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Failure to Dump Polluting Vehicles

Tax-break plan fails to put more green cars on the road

Few take up cost-saving scheme to dump polluting vehicles

Daniel Sin – Updated on Feb 22, 2009 – SCMP

Tax breaks offered to buyers of environmentally friendly vehicles in an effort to improve air quality have failed, Environmental Protection Department figures show.

In fact, the value of tax discounts given under one scheme is just 15 per cent of what the government forecast when it was launched in April last year.

That scheme allows buyers of commercial vehicles to save between 30 and 100 per cent of first registration tax if they bought various classes of goods vehicles, taxis, light buses or non-franchised buses that meet the Euro V emissions standards.

Just 196 vehicles have been registered under the scheme, representing tax forgone by the government of HK$4 million, as opposed to the HK$26 million annual budget for the programme.

There are more than 150,000 commercial vehicles registered in the city.

It was the third such scheme put in place since Chief Executive Donald Tsang Yam-kuen promised to reduce emissions in his October 2006 policy address.

The first, which began in April 2007, offered cash grants of between HK$17,000 and HK$173,000 to people who replaced their old commercial vehicles with new, more fuel-efficient ones.

Of the HK$3.2 billion committed to that initiative, just HK$451 million has been granted for 10,763 applications. There were 74,367 vehicles eligible for that grant.

The second scheme targeted petrol-powered private cars. It offered a 30 per cent reduction in first registration tax, up to HK$50,000, if people bought environmentally friendly cars.

With 420,729 private cars on the roads, just 6,763 applications have been approved. The cost of the scheme was about HK$160 million.

Even the government was not interested in its own green tax-break scheme, with just 600 environmentally friendly vehicles among its fleet of 5,236.

Friends of the Earth environmental affairs officer Angus Wong Chung-yin said the schemes were failing because they offered only “carrots” and no “sticks”.

As a result, there was nothing to encourage vehicle owners to scrap their polluting vehicles.

“That explains why the response has been low,” he said.

On the commercial vehicle replacement scheme, Mr Wong said that although owners were encouraged to choose low-emission and fuel-efficient models, there was no requirement to take the old ones off the road.

So while newer and cleaner vehicles were hitting the road, their old, smoke-belching predecessors were going into the second-hand market, remaining on the road and continuing to pollute.

An Environment Bureau spokeswoman tried to put a positive spin on the figures, noting that the response to the private car initiative had been encouraging.

“These environment-friendly petrol private cars account for 11 per cent of all newly registered private cars since the introduction of the scheme,” she said.

She blamed the limited availability of Euro V emission-standard commercial vehicles for the low response to the third scheme.

Mr Wong said the government should set a deadline for the phasing out of pre-Euro and Euro I vehicles, and designate low-emission zones where heavily polluting vehicles would be denied access.

“To deal with private cars, the government may require [aged] private cars to be checked twice a year rather than once a year,” he said. “The licence fees of [aged] cars should be increased.”

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