Government’s low-carbon car support package disappoints

Plans by the Business Department (BERR) to help the car industry weather the recession by supporting investment in lower-carbon cars have been met with disappointment. Meanwhile, the latest official EU car carbon dioxide emissions data has been published.

The support package was announced by Business Secretary Lord Mandelson in late January in response to the car sector’s warnings on the impact of the slump in sales. Ford will make 850 workers at its UK plants redundant. Nissan and Jaguar Land Rover have also announced job losses. UK car production fell by 5.7% last year, according to data from the Society of Motor Manufacturers and Traders (SMMT).

The main element of the support package is providing loan guarantees by the UK government to secure over £2 billion from the European Investment Bank and other sources. The money can only be invested in projects that reduce vehicle emissions, such as retooling production lines.

Paul Everitt, the SMMT’s chief executive, said he was frustrated that BERR had yet to reveal details of how the scheme would work - for instance, what proportion of the loan it would guarantee and what carmakers would have to pay the government to underwrite it. BERR declined ENDS’ request for further information.

Mr Everitt said the industry wants support to boost sales of new cars, including a scrappage scheme similar to Germany’s, where the government offers customers €2,500 to swap their old car for a new model. New cars are likely to be more CO2 efficient. The SMMT also wants help for car retailers to get the public buying more new cars.

  • Carbon dioxide emissions from new cars sold in the EU fell by 1.25% in 2007 to reach an average of 158 grams per kilometre, according to the latest official data published by the European Commission.1 The findings confirm an analysis by green transport campaigners T&E last August on the sector’s slow progress towards meeting a voluntary target of 140g/km by 2008 (ENDS Report 404, p 8 ). As a result, the Commission introduced a legal limit of 130g/km by 2015 (ENDS Report 407, pp 57-58 ).
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