UK Advisers Call for Additional Car Taxes for Environmental Reasons

To help the UK achieve net zero emissions by 2050, an independent government body is calling for a hike in car taxes. The Committee on Climate Change (“CCC”), an independent body formed in 2008 following the Climate Change Act, says lawmakers should increase tax rates for conventionally fueled cars to help raise money to fund climate change initiatives in the country. What’s more, the independent group of government advisors has restated its previous call to the government to move the proposed ban on the sale of new combustion engine vehicles from 2035 to 2032.

The CCC called for this actions in its latest progress report on the UK’s “Road to Zero” Strategy. To achieve net zero emissions by 2050, the CCC says that the government should prioritize reducing traffic levels and facilitate the mass rollout of low-carbon vehicles (“LCVs”). According to the report, higher taxes on carbon emissions could be introduced while fuel prices are currently low due to the coronavirus to minimize the effect on drivers.

“Greater use of carbon taxes can support the public finances and strengthen incentives to reduce emissions. They are particularly attractive when global oil prices, and therefore consumers’ energy costs, are low, as they are now,” the report claims. The CCC is also recommending the Vehicle Excise Duty (road tax) system be overhauled to make LCV ownership more appealing to the public. The body claims that in order for the UK to meet the 2050 deadline, sales of new combustion engine vehicles must stop within the next ten years.

“There should be a rising mandate for car companies to sell minimum share of zero-emissions vehicles, reaching 100% by 2032 at the latest,” the report says. “The UK government is consulting on bringing forward the date for phasing out petrol and diesel cars and vans (including hybrids) from 2040 to 2035 or earlier, in line with the Committee’s advice. The Committee’s assessment is that the date should be brought forward to 2032 at the latest, and backed by detailed policy arrangements to deliver.”

Although the CCC admits that the government’s plans to expand the UK’s EV charging network are in line with its net zero emission ambitions, there’s still more to be done. “Initial steps towards a net zero policy have been taken, but this was not the year of policy progress that the Committee called for in 2019. There were important new announcements on transport, buildings, industry, energy supply, agriculture and land use. But these steps do not yet measure up to meet the size of the net zero challenge and we are not making adequate progress in preparing for climate change.”

North American EV makers like ElectraMeccanica Vehicles Corp. Ltd. (NASDAQ: SOLO) may also be wishing that the U.S. and other major markets implement an equally aggressive program of phasing out internal combustion engine vehicles.

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