Scrapping of ‘green carrot’ a big mistake, Government told

Apr 15 2008 by jez Davison, Evening Gazette

LOCAL transport companies have slammed the Government’s decision to withdraw its green fuel tax incentive for firms which invest in bioethanol and biodiesel.

They believe the abolition of the 20p per litre incentive from Spring 2010 will discourage small firms from switching to environmentally friendly fuels.

Co-founder of Global Transport Logistics (GLT), Gary Smith said there was “no logic” behind the decision.

“I cannot understand it”, he said: “It flies in the face of everything they say they are trying to do to encourage environmentally friendly practices.”

The incentive withdrawal, which will rake in an estimated £550m for the treasury, is being replaced by the Renewable Transport Fuels Obligation (RTFO), which will stipulate that by 2010, at least 5% of all fuel sold in the UK will have to be made from material from sustainable sources. Suppliers who fail to meet their targets will be fined.

But small business owners believe the incentive should remain in place at a time when soaring fuel costs has left many struggling.

Gordon Mitchell, managing director of Mitchell Trucking Company Ltd at Riverside Park in Middlesbrough, said: “Our weekly fuel bills have risen from around £7,500 last year to £13,500. Fuel prices are killing us at the moment.”

The company does not currently use bio-fuels due to warranty rules imposed by the truck manufacturers, but would consider it if they were more widely available.

Mr Mitchell continued: “Our trucks go on long-haul trips all over the country. We need to make sure that garage pumps contain bio-diesel if the driver stops off to re-fuel”.

“We are more than happy to support environmentally friendly initiatives and we operate trucks with some of the greenest diesel engines available on the market.”

In the Forum of Private Business’s (FPB) most recent quarterly ballot of members, 78% of respondents agreed that “green” tax incentives would encourage them to invest in sustainable initiatives. But the majority of respondents were cynical about politicians’ enthusiasm for environmental policies, with 60% believing they are hijacking green issues in a bid to win votes.

Many feel that despite the inclusion of a raft of green measures in this year’s supposedly “Green Budget”, the benefits of investing in sustainability are outweighed by the costs. Think tank Tenon Forum estimates that implementing green practices has already cost small businesses £3.1bn over the past year.