Tax breaks for E85 company car drivers?

Thursday, December 07, 2006

Tax breaks for bioethanol company car drivers
Biofuels can reduce carbon dioxide emissions
UK now has agreement with biofuel producers

Cars such as this bioethanol Ford Focus could be given tax breaks for company drivers

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The Government is to consider giving tax incentives for environmentally-friendly company cars that run on bioethanol.

Gordon Brown revealed in his pre-budget statement that the Government could give tax breaks for cars running on fuel made from crops such as wheat and sugar, which absorb carbon dioxide from the atmosphere when they are growing. Independent studies have shown that the use of high-blend biofuels such as bioethanol E85 can reduce fossil carbon dioxide emissions by up to 70%.

The Chancellor declared that while the 20 pence per litre fuel duty rebate on biofuels remains unchanged, he is consulting prior to a budget decision on the level of tax discounts for company cars using high-blend biofuels.

He also revealed that Britain has a signed a partnership agreement with other South American and African countries on the development of biofuels.

At present, supermarket chain Morrisons is the only petrol retailer that sells E85 bioethanol, but only 13 of their fuel stations sell the fuel. Morrisons hopes to extend the number of outlets that sell bioethanol throughout the UK.

Other fuel companies say they will follow suit, but it could be a long time before bioethanol is widely available at Britain's fuel stations.