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Cash incentives for getting polluting vehicles off the roads branded a failure


16th Feb, 2010

A subsidy aimed at encouraging owners of old, polluting diesel trucks and vans to replace them early is failing because most of the people taking the grant would be buying a new vehicle anyway as theirs are worn out, owners and academics say.

They say the low take-up rate of the grants shows the scheme is ineffective for phasing out dirty old commercial vehicles, with one academic calling for punitive measures to be considered instead.

The HK$3.2 billion voluntary replacement scheme expires at the end of next month. It was launched in April 2007 and targets commercial diesel vehicles registered before 1995, when the so-called Euro 1 emissions standards were launched, and the later Euro I vehicles.

Owners are eligible for grants if their new vehicles comply with the latest Euro IV standards, which are up to 30 times less polluting than the older ones.

By the end of January, the Environmental Protection Department had approved 13,798 applications, involving HK$595 million, just 18.6 per cent of the fund. Of the applications, 89.2 per cent involved goods vehicles, 6.9 per cent non-franchised buses and 3.8 per cent light buses.

There are about 39,500 such old vehicles on the roads, 23 per cent fewer than before the scheme. But the number of old vehicles taken off the roads include 3,000 that were simply deregistered by their owners.

Lai Kim-tak, chairman of the Medium and Heavy Truck Concern Group, said most subsidies went to owners who needed to buy a new truck, not people changing their vehicles earlier than necessary.

Goods vehicles make up 92 per cent of pre-Euro and Euro I commercial diesel vehicles on the roads.

Lai said the scheme was not attractive to truck owners because it offered them little financial help to buy a new vehicle. The average grant is HK$43,000, while a Euro IV truck costs between HK$650,000 and HK$800,000.

“The scheme did not spur our members to replace trucks earlier because the subsidy is small and trucks are so expensive. We buy a new truck when ours no longer work and then we apply for the fund,” he said. “But by that time, with or without the grant, we need to buy a new truck.”

Dr Alexis Lau Kai-hon, an associate professor in the environmental division at the University of Science and Technology, said this was not the aim of the scheme. “The aim is to make people speed up replacement of vehicles. It they don’t, it means the scheme is not effective. In other words, the money is not well spent.”

With the scheme proving a failure, the government should consider the threat of punishment to urge owners of dirty vehicles to switch, Lau said.

“Apart from carrots, there should be sticks in government policy,” he said. “The government should give a clear signal that environmental conservation is its policy direction.

“Look at the example of the plastic bag levy. Traders opposed it fearing it would harm their business. But the levy is working very well now.”

He suggested the government set up low-emission zones or raise licence fees for dirty old vehicles.

The Environmental Protection Department said it would not extend the scheme because that would be counter to its objective of encouraging owners to replace vehicles early.

Last month, the department said it would consider compelling owners to scrap their polluting vehicles. Last year, lawmakers rejected a proposal to increase licence fees for older vehicles, citing the economic downturn.

source: scmp

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