Diesel surcharge should be increased, air quality study recommends

A report by the Policy Exchange think-tank has advised that the three per cent surcharge on company car tax should be increased and extended beyond 2021.

The research, conducted in conjunction with King’s College London, recommends cutting or removing tax breaks for diesel vehicles under the capital allowances scheme and increasing vehicles excise duty (VED) for new diesel cars.

Entitled Up in the Air: How to solve London’s air quality crisis: Part 2, the report states that the shift from petrol to diesel vehicles over the past 15 years has been ‘disastrous in terms of its impact on air quality and health’.

Commenting on the findings, Richard Howard, head of environment and energy at Policy Exchange, said: “If we are to clean up air pollution, then the government needs to recognise that diesel is the primary cause of the problem, and to promote a shift to alternatives.”

Diesel cars have been incentivised by the government since the late 1990’s because they produce lower CO2 than petrol vehicles. The promotion resulted in a drastic shift towards diesels with 40 per cent of new car sales from 2011 accounted for by diesel cars (an increase on 18 per cent in 2001).

Currently, diesel vehicles represent 36 per cent of the total car fleet across the UK.

However, the report outlines that by 2025 diesel cars will account for 50 per cent for all nitrogen dioxide (NOx) emissions produced from road transport in Greater London, and around 26 per cent in central London.

To encourage fleets and drivers to switch away from diesels, the report advises a series of measures, including linking VED to the health and environmental impact of the vehicles, resulting in a ‘damage cost’.

Under current government regulations, the three per cent diesel supplement will be removed from 2021. However, with diesel cars likely to continue to produce higher levels of NOx than petrol cars, the report recommends that the government consider extending the duration of the surcharge.

However, Mike Hawes, SMMT chief executive, has long criticised groups aiming to ‘demonise’ diesel. He said: “Today’s diesel engines are the cleanest ever. We need to avoid penalising one vehicle technology over another.”

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