehicles that can help to underpin the development of filling station
infrastructure. In addition, the short term also offers an opportunity to grow natural gas penetration in
the taxi and passenger car markets.
Experience in the UK market, in Europe and overseas, demonstrates that natural gas, in its
Compressed, Liquefied and Biologically produced forms, can contribute significantly to the
achievement of the Government's three main energy objectives: local pollution reduction, energy
diversity and carbon emissions reduction. Gas is also the only "near market" solution for achieving
energy diversity in transport and is the only alternative fuel where market penetration is not limited by
primary supply.
Industry is keen to work with Government to achieve significant progress in developing the market,
but require an adequate strategy to improve confidence. Government must promote the fact that
natural gas is "here to stay" and send out direct signals to the market that Government believe in
natural gas. Demand could be established through use of NGVs in own fleet/local government fleets
and emphasis on more education on Natural Gas as a vehicle fuel. A comprehensive package of
confidence building measures is required now.

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Vauxhall Motors
Vauxhall understands the need to update the current programmes to meet changing environmental
needs. However, it is also important to balance these needs against the current situation, which has
been severely damaged by events in 2003. We would support the following proposals:

    Continue Powershift and to a less extent the Cleanup programmes to fund the current clean
       technologies through to 2007, inline with current fiscal policy
    Within the 2 year period of 05-07, transition towards a new technology neutral programme to
       meet the "Powering future vehicles" strategy.
    Explore classes of vehicles rather than absolute emissions as criteria to ensure customer choice
    Explore alternative means of incentivising LPG/CNG and hybrid technology using a variety of
       levers including VED, BIK or direct taxation (income tax, VAT)
Once these measures have been put in place emphasis needs to be placed on increasing the frequency
and type of communications with customers on the financial and environmental benefits of using
alternative fuel vehicles.
Vauxhall believes that this would allow the current clean vehicle markets to make a smooth transition,
whilst also allowing the market to continue growing towards a sustainable situation. It would also
allow manufacturers to make a return on investment, whilst continuing to invest with confidence.

CNG Service Ltd
My main comment is that support for alternative fuels must be seen in the context of wider UK and
EU energy policy and sourcing strategy, in addition to reducing global warming and improving air
quality. The Energy White Paper recognised that security of supply will require increasing
Government attention in the years to come as Europe increasingly has to rely on imported oil, which
will come predominately from the Middle East.
Whilst there is a short term tightening of supply and demand in natural gas, it is clear that the picture
by 2006/7 will be very much improved, with a significant potential over supply position by 2007/8. I
attach an extract from the recent Ofgem report on gas prices which indicates the very healthy position
that the UK can expect to be in by 2007/8 (Appendix 3). It is a credit to Government policy that so
many private sector gas importation projects are proceeding apace with investment of around £10
billion underway to deliver this gas.
Looking ahead at 2020 it is clear that the UK and Europe will be heavily reliant on Middle East oil
which clearly carries major risks in relation to security of supply. Natural gas produced from bio-gas
or imported in LNG form or from Norway, represents a clear option to reduce this reliance, whether
used directly as a vehicle fuel or as the feedstock to produce hydrogen for use in fuel cell vehicles.
Given the length of time needed for major energy projects, this strategic underpinning for natural gas
vehicles needs to be recognised now.
In addition, support for natural gas needs to reward its clear environmental benefits:
    The German gas industry is installing 1000 CNG filling stations, taking advantage of the German
       Government fixing CNG fuel duty at the EU minimum until 2020. There are now around 15
       CNG cars that can be bought in Germany and this programme can be expected to allow
       German cars to produce the lowest level of carbon dioxide in Europe.
    France has more than 1600 CNG buses in operation, with a major programme in Paris in order to
        help improve its air quality (Nox and particulates) ahead of its bid for the 2012 Olympics

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The UK must not be left behind in relation to energy diversity, air quality and global warming impact.
To that end, there should be a dramatic increase in support for natural gas, either in the form of
increased grants or, as in Germany, longer duration of fixed low fuel duty. We owe this to our
children's health today and their economic well being in 2020 and beyond.
The performance, balance, focus and future role of the TransportEnergy grant programmes:
Whilst reduction in greenhouse gases and local air pollutants such as NOX and particulates is
important, grant programmes should also take into account strategic objectives in relation to security
of supply.

Norwood Consulting Ltd
Any proposals to spend any money encouraging the sale and development of alternative fuel vehicles,
whether they are LPG, CNG, Hydrogen or hybrid fuel vehicles will require to create a dramatic shift
in awareness of the impact of transport on our environment both by motorists and the retail motor
As far as this section is concerned, we offer thoughts on the kind of initiatives that should start the
process of awareness and start the process of "culture change". That process should be funded by a
"polluter pays" policy that uses the income from the scheme to make a clear statement about transport
emissions and air quality and offer solutions delivered by a UK wide Government programme.
We believe that a clear statement of intent relating to emission targets or clean vehicle numbers up to
say 2012 by Government should be linked to a stated plan to use an "environmental impact" levy
supplement imposed on Vehicle Excise Duty for that purpose. That would begin to influence changes
in motorist's perception of the impact of their vehicles. We contend that nothing short of that or a
similar bold initiative will have a real impact on the alternative fuel and emission reduction
Past experience shows that about 2% or 3% of motorists take advantage of the various clean vehicles
schemes in Europe and elsewhere. On the other hand very few UK motorists seem to consider that
buying a large 4 wheel drive vehicle or a performance car is part of our environmental problem.
Cleaning up the small 2 or 3 percent of existing vehicles, consisting mainly of the dirtiest vehicles,
would deliver some 500.000 to 700.000 cleaner vehicles by 2012. That would produce and deliver a
solid and sustainable infrastructure on which to plan to exit our fossil fuel dependence. It would also
foster the growth of a competent and sustainable service sector for gas vehicles. That will be essential
if we are to move away from fossil fuels as the short and medium term alternatives are mainly road
fuel gases in some form.
That small annual "environmental impact" charge could generate sufficient funds to pay for the
scheme. We suggest that a new "environmental impact" charge ranging from £5 to £25 per vehicle
per year, based on their engine size and fuel could be raised through the Vehicle Excise Duty system.
With over 20million vehicles under 2 litres and a wide range of taxi's, buses and other high emission
models, sufficient funds would be able to be ring fenced to not only extend support for new cleaner
vehicles, but also clean up the existing relatively dirtier vehicles. Additionally, funds would be
available to support the development of the infrastructure required to deliver CNG and Hydrogen
alternatives as they evolve and improve the LPG infrastructure network.
That commitment and stated long term policy would progressively reduce the need to subsidise fuel
duty as substantial growth in retail volumes would offer scope to reduce retail and wholesale margins
of road fuel gases without reducing return on investment.
By implementing this small annual "environmental impact" charge, drivers would become more
aware of the environmental impact of their vehicle, while not charging them anything like the true
cost of their pollution It may be seen as a new and dynamic statement of intent by Government that
has little real financial impact on individual motorists but that funds a dramatic new programme to
meet Government objectives by operating a "polluter pays" policy.

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A broad based grant scheme and others suggested refocusing detailed earlier would assist with the
clean up of existing vehicles and would run up to 2012. The scheme would set a grant support level
per vehicle that would reduce annually until 2012 by which time any technical advances should be
well advanced. New super clean vehicles would realise their true environmental impact without
having the gain eroded by older dirty vehicles. The scheme would have an exit policy that is clearly
stated at the outset to encourage take up.
While 100% of motorists would pay the charge, possibly only about 3% might actually change their
fuel or convert to road fuel gas but the very fact that a charge was being made would dramatically
endorse Government policy.
Such a programme would benefit from an aggressive marketing and awareness programme.
Whatever the final details and scope of such a scheme, we believe that this suggestion or a similar
revenue generating scheme, offers a sure and well funded way to raise awareness.
A bold and well planned major programme delivered using the expertise developed by the Energy
Saving Trust, the LPGas Association, motor manufacturers and other stakeholders will offer a realistic
chance that we develop an infrastructure, trained workforce and a motoring population that is able to
move us away from fossil fuels.

DaimlerChrysler UK Ltd
DaimlerChrysler has markets throughout the world and is constantly striving to develop new
technologies that reduce the impact that transport inevitably has on the environment. One thing is
clear, however, vehicle manufacturers need a clear understanding of the direction in which individual
Governments intend to influence the development of the transport infrastructure and industry in their
To be able to plan the future development of new products and technology, vehicle manufacturers
need Governments to provide clear long term policies. That will give the consumer, the confidence to
invest in new technology and the manufacturer sufficient belief that their investment in the
development of such technologies will be worthwhile.
Some countries in the European Union have clear policies that go forward to 2020; this gives such
reassurances and in addition encourages the development of the necessary infrastructure to support
these new technologies.
Production volumes of Commercial Vehicles are relatively small when compared to those of
Passenger Cars, this makes the amortisation of research and development costs on a unit basis more
onerous, consequently development needs to be planned with great care and based on clear goals.
If local authorities wish to introduce Low Emission Zones (LEZ's) there should be clear guidance
from Government as to the emission levels that they can adopt. Those performance levels should be
based upon the European Emission Standards and not an arbitrary level that has been decided at a
local level.

Reducing carbon emissions from transport is a high cost option, but is recognised as politically
Carbon equivalent reduction targets need to be balanced, but not confused, with air quality targets.
Government should take a 'well to wheel' stance on assessing new technology, but should remain
technology neutral.
Buses provide an ideal platform for demonstrating low carbon technology.
Grants that do not encourage fuel economy need to be revised.

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With the introduction of the New Vehicle Technology Fund the basic grant structure seems to be
appropriate to fund development through all the various stages.
The grant system needs to be transparent and offer longer-term visibility.
While the CleanUp programme has set a favourable precedent, it may take a long time for low carbon
vehicles to achieve market acceptance.
The size of grant pot needs to be increased to reflect the scale of the problem and the money needs to
be injected in the most effective manner.
Other fiscal and regulatory measures need to be in place before grants can be phased out.

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Annex A - List of consultation respondents
Alexander Dennis (TransBus)
Biofuels Northern Ireland
British Vehicle Rental and Leasing Association
Countryside Council for Wales
Cotswold Experience Tours
Cardiff Bus
CNG Services Ltd
DaimlerChrysler UK Ltd
Dr Stephen Finnegan
Energy Saving Trust
Environmental Industries Commission
Ford of Britain
Foden Trucks
Greater London Authority
Honda UK
Iveco Ltd
John Harwood
Lancashire County Council
LP Gas Association
London Bus Services Ltd
Low Carbon Vehicle Partnership
Lucy Robson
Lubrizol Ltd
MG Rover Group Ltd
Newport Transport
Norwood Consulting Ltd
Natural Gas Vehicle Association

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Octel Exhaust System & Octel Corp
Police HQ, Dyfed-Powys
Shell International Ltd
Severn Wye Energy Agency
Society of Motor Manufacturers and Traders
Scottish Water
Retail Motor Industry Federation
The Royal Society for the Protection of Birds
The Confederation of Passenger Transport
The Hardstaff Group
The Greenfuel Company
Toyota Motor Europe
The Carbon Trust
Volvo Trucks Ltd
Vauxhall Motors
Z Motors Ltd


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