Supporters of low carbon vehicles have welcomed a long-term commitment from the government to maintain the differential between the main rate of fuel duty and the rate for road fuel gases such as liquefied natural gas (LNG) and compressed natural gas (CNG) and biomethane.
In the Chancellor’s Autumn Statement last week, he said the differential would be maintained at the current level until March 2024, and also specified a clear duty trajectory for liquefied petroleum gas (LPG) for the same period.
The differential between the main rate and the LPG rate will continue to reduce by 1ppl each year to 2024. The Government says it will review the impact of these incentives on vehicle uptake and the public finances at the Budget in 2018. The Government will also seek EU approval to apply a reduced rate of fuel duty to methanol.
Andy Eastlake, managing director of LowCVP (Low Carbon Vehicle Partnership), said: “The LowCVP and its partners have been calling for longer-term certainty in future fuel duty rates for cleaner fuels to encourage adoption and investment. This announcement will provide over 10 years of stability for vehicle operators considering investing in low carbon vehicles, particularly for commercial fleets.”