Road ahead clear for tax breaks on cleaner diesel 

A  Commission paper unveiled on 13 January gives guidance to EU member states who wish to introduce tax incentives for diesel cars meeting stricter environmental standards than currently laid out in EU regulations.

The guidance document comes after France and Germany unveiled plans last summer to introduce tax incentives for cleaner diesel cars.

The paper recommends setting the tax incentives limit at 5 mg/km of particulate matter, a value which, at the present state of technological development, can only be met by equipping diesel cars with filters. 

The 5 mg/km value represents a reduction of 80% compared to the limit of 25 mg/km that became mandatory from January 2005 under the 'Euro 4' emission standards, the Commission has indicated. It said the value is primarily aimed at avoiding a fragmentation of the internal market as member states look to introduce new national tax incentives.

The value, which is only indicative, is published as the Commission is brushing up its proposal for the next stage of emission limits ('Euro 5') which would come into force in 2010. 

With the 'Euro 5' standard, Verheugen said the EU has "the most ambitious programme in the world". The proposal is due out in the second half of 2005.

But Europe is now lagging behind Japanese carmakers in putting cleaner vehicles on the market. The Toyota Prius, which runs on a hybrid technology combining a conventional gasoline engine with electric power, is already selling well and won the 2005 European car of the year award.