Taxing Diesel Cars Based on NOx Emissions in UK

The report outlines options for government and city authorities to cut NOx emissions from new diesel cars through tax-based measures. The average diesel car currently sold would be charged £1,100 to £1,700 if a NOx-based registration tax is adopted. Options are also detailed for city-based charges, with a focus on London, although the lessons may be applied to other cities heavily affected by air pollution, including Birmingham, Leeds, Southampton, Derby, and Nottingham.

The level of the proposed national charge is based on the amount of NOx emitted, and so encourages carmakers to clean up new vehicles. Applied at registration, the charge can be introduced and work alongside the reform of the CO2-based Vehicle Excise Duty in April 2017.

Turning to cities, the report details options for the parallel introduction of NOx-related road pricing, including integration to existing and planned charging schemes. Reform to company car taxation and ‘benefit in kind’ rules for diesel cars are also proposed. Finally, the report outlines how revenue generated may be used.

For further details, the full report by Green Budget Europe can be found here.