New green taxes on motoring and flying are likely to be introduced as part of proposals to reduce Britain’s transport emissions, the Government has suggested.
Grant Shapps, the Transport Secretary, unveiled his transport decarbonisation plan on Wednesday, pledging that every vehicle on the roads would be zero emission within decades.
The document says further "carbon pricing" for flights could be introduced and suggests new motoring taxes could offset the anticipated loss of fuel duty from electric vehicles.
It adds that the Government will need to ensure that "revenue from motoring taxes keeps pace" with the switch to electric vehicles "to ensure we can continue to fund the first-class public services and infrastructure that people and families across the UK expect".
On flights, the plan promises to reconsider carbon prices to "help accelerate" the move to green fuels, which could see air fares rise. Other key points include a commitment to banning new polluting lorries and reaching net zero in domestic flights by 2040.
"This is a comprehensive yet urgent strategy to end transport’s contribution to climate change within the next three decades, showing global leadership, as we prepare to host [the international climate summit] COP26," Mr Shapps said.
Electric vehicles are currently not liable for vehicle excise duty (VED) and drivers bypass fuel duty, which could leave the Treasury with a £34 billion hole. It would need to recoup £765 per car per year in lost fuel duty, according to analysis by the AA.
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Although the document acknowledges the need to fill the gap, there is reportedly disagreement within the Government about how this should be achieved. On Wednesday, the Department for Transport said any tax structures to recoup the losses would be up to the Treasury.
Among plans being considered is the introduction of a road pricing scheme, which could see drivers pay tolls or per mile, based on in-vehicle tracking technology. The Government is also looking to expand carbon pricing to include petrol, in line with the European Union – but that would not plug the entire shortfall.
Electric vehicles will pay no VED until at least 2025, the document said, but could be hit with higher fees from then.
"You couldn’t put the extra costs on VED, because so many people just wouldn’t pay it," Sir Edmund King, the AA president, said.
He warned higher purchase taxes would be a disincentive for people to buy electric vehicles and taxing the electricity would be potentially regressive, leaving some kind of pay as you go arrangement as the most obvious option.
"But that’s always been political suicide. It’s very difficult to sell something called road pricing to the public. They’ve got a dilemma, and they’re being very quiet about it," he said.
It comes amid growing disagreements within the Government about how its green ambitions will be paid for, which have seen a long-awaited strategy on switching to low-carbon heating delayed until the autumn.
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Surface transport accounts for 28 per cent of UK emissions, mainly from vehicles. Aviation accounts for seven per cent but has the fastest growing emissions – largely due to demand growth – and has few options for decarbonisation, posing a challenge to the Government’s commitment to reach net zero by 2050.
The Department for Transport plan also commits to considering an expansion of carbon taxes on flying under the UK’s Emissions Trading Scheme, which could lead to higher airline fares.
The industry currently receives a number of free allowances on flights in the UK and to the EU, which could be reduced.
The scheme could also be expanded to cover other non-carbon greenhouse gases, which could potentially triple the overall emissions the sector would need to pay for.
Mr Shapps told MPs in the Commons that the plan was "not about stopping people doing things – it’s about doing the same things differently."
He pushed back on the idea that getting aviation to net zero by 2050 would require the UK to reduce the growth in demand for flights, and promised "guilt-free flying".
Grant Shapps, the Transport Secretary, unveiled his transport decarbonisation plan on Wednesday
Credit: House of Commons/PA
"Everyone should continue to have access to affordable flights, allowing them to go on holiday, visit family and do business," the plan said.
The plan to reach net zero in domestic flights by 2040 and international aviation by 2050 relies heavily on the development of as-yet untested hydrogen-powered flight and sustainable aviation fuels.
The Climate Change Committee has called for reforms to aviation tax to ensure that flights are more expensive compared to rail journeys.
The Government recently announced that it would cut air passenger duty on domestic flights and increase rail fares by 2.6 per cent earlier this year – the first rise above inflation since 2013.
Review of road-building plans
The Government will review its £27 billion road-building scheme to take into account environmental considerations and the impact of the Covid pandemic.
It cited "fundamental changes" caused by the virus crisis to "commuting, shopping and business travel" that would reduce demand, but is also facing a legal challenge over its roadbuilding strategy from green groups, who say it failed to take environmental considerations into account.
Phase-out of petrol and diesel HGVs by 2040
In addition to the Government’s plan to ban the sale of internal combustion engine cars from 2030 and hybrids from 2035, it plans to end the sale of HGVs from 2040.
However, the haulage industry says practical alternatives are not yet viable. Electricity struggles to provide range for heavier vehicles, and hydrogen powered-lorries are still in the early stages of development.
The Government said the plan could include overhead electric charging on motorways to charge trucks on the go.
Less car use, cheaper public transport
The plan calls for people to use their cars less and switch to public transport and active travel where possible.
The Government faces a challenge to lure people back to public transport after numbers plummeted during the pandemic.
It committed to making buses and trains more competitively priced compared to driving and will look to create a "zero-emission city" with extensive cycle lanes, an all-electric bus fleet and a ban on nearly all petrol and diesel vehicles in city centres.
The number of people using public transport plummeted during the Covid pandemic
Credit: Jason Alden/ Bloomberg
The plan to have net-zero domestic and international aviation by 2050 relies heavily on as-yet untested technology.
Mr Shapps said on Wednesday that the UK had seen the world’s first zero-carbon hydrogen flight from Cranfield University Airport in Bedfordshire.
But using the technology at scale and on large passenger aircraft is still an optimistic goal. The plan will also rely on the use of sustainable aviation fuels, which could be encouraged by further carbon taxes on the more polluting kinds.
The Transport Secretary said VIPs returning from the COP26 international climate summit would be given the offer of using such fuels, but they are unlikely to achieve the kind of emissions savings necessary.
Electric vehicles sales quota
Manufacturers will be mandated to sell a proportion of electric vehicles this decade under radical proposals that carmakers have called a "slap in the face".
Mr King said last year’s target of banning sales of new petrol and diesel cars by 2030 was already "challenging and ambitious".
The Government has promised 6,000 ultra-rapid charge points, as well as more than £100 million for on-street and off-street charging.
However, automotive industry experts have indicated there is a need to go much further, with one estimate suggesting Britain needs 2.3 million public charging points by 2030. Mr Shapps has also suggested that British streets could see wireless charging for taxis and vans.