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Spain close to imposing emissions tax on cars

From Reuters| June 08,2007

The Spanish government is close to imposing emissions-related taxes on cars, which will raise taxes for the more contaminating models and probably lower them for the least contaminating, the environment minister said today.

"The Economy Ministry has practically completed a package of measures that will provide maximum incentives for the least contaminating vehicles," Cristina Narbona said.

"We are talking about emissions to the atmosphere, which defines itself. Some cars emit more, others less," she told journalists after a business meeting organized by financial newspaper Cinco Dias.

The law is likely to be included in a batch of energy-saving measures due to be approved by ministers within the next few weeks, she said.

There are also incentives to get trucks off the roads and make it more attractive to send freight by rail.

Narbona declined to say in an interview last week whether vehicle tax changes would be neutral overall.

Spanish industry has successfully curbed its emissions of carbon dioxide, the main greenhouse gas causing global warming.

However, CO2 from road transport is still growing fast, and the government is under pressure to act if Spain is to stand a chance of meeting its commitments to the Kyoto agreement on climate change.

The carmakers' association Anfac is alarmed by moves to tax certain models or technologies and warned the sector's competitiveness could suffer. Most of the major manufacturers, such as Ford Motor Co. and General Motors, have plants in Spain. Car sales have fallen so far this year because of higher interest rates.

Spain's Congress, where the Socialist government is the largest party, has just rejected a move by a small Catalan party to cut taxes on the cleanest cars.

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