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New ‘carrot and stick’ proposals to reduce exhaust emissions

By Evie Andreou

The government launched a public consultation on a new bill stipulating higher road tax for owners of cars exceeding acceptable limits for exhaust emissions and atmospheric pollutants while offering incentives to those choosing to buy low-emission vehicles.

The bill, prepared by the departments of road transport, Customs, labour inspection and environment and the finance ministry, concerns the update of existing legislation providing for the abolition of the consumption tax for passenger cars and vehicles for the transport of goods with a gross weight of up to 3,500 kilos and raises in road tax depending on their carbon dioxide and atmospheric pollutants emissions.

It concerns new and used cars registered in Cyprus after the law is put in effect. Officials said that it does not affect cars already registered.

According to senior transport officer, Yiannis Nicolaides, the bill introduces to national legislation atmospheric pollutants as another variable when it comes to calculating road tax. At the moment road tax is calculated based only on carbon dioxide emissions for passenger cars and engine capacity for vehicles used for transportation of goods.

Atmospheric pollutants are substances that accumulate in the air to a degree that is harmful to living organisms or to materials exposed to the air. These include ozone, particulate matter, sulphur dioxide, nitrogen dioxide, carbon monoxide, and lead.

The need to change national legislation derives from recent changes in the test method that has been applied so far for the European motor vehicle type-approval system concerning carbon dioxide values. The carbon dioxide values resulting from the new method are much higher than the values derived from the previous method. “Based on the existing data so far, it appears that the increase, on average, may go beyond 30 per cent,” the public consultation document said.

If there are no changes in Cyprus as regards the consumption tax which is calculated based on a vehicle’s carbon dioxide emissions payable to Customs and road tax, it will heavily impact the car sale market, it said.

In addition, it said, in Cyprus too, the highest acceptable limits for carbon dioxide emissions and air pollutants have been lowered, meaning that the country could face fines from the EU and/or need to purchase carbon allowances to offset its carbon emissions.

“But even if we were not faced with fines, lowering emissions and air pollutants is in the best interest of everyone, it is about better air quality,” Nicolaides told the Cyprus Mail.

According to the proposal, owners of vehicles manufactured between 2006 and 2011 would have to pay, in on top of registration fees, an additional fee of €400. That amount is raised to €600 for vehicles manufactured prior to 2006.

Consumers will also be given incentives; in case anyone wishes to withdraw their old car of over 15 years and buy a new one with low carbon dioxide emissions – under 150 grammes per kilometre – they will not be charged the €150 registration fees and go five years without paying road tax.

The aim is for the bill to be voted by the house plenum and put in effect as of the beginning of the next year, but given that it is still at the stage of public consultation, its creators admitted that this was a very optimistic plan. Members of the public and stakeholders such as car dealers will be able to submit their proposals and comments by   September 21 the latest.

The bill may be found at (Greek only):$file/20180821_%CE%9D%CE%AD%CE%B1_%CE%A4%CE%AD%CE%BB%CE%B7_%CE%9A%CF%85%CE%BA%CE%BB_%CE%9A%CE%B1%CF%84%CE%AC%CF%81%CE%B3%CE%B7%CF%83%CE%B7_%CE%A6%CE%9A_%CE%94%CE%B7%CE%BC%CF%8C%CF%83%CE%B9%CE%B1_%CE%94%CE%B9%CE%B1%CE%B2%CE%BF%CF%8D%CE%BB%CE%B5%CF%85%CF%83%CE%B7.pdf

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