Brown backs green transport in pre-budget report

Gordon Brown delivered a boost to green transport in his pre-budget report, backing biofuels with extended tax relief and doubling the duty on flight tickets.

The next generation of biodiesel will now benefit from the 20p per litre discount, as will all new green fuels as they emerge, with more tax incentives in the pipeline for biodiesel and biogas, for example for company cars. “A priority for vehicles, responsible for 25 per cent of emissions, is to promote cleaner fuels through fiscal incentives,” Gordon Brown said.

The Chancellor kept fuel duty increases modest, however, refusing to restore the above-inflation fuel duty escalator as some environmental campaigners would have hoped, only increasing fuel duty in line with inflation, by £1.25 per litre.

In a move aimed to curb the growth of aviation – responsible for a fifth of all carbon emissions from transport – from February 1st air passengers will pay £10 and not £5 in tax on European flights, and £20 instead of £10 for other destinations. “Currently aircraft emissions are not part of the EU emissions trading scheme. Nor is aviation fuel taxed,” Gordon Brown acknowledged, but went on to say that a “global agreement” is needed alongside domestic action by individual countries to change this.

Other green measures included in the report, which sets the Government’s spending agenda for the next three years, include tax relief for carbon-neutral homes, which will be exempt from stamp duty “for a limited time period.”

“Next week the Secretary for Communities and the Housing Minister will set out plans to ensure that within 10 years every new home will be a zero carbon home, and we will be the first country ever to make this commitment,” the Chancellor said.

“And for existing homes I will consult on a new facility to undertake energy audits and offer low loans that would in time, because of low energy bills, pay for themselves,” he added.

He also announced the first feasibility study on carbon capture and storage (CCS) under the North Sea, also launched on Wednesday as a cooperative initiative between Norway and Britain, and a demonstration plant to be built in Britain.

“Tackling climate change is an opportunity for Britain to create thousands of new jobs. And our new institute to investigate new environmental technologies will start with a budget of £550 million and I can also confirm a second enterprise capital fund focused on innovative green technologies,” he concluded.

Environmental group Greenpeace condemned the investment in CCS, saying that the Chancellor “shouldn’t be using taxpayers’ money to perpetuate the UK’s centralised energy system.

“It’s a shamefully expensive, inefficient and outdated technology that wastes two-thirds of the energy generated,” said John Sauven, director of Greenpeace.

He also condemned the level of tax increases on petrol and flights as insufficient. “Although he announced a small increase in the price of petrol, he missed a sitter by rejecting the fuel duty escalator.

“And he stumbled again by failing to raise Air Passenger Duty to a level that will have a significant impact. Protecting UK competitiveness in the short term at the expense of protecting the climate may be the least prudent move the Chancellor ever made,” he said.

The pre-budget report can be accessed here.

Goska Romanowicz

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