Joe Carey (Clare, Fine Gael)
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Question 113: To ask the Minister for Finance the financial assistance or resources he has provided in pursuit of the development of hybrid cars; and if he will make a statement on the matter. [28112/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Assistance is provided through the VRT system towards the purchase of hybrid vehicles. The Finance Act 2001 introduced a 50% VRT relief for category A (passenger car) and category B (car and jeep derived vans) series production hybrid electric vehicles. A hybrid electric vehicle is one which uses a combination of petrol and electricity for motive power, being capable of running on the electric motor alone, thereby increasing efficiency and reducing carbon dioxide emissions. The purpose of the VRT relief scheme is to promote innovation and the development of new green technology by car manufacturers, by encouraging the purchase of such vehicles. The relief consequently applies only to "series production" cars of this nature; that is, cars which at the point of manufacture employ the new technology. Section 81 of the Finance Act 2008 provided that, on the introduction of the new carbon dioxide emissions-related VRT system on 1 July, the existing 50% VRT relief would be replaced by a relief of up to €2,500 of the VRT payable on such vehicles during the period 1 July 2008 to 31 December 2010. This relief will be paid, where applicable, in addition to any benefits such cars may otherwise receive under the emissions-related VRT system, by virtue of their low carbon dioxide emissions. Similar VRT reliefs apply in the case of flexible fuel vehicles since January 2006. Electric vehicles, which had a similar VRT relief during 2007, have been exempted from VRT from January 2008 for a three-year period. The total cost of these VRT reliefs up to the end of May 2008 amount to approximately €38 million, of which some €30 million has arisen since January 2007. Of this total cost, hybrid vehicles account for €22.8 million, with around €15 million arising since January 2007.