EU wants to scrap old cars

The European Commission has put its weight behind proposals that will encourage people to buy new, greener cars and could help pull motor manufacturers out of the financial slump. In a Brussels meeting organised by the European Union between motor industry executives, ministers and MEPs, a £32 billion package of low interest loans was proposed to help the industry develop new green technologies. In the future, consumers would get tax incentives to scrap their old cars and buy newer, more efficient models. So-called gas-guzzlers would be penalised by very high taxes in a system that could mirror the one recently introduced in France.Christian Streiff, boss of Peugeot-Citroen, said European sales were falling, forcing factories to idle. He insisted the motor industry needed EU-backed loans to develop greener cars. He claimed that encouraging consumers to scrap older, less efficient cars would reduce total car CO2 emissions by 4.5 per cent. Naturally, it would also increase new car sales and could help carmakers avoid potentially huge lay-offs.The plan mirrors the soft-loans package being provided by the Bush administration to GM, Chrysler and Ford in the States.The European Investment Bank, which would lend the money, is understood to be wary about the scale of loans. Environmental campaigners are also unhappy about the money being made available to an industry that has failed to meet emissions reduction targets.

Will Powell