THE Freight Transport Association (FTA) says the government is withdrawing from its previous commitment to encourage industry to use alternative fuelled environmentally friendly lorries.

The combination of plans to increase duty on the fuel itself and the substantial reduction of grants to convert vehicles to operate on natural gas would seem to signal the end of any government support for greener vehicles.

In the Budget in March 2004 the Chancellor announced an increase in duty of 1.42p per litre from 6.1p per litre to 7.52p per litre - a rise of 23 per cent. In the event the Chancellor decided in December that due to the high rise in the price of oil in 2004 he would not increase any fuel duty levels.

However, his intentions in March were quite clear and the increase on duty for natural gas was only saved by the oil situation.

Last month the FTA attended a meeting hosted by the Department for Transport (DfT) and the Energy Savings Trust (EST) which administers the grants for vehicle conversions to natural gas use.

At that meeting it was made clear that no EST grants will be paid from April 1 until the European Commission approves the UK grant proposals.

The DfT refuses to consider the continued payment of grants until the EC decision is known, even though no specific complaint regarding existing grants had been made by the EC.

The EC will only allow grants of up to 30 per cent of the additional cost of a low emission vehicle. Existing grants are up to 75 per cent. The grant must be calculated over a five-year vehicle life with reductions made for any cost benefits, eg the lower cost of compressed natural gas/liquid natural gas (CNG/LNG) as a fuel.

Grants for new HGVs would only apply to those meeting the EEV emission standard, ie above Euro 5 (it is believed that only one manufacturer currently has an engine meeting this standard). Under EC rules, grants cannot be given to meet legislative emission standards.

Once a council imposes a Low Emission Zone (LEZ), grants cannot be given to either new vehicles or the retrospective fitment of emission reduction equipment in order to meet this higher emission standard. Vehicles operating in a LEZ cannot have a grant to meet the LEZ standard but vehicles 'not operating' in the LEZ can have a grant to meet the same standard

The FTA's engineering policy manager Geoff Day says: "We are very disappointed at the evident change in government policy on alternative fuel vehicles. The latest news is likely to result in few applications for new conversion grants and a steady decline in the number of natural gas vehicles.

"Those companies who have made conversions are likely to feel confused and betrayed by the change of government policy.

"I now see little future for natural gas vehicles."