Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

511. To ask the Minister for Transport, Tourism and Sport the policy rationale behind the introduction in 2008 of the new system of linking motor tax and VRT to the CO2 emissions from vehicles; and if he will make a statement on the matter. [13569/18]

Shane Ross (Dublin Rathdown, Independent)
Link to this: Individually | In context | Oireachtas source

Arising from a commitment in the Programme for Government 2007-2012 to rebalance the motor tax and vehicle registration tax (VRT) systems to reward the purchase of greener cars, a new basis of charging motor tax and VRT for private vehicles was introduced from July 2008.  The purpose of the change was to create an incentive for consumers to purchase cars with lower carbon dioxide (CO₂) emissions, an important step in reducing national greenhouse gas emissions and in meeting Ireland’s commitments under the Kyoto Protocol.

For both systems, vehicles were categorised in seven graduating bands A – G, based on the CO₂emissions levels specified on the Certificate of Conformity of a vehicle.  Those choosing to purchase lower-emission vehicles paid less in motor tax and VRT, and those choosing higher-emission vehicles paid more.

From January 2013, a revised banding structure was introduced for both motor tax and VRT, splitting the lowest CO₂Band A into four and Band B into two.  A zero emissions band for electric vehicles was also introduced for motor tax only.  The revised banding allows for the further differentiation of the fleet in favour of the ever more environmentally friendly cars coming on to the market.

The 2008 changes also included the introduction of a new labelling system for cars based on CO₂emission levels.  The label is similar to the energy-rating label that was already in place for many consumer electrical goods at the time and includes information on fuel efficiency, the annual rate of motor tax and the applicable rate of VRT.This is designed to make consumers more fully aware of the incentives being created through the changes and to assist them in making informed decisions.