Economic Instruments - Charges and taxes
Annual Car Tax - Brief Summary (UK)
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The UK was the first Member State that applies a CO2 based annual tax - a passenger car emitting less than 150g CO2/km is charged €159, while more polluting cars are charged by an amount increasing incrementally to €246 (cars emitting more than 185 g CO2/km (CEC, 2002).
The UK will introduce higher vehicle excise duties for the most polluting cars from 2009 as part of reforms announced by the government in its annual budget. From then, cars that emit more than 255 grams of CO2 per kilometre will be subject to
CO2 emissions from new cars fell by their biggest ever margin in 2008 with the average model now emitting just 158.0g/km - 4.2% less than the 2007 figure and 16.8% down on the 189.8g/km base level in 1997 (SMMT, 2009).
The figures, revealed in the Society of Motor Manufacturers and Traders’ (SMMT) annual New Car CO2 Report, showed that while the number of cars on the road and the distance travelled has increased, their share of total UK emissions continues to fall. Cars now account for just 11.5% of the country’s total CO2 emissions, largely as a result of new technology, improved fuel consumption rates and better consumer awareness.
Commission of European Communities, 2002. Taxation of Passengers Cars in the European Union - options for action at national and Community levels.
Communication from the Commission to the Council and the European Parliament. COM(2002) 431 Final. Brussels.
ENDS, 2008. UK budget boost for green transport. ENDS Europe DAILY 2503, 12/03/08
SMMT (The Society of Motor Manufacturers and Traders Ltd), 2009. New car CO2 emissions fall at fastest rate on record. http://www.smmt.co.uk/articles/article.cfm?articleid=19207