Government urged to encourage greenness

• Car makers call for more incentives for buyers…
• ..and scrapping of 3% tax penalty on diesels
• Average CO2 levels for new cars will miss targets

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Penalties for diesel company cars should be scrapped and grants for alternatively fuelled vehicles reintroduced, says the Society of Motor Manufacturers and Traders.

Announcing another slight fall in average CO2 levels for new cars through 2006, the SMMT says the Government needs to take action and help drive the figure down further.

The SMMT's initial figures for 2006 show that average new car emissions of CO2 fell by just 1.3%, from 169.4g/km to 167.2g/km. While that puts average CO2 levels 11.9% below the 1997 baseline figure of 189.8g/km, it is well short of the target to reach an average of 140g/km by 2008.

Calling for the immediate end to the 3% tax penalty which diesel models attract in company car schemes, the SMMT said the 'diesel disincentive' is one of the reasons why the UK continues to lag behind the rest of Europe.

The call is likely to fall on deaf ears at the Treasury, however, considering how Chancellor Gordon Brown's said the tax structure would continue unchanged until 2009 at the earliest in last December's pre-budget report.

The SMMT also wants grants for cars with the lowest levels of carbon dioxide to be introduced to stimulate interest in the models amongst motorists. It says the Department for Transport was wrong to think that incentives don't drive demand and shelve the planned Low Carbon Car Fund last year.

Since the Powershift fund for LPG conversions was wound up, for instance, the SMMT says registrations of such vehicles have fallen from a peak of 3185 in 20003 to only 39 in 2006.

• A more detailed report on CO2 emissions, including performance by different types of vehicles, will be published by the SMMT in April.