The first year rate of Vehicle Excise Duty (VED) for new diesel cars should be raised by up to £800 to help reduce emissions, according to Policy Exchange.
The think tank is proposing HM Treasury increase the first year VED rate for new diesels to reflect the greater air pollution caused, in a bid to encourage people to buy lower emission alternatives such as petrol, hybrid or electric cars, instead. Based on a 50% decrease in diesel car sales, the increase in VED would raise around £500 million a year in additional taxes.
A study launched in January as part of a response to the VW ‘dieselgate’ scandal, found that a large number of diesel vehicles were breaking official emissions limits, despite actually following testing processes.
Richard Howard, head of environment and energy at Policy Exchange, said: “Air pollution is overwhelmingly a diesel problem. The CO2 advantage of diesels has now been eliminated with data from the Society of Motor Manufacturers and Traders showing that, in 2013, CO2 emissions from new petrol cars were lower than those of diesel cars (on a sales-weighted basis).