Tax breaks are failing to boost green fuels
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by Guy Sheppard • A major reduction in duty has failed to increase demand for cleaner fuels among hauliers, The Energy Saving Trust, which provides government grants to convert vehicles. says there has been only a modest increase in applications, despite a 29% cut in duty on road fuel gases in the Budget nine months ago.
But Neil Wallis, who manages the trust's Powershift programme to promote clean fuels, believes demand is about to rise: "We are aware that there are quite a number of things in the pipeline but there will be a bit of a lead time for the effects of the
Budget to work through,'' he says. "I would hope there will be several thousand trucks running on natural gas within the next two to four years. Once people see the operational benefits, and particularly the cost-effectiveness of running on this fuel, that is when you will see a really big take-up."
Wallis adds that converting an HGV to run on natural gas can cost up to £20,000, but says grants will cover up to 75°o of this. "It's very much cheaper in running costs and is roughly 40% cheaper than the price of diesel." he reports.
The trust expects to receive grant applications to convert around 100 vehicles to natural gas this year, compared with around 80 last year.
Wallis says the market for cleaner fuels seems to be splitting down the middle, with liquid petroleum gas (LPG) favoured for cars and GDVs; and natural gas for trucks.
"The greater amount of fuel that heavier vehicles use makes it more of a proposition than for smaller vehicles," he explains. "The fuel saving on LPG is slightly less than on natural gas. We reckon there are roughly 5,000 LPG vehicles at present and we expect that to increase rapidly next year and in subsequent years."
Contact The Energy Saving Trust on 0171 222 0101.