Camillus Glynn (Fianna Fail)

Cuirim fáilte roimh an Aire go dtí an Teach. This Bill, although small, is very important. It is another element in the process of encouraging innovation in the use of motor vehicles. We are increasingly aware of the link between car usage and its effect on our environment. With this in mind, the launch of the new vehicle labelling system in June of this year was a welcome development. Changes to vehicle registration tax and annual motor tax for new cars registered on or after 1 July 2008 will see an improvement in the situation regarding emissions from vehicles.

Calculating on the basis of carbon dioxide, CO2, emissions from vehicles rather than engine size focuses on the effect on our environment of emissions from the cars we drive. Innovation is crucial if we are to deal with the issue of cars and our environment. Seven emission tax bands have been created and VRT and motor tax payable will now be determined by the relevant band for each vehicle.

It is reasonable to assume that, when speaking of the environment, the Kyoto Protocol and all that pertains thereto, we have been criticised as a country for not taking action to reduce carbon emissions. Positive thinking generates a positive response, and this is a positive response. There is an old saying that the most important step in a million mile journey is the first step, and this is that important first step. The purpose of these changes is to incentivise consumers to purchase vehicles with lower CO2 emissions, an important step in reducing national greenhouse gas emissions and in meeting Ireland's commitments for the purposes of the Kyoto Protocol. The clear objective of the new CO2 based tax structure for cars is to influence the purchasing decisions of consumers by rewarding the buyers of low-emitting cars and charging a premium on less efficient vehicles. It makes sense and will have long-term, positive effects for generations to come. Anyone buying a new car can now make a positive choice on investment and environmental grounds by purchasing a low CO2 emitting vehicle. This decision is within the remit of any individual.

Senator Coffey referred to transport difficulties and while it is not pertinent to the Bill I will respond to some of the comments he made. To keep it parochial, with regard to improving arterial routes everybody agrees and appreciates that if traffic moves freely rather than labouring on a long linear car park, which we all have experienced from time to time, this of itself will reduce carbon emissions.

During recent months, the N6 opened between Kilbeggan and Athlone. In the past week, approval was given to Westmeath County Council to go to tender for construction of a new bridge less than half a kilometre from where I live, which will allow Mullingar to be completely bypassed. With the M4 bypass will be the eastern bypass which will link the M4 to the N52 going across from the Kilbeggan road. This is a positive step with regard to keeping traffic moving and thereby reducing emissions.

A couple of years ago, I invited the then Minister for Transport, Deputy Dick Roche, to be our guest speaker at the annual Fianna Fáil business breakfast in Mullingar. He came and afforded a new status and priority to this stretch of road and this has been the engine which drove this project forward to getting the thumbs up for completion. This is the final stage of the project and it will contribute to reducing CO2 emissions.

Anyone who chooses to purchase a car with high CO2 emissions will have to pay a higher rate of motor tax, in addition to any price rise as a result of the VRT changes. It is a polluter pays policy and everybody agrees with this. In 1999 a EU directive introduced labelling for all new vehicles, including specific requirements to provide consumers with information on fuel economy and CO2 emissions. Our new system, introduced in July, will strengthen these existing EU requirements.

To return to Senator Coffey's point on transport costs, I drive a diesel car and it is not long since diesel was almost €1.50 per litre. During recent days, I saw diesel for sale in Mullingar for €0.959 per litre. This is a major change and it is welcome.

With regard to reducing the strength of cars, it has been proven conclusively that higher powered cars produce more CO2 emissions. The Minister has correctly taken the appropriate step. In this country, everybody will state that something needs to be done and criticise one. However, when one does something one is also criticised. So I say "do it" and be whatever to the critics because if it is the right thing to do it should be done. We have to tackle the manner in which CO2 emissions are being released into our environment at alarming levels.

With regard to the local government fund, I am a strong supporter of local government. It is an important element of how we are and how we live. The Minister is committed and, as Government spokesperson on the environment, heritage and local government, I am also committed to ensuring that in the lifetime of the Government positive proposals will be brought forward in terms of the White Paper and legislation. We must take on the job of improving local government.

Recently, the Government outlined its plans for 10% of the national road transport fleet to be powered by electricity by the year 2020. Our size suits electric vehicles and the country can become an effective test centre for the world's car manufacturers. A total of 200,000 electric vehicles could be on our roads in 12 years and that would be a ground-breaking development.

The Minister is doing everything he can to ensure that people use cars which have the minimum effect on the environment. The electric vehicles plan includes tax incentives for businesses to purchase electric vehicles. Businesses can write off 100% of the cost of purchase against tax under the accelerated capital allowance scheme. It also includes a €1 million project by Sustainable Energy Ireland to research, develop and demonstrate vehicles nationally. Assistance for individuals purchasing electric vehicles is also included as is publication of a buyer's guide and a cost of ownership calculator by Sustainable Energy Ireland. A national task force will be established to examine infrastructural options for national roll-out of electric vehicles, including street charging.

We are signalling our intention that we are serious about dealing with the issue of car emissions. The Minister stated that he expects considerable international investment to flow from this plan. We should all be aware that in 2008 we will have sent more than €6 billion out of the country to pay for fossil fuels. The electric car scheme would bring money back into the Irish economy and fuel our transport fleet with Irish renewable electricity.

We all need to be increasingly aware of the environment. Anything is welcome that can help us to reduce our fossil fuel bill and meet our climate change challenges. This plan could bring much investment and many jobs to Ireland. It has the potential to make Ireland a centre for electric vehicles. In these changed economic times such a development would be welcome and ground-breaking. As I stated, we must do what we can to reduce our dependence on fossil fuels. We know how fickle this market can be and we all saw the major increase in the price of fossil fuels. In recent months, I have seen people in the transport business going bust. I welcome the Bill and I commend it to the House.