Low-carbon vehicle funding unveiled as Heathrow “sweetener

If you're new here, you may want to subscribe to our or .

| Sourced From |

Business groups have welcomed £250m in additional funding for low-emissions vehicles, announced yesterday as an environmental “sweetener” alongside the controversial decision to grant approval for a third runway at Heathrow.

The government hopes the money will help UK manufacturers deliver affordable low-carbon vehicles and stimulate consumer uptake.

Neil Bentley, CBI director of business environment, welcomed the extra funding, arguing that it provided “an opportunity for Britain to become a market leader in low-carbon vehicle technology”.

However, Bentley also said that car manufacturers must have access to credit if they are to invest in the low-carbon research they needed to survive.

On Wednesday prime minister Gordon Brown indicated that they would get the support they needed. “We have been talking to the various car companies and we will make announcements in due course,” he said.

The new £250m in funding is part of a wide-ranging package of green transport measures designed to appease critics of the government’s decision yesterday to grant approval to a third runway at Heathrow.

The government also announced plans for a high-speed rail link between Heathrow and Birmingham and new rules to ensure that only airlines operating the greenest fleets can use the third runway.

In addition, transport minister Geoff Hoon set the initial cap on the number of additional flights to and from the airport at 125,000 a year, half that requested by BAA, and pledged that stringent new rules would require the number of flights to be further curbed if air and noise pollution standards are breached.

The concessions were reportedly achieved following a series of “bruising” debates with environment secretary Hilary Benn and climate change secretary Ed Miliband, who both said they would only support the plans if strict caps on flights and stringent environmental rules were enacted.

However, the fallout from the government’s decision to give the green light to a third runway continued today with Greenpeace vowing to fight the decision at every turn, the Tories repeating their commitment to scrap the plans if elected, and one think tank accusing the government of “fantasy economics” in its attempts to justify the expansion.

Greenpeace executive director John Sauven said that there was still a chance that the project could be blocked. “We will fight it every step of the way because the lives of millions of people depend on us all slashing carbon emissions,” he said.

The lobby group last week announced that it had bought an acre of land on the proposed site, which it would sell to thousands of campaigners around the world in an attempt to resist any compulsory purchase orders the government may impose. The group is also likely to embark on a direct action campaign to disrupt work on the project.

David Cameron today also gave further hope to campaigners that the expansion could be stopped by repeating his pledge to block the plans if elected, while speculation is mounting that the government could still lose a Commons vote on the issue given that about 50 backbench MPs are said to be opposed to the plans.

Meanwhile, the New Economics Foundation slammed the government’s claims that the third runway would deliver a £5.5bn new economic benefit, arguing that the costs the Department for Transport attached to the expected increase in carbon emissions failed to account for the increased climate change impact of emissions released at high altitude.

It said that while the government put the economic cost of increased emissions at just £13.33 a tonne, a more accurate estimate would be £70 a tonne, meaning that the expansion would deliver no net economic benefit.

Aviation is to be included in the EU emissions trading scheme from 2013 and while a tonne of emissions covered by the scheme is priced at about €13 (£11.55), experts expect it to rise to more than €40 by 2013.

The research echoes earlier criticism of the government’s economic case for expansion, which accused the Department for Transport of using hypothetical plane designs that were not yet in existence to calculate future emissions and based passenger number estimates on projected oil prices of between $53 and $64 a barrel by 2030.